The Dream Factory of China

　　A report from the Sixth Party Congress of the Shenzhen municipal pointed out the missions to “strengthen Shenzhen-Hong Kong legal services collaboration, to take in a group of locally and internationally renowned legal service organisations, to improve international legal capabilities and standards of our city”, and to “elevate Qianhai to the status of a hub for commercial mediation in Guangzhou, Hong Kong and Macau.”

　　With this in mind, the Shenzhen Court of International Arbitration (SCIA) recently held its inaugural Guangzhou-Hong Kong-Macau Commercial Mediation Forum in Shenzhen, with the theme “Cross-Border Commercial Mediation and the Legal Environment of the Free-Trade Zone”.

　　14 mainland, Hong Kong and Macau representatives from respective units of the Guangzhou-Hong Kong-Macau Commercial Mediation Alliance, legal experts and enterprise representatives gathered at the forum to discuss commercial mediation mechanism issues in the free-trade zone.

　　Experts from these three jurisdictions hold that mediation has become the most popular means to settle cross-border commercial disputes. The Alliance can thus work towards its advantage as a platform for mediation and arbitration to help resolve cross-border disputes, thus fortifying the nation’s “One Belt, One Road” strategy.

　　Dispute Resolution Mechanisms Should Be Diversified

　　Deputy Director of the Judicial Reform Bureau of the Supreme People’s Court Jiang Huiling said currently that China is entering a critical and pressing era and the challenges that it faces are unprecedented. It is necessary for us to fully cash in on the opportunities offered by the country’s development, to harness social strength and power while balancing social demands, to manage social relations and establish social norms, so as to ensure the country and society retain its energy and orderliness in a time of upheaval. Hence, it is of utmost importance to develop mediation and arbitration in diversifing the mechanisms for dispute resolution.

　　Jiang said that a diversified dispute resolution mechanism is becoming more and more important. The Fourth Plenary Conference agreed to incorporate, for the first time, the diversification of dispute resolution mechanisms into the country’s top level policies.

　　The Supreme People’s Court supports such a development, and has established procedures to standardise the approaches of litigation mediation,recognised the validity of contracts borne out of mediation agreements, established a centre for litigation and mediation, and differentiated between various kinds of disputes and the relevant channels for resolution. The Court has also created a list of potential mediators, encouraged local courts to set up professional mediator systems, and classified mediation law as part of civil law. In the broader context, the nation is currently quickening its pace towards rule of law, and the successful experiences of diverse mediation mechanisms should be held as nationwide legal norms and be applied nationwide.

　　Jiang said that the future of commercial dispute resolution mechanisms and other dispute resolution mechanisms hinges on whether courts and actors comply with the rules and procedures set for by the mechanism itself. In establishing the Guangzhou-Hong Kong-Macau Commercial Mediation Alliance, the SCIA has taken the lead in this aspect in aspect. The existence of the Alliance is expected to bring about the general development and progress of the dispute resolution legal sector in the Guangzhou-Hong Kong-Macau region, providing local and foreign litigants with professional and efficient mediation services.

　　Guangzhou, Hong Kong and Macau Should Share Mediation Experiences with Each Other.

　　Chan Bing Woon, member of the Hong Kong Mediation Council and Public Outreach and Publicity Council, both overseen by Hong Kong’s Department of Justice, said that the Hong Kong Special Administrative Region government has always been emphasizing on mediation as a means to resolve dispute. Now more than ever, mediation is seeing increasing popularity in Hong Kong. The Department will research on a number of measures and work closely with other jurisdictions to ensure the healthy development of Hong Kong’s mediation sector.

　　Former President of the Hong Kong Institute of Arbitrators Sylvia Siu said that with judicial reform, Hong Kong hopes to encourage the early settlement of disputes between litigants. This approach has proved successful, as litigation fees in Hong Kong are high - cases of1 million yuan and above would require lawyers to represent the litigants. A 1 million yuan case would entail litigation fees of a few million yuan. Hong Kong legislation requires that should litigants choose not to mediate in the cases that require mediation in the first place, they might not be able to  claim the litigation fees even if they win the case.. Numbers provided by the Hong Kong High Courts show that out of the 411 cases dealt with, 65 per cent of them were settled through mediation.

　　Head of the Legal Drafting Department of the Macau Law Reform & International Law Bureau Lam Wai Lon said that mediation in Macau is divided into judicial mediation and non-judicial mediation. Judicial mediation involves mediation by courts or procuratorates, while non-judicial mediation is conducted by arbitration organisations.

