The role of mediation in the resolution of Belt and Road Initiative disputes
China’s Belt and Road Initiative (BRI) has gained huge momentum of late, with governments, companies and lawyers keen to maximise the many opportunities it presents. The resolution of disputes arising from the BRI is no exception. The sheer complexity and scale of BRI projects is prompting a welcome review of dispute resolution processes, with a view to resolving BRI disputes more quickly and amicably, ideally in a confidential and enforcement-friendly environment.
Recent developments suggest that the BRI presents an opportunity for less formal procedures, like mediation, to flourish and enter the mainstream. Indeed, three key BRI jurisdictions – China, Singapore and Hong Kong – have recently promoted mediation in the context of BRI disputes.
In September 2017, the Singapore International Mediation Centre (SIMC), and the China Council for the Promotion of International Trade China Chamber of International Commerce Mediation Center(CCOIC) agreed to cooperate on assisting businesses to resolve cross-border disputes arising out of the BRI. The two mediation centres will help: (a) Chinese companies investing in Singapore (33% of its investment in BRI countries); (b) Singapore companies investing in China (85% of the total inbound investment from BRI countries); and (c) companies investing in other markets under the BRI.In tandem, Hong Kong has also signalled its willingness to embrace mediation as an intrinsic BRI dispute resolution tool. The Department of Justice appears keen to develop eBRAM.hk – an online dispute resolution tool tailored to big infrastructure projects under the BRI providing for secure online arbitration and mediation services. Other proposals discussed recently at the Hong Kong government’s Belt and Road Summit include a bespoke BRI arbitral and mediation centre, as well as a harmonised dispute resolution clause for BRI disputes requiring mediation first, then arbitration.
The rate of investment under the BRI (for example, major projects like the US$13bn Malaysian East Coast Rail Link and a US$105m Thai rail contract have just been agreed) may simply outpace development and harmonisation of BRI dispute resolution provisions in underlying contracts. However, these recent statements and discussions in Singapore and Hong Kong represent a further demonstration of the growing popularity of mediation in Asia, and the central role it could play in years to come under the BRI.
Read more on our Asia Disputes Notes Blog.
Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.