Mixed-mode dispute resolution: China’s Belt and Road is driving change

A trend toward combining alternative dispute resolution processes (typically mediation and arbitration) is gaining traction internationally and is being particularly driven in Asia by the Belt and Road Initiative.

With China at the heart of the Belt and Road, a more consensus-driven approach to dispute resolution, reflecting Asian values and promoting mediation, looks set to thrive. Traditionally, international commercial disputes play out to Western values and norms and have been adversarial in nature.

For some time, mediation has been discussed as a dispute resolution process suitable for Belt and Road disputes. As an adjunct to adjudicative processes like litigation and arbitration, academicsend-users and China’s own court reforms have highlighted the integral role mediation is likely to play as part of a multi-tier process.

2019 developments

Singapore and China started 2019 with a pro-mediation statement of intent. A memorandum of understanding was signed between the Singapore International Mediation Centre (SIMC) and the China Council for the Promotion of International Trade (CCPIT) in Beijing on 24 January. This announced the establishment of an international panel of mediators to handle disputes that may arise from BRI projects. Mediators will be drawn from a pool of dispute resolution specialists in China, Singapore and other countries and regions along the Belt and Road. Both parties plan to develop rules for case management and enforcement for BRI disputes submitted to mediation. As with other institutions and proposed online platforms, negotiation, mediation and – as a last resort – arbitration will be the combination of processes championed by SIMC and CCPIT.

The ICC too has just published mediation guidance for Belt and Road disputes, alongside appropriate clauses from its existing suite. These promote the use of mediation as either a standalone or mixed-mode process with arbitration.

“Belt and Road presents a rare opportunity to rethink how complex multi-party, international disputes are resolved,” said Herbert Smith Freehills’ Justin D’Agostino, chair of the ICC Court’s Belt and Road Commission.

“For centuries, dispute resolution has been anchored to adversarial processes. With the Belt and Road’s Asian nexus, a more consensual, efficient approach may evolve to resolve disputes. ICC has long offered mediation and arbitration services and is well placed to offer mixed-mode dispute resolution along the Belt and Road.”

 

Justin D'Agostino
Justin D'Agostino
Global Head of Dispute Resolution, Hong Kong
+852 21014010
Anita Phillips
Anita Phillips
Professional Support Consultant, Hong Kong
+852 21014184
Briana Young
Briana Young
Professional Support Consultant, Hong Kong
+852 21014214

Dispute resolution in Asia-Pacific: Parties seek efficient processes and enforceable outcomes

Following our report on the Global Pound Conference series, which brought together over 4000 stakeholders at 28 conferences worldwide, our analysis of the Asia Pacific results reveals different demands in Asia and Oceania.

Six Asia Pacific cities hosted conferences to assess how dispute resolution can be improved: Singapore; Hong Kong; Chandigarh, India; Bangkok, Thailand; Sydney, Australia and Auckland, New Zealand. Each conference addressed the demand side (commercial party perspectives on dispute resolution); the supply side (what advisers and providers are delivering to commercial parties); the key obstacles and challenges; and what needs to be addressed to effect change.

Region-wide, the data highlights that commercial parties want to use mediation and other ADR processes more, either alone or as an adjunct to adversarial proceedings. However, the data shows that the market is not responding adequately. As a result, mediation remains under-utilised, and actual use lags behind positive attitudes to it. Unless parties and their advisors actively take a different course (for example through inserting escalation clauses in contracts, actively proposing mediation at the point of dispute, or by following mandatory mediation protocols), there is likely to remain a perpetuation of the “same old processes” – litigation and arbitration.

Read more analysis of the Asia Pacific results on our Asia Disputes Notes blog here.

New Japan International Mediation Centre

It has recently been announced that a new “Japan International Mediation Centre” (JIMC) is to open in Kyoto in early 2018.

While details on the new centre are still limited, it is known that it is being established in collaboration and with the assistance of the Singapore International Mediation Centre (SIMC), which may provide an indication of how the new centre is likely to operate.

The establishment of the centre is an interesting development in a jurisdiction which is known for its amenability to privately negotiated settlements of disputes but in which (along with many other Asian jurisdictions) the concept of mediation has failed to thrive and become institutionally embedded.

For more on the JIMC, read our Japan Dispute Avoidance Newsletter.

Herbert Smith Freehills also hosts a dedicated ADR Hub as a resource for our clients.  This includes a spotlight series on ADR in Asia Pacific, Issue 2 of which specifically delves into ADR in Singapore including the features of the SIMC.

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.

