HKIArb Administered Mediation Rules and Suggested Mediation Clause

These Rules are drawn up based on the UNCITRAL Conciliation Rules and the Rules of the Joint Mediation Helpline Office. These Rules shall be referred to as the Hong Kong Institute of Arbitrators Administered Mediation Rules (“these Rules”).

APPLICATION OF THE RULES

Article 1

• These Rules apply to mediation provides for these Rules to apply; or provide for mediation “administered by the Hong Kong Institute of Arbitrators” or words to similar effect.
• For the purposes of these Rules, “mediation” means a process, whether referred to by the expression conciliation, mediation or an expression of similar import, whereby parties request a third person or persons (“the mediator”) to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship. The mediator does not have the authority to impose upon the parties a solution or decision to the dispute.
• The parties may agree to exclude or vary any of these Rules at any time.
• Where any of these Rules is in conflict with a provision of law from which the parties cannot derogate, that provision prevails.

COMMENCEMENT OF MEDIATION PROCEEDINGS

Article 2

• The party initiating mediation sends to the other party a written invitation to mediate under these Rules, briefly identifying the subject of the dispute.
• Mediation proceedings commence when the other party accepts the invitation to mediate. If the acceptance is made orally, it is advisable that it be confirmed in writing.
• If the other party rejects the invitation, there will be no mediation proceedings.
• If the party initiating mediation does not receive a reply within thirty calendar days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to mediate. If he so elects, he informs the other party accordingly.

NUMBER OF MEDIATORS

Article 3

There shall be one mediator unless the parties agree that there shall be two or three mediators. Where there is more than one mediator, they ought, as a general rule, to act jointly.

APPOINTMENT OF MEDIATORS

Article 4

• In mediation proceedings with one mediator, the parties shall endeavour to reach agreement on the name of a sole mediator;
• In mediation proceedings with two mediators, each party appoints one mediator;
• In mediation proceedings with three mediators, each party appoints one mediator. The parties shall endeavour to reach agreement on the name of the third mediator.
• Parties may enlist the assistance of the Hong Kong Institute of Arbitrators (“HKIArb”) in connexion with the appointment of mediators. In particular,
• A party may request the HKIArb to recommend the names of suitable individuals to act as mediator(s); or
• The parties may agree that the appointment of one or more mediators be made directly by the HKIArb.

In recommending or appointing individuals to act as mediator, the HKIArb shall have regard to such considerations as are likely to secure the appointment of an independent and impartial mediator.

SUBMISSION OF STATEMENTS TO MEDIATOR

Article 5

• The mediator [1] , upon his appointment, requests each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party sends a copy of his statement to the other party.
• The mediator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party sends a copy of his statement to the other party.
• At any stage of the mediation proceedings the mediator may request a party to submit to him such additional information as he deems appropriate.

REPRESENTATION AND ASSISTANCE

Article 6

The parties may be represented or assisted by persons of their choice and such persons must sign a separate confidentiality agreement and agree to abide by these Rules. The names and roles of such persons are to be communicated in writing to the other party and to the mediator; such communication is to specify whether the appointment is made for purposes of representation or of assistance.

ROLE OF MEDIATOR

Article 7

• The mediator assists the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
• The mediator will be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.
• The mediator may conduct the mediation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the mediator hear oral statements, and the need for a speedy settlement of the dispute.
• The mediator may, at any stage of the mediation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.

Article 8

In order to facilitate the conduct of the mediation proceedings, the parties, or the mediator with the consent of the parties, may arrange for administrative assistance by the HKIArb or other suitable person(s).

COMMUNICATION BETWEEN MEDIATOR AND PARTIES

Article 9

• The mediator may invite the parties to meet with him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.
• Unless the parties have agreed upon the place where meetings with the mediator are to be held, such place will be determined by the mediator, after consultation with the parties, having regard to the circumstances of the mediation proceedings.

DISCLOSURE OF INFORMATION

Article 10

When the mediator receives factual information concerning the dispute from a party, he discloses the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate. However, when a party gives any information to the mediator subject to a specific condition that it be kept confidential, the mediator does not disclose that information to the other party.

CO-OPERATION OF PARTIES WITH MEDIATOR

Article 11

The parties will in good faith co-operate with the mediator and, in particular, will endeavour to comply with requests by the mediator to submit written materials, provide evidence and attend meetings.

