Arbitration & Mediation
The majority of civil disputes litigated between parties are settled before trial. A settlement is usually preferable to prosecuting or defending a dispute to trial, having regard to the risk of failure at trial and the time and legal costs incurred in resolving a dispute at trial.
Mediation has become an integral process in assisting the resolution of disputes prior to trial. Mediation is a flexible and confidential process of negotiation, facilitated by an independent impartial third person, called the mediator. The mediator (usually a barrister who is an accredited mediator), will facilitate the parties in reaching an amicable settlement of their dispute.
The mediator will possess the necessary skills that assist the parties to break deadlocks in their negotiations and reach a compromise in areas of contention.
While mediation does not always achieve a final resolution of the dispute, it is often effective in bringing the parties to the table and reducing the points of contention between them. Thus, even if the mediation is unsuccessful, it may facilitate the settlement of a dispute later by changing the perceptions of the parties as to the possibility of settlement, which may in turn save the parties the time and costs.
In summary, the key advantages of mediation include confidentiality, informality and the saving of time and costs if the dispute is resolved at mediation.
It is therefore vitally important that you receive sound advice in respect of the option of mediating your dispute with a view to saving you time, costs and avoiding the uncertainty of resolving your dispute at trial.
Arbitration is an alternative dispute resolution process to Court litigation. It is particularly useful in the following circumstances:
- the subject matter of the dispute is highly technical, requiring the appointment of an arbitrator specialising in the relevant field;
- the parties require the confidentiality of “closed court” hearings that take place in arbitrations – whereas most commercial cases tried in Court are heard in “open court” which permits the public and the press to attend;
- the parties wish to have a relatively quicker resolution of the dispute.
Arbitration offers a flexible and efficient means of resolving disputes both in Hong Kong and internationally. Arbitration is particularly effective where there is disagreement in litigating a dispute in a jurisdiction acceptable to all parties to a contract. For example, arbitration also allows international transactions to be dealt with under a legal system and at a geographical location chosen by the parties.
During an arbitration hearing, the parties present arguments and evidence to the arbitrator, who makes a determination. The decision of the arbitrator is final and binding and the award is enforceable.
The jurisdiction to arbitrate is usually founded upon the consent of parties, pursuant to an arbitration clause contained in commercial contracts. As such, it is important that you obtain legal advice to ensure that any arbitration clause you wish to include in your commercial contract is valid and enforceable.