The PRC People’s Mediation Law, which was considered and approved at the sixteenth meeting of the Standing Committee of the Eleventh National People’s Congress on 28 August, will come into effect on 1 January 2011.
The mediation regime stems from the legal and cultural traditions of ancient China, which emphasize the concepts of harmony and dispute resolution. The State Council formulated and promulgated the Formation of People’s Mediation Committees Regulations in 1989, which set forth the process for conducting people’s mediation, but little else. The new People’s Mediation Law provides comprehensive details on people’s mediation committees, people’s mediators, mediation processes, mediation agreements and other related matters, establishing a comprehensive people’s mediation regime in China. The People’s Mediation Law highlights a number of areas, of which the following two have sparked concerns as they may have an impact on enterprises.
Judicial confirmation regime
The People’s Mediation Law provides that any mediation agreements reached through mediation by a people’s mediation committee are to be legally binding and must be executed by the parties as agreed. Article 33 of the law also sets out a judicial confirmation regime to be adopted by the courts in relation to mediation agreements:
- Both of the concerned parties may, if it is deemed necessary, jointly apply to a people’s court for judicial confirmation of a mediation agreement within 30 days of the effectiveness of such agreement;
- If the mediation agreement is confirmed as valid by the people’s court according to law, and if one party refuses to execute or does not fully execute the agreement, the other party may apply to the people’s court
- for enforcement of the agreement;
If the mediation agreement is found to be invalid, the parties may alter the original mediation or reach a new agreement through people’s mediation, or may institute legal proceedings at a people’s court.
The judicial confirmation regime is established to offer an important means of judicial remedy and protection for people’s mediation, which is a dispute resolution method that is primarily governed by residents themselves.
People’s mediation by enterprises
Pursuant to the People’s Mediation Law, enterprises may be able to set up a people’s mediation committee if they so require. Given that government departments are increasingly focusing on the role of “mediation” as a dispute resolution mechanism, this provision may indicate that enterprises may be able to establish their own people’s mediation committees in the relatively near future.
Pursuant to the People’s Mediation Law, members of the people’s mediation committees established by enterprises and business units are to be elected by workers’ conferences, worker representatives’ conferences or trade unions. Enterprises and business units should provide people’s mediation committees with the working conditions and budgets necessary to carry out their work. But the level of such budgets is not clearly defined in the law.
In practice, the similarities and differences between people’s mediation, administrative mediation and judicial mediation should be noted. For example, article 18 of the People’s Mediation Law says that for any disputes which are appropriate to be resolved through people’s mediation, the basic people’s courts and the public security authorities should tell the concerned parties to apply to the people’s mediation committee for mediation before accepting their cases.
Business Law Digest is compiled with the assistance of Haiwen & Partners. The authors can be emailed at baochen@haiwen-law.com. Readers should not act on this information without seeking professional legal advice.
