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Cross-border Dispute Resolution Service

Introduction

The Cross-border Dispute Resolution Mechanism is a brand-new service which combines the advantages of mediation and arbitration to resolve cross-border disputes. When commercial disputes emerge, parties can opt to utilize this Mechanism to resolve the conflict in a non-litigation approach in Hong Kong or the Mainland.

Under this Mechanism, if parties are able to achieve settlement through mediation, the relevant arbitration institution will issue an arbitral award with reference to the mutually signed Mediated Settlement Agreement. Otherwise, if the settlement through mediation is futile, parties can continue dispute resolution through arbitration, where an arbitral award will be issued by the arbitration institution.

Mediators involved in the “Cross-border Dispute Resolution Service” are International Accredited Professional Mediators of IDRRMI. Arbitrators will be individually appointed by relevant arbitration institutions. Different experts will appointed to be mediators or arbitrators in each case, safeguarding the fairness and equality of this Service.

Hong Kong and international enterprises withe businesses or investment in the Mainland can benefit from this Service. When disputes emerge, this Service can facilitate parties in reaching effective and feasible resolution options. The Mediated Settlement Agreement signed by all parties in this Mechanism will be issued as an arbitral award, which can then be enforced in more than 150 national courts including China. It can also be executed in the Mainland China and regions where the enterprise has business registration. Therefore, the Service has significant advantages on the ease of enforcement, being unconfined to specific regions, and applicable to places under both Common Law and Civil Law. “Cross-border Dispute Resolution Service” is thus an alternative dispute resolution method which is rapid, money and court-resources-saving. It is especially suitable for cases involving multiple jurisdictions, solving the problems all at the same time, and avoiding the filing of the same petition in different jurisdictions.

Scope of Services

IDRRMI accepts all kinds of international and cross-border disputes involving Hong Kong and the Mainland, happening home and abroad on equal subjects of natural persons, legal persons or other organizations. The “International Mediation Model” will first be adopted to resolve the dispute. Afterwards, an arbitral award will be issued by an international arbitration institution for the enforcement of the Mediated Settlement Agreement.

Mediation Clause

International Dispute Resolution and Risk Management Institute recommends the following Mediation Clause be inserted in any contract:

“Any dispute arising from or in connection with this contract shall be submitted to International Dispute Resolution and Risk Management Institute for mediation and arbitration which shall be conducted in accordance with the IDRRMI’s Mediation Rules in effect at the time of mediation.”

Application Method

Any one, both or multiple party/parties in any disputes involving Hong Kong, the Mainland or elsewhere may submit application to IDRRMI for mediation, regardless of prior mediation agreement between the parties. The following documents are required when applying for mediation service at IDRRMI:

  1. The names of all parties and their respective valid contact
  2. The facts of the dispute and request for mediation
  3. Related evidence and documents
  4. Proof of identity
  5. If any party entrusts an attorney to participate in mediation, a letter of attorney and authorization shall be submitted.

Each party is required to pay the non-refundable registration fee (HK$2,000) to IDRRMI, regardless of the participation of all the parties in the “Cross-Border Disputes Resolution Mechanism”. The Secretariat of IDRRMI would, on receipt of the application for mediation service, send invitation to contact all the other parties (if required), and encourage other parties to settle the dispute by the Cross-Border Disputes Resolution Mechanism. Other parties should reply in writing about their acceptance to engage in mediation within 14 days from the day of notification. The Secretariat of IDRRMI will remind other parties that if no response is received within the time limit, the parties will be regarded as rejecting mediation. After all parties agree to engage in mediation and pay the respective mediation fee, the Secretariat of IDRRMI will officially commence the mediator appointment procedures and arrange verification of relevant evidence submitted by the parties. In any case the appointed mediator is not available to perform his/her duties, another mediator would be nominated by IDRRMI , unless otherwise agreed by the parties. All parties should jointly appoint a mediator within 15 days from the day of receiving the notification of mediator appointment. If there is no consensus as at the deadline, IDRRMI would specify a mediator to handle the case.
Applicants are also required to:

