Highlights of China’s new Commercial Mediation Regulation

The State Council approved the new Commercial Mediation Regulation at its 75th executive meeting on 19 December 2025, announcing that it will take effect on 1 May 2026. As China’s first administrative regulation dedicated to commercial mediation, the move marks a new phase in the institutionalisation and standardisation of China’s commercial mediation regime, widely regarded as a milestone in the development of alternative dispute resolution (ADR). This article outlines the regulation’s core provisions and provides practical suggestions to practitioners.

Scope of application

Prior to promulgation of the regulation, Chinese legislation provided no clear definition of commercial mediation. The principal statute governing mediation was the People’s Mediation Law.

Nevertheless, the two mechanisms address different types of disputes: people’s mediation deals primarily with community and grassroots disputes, and typically relies on local mediators drawn from neighbourhood organisations who have generally received limited professional training.

Commercial mediation, by contrast, focuses on complex business disputes and is conducted by mediators with commercial legal knowledge, which requires a higher degree of specialisation.

Currently, article 2 of the regulation defines commercial mediation as a process conducted under the auspices of a commercial mediation organisation where parties voluntarily reach agreement to settle disputes arising from trade, investment, finance, transport, real estate, construction, intellectual property and other commercial fields.

It explicitly excludes matters relating to marriage and family, succession, guardianship, employment and labour disputes, and consumer protection.

This new provision now fills a longstanding legislative gap by establishing a unified legal definition of commercial mediation in China.

It also aligns with international practice, particularly the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (2018), which adopts a broad interpretation of the term “commercial”.

Fundamental principles

Article 14 of the regulation stipulates that commercial mediation must follow the basic principles of party autonomy, legality, good faith and confidentiality, constituting core norms underpinning operation of the commercial mediation system.

Two distinctive strengths of commercial mediation as an ADR mechanism examined here are party autonomy and confidentiality.

First, commercial mediation is rooted in party autonomy. Article 15 provides that mediation may not proceed if either party expressly rejects it.

Article 21 further specifies that where mediation fails to lead to an agreement – or where a party does not consent to continue or intends to use mediation for an unlawful purpose – the process must be terminated.

Together, these provisions ensure that parties retain full discretion over whether to engage in and continue mediation, safeguarding their autonomy in choosing mediation as a way to resolve their disputes.

Second, commercial mediation is also characterised by confidentiality. Pursuant to article 19, commercial mediation is in principle private, unless the parties agree otherwise. However, matters involving state secrets, commercial secrets or personal privacy may not be made public under any circumstances. This safeguard enables parties to express their positions openly and candidly throughout the mediation process, fostering genuine dialogue and trust between the parties.

Mediator liability mechanism

The regulation establishes the framework for a mediator liability mechanism built upon neutrality, impartiality and responsibility. The system provides a clear institutional basis for regulating the professional conduct of commercial mediation.

First, the regulation defines the core obligations that mediators must observe. Offering guidance for executing core responsibilities, articles 19 and 20 require mediators to uphold duties of confidentiality, disclosure and recusal.

Second, the regulation spells out legal consequences for breaching those duties. Article 30 stipulates that mediators may face administrative penalties from the judicial authorities if breaching obligation of confidentiality and causing serious harm or colluding with parties in sham mediations that undermine national interests, public policy or the rights of others.

In grave cases, their authorisation to conduct mediation may be suspended and any illegal earnings will be confiscated.

Enforcing mediation agreements

Article 22 of the regulation provides that when a commercial mediation results in a settlement, the parties must draw up a written mediation agreement. To ensure the agreement’s effectiveness in practice, the regulation introduces two complementary enforcement mechanisms for both domestic and cross border scenarios, strengthening the enforceability and effectiveness of mediated settlements.

First, for domestic enforcement, a mediation agreement may be confirmed and enforced through judicial confirmation procedures under articles 205 and 206 of the Civil Procedure Law.

Second, for cross border enforcement, the regulation allows parties to apply to the competent authority of a foreign jurisdiction for recognition and enforcement in accordance with the relevant international treaties.

This framework aligns with the international enforcement regime established under the UN Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation, to which China is a signatory party.

It also reflects China’s commitment to fulfilling its obligations under article 18 of the Vienna Convention on the Law of Treaties, namely, not to defeat the object and purpose of a treaty.

Opening up to global market

The regulation is also intended to support China’s broader agenda of high-level opening-up. By promoting a two-way exchange of talent and institutional co-operation, it encourages regulatory innovation, international collaboration and professional capacity building.

The aim is to integrate China’s mediation services into the global dispute resolution market and strengthen their international competitiveness and participation in global governance.

With the regulation’s implementation, commercial mediation organisations are entering a new phase of standardisation.

The next step for China will be enhancing co-ordination among litigation, arbitration and mediation to build a more integrated system for resolving commercial disputes, further advancing the internationalisation and professional sophistication of China’s dispute resolution landscape.

Zou Hongli is a partner at Guantao Law Firm. She can be reached by phone at +86 21 2356 3298 and by email at zouhl@guantao.com
Liu Xuanxuan is a paralegal at Guantao Law Firm. She can be reached by phone at +86 180 0191 6873 and by email at liuxuanxuan@guantao.com