Establishment and Conception of the Pattern of Center for Interfacing Litigation and Mediation of Qianhai Court (under Preparation)

Publicity Time: 18:02:14, Dec. 25, 2015

I. Establishment and Conception of the Pattern of center for interfacing litigation and mediation of Qianhai Court (under Preparation)
At present, all the courts in China are deepening reforms and striving to advance the social governance by law in multiple levels and fields according to the strategic arrangement for the reform of diversified dispute settlement mechanism determined by the central government.
As an exemplar court for comprehensive reform, Qianhai Court is preparing to establish the center for interfacing litigation and mediation under guidance of the superior court and leadership of Present Wen Changzhi.
In consideration of the features of the reform of dispute settlement mechanism in the free trade zone, the establishment of the center for surfacing litigation and mediation shall satisfy the following requirements:
1. Requirement of the exemplar area of governance by law
Exemplar area of governance by law - a significant symbol that varies from other free trade zones
As the unique “Exemplar Area of Governance by Law under Socialism with Chinese Characteristics” expressly defined in all the plans approved by the State Council, it is the critical competence in future for the Qianhai and Shekou Area.
Under the basic legal framework of the state, Qianhai focuses on pioneering and experimenting in such aspects as legislation, justice, law enforcement and legal services, with the efforts to make a breakthrough in the construction of governance by law in the free trade zone and formulate a set of legal framework and institutional system which is adapted to the strategic orientation of the free trade zone, meanwhile in line with the high-standard international trading and investment rules.
2. Requirement of modernized national governance
Jiang Huiling, Deputy Director of Judicial Reform Office of Supreme People’s Court, holds that the diversified dispute settlement mechanism shall be raised to the altitude of modernized national governance and brought into the overall work arrangements of all the courts across the country.
The current relationship between state and society of China is in the process of evolving from social control into social governance.
Emphasizing social governance, Qianhai carries out the administrative reform and leads in the exploration into regional governance of statutory bodies.
Social governance stresses on the contents of self-regulation and autonomous discipline of the society, meanwhile pursues the results in fostering social strengths, facilitating fairness and justice and instituting a new mechanism for social governance.
3. Requirement of effective settlement of disputes
Characteristics of disputes in free trade zones: (1) Increase of foreign parties. The open policies of free trade zones will attract a large quantity of foreign enterprises to enter, thus largely increase the international and overseas commercial disputes. (2) Rise of professionalism. The investment and operation of enterprises in the free trade zones will surely encounter a series professionalized, internationalized and frontier legal issues in terms of cross-border investment, international trading and offshore finance, etc. (3) Aggravation of conflicts in legal cultures. Conflicts may occur between different legal systems involved in the disputes in the aspects of legal senses, systems and practices. 
Existing patterns of diversified dispute settlement mechanism of courts
a. Mediation by the filing judges and assistants;
b. People’s mediation windows;
c. Pertinent cooperation with social mediation organizations like chambers of commerce.
The courts joint efforts with labor unions, consumers’ associations, chambers of commerce, social mediation organizations, etc. to formulate normative documents on assisted or commissioned mediation, which expressly regulate such issues like deadlines, operation and agreement effects of socialized mediation as well as interfacing litigation and mediation.
For example, on May 27, 2014, the People’s Court of Pudong New Area, Shanghai and the Shanghai Commercial Mediation Center executed the Memorandum of Collaboration, and the latter assigned the Joint Tribunal for International Commercial Mediation to the court of free trade zone;
4. Pattern of social court
In Henan Province, there has emerged a socialized mechanism of court mediation in the form of organized “social court”, i.e. a permanent dispute settlement body consisting of venerable retired cadres, NPC members, CPPCC delegates, village committee directors, etc. which mediates disputes under commission and guidance of the court in accordance with such civil regulations like local flavor, moral principles, public order and social customs. 
