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Mediation in China as an Alternative Dispute Resolution Method / History and Recent Developments
The recent launch of the International Organization for Mediation (IOMed) in Hong Kong has led to greater media attention on mediation for disputes involving China. At the same time, mediation has received significant attention by the legislators, judiciary and government agencies in China as a viable way to resolve also civil and commercial disputes.
China's judiciary has experienced unprecedented growth in caseloads, reflecting heightened public trust in legal institutions and expanded access to justice. From 2019 to 2024, courts witnessed a 67% increase in accepted cases—from 28.7 million to 48 million—signaling both progress and systemic pressure. This surge intersects with the statutory six-month adjudication deadline for domestic cases, creating the current operational challenges in the judicial system that litigants have to face. One of the ways in which the Chinese government is trying to resolve this impasse is by promoting mediation.
Mediation is essentially assisted settlement negotiations. More specifically, it is a voluntary and confidential non-litigation dispute resolution mechanism, in which two or more parties to a dispute attempt to reach an settlement with the assistance of a neutral and impartial third party, known as the mediator. The mediator does not have the authority to impose a binding decision on the parties but facilitates communication, promotes understanding, normally by focusing on the parties’ interests rather than on the legal details, and helps the parties identify mutually acceptable solutions.
Mediation is recognized under international legal frameworks, such as the UNCITRAL Model Law on International Commercial Mediation and the Singapore Convention on Mediation, as a flexible, party-centered method of dispute resolution. In China, it is used in both domestic and international disputes across commercial, civil, and other legal contexts.
1. China Mediation History
From a historical perspective, and without delving into imperial past, contemporary China has a long tradition of commercial mediation.
In 1987, the China Council for the Promotion of International Trade (CCPIT) Mediation Center was established, marking the beginning of specialized foreign-related mediation.
After China joined the WTO in the 21st century, institutions like the Shanghai Economic and Trade Commercial Mediation Center (SCMC) emerged, shifting commercial mediation from being mainly handled by business associations to a more diversified model, including centers like the “Belt and Road” International Commercial Mediation Center.
Following the signing of the Singapore Mediation Convention in 2019, the judicial confirmation system enhanced the enforceability of mediation agreements, aligning cross-border mediation mechanisms with international standards.
In 2020, the Supreme People's Court launched a "one-stop" platform for international commercial dispute resolution. With the integration of online litigation-mediation connections, commercial mediation case volumes grew by over 30%.
2. The Current Legal Framework
2.1 Supportive Legislation
The PRC foundational legal framework for mediation can be summarized as set out below.
Legislation & Judicial Interpretations | Key Points |
|---|---|
People's Mediation Law |
The law establishes the legitimacy and voluntary nature of people’s mediation, clarifies the mediation procedures, and affirms that mediation agreements reached through people’s mediation are legally binding. It also introduces a judicial confirmation mechanism: if the people's court confirms the validity of a mediation agreement in accordance with the law, the parties can apply for its compulsory enforcement. |
Civil Procedure Law |
The law provides for mediation by the people’s courts, establishing mediation as a fundamental principle of civil litigation. It stipulates that court-led mediation must follow the principles of voluntariness and legality, and clarifies that a mediation agreement may be converted into a mediation statement, which is enforceable by law. |
Supreme People's Court (SPC) provisions on Several Issues concerning Civil Mediation by People's Courts
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It refines the mediation procedures and allows for partial validity of the mediation agreement. |
SPC Provisions on Judicial Confirmation Procedures for People's Mediation Agreements
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This interpretation clarifies that mediation agreements confirmed by the court have enforceable effect, addressing the issue of the weak binding force in mediation.
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The last piece of legislation is particularly significant, as it enables parties involved in institutional mediations in the PRC to apply for judicial confirmation of their settlement agreement. Judicial confirmation allows the court to formally endorse the agreement, thereby granting it the same legal force and enforceability as a court judgment. Naturally, this mechanism has its limitations: courts may decline confirmation if the settlement contains provisions that are overly complex or difficult to enforce. Nonetheless, it offers a valuable tool for reducing time and costs in cases where one party fails to comply with the terms of the agreement.
In addition, China is one of the signatories of of the Singapore Convention on Mediation which provides that certain international commercia settlement agreements resulting from mediation may be directly enforceable in member countries.
2.2 Recent Policies
China has recently introduced a range of policies to support and promote the development of mediation. For instance, the 2024 Legislative Work Plan of the State Council lists the Regulations on Commercial Mediation as a key legislative project. Central policy documents, such as the Decision on Further Deepening Reform Comprehensively to Promote Chinese-Style Modernization, call for the improvement of international commercial arbitration and mediation systems.
The Supreme People’s Court and the Ministry of Justice have also issued opinions on further strengthening institutional mediation under the new circumstances. These aim to expand the scope and coverage of mediation, enhance the coordination and integration between mediation and litigation procedures, promote innovation and efficiency in mediation mechanisms, and advance the legalization of mediation.
Institutions such as the CCPIT Mediation Center the Shanghai Commercial Mediation Center and the more recent Shanghai International Commercial Mediation Center have also received strong support and development.
On 21 November 2024, the local legislature of Zhuhai, Guangdong Province (the Standing Committee of the Zhuhai Municipal People’s Congress) adopted the “Commercial Mediation Regulation of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin” which came into effect on 1 January 2025.
3. Characteristics and Function of Mediation
Mediation conducted within a legal framework—particularly in the commercial context—offers distinct advantages that make it an increasingly attractive method of dispute resolution.
First, mediation is voluntary. Unlike litigation, no resolution is imposed; a settlement is reached only if both parties agree, preserving autonomy and fostering cooperative solutions.
Second, mediation is confidential. Proceedings are not open to the public, documents remain confidential, and mediators are bound by duties of confidentiality. It is important to note, however, that while the information and documents exchanged in mediation are confidential, they are not privileged—meaning that parties may still rely on them in any subsequent litigation.
Third, mediation is both cost-effective and flexible. It typically allows for faster resolution than litigation, conserving time and resources—an essential feature in commercial disputes that often require prompt outcomes. While litigation may involve complex procedures and unpredictable outcomes, commercial mediation offers a streamlined process, usually concluding within 30 days.
Mediation is particularly well-suited to cases where both parties are acting in good faith—when each genuinely believes they are in the right, or when both wish to resolve the dispute amicably and preserve an ongoing business relationship. It is also especially valuable in disputes involving complex issues, where a negotiated solution may be more appropriate than a rigid legal judgment, and where the amount at stake may not justify the high costs of protracted litigation.
Most significantly, mediation agreements that receive judicial confirmation carry the same legal force as court judgments. This ensures not only the authority but also the enforceability of the settlement, providing parties with both certainty and finality.
In sum, when supported by a robust legal framework, commercial mediation stands as a powerful alternative to litigation—offering efficiency, confidentiality, and enforceability, particularly in cases where mutual understanding, complexity, or cost considerations make traditional proceedings less appropriate.
By Hermes Pazzaglini and Yijun MU
