Several Provisions of Shanghai Municipality on Promoting Commercial Mediation in Pudong New Area

(Adopted at the 17th Session of the Standing Committee of the 16th Shanghai Municipal People's Congress on November 28, 2024)

Article 1 In order to promote the development of the commercial mediation, improve the commercial mediation system, enhance the quality, efficiency and influence of the commercial mediation, resolve the commercial disputes promptly and effectively and optimize the business environments in Pudong New Area, and in accordance with the basic principles of the relevant laws and administrative rules, these Provisions are formulated in the light of the actual circumstances of Pudong New Area.

Article 2 These Provisions shall apply to the mediation activities carried out by the commercial mediation organizations in Pudong New Area to resolve commercial disputes at the instance of the parties thereto.

The term "commercial mediation" in these Provisions refers to the activities in which the parties concerned voluntarily settle the commercial disputes through friendly consultation under the auspices of the commercial mediation organizations owing to the commercial disputes in the fields of trade, investment, finance, shipping, intellectual property and so on.

Article 3 This Municipality shall support Pudong New Area to benchmark the high-standard international rules for commercial mediation, take into account the actual situations of the economic and social development, rely on the advantages of industrial agglomeration, improve the commercial mediation system with reasonable organizational layout, efficient and convenient services, complete supporting systems, and standardized and orderly development, so as to meet the multi-level and diversified commercial mediation needs, and create a preferred place for resolving the commercial disputes.

Article 4 The Municipal People's Government shall strengthen its leadership over the development of the commercial mediation in Pudong New Area, and coordinate the major issues in the development of the commercial mediation in Pudong New Area.

The People's Government of Pudong New Area shall establish a working mechanism to promote the development of the commercial mediation and formulate policy measures to promote the innovative development of the commercial mediation.

Article 5 The municipal judicial administrative departments shall establish a commercial mediation management system to supervise and manage the commercial mediation activities.

The judicial administrative departments of Pudong New Area shall be responsible for the routine supervision and management of the commercial mediation organizations and their commercial mediation activities within its administrative areas.

The relevant administrative departments of this Municipality and Pudong New Area, including the development and reform, commerce, state-owned asset supervision, human resources and social security, finance, taxation, and the other departments, shall promote and safeguard the work related to the commercial mediation in accordance with their respective responsibilities.

Article 6 Commercial mediation shall adhere to the principles of voluntariness, fairness, honesty, confidentiality, and efficiency. Commercial mediation shall not violate mandatory provisions of laws and rules, harm national interests, public interests, or the legitimate rights and interests of others, or contravene public order and good morals.

Article 7 Commercial mediation organizations established in Pudong New Area shall meet the following conditions:

1. Their proposed legal representative or person in charge shall have relevant experience and professional knowledge in dispute resolution, a good record of integrity, and be fair and upright;

2. Their domicile shall be in Pudong New Area, with a standardized name, business scope, articles of association, and necessary organizational structure;

3. They shall have the necessary premises and start-up funds for conducting commercial mediation; 

4. And they shall propose to hire a certain number of commercial mediators appropriate with its business scope, as well as necessary full-time support staff.

The name of a commercial mediation organization shall consist of its trade name and terms such as "Commercial Mediation Center".

Article 8 For the establishment of a commercial mediation organization, the initiator shall submit a registration application and the following materials to the judicial administrative departments of Pudong New Area:

1. The establishment application form;

2. The basic information and supporting documents of the proposed legal representative or person in charge;

3. The proof of residence;

4. The capital verification report;

5. The basic information and supporting documents for the commercial mediators to be appointed; 

6. and the draft articles of association and other relevant documents, etc.

The judicial administrative departments of Pudong New Area shall issue a preliminary review opinion within 20 days after receiving the registration application and submit it to the municipal judicial administrative department for examination and review. The municipal judicial administrative department shall conduct the examination and verification within ten days. If registration is granted, a registration certificate shall be issued to the applicant; for those who are not allowed to register, the reasons shall be explained in writing to the applicant. The registered commercial mediation organization shall be a non-profit legal entity.

Article 9 Where a commercial mediation organization changes its registered address, legal representative, or person in charge, or needs to deregister due to its self-dissolution, division, merger, or the other reasons, it shall apply to the municipal judicial administrative department for change or deregister.

Article 10 The commercial mediators shall be familiar with the rules and customs of commercial transactions, possess the professional knowledge and work experiences required for mediating commercial disputes, and have completed the relevant training on commercial mediation.

The commercial mediation organizations may give priority to hiring commercial mediators from the professionals in the legal services, economic and trade fields, as well as the personnel engaged in research and teaching in the aforementioned fields.

Article 11 The commercial mediation organizations shall publicly disclose the information such as their mediation rules, roster of the commercial mediators, and the number of the cases resolved through commercial mediation.

