Shanghai to promote high-quality commercial mediation services| May 31, 2024

On May 22, Shanghai introduced a series of measures aimed at promoting the high-quality development of commercial mediation within the city.

These measures are designed to provide professional, efficient, and convenient services for businesses to mediate commercial disputes. The objective is to establish world-class commercial mediation agencies and attract top-tier talent with international perspectives and expertise in international trade rules.

The document, titled Several Measures for Promoting High-Quality Development of Commercial Mediation in Shanghai, was jointly issued by seven authorities:

Shanghai High People's Court

Shanghai Municipal Commission of Commerce

Shanghai Municipal Bureau of Public Security

Shanghai Municipal Bureau of Justice

Shanghai Municipal Administration for Market Regulation

Shanghai State-owned Assets Supervision and Administration Commission

Shanghai Federation of Industry and Commerce

Here are the highlights from the document.

1. Enhancing regulations and establishing mediation association

Shanghai will expedite the legislative process for commercial mediation, drafting model rules for mediation, establishing codes of conduct for mediators, and issuing guidelines for mediation service fees.

Additionally, the city will promote the establishment of the Shanghai Commercial Mediation Association, guiding mediation agencies to enhance their mediation services.

2. Encouraging growth of mediation agencies

Shanghai is committed to fostering the growth of mediation agencies by providing support to large, well-managed organizations that possess comprehensive capabilities, facilitating their expansion and the improvement of operations.

Meanwhile, the city aims to elevate mediation agencies that possess core competitive advantages and enjoy high international recognition, particularly in areas such as foreign-related, financial, and intellectual property mediation, by encouraging them to further professionalize and distinguish themselves.

Moreover, Shanghai will identify and endorse exemplary institutions with strong international competitiveness and influence, encouraging them to pursue certification under the prestigious 'Shanghai Brand' designation.

3. Supporting foreign-related mediation

Shanghai is committed to supporting foreign-related mediation by establishing a talent pool comprised of individuals with international perspectives and expertise in international trade rules and dispute resolution. This pool will be cultivated and expanded through targeted training and recruitment efforts.

Priority will be given to mediators included in this talent pool for participation in municipal talent programs, international exchange activities, professional training sessions, forums, and opportunities at renowned international commercial mediation agencies.

Additionally, the city will streamline the entry process for foreign mediators, parties, and agents involved in mediation proceedings. They will be able to apply for port visas and multiple-entry visas with mediation notices or invitations issued by recognized mediation organizations, facilitating their participation in mediation activities.

4. Establishing training and certification system for mediators

Shanghai will support the Shanghai Commercial Mediation Association in forming a credentials review committee to certify the capabilities of mediators.

It will also enhance the international and professional standards of certification through collaboration with leading international mediation standards organizations.

Additionally, Shanghai will engage with quality mediation training institutions to conduct mediator training programs.

And the city will pilot an "international certification" program tailored to foreign-related commercial mediators, offering training subsidies for certified mediators.

5. Implementing the 'Harmony' Plan

To promote and implement the "Harmony" Plan, Shanghai will establish the Shanghai Alliance for the Development of Commercial Mediation. This initiative aims to encourage businesses to prioritize mediation in dispute resolution.

As part of the plan, the city will launch an online platform and encourage industry organizations, businesses, and law firms to join by signing a commitment letter. By signing this letter, they agree to include "model mediation clauses" in their contracts, thereby voluntarily prioritizing mediation in dispute resolution.

Additionally, Shanghai is dedicated to fostering a "mediation first" mindset among businesses. The city will support events such as the Shanghai-Hong Kong Commercial Mediation Forum and the Shanghai Commercial Mediation Promotion Week to raise awareness and recognition of mediation in the business community.

6. Optimizing coordination with litigation

Shanghai is committed to improving coordination between litigation and mediation in commercial disputes by revising the Several Opinions on Further Strengthening Coordination Between Litigation and Mediation, jointly issued in 2019 by the Municipal Bureau of Justice and the local High People's Court.

Qualified commercial mediation organizations will be selected by judicial and administrative authorities to be housed in district-level non-litigation dispute resolution centers, and support will be provided for their mediation efforts.

Courts will guide resident organizations in their mediation work, establish a feedback mechanism for cases that are not judicially confirmed, and provide such support as pre-litigation preservation of assets.

Additionally, the city will prioritize referring commercial litigation cases to mediation organizations and support the reasonable collection of fees for the handling of these cases.

7. Piloting collaboration with notary offices

Shanghai aims to bolster collaboration between mediation organizations and notary offices to facilitate the enforceability of qualifying mediation agreements.

The city will further explore the option of notarization for granting enforceability to mediation agreements that involve payments related to intellectual property disputes.

Efforts will be made to encourage mediation organizations and notary offices to negotiate fee structures for notarization based on market principles. Additionally, notary offices will be encouraged to adopt a system in which partial fees are collected for debt instrument notarization, with the remainder payable upon the issuance of enforcement certificates. This approach aims to enhance parties' willingness to choose notarization to validate mediation outcomes.

8. Enhancing legal tech support

Shanghai will facilitate cooperation between mediation organizations and legal technology companies to develop and promote AI-driven commercial mediation products.

Mediation organizations are encouraged to utilize technology solutions, such as livestreaming and electronic signatures, to facilitate online mediation.