Counsel and witnesses

Are the parties typically represented by lawyers in commercial mediation? Are fact- and expert witnesses commonly used?

The parties are not necessarily represented by lawyers in commercial mediation since mediation is not a pure legal debate. Sometimes the representatives of the company may initiate a commercial mediation proceeding themselves without the involvement of lawyers. Yet, in the majority of cases when corporate parties are involved, the parties will often entrust a lawyer in advance. If the case is complex whereby the core divergences are around factual, industrial and technical issues, the parties might engage fact and expert witnesses. In ordinary cases with a small amount in dispute, it is not that common to engage fact and expert witnesses when the parties pursue efficiency in resolving the dispute.

Procedural rules

Are there rules governing the mediation procedure? If not, what is the typical procedure before and during the hearing?

The PRC Mediation Law and the mediation rules of Chinese mediation institutions have regulated the applicable rules governing the mediation procedure. These rules include but are not limited to:

  • the requirements for applying for mediation;
  • the appointment of mediators;
  • the involvement of fact and expert witness in the mediation;
  • the obligations and rights of the mediators and the parties;
  • the mediation agreement;
  • the validity and enforcement of mediation agreement.
Tolling effect on limitation periods

Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

The commencement of mediation will not automatically interrupt the limitation period for a court or arbitration claim. In litigation cases, the judges have a high influence on the case review period. In most cases, the commencement of mediation will not interrupt the limitation period for the court. Yet, for arbitration cases, when parties are willing to move to mediation or to settle, the arbitrators will often grant more time for the parties to go through mediation procedures.

Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

The dispute resolution clause providing for mediation is contractually binding. The legal basis for enforceability is the contractual obligation agreed by the parties. 

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

Mediation proceedings are strictly private and confidential. The parties, the mediators and the working staff of the mediation commissions or institutions shall keep all information of the mediation proceedings confidential. The PRC Mediation Law does not explicitly regulate this confidentiality obligation. However, the vast majority of the mediation rules of the mediation commissions and institutions provide that the mediators, the parties and their representatives, witnesses, experts, staff members of the mediation commissions and institutions and other participants in the mediation process are under an obligation of confidentiality with regard to all matters relating to the mediation. However, if the parties permit disclosure of information during the mediation, the confidentiality obligation can be waived. Any participant in the mediation process may be personally liable if they breach the confidentiality obligation.

Success rate

What is the likelihood of a commercial mediation being successful?

On account of mediation’s confidentiality characteristics, there are no publicly available statistics of the success rate of commercial mediation in China.