Provisions on Encouraging the Parties to Make Conciliation and Mediation in Arbitration Rules of Beijing Arbitration Commission
Zhai Xueming^*

Arbitration is the highly effective and flexible dispute settlement mechanism on the basis of fully respecting the intention of both parties. The dispute settlement of conciliation through friendly negotiation is ideal for both parties to reasonably mitigate the judgment risks and rapidly realize the distribution of profits and losses. Therefore, the application of conciliation and mediation during the arbitration procedure is greatly encouraged and supported by arbitral tribunal and arbitration organizations. In addition to the independent mediation proceeding, there are diversified rules and systems designed in favor of the parties involved to reach the conciliation and mediation in traditional arbitration proceedings. Next, the author will specifically introduce such rules and systems by taking Arbitration Rules of Beijing Arbitration Commission effective as of April 1, 2008 for example.

I. Exclude the worries and get rid of disturbance with just award

It is stipulated in Article 39 paragraph 4 of the Arbitration Rules of BAC that “if the conciliation fails to lead to a settlement, neither party shall invoke any of the statements, opinions, views or proposals expressed by the other party or the arbitral tribunal during the conciliation as grounds for any claim, defence or counterclaim in the arbitral proceedings, other judicial proceedings or any other proceedings.” Article 58 paragraph 2 of Chapter 8 in special provisions for international commercial arbitration stipulates that “if, upon the termination of unsuccessful conciliation proceedings, both parties request a replacement of an arbitrator on the ground that the results of the award may be affected by the conciliation proceedings, the Chairman may approve the request. The resulting additional costs shall be borne by the parties.”

During the mediation, the parties would always worry about that their expressions would cause the unfavorable legal consequences in the later award and the preceding provision could effectively guarantee the confidentiality, immediacy and non-reason, excluding the worries of both parties so that the conciliation and mediation could be conducted effectively.

II. Diversified ways of case settlement to choose so as to make sure the realization of rights of both parties

It is stipulated in Article 38 paragraph 2 of the Arbitration Rules of BAC that “If the Claimant withdraws the application for arbitration, the arbitral tribunal shall decide on the dismissal of the case. If the arbitral tribunal has not been constituted at the time of withdrawal, the BAC, shall decide on the dismissal”; and Article 39 paragraph 2 of the Arbitration Rules of BAC specifies that “if the conciliation leads to a settlement, the parties may withdraw their claims and counterclaims if any, or request the arbitral tribunal to issue a Statement of Conciliation or make an award in accordance with the terms of the settlement.”

Based on the preceding rules, where the conciliation or mediation leads to a settlement, the parties may withdraw their claims or request the arbitral tribunal to issue a Statement of Conciliation or make an award. The documents on case conclusion may exclude the specific disputes of the parties as well as specific process and reasons for mediation and conciliation, etc. In whatever way the case concluded totally depends upon the consideration of the parties who may withdraw the claims based on the full trust of the other party and consideration of arbitration cost, or request the arbitral tribunal to issue the enforceable statement of conciliation or award out of effectively protecting their own rights.

In addition, it is worthy mentioning that in terms of the disputes being resolved through independent mediation proceeding, where both parties wish to exercise their rights in mediation agreement, they may have the enforceable statement of conciliation or award by arbitration procedure; whist the arbitration procedure for issuing the effective legal document would apply to the summary procedure based on the intention of both parties and conduct the written hearing so as to save the arbitration expenses and time.

III. Part of arbitration expenses may be refunded for conciliatory and withdrawn cases and save the arbitration cost for both parties

It is stipulated in Article 38 paragraph 3 of the Arbitration Rules of BAC that “if the Claimant withdraws the application for arbitration before the constitution of the arbitral tribunal, the BAC shall refund the case acceptance fees paid in advance but may, depending on the circumstances of the case, retain a portion of the case handling fees paid in advance. If the Claimant withdraws the application for arbitration after the constitution of the arbitral tribunal, the BAC shall, depending on the circumstances of the case, charge a portion or all of the case acceptance fees and the case handling fees paid in advance.”

Notwithstanding, where the parties, after reaching the conciliation or mediation, choose to request the arbitral tribunal to issue the enforceable statement of conciliation or award, the arbitration fees shall not be refunded. However, where the party fully trusts the other party performing the conciliation or mediation agreement, or the other party has performed the substantial liabilities during the arbitration procedure, withdrawing the application for arbitration is obviously a more economical way. During the negotiation for conciliation, the arbitration fees sharing would always be an important factor for both parties to reach an agreement. It is obvious from the preceding rules that making the conciliation as soon as possible could save more arbitration fees; therefore, the application of fees refunding system could effectively relieve the hindrance of both parties in the last threshold for both parties to make the conciliation or mediation and promote both parties to make compromise as soon as possible in the last step of conciliation or mediation and reach an agreement.

From these rules and systems above, it could be easily seen that the flexibility and humanization of arbitration system have been greatly represented in the system design and rule application of mediation and conciliation; whist the conciliation and mediation system requires more improvement and development during the improvement and innovation of arbitration rules and procedure.

* Case manager form Secretariat of BAC

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