Innovative pattern: The pattern of multi-purpose platform
Despite the respective advantages of the existing patterns of diversified dispute settlement of courts, they are still not able to completely meet the abovementioned requirements of Qianhai and Shekou Free Trade Zone and should be further innovated on their basis. It is suggested that the center for interfacing litigation and mediation should implement the innovative pattern of multi-purpose platform.

II. Main Contents and Characteristics of the Pattern of Multi-purpose Platform
a. Guided by court
b. Organized platform
c. Network-based platform
d. Socialized platform
e. Professionalized platform
f. Internationalized platform
g. Communication-oriented platform research
h. Advanced mediation
i. Appropriate separated mediation from trial
　j. Diversified manners of dispute settlement
　k. Guided by court
  The center for interfacing litigation and mediation aims at setting up an open platform for diversified dispute settlement mechanism under guidance of the court along with the idea of “leadership of the Party committee, supports from the government, guidance of the court and participation of the society”.
  Simple “operational guidance” is not enough to enable the court to exert more important effects on the major mediation mechanism in the free trade zone. As provided by Article 5 of the People’s Mediation Law of the People’s Republic of China, the judicial administration authorities of local people’s governments above county level shall be responsible for guiding the people’s mediation works within the administration areas.
The grassroots people’s courts shall provide operational guidance for the people’s mediation committees in mediating civil disputes. Qianhai Administration Bureau, the current administration authority of Qianhai, is a statutory body instead of a government at a certain level.
  Rather than merely lingering on the phases of “operational guidance” and “commissioned mediation”, the court shall actively integrate various strengths for dispute settlement based on the practices of the free trade zone, and organize, guide and safeguard the social mediation resources as required for modernized national and social governance.
　2. Organized platform
  Setting up mediation organizations under direct guidance of the court. Producing a roll of mediators for the center for interfacing litigation and mediation who are recruited among retired judges veteran in mediation, professionals with senior expertise and experience in mediation and experts from Hong Kong, Macau, Taiwan and abroad to institute permanent dispute settlement bodies and professional research entities which mediate disputes under commission and direct guidance of the court.
  Formulating such systems as the Regulation on Mediators Recruitment and Administration and the Rules on Mediation which are different from simple “operational guidance”.
　3. Network-based platform
  a. Itinerant sub-centers for mediation. Founding industrial and regional itinerant sub-centers for mediation in Qianhai as per its characteristics and needs.
　b. Liaisons for mediation. Appointing liaisons for mediation to the enterprises registered in Qianhai and the foreign-funded enterprises, industry associations and chambers of commerce as needed.
　4. Socialized platform
  The center for interfacing litigation and mediation links up various social resources like mediation organizations and provides an interactive mechanism to satisfy the demands of the parties involved for diversified dispute settlement.
　a. Actively coordinating among judicial administration authorities and people’s mediation organizations, setting up “People’s Mediation Office” under the center for interfacing litigation and mediation and assigning people’s mediators to carry out mediation works.
　b. Actively coordinating other social mediation organizations to deploy mediation offices or assign mediators to this court.
　c. Producing a roll of mediation bodies of those having executed cooperation agreements with this court to be chosen by the parties involved on a voluntary basis.
　d. Fostering new mediation bodies. Endeavoring to shape a pattern of social affairs governance with participation of multiple parties and actively fostering mediation bodies among civil organizations, so as to expand the organizational foundation for the major mediation platform.
　5. Professionalized platform
  Exploring a professionalized mediation work mechanism. Against such common and frequent circumstances in the free trade zone as cases involving financing and Hong Kong, establishing professional mediation committees concerning disputes over financing and the issues involving Hong Kong, Macau and Taiwan, etc., and formulating normative documents on professionalized mediation together with relevant authorities.
  Probing into a professionalized mediators training mechanism. Providing training for general mediators and industrial mediators and assisting in certifying their qualifications.
　6. Internationalized platform
  Organizing a team of mediators which is highly internationalized and comprises a certain proportion of mediators from Hong Kong, and recruiting mediators from abroad like foreigners and Hong Kong citizens; communicating and cooperating with domestic and foreign mediation organizations and introducing resources of knowledge, talents, teachers and trainers.