The municipal judicial administrative department shall disclose to the public the name, domicile, business scope, legal representative or person in charge of the commercial mediation organization registered and established by it.

The judicial administrative departments of Pudong New Area shall establish a roster of the commercial mediation organizations, publish it to the public and accept social supervision.

Article 12 The commercial mediation organizations may conduct mediation upon the application of a party concerned, but if the other party refuses mediation, mediation shall not be carried out.

The commercial mediation procedure shall begin from the date when all the parties agree to participate in the mediation.

Article 13 The commercial mediation organizations may charge reasonable fees, and the relevant fees shall be subject to the market-regulated prices. The commercial mediation organizations shall, in accordance with the principles of fairness and reasonableness, comprehensively consider the factors such as the remuneration of the commercial mediators, the operating costs of the commercial mediation organizations, and the other reasonable expenses arising from commercial mediation activities, determine the fee items, standards and methods for the case registration fees, mediation service fees, etc., and make them public to the society.

Article 14 The commercial disputes shall generally be mediated by a sole commercial mediator. If the parties thereto agree otherwise, multiple commercial mediators may be appointed.

The commercial mediation organizations shall specify the rules for commercial mediators in mediation rules. In accordance with the mediation rules, the parties may jointly select a commercial mediator from the roster of commercial mediators, or entrust the commercial mediation organization to appoint a commercial mediator, or select a commercial mediator outside the roster.

Article 15 The commercial mediators shall conduct commercial mediation in accordance with laws, industry rules, and commercial practices, and assist the parties in voluntarily reaching a mediation agreement.

The commercial mediators shall perform their mediation duties diligently and prudently, maintain a fair and impartial stance, and shall not induce the parties to accept mediation or reach a settlement through fraud, coercion, or otherwise.

Article 16 The commercial mediation organizations shall be encouraged to set up the information technology facilities with the functions such as online application for mediation, online mediation and online electronic signatures, so as to achieve online mediation.

The commercial mediation organizations shall be encouraged to establish a rapid mediation and resolution mechanism for the small-amount commercial disputes.

Article 17 The commercial mediation organizations and mediators shall fulfill the confidentiality obligations and shall not disclose the information obtained during the process of commercial mediation without the consent of the parties concerned, unless otherwise provided by law.

Article 18 Where the commercial mediation organizations or mediators may have conflicts of interest with the commercial disputes, they shall disclose them in a timely manner; the parties concerned have the right to apply for the withdrawal of the commercial mediator or terminate the mediation.

The commercial mediators shall not serve as arbitrators in the subsequent arbitration proceedings related to the disputes arising from the commercial mediation, unless otherwise provided by law or with the consent of the parties concerned.

Article 19 The parties concerned shall not use the statements, admissions, concessions or the commitments made by the other party during the process of the commercial mediation, as well as the opinions or suggestions expressed by the commercial mediator(s), as the favorable evidence in the subsequent arbitration, litigation or the other dispute resolution procedures related to the disputes involved in the commercial mediation, unless otherwise provided by law or with the consent of the other party concerned.

Article 20 Where the parties reach a settlement on all or part of the commercial dispute, they shall sign a written commercial mediation agreement. The commercial mediators and commercial mediation organizations shall sign and affix their seals to the commercial mediation agreement.

The commercial mediation agreements reached through mediation shall be legally binding on all parties, and all parties shall perform it.

The parties concerned of a commercial mediation agreement reached through mediation by a commercial mediation organization may apply for judicial confirmation in accordance with the law. They may also apply to the arbitration institution to make an award based on the contents of the commercial mediation agreements in accordance with the law.

For the commercial mediation agreements with payment contents and clear creditor debtor relationship, the parties concerned may apply to a notary institution to notarize the debt documents with compulsory enforcement effect in accordance with the law.

For the commercial mediation agreements that involve payment of money or securities, the parties concerned may apply to the competent people's courts for payment orders in accordance with the law.

Article 21 The People's Government of Pudong New Area shall provide financial support for the development of commercial mediation, which shall be used for industry development and talent cultivation, etc.

The People's Government of Pudong New Area shall, in conjunction with relevant industry regulatory authorities, chambers of commerce, and industry associations, strengthen research on the practical needs and development trends of commercial mediation, and support and guide the establishment and development of commercial mediation organizations in relevant industries.

The People's Government of Pudong New Area shall strengthen the development of commercial mediation professionals through measures such as organizing regular training sessions and establishing a talent pool of commercial mediators.

Article 22 The judicial administrative departments of this Municipality and Pudong New Area, as well as the people's courts, shall optimize the working mechanism for coordinating the litigation and mediation of the commercial cases, strengthen guidance on the mediation business of the commercial mediation organizations, and guide the commercial disputes to be mediated by the commercial mediation organizations.

