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Home > Resolving Disputes > Mediation and Arbitration

Mediation and Arbitration

What is Mediation?

Mediation is a structured process comprising one or more sessions in which an impartial mediator, without adjudicating a dispute or any aspect of it, assist the parties to the dispute to do any or all of the following –

  1. Identify the issues in dispute;
  2. Explore and generate options;
  3. Communicate with one another;
  4. Reach an agreement regarding the resolution of the whole, or part, of the dispute.

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Advantages of Mediation

  • Focus on Interests: The Mediator will encourage the Parties to listen and appreciate the underlying interests and concerns of each other. The appreciation of the real interests underpinning the positions being taken by each party is the key which opens the door to compromise and agreement.
  • Informed Decision: In Mediation, the Parties have the responsibility for decisions, having regard to various options for settlement.
  • Flexible: The Parties set the agenda and decide what issues need to be addressed.
  • Direct Communication: The Parties can express their own opinions and concerns in finding ways to communicate directly and to resolve differences in a positive way.
  • Consensus: The Parties negotiate and reach settlement on a voluntary basis in terms acceptable to both.  Relations between the Parties could sometimes be preserved by Mediation.
  • Confidentiality: Mediation is conducted in a confidential way. The Mediator, the Parties and all present at the Mediation will sign agreements to agree to maintain confidentiality.
  • Efficient and Effective: Mediation can be more efficient and effective as a dispute resolution process for the resolution of financial disputes. 

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What is Arbitration?

Arbitration is a private and confidential process which can provide parties with a relatively fast, final and binding resolution of a dispute.  Arbitration is normally conducted in accordance with the terms of an arbitration agreement between the Parties and the Arbitration Ordinance (Cap 609). The arbitration process in the FDRC is primarily a “documents-only” arbitration.

Arbitration in many aspects are similar to a court proceedings. The arbitrator is an umpire to decide the dispute based on the merits of each party’s case. The arbitrator is independent and impartial and is usually an expert in the field in relation to the dispute. The decision of the arbitrator, known as the arbitral award, is final and binding and can only be appealed on point of law.

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Advantages of Arbitration

  • Enforceability: Enforcement of foreign court judgments can be difficult in the absence of an appropriate bilateral treaty.  Under the New York Convention signed by more than 140 jurisdictions, each of the Convention party undertakes to recognise and enforce arbitral awards made in other signatory members.
  • Efficient and Effective: Arbitration on a “documents-only” basis can be very efficient and effective.
  • Final and Binding: Arbitral Awards are usually final and binding and can only be appealed on point of law, which means prolonged court appeal procedures can be avoided.

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Rules and Ethics Codes for FDRC Mediators and Arbitrators

FDRC is the sole authority to set up and maintain a List of Mediators and a List of Arbitrators (collectively known as the “Lists”) for the provision of Mediation and Arbitration services respectively. FDRC has the power to admit mediators and arbitrators to the Lists and remove from the Lists at its sole discretion those who fails to adhere to the TOR and/or the FDRS Mediation and Arbitration Rules and/or Ethics Codes for FDRC Mediators and Arbitrators.

The Parties are also required to comply with the FDRS Mediation and Arbitration Rules.  In particular, the Rules set out the following important matters:

For Mediation –

  • How is a mediator will be appointed
  • What are the roles of mediator and the parties
  • How the mediation process will be conducted
  • Confidentiality

For Arbitration –

  • How to commence an arbitration
  • How to make proper submissions
  • How an arbitrator will be appointed
  • Jurisdiction of the arbitrator
  • The arbitration process
  • When will an in-person hearing be conducted
  • How should parties communicate with the arbitrator
  • Confidentiality
  • Fees and costs

If you want to know more about our Mediation and Arbitration Rules, please click here.

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