Anna Koo on International Commercial Mediation in China and the UNCITRAL Model Law

"UNCITRAL and International Commercial Mediation in China"
Anna Koo
Comparative Law Journal of the Pacific
Special Issue, Vol XIX, 2015

In less than four years and after only four sessions, the Working Group on Arbitration and Conciliation came up with the UNCITRAL Model Law on International Commercial Conciliation of 2002 (the 'Model Law'), relying primarily on the Conciliation Rules of 1980 (the 'Conciliation Rules'). The Model Law is the first of its kind to encourage the use of conciliation as a dispute settlement method for cross-border commercial transactions. It provides uniform rules for some procedural aspects of conciliation, with a view to enhancing predictability and certainty in the use of the process. It applies to a wide range of international commercial disputes. Such disputes may arise from any legal relationships of a commercial nature, whether contractual or not. They satisfy the requirement of internationality if the parties of a conciliation agreement have their places of business in different States at the conclusion of that agreement. In addition, it happens when the State, in which either a substantial part of the obligations of the commercial relationship is to be performed, or with which the subject matter of the dispute is most closely connected differs from the State in which the parties have their places of business. Furthermore, 'conciliation' does not merely refer to a directive, advisory form of mediation. It is an umbrella term for all procedures in which a third party assists the parties to settle a dispute without imposing a binding decision, including mediation, neutral evaluation, mini-trial or similar proceedings.

      Rather surprisingly, the Model Law inspired only 14 countries to enact or amend domestic legislation on mediation over the past decade. Such responses were hardly comparable to those of the UNCITRAL Model Law on International Commercial Arbitration of 1985. Despite the fact that China, Fiji, India, Japan, Mexico, Singapore and Thailand participated in the drafting stage, none of the countries in the Asia-Pacific region have informed the UNCITRAL Secretariat of adopting statutes based on the principles of the Model Law thus far. On the other hand, both domestic and international mediation activities proliferated in this region. Disputants preferred modern sets of mediation rules developed by service providers or themselves instead of the Conciliation Rules. Governments endorsed the use of mediation as an adjunct to litigation and promulgated legislation specific to mediation without explicit reference to the Model Law. The key question, then, is whether the Conciliation Rules and the Model Law become obsolete or remain relevant in the Asia-Pacific context. This chapter identifies major challenges involved in international commercial mediation from the findings of three recent surveys. Focusing on mainland China and its two special administrative regions, it compares and explains the extent to which mediation rules and laws in these jurisdictions address the pressing issues of mediation. It argues that the policies underlying the UNCITRAL texts echo those of the Chinese regulatory and legal framework for international commercial mediation, but the Conciliation Rules and the Model Law face an urgent need for update if they intend to lead their harmonizing role in China... Click here to read the full article.