Article 23 The judicial administrative departments of this Municipality and Pudong New Area shall, together with the relevant departments, chambers of commerce, industry associations, etc., carry out the commercial mediation promotion activities, improve the awareness of commercial mediation, encourage and guide the business entities to prioritize the use of commercial mediation methods to resolve disputes.

The judicial administrative departments of Pudong New Area shall take commercial mediation as an important component of the publicity of the rule of law and the legal education, and hold the Publicity Week of Commercial Mediation every year to promote commercial mediation.

Article 24 This Municipality and Pudong New Area shall support the establishment of the commercial mediation industry organizations. The commercial mediation industry organizations shall formulate professional ethics standards and member disciplinary measures for the commercial mediators in accordance with laws, rules and articles of association, conduct self disciplinary-management of the commercial mediation organizations and commercial mediators, and accept guidance and supervision from the municipal judicial administrative department. The commercial mediation industry organizations and the related industry associations shall strengthen the professional training for commercial mediators.

This Municipality shall support the commercial mediation industry organizations to formulate the evaluation standards for the competence level of the commercial mediators, and conduct the evaluations of the competence level of the commercial mediators.

The commercial mediation industry organizations shall be encouraged to cooperate and exchange with the international mediation certification agencies, and entrust the mediation training institutions to conduct training for the commercial mediators.

Article 25 The overseas commercial mediation organizations that are legally established and have been in operation for more than five years, engage in substantive commercial mediation services, have high international reputation, and whose business leaders have not been criminally punished for intentional crimes, may establish business institutions in the Ling-ang Special Area of the China (Shanghai) Pilot Free Trade Zone after registration with the municipal judicial administrative department and filing with the State Council judicial administrative department to provide foreign-related commercial mediation services for international commercial disputes.

The commercial mediation organizations in Pudong New Area shall be supported and encouraged to establish offices overseas to conduct commercial mediation activities.

Article 26 For the foreign personnel who temporarily come to Pudong New Area to participate in commercial mediation, the commercial mediation organizations may apply for port visas on behalf of them at the Pudong New Area port in accordance with the provisions and enjoy the convenience of port visas.

Article 27 The commercial mediation organizations shall submit their work reports for the previous year to the judicial administrative departments of Pudong New Area before March 31st each year. The annual work reports shall include the information on their business operations, changes in the commercial mediators and full-time auxiliary personnel, and the judicial confirmation of the commercial mediation agreements. The contents of the annual work reports shall be truthful, accurate and complete, and shall not include false information.

Article 28 Where laws and rules have already provided for the handling of violations of these Provisions, such provisions shall prevail.

Article 29 Where a commercial mediation organization violates these Provisions by failing to publicly disclose relevant information or submit an annual work report as required, the judicial administrative departments of Pudong New Area shall order it to rectify within a specified time limit. If the organization refuses to rectify within the time limit or fails to meet the requirements after rectification, a warning shall be issued.

Where a commercial mediator violates these Provisions by using fraud, coercion, or the other means to make the parties concerned accept mediation or reach a settlement, the judicial administrative departments of Pudong New Area shall give a warning, and if there are illegal gains, the illegal gains shall be confiscated. For a serious case, a fine of not less than 1,000 yuan but not more than 5,000 yuan shall be imposed, and the person may be ordered to suspend his or her business activities for not more than three months.

Article 30 The parties concerned shall not collude maliciously to infringe upon the national interests, public interests, or the legitimate rights and interests of the others via false mediation. The commercial mediation organizations and mediators shall strengthen the identification and prevention of the false mediation.

Where it is determined that the mediation is false and there is evidence to prove that the commercial mediation organization or the mediator is at fault, the judicial administrative departments of Pudong New Area shall give a warning, and if there are illegal gains, they shall be confiscated. The commercial mediation organization shall be fined not less than 10,000 yuan but not more than 50,000 yuan, and may be ordered to suspend its business for not less than one month but not more than three months. For a serious case, the municipal judicial administrative department shall revoke the registration certificate of the commercial mediation organization. A fine of not less than 1,000 yuan but not more than 5,000 yuan shall be imposed on the commercial mediator, and he or she may be ordered to suspend his or her professional activities for not less than three months but not more than six months. For a serious case, the judicial administrative departments of Pudong New Area shall order the commercial mediation organization to dismiss the commercial mediator.

Article 31 Where individual commercial mediators participate in commercial mediation activities in Pudong New Area in accordance with the law, they shall comply with the relevant provisions of this Municipality and Pudong New Area.

Article 32 These Provisions shall apply mutatis mutandis to commercial mediation activities carried out within the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone (outside the Pudong New Area)

Article 33 These Provisions shall be effective as of December 1, 2024.