  • For reapplication for mediation of the same case) Re-submit the registration fee;
  • Sign documents of arbitration application;
  • Appoint or authorize IDRRMI to appoint one or more than one mediator(s) in the IDRRMI Panel of Dispute Resolution Experts
    Appoint an arbitrator from the panel of arbitrators of the recommended arbitration institutions;
  • Prepay 50% of the mediation fee enlisted on the Table of Mediation Fee; and
  • Prepay arbitration fee as requested by the arbitration institution

Table of Mediation Fee

Amount in Dispute (HK$) Administration Fee (HK$) Mediation and Arbitration Fee (HK$) Total
(excluding Registration Fee) (HK$)
Lower Limit Upper Limit Basic Fee Additional Fee Lower Limit Upper Limit Basic Fee Additional Fee Lower Limit Upper Limit Lower Limit Upper Limit
100,000 or below 3,000 3,000 3,000 3,000 3,000 3,000 6,000 6,000
100,000 < 500,000 3,000 1% of 100K and more 3,001 7,000 3,000 1% of 100K and more 3,001 7,000 6,002 14,000
500,000 < 1,000,000 7,000 0.5% of 500K and more 7,001 9,500 7,000 0.6% of 500K and more 7,001 10,000 14,002 19,500
1,000,000 < 5,000,000 9,500 0.5% of 1M and more 9,501 29,500 10,000 0.4% of 1M and more 10,001 26,000 19,502 55,500
5,000,000 < 10,000,000 29,500 0.4% of 5M and more 29,501 49,500 26,000 0.4% of 5M and more 26,001 46,000 55,502 95,500
10,000,000 < 50,000,000 49,500 0.3% of 10M and more 49,501 169,500 46,000 0.2% of 10M and more 46,001 126,000 95,502 295,500
50,000,000 < 100,000,000 169,500 0.2% of 50M and more 169,501 269,500 126,000 0.1% of 50M and more 126,001 176,000 295,502 445,500
100,000,000 or above 269,500 0.08% of 100M and more 269,501 1,500,000 176,000 0.05% of 100M and more 176,001 1,000,000 445,502 2,500,000
Registration Fee for each party 2,000
  1. No additional rental fee will be charged if conference room(s) is/are booked for mediation;
  2. If more than one mediator is appointed, no additional fees will be charged except for those stated in the “Professional Fees for Mediator”;
  3. In the case that the amount in dispute cannot be confirmed, IDRRMI reserves the right to adjust mediation costs.

Table of Suggested Mediator Remuneration

Amount in Dispute (HK$) Cross-border Mediator Charges (HK$) Senior Cross-border
Mediation Expert Charges (HK$)
Lower Limit Upper Limit Hourly rate Upper Limit Hourly rate Upper Limit
100,000 1,000 10,000 2,000 20,000
100,000 500,000 1,500 15,000 3,000 30,000
500,001 1,000,000 2,000 20,000 4,000 40,000
1,000,001 5,000,000 2,000 30,000 4,000 60,000
5,000,001 10,000,000 3,000 45,000 6,000 90,000
10,000,001 50,000,000 3,000 45,000 6,000 120,000
50,000,001 100,000,000 4,000 60,000 8,000 160,000
100,000,001 4,000 80,000 10,000 200,000
  1. The above Suggested Mediator Remuneration is for one mediator. If the parties in dispute agreed to appoint two or more mediators, the remuneration shall be in multiply of the number of mediators.
  2. If the amount in dispute cannot be determined, the Suggested Mediator Remuneration will be determined by IDRRMI upon negotiation with mediator.
  3. All charges incurred in the course of mediation shall be borne by parties in dispute, except for the individual income tax of the appointed mediator(s).