　7. Communication-oriented platform research
  Establishing research institutes in mediation development that study how to improve and develop the diversified dispute settlement mechanism under various legal systems with the supports from universities and legislation authorities.
  Organizing mediation forums to facilitate communication among mediation bodies and mediators and popularize mediation and other non-litigation methods for dispute settlement.
　8. Advanced mediation
  In the case that the parties involved have the intention for mediation, the mediation before litigation and the mediation before court proceeding become necessary steps in the process of handling the case, then the interest parties will be guided to the center for interfacing litigation and mediation for advanced mediation upon their consent.
　9. Appropriate separated mediation from trial
  The dispute settlement function of the center for interfacing litigation and mediation is more undertaken by the non-litigation diversified dispute settlement mechanism, while the judges assigned to the center normally play the role of guidance, organization, coordination, judicial confirmation and supervision for said mechanism instead of directly mediating the disputes. The judges undertaking the litigations are encouraged to commission or request the center for interfacing litigation and mediation to assist in mediating the cases.
　10. Diversified manners of dispute settlement
  Actively improving several manners of dispute settlement such as “mediation - judicial confirmation” and “mediation - quick ruling by court”. Developing new manners of dispute settlement like “independent third-party ruling mechanism for commercial cases involving Hong Kong”. The following matters shall be taken into consideration for the operation procedures:
　a. In connection with the case filing system, the mediation by the center for interfacing litigation and mediation consists of mediation before and during litigation.
　b. Mediation before litigation employs the method of guidance by the case filing personnel; mediation during litigation adopts the method of mediation commissioned or assisted by the judges.
　c. After accepting a case of mediation before litigation, the center for interfacing litigation and mediation gives a special case number and timely submits the case to the mediators or other mediation bodies. The time limit for mediation before litigation is normally 15 days. After completing the mediation in accordance with the mediation rules, the mediators before litigation will respond to the center with the mediation results. In case that the parties involved reach a settlement agreement without requesting a reconciliation statement from the court, the original settlement agreement will be registered for filing; in case that the parties involved request a reconciliation statement from the court, the center will immediately transfer the case for filing, and the judges will examine and confirm the settlement agreement. If the mediation fails, the mediators before litigation will transfer relevant materials to the center, which will register the same and transfer the case to the case filing personnel to go through the formalities for case filing.  
　d. During litigation, in case of commissioning the mediators of the center or other mediation organizations to assist in mediating the case, the judges will fill in the letter of commission for mediation and transfer the same together with the case materials to the center, which will uniformly register and commission the case and transfer the materials. The time limit for commissioned mediation is normally 15 days. After completing the mediation in accordance with the mediation rules, the commissioned mediators will submit the letter of response to commissioned litigation, the settlement agreement and the mediate notes to the center, which will register the same and transfer the case to the judges. In case that the parties involved reach a settlement agreement upon commissioned mediation, they may apply for withdrawal of the litigation or request a reconciliation statement from the judges. If the mediation fails, the judges will timely switch to trial.
　e. Whether the mediation is chargeable:
  For a case mediated by a mediator in the roll of mediators of this court, the court is advised to exempt the parties involved from any fee and appropriately subsidize the mediator of this court.
  In case that the parties involved voluntarily choose other tolling mediation organizations, they shall effect payment as provided by such organizations.

