RECOGNITION OF SUCCESSFUL COMMERCIAL MEDIATION RESULTS
Legal validity of successful commercial mediation results
In the course of commercial mediation, if the parties successfully agree to settle partial or all of the disputes, the Mediator shall make a record on the results of the successful mediation.
The results of a successful mediation take effect on the parties in accordance with the civil law. However, “take effect on the parties” here only means “bind the parties” as a contractual agreement. If a party fails to comply with the results of the successful mediation, that party is only liable for the violation of that contractual obligations/agreement. The other party cannot ask the enforcement agency to enforce the results of the successful mediation.
However, the result of a successful mediation through commercial mediation differs from ordinary contractual agreements in being recognized by the Court with a fairly streamlined procedure, in order to be enforced under the Law on enforcement of civil judgments.
Only after recognizing by the Court can the results of a successful mediation be enforced by civil judgment enforcement agencies
Following the successful result from the dispute settlement procedure by commercial mediation, the parties can perform the result voluntarily without having any additional procedures carried out. However, to ensure that each party will perform its obligations under the results of the successful mediation, the parties may also ask the Court to recognize such successful mediation. The results of the successful mediation recognized by the Court could be enforced similar to final Court judgments or arbitral awards. The results of a successful mediation are considered and recognized in accordance with the civil procedure law.
The statute of limitations for requesting recognition from the Court
The statute of limitations for requesting the Court to recognize the results of a successful commercial mediation is 6 months from which the parties reach an agreement on the successful mediation. Therefore, if neither party submits a written request for the recognition of the results of the successful commercial mediation within 6 months from which the written record of the successful mediation results is made, the parties lose the right to request.
However, the Court only applies the provisions on the statute of limitations for either one or both parties, provided that this request is made before the Court issues the decision to resolve the request; the party benefiting from applying the statute of limitations has the right to refuse to apply the statute of limitations, except where such refusal aims to avoid the performance of obligations.
Conditions for recognition by the Court
In order to be recognized by the Court, the results of a successful mediation must meet the following conditions:
- The parties to the mediation agreement have full civil act capacity.
- The parties to the mediation agreement are persons with rights and obligations to the results of the successful mediation. In case the results of the successful mediation relate to the rights and obligations of a third party, the third party’s consent is required.
- Either One or both parties request a Court’s recognition.
- The content of the successful mediation are totally voluntary, neither violate any prohibitions imposed by the law, nor are contrary to social morality, or aim to avoid any obligation towards the State or a third party.
Under the above-mentioned recognition conditions, the Court will be particularly interested in the condition that the results of a successful mediation “do not aim to avoid any obligation towards the State or a third party”.
The competent court for recognition
Recognizing the results of a successful commercial mediation is a civil matter under the jurisdiction of the Court in accordance with the Civil Procedure Code. The court with jurisdiction handling the request for recognition of the results of a successful commercial mediation is the district-level People’s Court, in which the requester, as an individual, resides or works, or in which the requester, as a company, locates. However, the requester may also select the Court where the other party has properties to resolve the request for recognition of successful commercial mediation results.
Where both parties request for the recognition of successful commercial mediation results, they may select one of the territorial competent courts.
Procedure for recognition in court
The requester must submit a “Request for recognition of successful mediation results” to the competent Court. The Supreme People’s Court does not issued a form for the request to recognize the results of successful commercial mediations, so HTA Commercial Arbitration Center has based on the legal provisions to create a Form in order to assist the parties in mediation to proceed with the recognition procedure.
Procedures for receiving and processing the request for recognition of successful mediation results shall comply with the general provisions on procedures for resolving civil matters. From the request acceptance date, the Court has 15 days to prepare and issue a decision to open a meeting to consider the request; Within the next 10 days, the Court opens a meeting to consider the request. Participants and procedures for conducting the meeting shall also comply with general provisions on procedures for resolving civil matters, whereby Procurators of the Procuracy of the same level also participate in the meeting.
The judge shall issue a decision to recognize or to not recognize the successful mediation results when all of the above conditions are met or not met. The decision to recognize or to not recognize the results of successful mediation take effect immediately, without appeals or protests according to the appellate procedures.
- Please refer to the form of Decision on regconition of successful out-of-court mediation result
- Please refer to the form of Decision on not regconition of successful out-of-court mediation result
However, the Court’s decision to not recognize the successful mediation results does not affect the content and legal validity of the successful mediation results. And the decision of the Court on the recognition of successful mediation results shall be enforced in accordance with the law on civil judgment execution.
HTA COMMERCIAL ARBITRATION CENTER