Budget Reference

Amount in Dispute (HK$) Budget for IDRRMI
International Dispute Resolution Mechanism (a) (HK$)
Budget for Arbitration (b) (HK$) Amount saved for using
International Dispute Resolution
Mechanism
(a) vs (b) (HK$)
Lower Limit Upper Limit Lower Limit Upper Limit Lower Limit Upper Limit
100,000 39,400 52,200 69,000 136,500 – 54%
100,000 500,000 40,902 69,100 136,500 204,000 – 66%
500,001 1,000,000 51,402 88,092 204,000 335,400 – 72%
1,000,001 5,000,000 67,196 150,420 221,400 877,400 – 78%
5,000,001 10,000,000 140,942 320,620 877,400 1,241,400 – 76%
10,000,001 50,000,000 212,342 662,220 789,900 2,096,400 – 67%
50,000,001 100,000,000 501,542 905,540 1,370,400 2,595,800 – 63%
100,000,001 1,000,000,000 698,782 2,400,142 1,683,800 5,997,800 – 58%

Mediation Rules

Article 1 Purpose

Utilizing our experience in dispute resolution and our huge platform of professional connections, International Dispute Resolution and Risk Management Institute (IDRRMI) aims to resolve cross-border and international civil and commercial disputes in a harmonious, efficient and effective manner, at a low cost.

Article 2 Scope of Services

All kinds of international and cross-border disputes involving Hong Kong and the Mainland, happening home and abroad on equal subjects of natural persons, legal persons or any organizations, can be submitted to IDRRMI. The “Hong Kong International Mediation model” will first be adopted to resolve the dispute. Afterwards, an arbitral award will be issued by an international arbitration institution so as to secure the feasibility of the Mediated Settlement Agreement.

Article 3 Application of Rules

Parties concurring with submitting the dispute to IDRRMI for mediation according to the Cross-Border Disputes Resolution Mechanism, shall be deemed to agree to process the mediation in accordance with this Mediation Rules.

Article 4 The Principle of Impartiality and Fairness 

Mediation shall comply with parties’ voluntary will. Mediators shall abide by the principle of impartiality and fairness. Mediation shall be processed based on proven facts, respect the provisions of contract, in accordance with the laws and with reference to international practice, be conducted on the basis of impartiality, fairness and rationality. This is to facilitate parties to reach a settlement after taking into account the interests of all parties.

Article 5 Panel of Mediators

IDRRMI possesses a panel of cross-border mediators who have respective expertise and practical mediation experience in economics, trading, finance, securities, investment, intellectual property rights, technology transfer, real estate, construction contract, transportation, insurance and other commercial, maritime and/or legal aspect(s) and practical experience in mediation.

Article 6 Application and Acceptance of Mediation 

Any one, both or multiple party/parties in any disputes involving Hong Kong, the Mainland or elsewhere may submit application to IDRRMI for mediation, regardless of prior mediation agreement between the parties. The following documents are required when applying for mediation service at IDRRMI:          

1. The names of all parties and their respective valid contact;
2. The facts of the dispute and request for mediation;
3. Related evidence and documents;
4. Proof of identity; and
5. If any party entrusts an attorney to participate in mediation, a letter of attorney and authorization shall be submitted.

Each party is required to pay the non-refundable registration fee (HK$2,000) to IDRRMI , regardless of the participation of all the parties in the “Cross-Border Disputes Resolution Mechanism”. The Secretariat of IDRRMI will, on receipt of the application for mediation service, send invitation to contact all the other parties (if required), and encourage other parties to settle the dispute by the Cross-Border Disputes Resolution Mechanism. Other parties should reply in writing about their acceptance to engage in mediation within 14 days from the day of notification. The Secretariat of IDRRMI will remind other parties that if no response is received within the time limit, the parties will be regarded as rejecting mediation. After all parties agree to engage in mediation and pay the respective mediation fee, the Secretariat of IDRRMI would officially commence the mediator appointment procedures and arrange verification of relevant evidence submitted by the parties. In any case the appointed mediator is not available to perform his duties, other mediators would be nominated by IDRRMI, unless otherwise agreed by the parties. All parties should jointly appoint a mediator within 15 days from the day of receiving the notification of mediator appointment. If there is no consensus as at the deadline, IDRRMI would specify a mediator to handle the case.
Applicants are also required to:

(For reapplication for mediation of the same case) Re-submit the registration fee;
Sign documents of arbitration application;
Appoint or authorize IDRRMI to appoint one or more than one mediator(s) in the IDRRMI Panel of Dispute Resolution Experts
Appoint an arbitrator from the panel of arbitrators of the recommended arbitration institutions;
Prepay 50% of the mediation fee enlisted on the Table of Mediation Fee; and
Prepay arbitration fee as requested by the arbitration institution
Article 7 Mediation Venue

Mediation will be held in IDRRMI. Where otherwise agreed or requested by the parties and approved by IDRRMI, or recommended by IDRRMI and agreed by all parties, mediation can be held at other venues. The venue costs thereof shall be borne by all parties.

Article 8 Appropriate Ways of Mediation

The mediator shall adopt the Hong Kong International Mediation model and communicate with parties through meetings, written or oral correspondence(s) which he/she shall think fit. The mediator can conduct mediation in manners he/she considers appropriate. If the mediator deems it necessary, and agreed by the parties, professionals of the related industry can be invited to assist and participate in the mediation, which the costs shall be borne by all parties.  

Article 9 Confidentiality

Unless otherwise agreed by the parties, the process of mediation is confidential. Mediator, parties and their attorneys, the Secretariat of IDRRMI and other persons involved in the mediation process shall be obliged to keep all mediation communications confidential, unless otherwise stated in laws and regulations.

Article 10 The Settlement Agreement

As the parties reach settlement through mediation, the mediator should, according to the content of the mediation, draft a Settlement Agreement, which is then signed by the parties. Meanwhile, the mediator shall also sign on the agreement and stamp with the seal of IDRRMI. In accordance with this Mediation Rules, after reaching a Settlement Agreement based on mutually agreed requirements, the Settlement Agreement should be submitted to an international arbitration institution. In accordance with the contents of the Settlement Agreement and processed by independent arbitration, an award will be issued by the arbitration institution to enhance the legal protection of executing the Settlement Agreement. If no agreement is reached, the dispute concerned shall subsequently be submitted to an international arbitration institution for independent arbitration and issuing award.

Article 11 Termination of Mediation

The mediation proceedings shall be terminated if any of the following cases evolves:

1. A Settlement Agreement is reached between the parties;
2. Any party notifies IDRRMI to terminate mediation proceedings;
3. The mediator believes that further attempts at mediation are no longer justified, and thus decides to terminate the mediation;
4. Expiry of mediation term; or
5. IDRRMI considers necessary to terminate the mediation proceedings in other circumstances.
Article 12 Mediation Term

The parties can voluntarily establish a mediation term. With the consent of all parties, the mediator can also determine a mediation term. Mediation term in any case should not be longer than 30 days from the day of confirmation of mediator appointment, except for those cases deferred with the consent of the parties and approved by IDRRMI.

Article 13 Doctrine of Without Prejudice

Parties are not allowed, in subsequent arbitration or litigation, to cite any statement, opinion, comment or suggestion made by the mediator and all parties during mediation proceedings, as the basis for an appeal or a plea.

Article 14 Costs of Mediation

Costs of the mediation are charged in accordance with the Table of Mediation Fees, added by the remuneration of mediators, travel expenses, material translation fee and related administration fee. In principle, the costs are equally shared by the parties, unless otherwise stated in the Settlement Agreement. Other expenses would be borne by the parties respectively. Regardless of whether the mediation is successful, all fees paid including but not limited to the Registration fee, Administration fee, mediator’s remuneration and other incurred expenses are non-refundable.

Article 15 Explanation

IDRRMI is responsible for the interpretation of these rules.