Mediation Options For Resolving Commercial Disputes In China

This article analyzes alternative forms of mediation available to foreign enterprises for resolving their commercial disputes in China, highlighting the defining characteristics of each form of mediation. Institutional commercial mediation is an out-of-court private mediation process conducted through a professional mediation institution. This form of mediation is consistent with the usual characteristics of modern mediation, but for various reasons it is underutilized by foreign enterprises. Despite some individual lapses, the med-arb procedure (i.e. mediation procedure within an arbitration) is generally in line with international practice. Court mediation remains the most problematic form of conciliatory dispute resolution method. Local protectionism, the policy preference for settling lawsuits and the absence of judicial independence have made court mediation structurally deficient. As long as the principle of voulntariness is upheld, mediation is a cost-effective way for resolving commercial disputes in China.