Postcard From Hong Kong

Bill Wood QC has been attending Hong Kong International Arbitration week and offers some reflections

At Hong Kong Arbitration Week’s ‘ADR in Asia’ session yesterday there was a striking account from Arthur Ma of DaHui law firm in Beijing, of arbitration practice on the mainland. At an early directions hearing Chinese arbitrators will routinely offer to mediate. If they do mediate and it does not settle the arbitration proceeds regardless with the same tribunal. 

For western lawyers red lights immediately flash. Surely you should use a separate mediator? Somebody outside the process? Will the award not ultimately prove to be unenforceable?

Why turn to somebody new, asks Arthur? It is as if you are just getting to the front of the taxi queue when you get pulled out and sent to the back of another queue. If the arbitrators have won the parties’ trust why would you go elsewhere for your mediation or, if needed, your subsequent arbitration? If the parties agree and there is a protocol to cover the confidentiality issues what’s the harm? It works!

Underlying this fundamental difference of view may be a difference in the style of arbitration. The arbitration procedures in Asia often seem much closer to brokering a deal between the parties than an arm’s-length adjudicatory procedure. One wonders whether the original trade arbitrations, such as those carried out by commercial men on the deck of the ship with the cargo there to be examined, were not also closer to that model. I suspect the result was often less an award ex cathedra than an expression of consensus, maybe sometimes even compromise. Something like this:

“Are we all agreed that this wheat is showing signs of mould?”

Modern arbitrators often express nostalgia for those days and regret the excessive legalism of the modern era. (At Tuesday evening’s debate sponsored by Norton Rose and chaired by the stellar panel of Lord Neuburger, Neil Kaplan QC. and Juliet Blanch, a motion was passed that “Due process paranoia was the curse of modern arbitration”!)

Room for mediation to step up and play its part? I think so. 

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