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Resolving Cross-border Disputes:
Cross-border Mediation Mechanism

In October 2014, Hong Kong Mediation Centre (“HKMC”) has introduced an innovative service - “Mediation and Arbitration” mechanism. It is a disputes resolution process which combines the strength of Mediation and Arbitration to create a synergy to resolve cross-border disputes.

Under this mechanism, when parties are able to settle their dispute through mediation, Shenzhen Court of International Arbitration also known as South China International Economic and Trade Arbitration Commission (“SCIA”) and Shenzhen Arbitration Commission (“SAC”) will issue a consent award to their mediated settlement agreement. Such consent award is enforceable in the Mainland and all 155 States parties under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention.  If the parties are unable to settle their dispute through mediation, they may continue with the arbitration proceedings.

Mediation under the “Mediation and Arbitration” mechanism at HKMC enjoys the irreplaceable benefit of enforceability: Settlement agreements may be made consent awards under “Mediation and Arbitration”.  Under the HKMC-SCIA and HKMC-SAC “Mediation and Arbitration” Mechanism, the mediator(s) will be exclusively appointed by HKMC and the arbitrator(s) will be separately and independently appointed by SIAC or SAC, and under the applicable arbitration rules and mediation rules of each Centre. The arbitrator(s) and the mediator(s) of each case will be different persons to maintain the impartiality and fairness.

Hong Kong commercial enterprises and international enterprises with trading or business investment in China will be beneficial by the mechanism in arriving at a highly feasible and effective resolution when a dispute is whereby arisen. Besides the settlement arrangement signed under the “Mediation and Arbitration” mechanism will be enforceable in China and the place of business registration of the company.

The first cross-border commercial dispute using the “Mediation and Arbitration” mechanism has been resolved in December 2014. It was a commercial dispute of amount of RMB 55 million involving contractual disputes, personal loans, trustee properties and mortgages. The arbitration award was issued on the mediated settlement agreement accordingly.  The parties have subsequently applied to enforce in the court of China making whole mechanism verified to be enforceable in China. The parties highly appreciate effectiveness and professionalism of the mechanism in resolving their problems for years. They also applauded that their savings in financial resources and time is enormous.

 

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