　　To further differentiate, judicial mediation can be categorised into mediation before litigation, and mediation during litigation. Judicial mediation before litigation involves litigants going through the necessary mediation procedures before commencing on litigation, which is usually handled by the judge in charge of the case. Macau encourages litigants to go for mediation before litigation in order to ease the pressure on the courts.

　　Sharing Experiences with “One Belt, One Road” Countries

　　Jiang said that President of the Supreme People’s Court cum Chief Justice Zhou Qiang recently stressed that a diverse conflict resolution mechanism should be the focal point of growth of the legal industry in China, and should serve as a contribution with “Chinese characteristics” to the international dispute resolution mechanism sector.

　　Dean of the School of Law at Macau University of Science and Technology cum Executive Director of the SCIA Professor Shen Sibao said that as a free-trade zone, Qianhai is brimming with vitality and possess a very strong internal driving force that would facilitate the diversification of conflict resolution mechanism. In order to conduct cross-border mediation and arbitration in Qianhai, one has to intelligently combine mainland China’s legal system with that of the common law system, continuously seeking systemic and regulatory innovation in the process.

　　Shen said that the “One Belt, One Road” developmental strategy is one that covers the entire globe. The Alliance should seriously consider going through its experience in cross-border commercial mediation and arbitration, and share it with countries in Southeast Asia, the BRIC countries, or those situated along the “One Belt, One Road” developmental lines. This would be China’s contribution to the development of the world’s mediation, arbitration and diverse conflict resolution mechanisms as an economic superpower.

　　Deputy Board Chairman cum General Manager of China Legal Services (Hong Kong) Du Chun said that it is generally understood that litigation might not be the best means to resolve a conflict. Thus, experts and academics promulgated an alternative mechanism for conflict resolution. With our country’s experience in developing diverse conflict resolution mechanisms, we can help replicate a similar mechanism with Chinese characteristics on the global stage. This would entail promoting current autonomous and self-help conflict resolution mechanisms as the mainsteam, while  considering litigation as an alternative option.

　　Chairman of the Alliance cum Hong Kong lawyer Gary Soo said that even though the Alliance is headquartered in Qianhai, the services it provides are not hemmed in by geographical boundaries. He stated at by year’s end, the Alliance would be conducting mediator training courses in Qianhai. These courses would reference the models from Hong Kong, Macau and mainland China as training material. The Alliance hopes to strengthen its collaboration with courts and other organisations to create an effective mediation mechanism in the long run.

　　Director of the Guangdong Province Private Enterprise Complaint Centre cum Vice-Chairman of the Alliance Liu Xiangrong said that the 14 members of the Alliance hail from different legal systems. Hence, members can boast an understanding of different legal systems and conduct mediation basing on their different experiences.

　　The Many Approaches of the Alliance

　　President of the SCIA Liu Xiaochun introduced Qianhai’s innovation in developing a diverse conflict resolution mechanism. Such innovative approaches include:

　　Approach 1: Setting up an SCIA mediation centre. This would serve litigants who are willing to understand mediation on their own accord, thus saving precious administrative and judicial resources in the process. In this year alone, the total value of mediation settlement cases was worth close to 14 billion yuan.

　　Approach 2: Mediation by chambers of commerce with independent arbitration by the SCIA. Collaborative platforms were established with the Shenzhen Association of Foreign Investment, Shenzhen Chamber of Commerce and the Guangdong Federation of Commerce. This approach aims to help resolve disputes between private enterprises. The advantage of this approach is that operations can beconducted outside China.

　　Approach 3: Mediation at trade exhibitions with arbitration by the SCIA. The SCIA has intellectual property conflict resolution representatives at the China Import and Export Fair (commonly known as “Canton Fair”) and the China Hi-Tech Fair. Currently, the SCIA has handled cases from 106 countries at these fairs, with a mediation success rate of over 60 per cent.

　　Approach 4: Mediation in Hong Kong while arbitration in mainland China. This is an excellent solution to conduct cross-border conflict resolution. The SCIA is in talks with Macau authorities on a similar approach. Through this approach, cases can be handled anywhere in Hong Kong, Macau and mainland China.

　　Approach 5: A “Four-In-One” conflict resolution approach to capital market disputes. A conflict resolution centre has been established for Shenzhen’s securities and futures industry. Through the promotion of self-legislation, regulatory oversight, professional mediation and commercial arbitration, disputes in capital markets can be resolved through this “Four-In-One” approach with the help of the Securities Association, Asset Management Association and Futures Association.

　　Approach 6: Establishing the Guangzhou-Hong Kong-Macau Commercial Mediation Alliance. In pooling resources from these three jurisdictions, professional and efficient mediation services can be provided to litigants. Litigants can choose to mediate with the assistance from the Alliance members in any of the three said jurisdictions or to put forward the case with the arbitration process.