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ADR in Asia Pacific: Spotlight on Indonesia

The third edition of our ADR in Asia Pacific Guide spotlights alternative dispute resolution (ADR) in Indonesia. 

We summarise the state of play in relation to ADR in Indonesia and its interplay with adversarial processes like litigation and arbitration. We delve into the detail of the Supreme Court's new mediation regulation and decree and analyse how these hope to improve rates of settlement. We then look at some practical aspects of mediation and dispute resolution from a lawyer's perspective, highlighting the often novel way in which mediation is deployed in Indonesia. Finally, we summarise the ground-breaking Global Pound Conference (GPC) series which looks at all dispute resolution processes and how these can be improved for commercial parties. Herbert Smith Freehills is proud to be global founding sponsor of GPC.

To download your copy, please click here

 

Shape the future of dispute resolution: Global Pound Conference moves to Hong Kong

Hosting more than 5,000 corporate and disputes professionals in a series spanning 40 cities across 31 countries, the Global Pound Conference (GPC) is a global conversation about how to improve the resolution of commercial disputes in the 21st century.

Using a unique electronic interactive format, which has been dubbed the blueprint for future conferences, delegates from key stakeholder groups vote anonymously on standardised questions, debated in real time by world class moderators and panellists. The data will be distilled into a global report and white paper, heralding a new era of dispute resolution.  

If you are involved in contentious work (whether litigation, arbitration, ADR or investigations) we invite you take part in this historic series. Click here to find an upcoming GPC event in a city near you and to access the voting results from the events that have taken place to date – in Singapore, Lagos, Mexico City, New York, Geneva, Toronto and Madrid.  To stay up to date on all the conversations and developments throughout the GPC Series, please join us on LinkedIn​.​​

On 23 February 2017, the series moves to Hong Kong. With the backing of leading corporates, institutions and the Department of Justice, the Hong Kong event is set to be a major dispute resolution conference of 2017. General counsel, regional heads and senior executives from leading corporates will share their views, alongside leading international judges, arbitrators and mediators. The Hong Kong event will also include a keynote address from Secretary for Justice, Rimsky Yuen, as well as a closing address from Chief Justice Geoffrey Ma. Click here to access the full programme and here to see the invitation.

Find out more and register your place.

Date:

Thursday, 23 February 2017 

Time:

9am – 6pm, including networking, sit-down lunch

Venue:

The Hong Kong Convention and Exhibition Centre (HKCEC)

Registration fee:

Early bird: US$150 until 31 December 2016

Regular:

US$220

 

ADR in Asia Pacific – Part 3

Further to our earlier posts (here and here) highlighting material from our recently updated Guide to Dispute Resolution in Asia Pacific, we now feature in part 3 the responses from New Zealand, Pakistan, Philippines, Singapore, Taiwan, Thailand and Vietnam to the question whether parties to litigation or arbitration are required to consider or submit to ADR procedures before or during proceedings.

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Singapore: proposed new legislation to encourage mediation

A Mediation Bill has recently been put before the Singapore Parliament with a view to encouraging the growth of mediation in the jurisdiction.  The three key proposals in the Bill (which echo similar provisions in the EU Mediation Directive and various other mediation laws around the world) are:

(i)   A power (though not a duty) in the courts to stay proceedings in favour of mediation agreed by the parties

(ii)  A mechanism for settlement agreements reached at pre-litigation mediations to be recorded and enforced as court orders; and

(iii) Confirmation of the confidentiality of mediation communications.

Read more detail on the proposals here.  

 

ADR for financial disputes: Proposals to significantly enhance the Hong Kong Financial Dispute Resolution Scheme

The Hong Kong Financial Dispute Resolution Centre (FDRC), which since June 2012 has been providing ADR services to financial institutions and their individual customers in Hong Kong, has recently launched a consultation to significantly enhance the Financial Dispute Resolution Scheme (FDRS) administed by it. The FDRS provides a channel for the resolution of monetary disputes by way of “mediation first, arbitration next”.

The proposals mean that the FDRC’s jurisdiction is likely to be significantly increased, bringing the Hong Kong scheme more into line with financial dispute resolution schemes in other jurisdictions and permitting a greater number of monetary disputes to be handled by the FDRC rather than (or as well as) the courts. 

Read more detail from our Hong Kong office here.

 

ADR in Asia Pacific – Part 2

Further to our earlier post highlighting material from our recently updated Guide to Dispute Resolution in Asia Pacific, we now feature in part 2 the responses from Indonesia, Japan, Korea, Laos, Macau, Malaysia and Myanmar to the question whether parties to litigation or arbitration in that jurisdiction are required to consider or submit to ADR procedures before or during proceedings. 

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