SUGGESTIONS BY PARTIES FOR SETTLEMENT OF DISPUTE

Article 12

Each party may, on his own initiative or at the invitation of the mediator, submit to the mediator suggestions for the settlement of the dispute.

Article 13

• When it appears to the mediator that there exist elements of a settlement which would be acceptable to the parties, he formulates the terms of a possible settlement and submits them to the parties for their observations. After receiving the observations of the parties, the mediator may reformulate the terms of a possible settlement in the light of such observations.
• If the parties reach agreement on a settlement of the dispute, they draw up and sign a written settlement agreement [2] . If requested by the parties, the mediator draws up, or assists the parties in drawing up, the settlement agreement.
• The parties by signing the settlement agreement put an end to the dispute and are bound by the agreement.

Article 14

The mediator and the parties must keep confidential all matters relating to the mediation proceedings. Confidentiality extends also the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

TERMINATION OF MEDIATION PROCEEDINGS

Article 15

The mediation proceedings are terminated:

• By the signing of the settlement agreement by the parties, on the date of the agreement; or
• By a written declaration of the mediator, after consultation with the parties, to the effect that further efforts at mediation are no longer justified, on the date of the declaration; or
• By a written declaration of the parties addressed to the mediator to the effect that the mediation proceedings are terminated, on the date of the declaration; or
• By a written declaration of a party to the other party and the mediator, if appointed, to the effect that the mediation proceedings are terminated, on the date of the declaration.

RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS

Article 16

The parties undertake not to initiate, during the mediation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject of the mediation proceedings, except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

Article 17

• Upon termination of the mediation proceedings, the mediator fixes the costs of the mediation and gives written notice thereof to the parties. The term “costs” includes only:
• The fee of the mediator which shall be reasonable in amount;
• The travel and other expenses of the mediator;
• The travel and other expenses of witnesses requested by the mediator with the consent of the parties;
• The cost of any expert advice requested by the mediator with the consent of the parties;
• The cost of any assistance provided pursuant to Articles 4, paragraph (2)(b), and 8 of these Rules.
• The costs, as defined above, are borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party are borne by that party.

Article 18

• The mediator, upon his appointment, may request each party to deposit an equal amount as an advance for the costs referred to in Article 17, paragraph (1) which he expects will be incurred.
• During the course of the mediation proceedings the mediator may request supplementary deposits in an equal amount from each party.
• If the required deposits under paragraphs (1) and (2) of this article are not paid in full by both parties within thirty calendar days, the mediator may suspend the proceedings or may make a written declaration of termination to the parties, effective on the date of that declaration.
• Upon termination of the mediation proceedings, the mediator renders an accounting to the parties of the deposits received and returns any unexpended balance to the parties.

ROLE OF MEDIATOR IN OTHER PROCEEDINGS

Article 19

• Unless otherwise agreed by the parties, the mediator shall not act as an arbitrator or legal representative in respect of a dispute that is the subject of the mediation proceedings or in respect of another dispute that has arisen from the same contract or legal relationship or any related contract or legal relationship.
• The parties undertake that they will not present the mediator as a witness in any such proceedings.

ADMISSIBILITY OF EVIDENCE IN OTHER PROCEEDINGS

Article 20

• The parties undertake not to rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the mediation proceedings;
• Views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
• Admissions made by the other party in the course of the mediation proceedings;
• Proposals made by the mediator;
• The fact that the other party had indicated his willingness to accept a proposal for settlement made by the mediator;
• Any other information provided by the parties for the purpose of or in the course of mediation proceedings.

EXCLUSION OF LIABILITY AND INDEMNITY

Article 21

The parties jointly and severally release, discharge and indemnify the mediator and the HKIArb in respect of all liability whatsoever, whether involving negligence or not, from any act or omission in connection with or arising out of or relating in any way to the mediation proceeding conducted under these Rules unless the act or omission is fraudulent.

HKIARB SAMPLE ADMINISTERED MEDIATION CLAUSE

Any dispute or difference, whether contractual or other legal relationship, arising out of or relating to this contract and mediation clause, including any question regarding its existence, validity or termination shall be referred to mediation in accordance with the Hong Kong Institute of Arbitrators Administered Mediation Rules in force.

[1] In this and all following articles, the term “mediator” applies to a sole mediator, two or three mediators, as the case may be.

[2] The parties may wish to consider including in the settlement agreement a clause that any dispute arising out of or relating to the settlement agreement shall be submitted to arbitration.