III. New Patterns of Dispute Settlement: Independent Third-party Ruling Mechanism under Applicable Laws of Hong Kong for Commercial Cases Involving Hong Kong
  In order to better settle the disputes involving Hong Kong, study the application of Hong Kong laws to specific cases and promote integration and mutual reference of the two legal systems, it is advised to formulate an independent third-party ruling mechanism under applicable laws of Hong Kong for commercial cases involving Hong Kong, with the main contents as follows:
　a. The independent third-party is played by legal experts like retired judges and law school professors from Hong Kong;
　b. After the parties involved bring a dispute involving Hong Kong before the court, the court may suggest they choose ruling by an independent third-party to assist in settling the dispute;
　c. The independent third-party shall conduct hearing with reference to the litigation procedures of Hong Kong;
　e. After hearing, the independent third-party makes ruling based on the evidence presented by the parties involved in accordance with Hong Kong laws;
　f. After completion of the ruling, the independent third-party may guide the parties involved to reach a settlement agreement;
　g. If no settlement agreement is reached, the parties involved may continue with the litigation procedure at Qianhai Court, where the undertaking judge shall conduct reasoning and make relevant choices on the independent third-party ruling under the law;
　h. If the case complies with the circumstances to which the Hong Kong laws are applicable, in accordance with Article 1 of the Interpretation of the Supreme People’s Court of the People’s Republic of China on Certain Issues Concerning Application of the Law of the People’s Republic of China on Choice of Law for Foreign-related Civil Relationships, the court may admit such independent third-party ruling as a legal expert’s opinion base on ascertained Hong Kong laws, and listen to the contentions of the parties involved on the contents of the applicable Hong Kong laws and the understanding and application thereof.
  If all the parties involved raise no objection to the contents of such Hong Kong laws and the understanding and application thereof, the court may confirm the same; if any party involved raises objection, the court will carry out examination and determination. 
  Then the court may need to further ascertain the Hong Kong laws by other means and make judgment based thereon.
  Inspiration 1: As Hong Kong adopts the case law system, ascertainment of Hong Kong laws is not only for relevant judicial precedents, but also for the expert ruling opinions based on the particular facts and relevant precedents of the cases, which are possibly the most accurate “stare decisis”.
  The basic thought of the case law system is the acknowledgement on the imperfection of laws, as the legislators may focus only on some principle provisions of a law; when dealing with particular cases, the judges should make specific interpretations and judgments according to the actual circumstances and the substance of the law provisions, on the basic principle of “stare decisis”.
  Inspiration 2: For the development and reform of the mechanism for ascertainment of Hong Kong laws in the future, if the legal experts are requested to issue legal opinions on ascertainment of Hong Kong laws, they should have the opportunities when feasible to summon the parties involved for hearing, so as to better understand the details of the cases.
  Inspiration 3: When handling a case to which the Hong Kong laws are applicable, Qianhai Court is advised to first use the independent third-party ruling procedure for commercial cases involving Hong Kong at the center for interfacing litigation and mediation, so as to more accurately ascertain the Hong Kong laws and facilitate reconciliation of the dispute; the center will thus also have a new function of ascertaining and applying Hong Kong laws.
  i. If the case does not comply with the circumstances to which the Hong Kong laws are applicable, the undertaking judge will apply the continental law to reasoning and making relevant choices in such independent third-party ruling.
  Therefore, in the same judgment, there may be conflicts between the continental law system and the Anglo-American law system in the aspects of legal senses, judicial systems, ruling thoughts and legal practices. Probably unprecedented in the law development history of the world, such judgments are beneficial not only to the mutual reference and integration of the two legal systems, but also to raising the judging competence of the judges, as well as to the legislation and academic research in relevant fields.
IV. Summary: Significance of the Center for Interfacing Litigation and Mediation (under Preparation) of Qianhai Court
  1. Creating a new pattern of diversified dispute settlement mechanism: Multi-purpose platform;
  2. Pushing the socialization of court mediation to a new height. Not only interfacing with social mediation resources, but also propelling their organization, network basis, professionalization and internationalization.
  3. Establishing a new pattern of dispute settlement: Independent Third-party Ruling Mechanism under Applicable Laws of Hong Kong for Commercial Cases Involving Hong Kong
  4. Improving and developing the concept of ascertainment of Hong Kong laws to better ascertain them.
  5. Expanding the applicable scope of Hong Kong laws, which is beneficial to the mutual reference, study and enhancement between the continental law system and the Anglo-American law system. 
  6. Contributing to the effective dispute settlement in the free trade zone and accelerating its formation of a legalized and internationalized business environment.

　　　　　　　　　　　　　　　　　　　　　　　　　　　　
　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　Chen Liubo