The CPR/CCPIT Mediation Procedure for Disputes Submitted to the U.S.-China Business Mediation Center
July 7, 2010
1. Agreement to Mediate; Scope of Procedure
This CPR/CCPIT Mediation Procedure (the "Procedure") shall apply to all disputes submitted to the US-China Business Mediation Center (the “Center”). It may be adopted, with or without modification, by agreement of the parties before or after a dispute has arisen.
2. General Principles
All proceedings conducted by the Center shall take place observing the following general principles:
1. The process is non-binding. Unless the parties otherwise agree, the mediators shall have no authority to issue an enforceable award or judgment.
2 . The mediators shall be neutral and impartial. The mediators shall have no interest in the outcome of the dispute and have no current or anticipated business or personal relationship with any party to the dispute.
3. The process shall be conducted expeditiously. Each party representative will make every effort to be available for meetings.
3. Initiating the Proceeding
Disputes can be submitted to the Center in any of the following ways:
A. By mail, at either U.S.A. att: Panels Management Group
International Institute for Conflict Prevention & Resolution
575 Lexington Avenue
New York, New York 10022
att: Panels Management Group
China Council for Promotion of International Trade
No. 1 Fuxingmenwai Street
B. By fax at either
C. By Internet at either
Whenever feasible, disputes should be submitted by completion of the official submission form annexed hereto as Appendix A. The schedule of fees is attached hereto as Appendix B. Half of the fee must be submitted by the claimant upon submission of the claim. Claims that are not accompanied by appropriate payment will not be processed.
The Center will review the submission for administrative adequacy and promptly advise the respondent of the submission. If the respondent has previously agreed to mediation through a contract or other agreement, then it shall be required to respond in the manner described below. If the respondent party has not previously agreed to mediation through a contract or other agreement, the respondent will be urged to agree to mediation but will not be required to do so.
A respondent who declines the proposal for mediation shall advise the Center and the claimant promptly. A respondent who accepts the proposal for mediation shall submit, within twenty (20) business days of receipt of notice, its version of the submission form accompanied by its one-half share of the fee. In the event that the respondent declines the proposal for mediation, or if 20 business days elapse without the Center’s receiving notice from the respondent of its willingness to submit to mediation, the Center shall notify the claimant and refund the entire fee except for $250, which shall be retained by the Center as an administrative fee.
4. Selecting the Mediator
The mediator shall be selected by the parties from the CPR/CCPIT Panel of Neutrals in the following manner. The parties shall indicate whether they seek a single mediator or a joint team of one Chinese and one America mediator. Based upon the information in the submissions, and upon such supplemental information as the Center may seek from the parties (to determine matters such as preferred subject matter expertise, time constraints, potential conflicts of interest and geographic location) the Center shall submit to the parties the names of at least six candidates (in the case of joint mediation, three Chinese and three American) with their resumes. If the parties are unable to agree on a single candidate (in the case of joint mediation, one Chinese and one American candidate) from the list within seven business days following receipt of the list, each party shall, within 15 business days following receipt of the list, send to the Center the list of candidates ranked in descending order of preference. The candidate(s) with the lowest combined score will be appointed as the mediator(s) by the Center. The Center will decide the outcome in the case of a tie.
Before proposing any mediator candidate, the Center will request each candidate to disclose any circumstances known to him or her that would cause reasonable doubt regarding the candidate's impartiality. If a clear conflict is disclosed, the individual will not be proposed. Other circumstances that a candidate discloses to the Center will be disclosed to the parties. A party may challenge a mediator candidate if it knows of any circumstances giving rise to reasonable doubt regarding the candidate's impartiality.
The compensation of the mediator(s) will be determined by the Center and disclosed to the parties before appointment. A deposit will be required to be deposited with the Center by the parties prior to the commencement of the mediation procedure. Mediator compensation, and any other costs of the process, will be drawn from this deposit. The payment may be periodically supplemented upon notice from the Center. If a party withdraws from a multiparty mediation but the procedure continues with the remaining parties, the withdrawing party shall not be responsible for any costs incurred afterit has notified the mediator and the other parties of its withdrawal.
Before appointment, the mediator(s) will assure the parties of availability to conduct the proceeding expeditiously. Upon retention of the mediator(s), the parties shall enter into an engagement agreement in the form attached hereto as Appendix C.
5. Rules of Proceeding
The following rules will apply to all mediations conducted pursuant to this Procedure, subject to any changes on which the parties and the mediator(s) agree.
1. Rules Concerning Process
A. Except as otherwise determined by mutual consent, parties who have agreed to mediate, and who have selected a mediator, must attend the first session of the mediation. Any party may withdraw at any time after attending the first session, and before execution of a written settlement agreement, at its sole discretion by supplying written notice to the mediator(s) and the other party.
B. The mediator(s) shall control the procedural aspects of the mediation. The parties shall cooperate fully with the mediator(s).
C. The mediator(s) are free to meet and communicate separately with each party, at the mediators’ discretion or at the request of a party.
D. The mediator(s) shall decide when to hold joint meetings with the parties and when to hold separate meetings. The mediator(s) shall fix the time and place of each session and its agenda, in consultation with the parties. There shall be no stenographic record of any meeting. Formal rules of evidence or procedure shall not apply.
E. The mediators may withdraw at any time by written notice to the parties (i) for serious personal reasons, (ii) if the mediators believe that a party is not acting in good faith, or (iii) if the mediators conclude that further mediation efforts would not be useful. If the mediators withdraw pursuant to (i) or (ii), he or she need not state the reason for withdrawal.
F. If any party has a substantial need for documents or other information in the possession of another party, or for other information that may facilitate a settlement, the parties shall attempt to agree to terms for the voluntary provision of such information. Should they fail to agree, either party may request a joint consultation with the mediator(s), who shall assist the parties in reaching agreement. At the conclusion of the mediation process, upon the request of a party that provided documents or other material to one or more other parties, the recipients shall return those documents and materials to the originating party without retaining copies.
G. Each party must be represented at each mediation conference by a business executive authorized to negotiate a complete resolution of the entire dispute, unless excused by the mediators as to a particular conference. Each party may be represented by a business or legal consultant. The parties shall exchange with each other, with a copy to the mediator(s), the names and job titles of all individuals who will attend each joint mediation session. The mediator(s) may limit the number of persons representing each party.
H. The mediator(s) may obtain independent expert advice and assistance, with the prior agreement of and at the expense of the parties. The process of obtaining such expert advice and assistance shall be administered by the Center. Any person proposed as an independent expert also will be required to disclose any circumstances known to him or her that would cause reasonable doubt regarding that person's impartiality.
2. Rules Concerning Professional Ethics
All proceedings shall be conducted in observance of professional ethics that shall be discussed and agreed upon by CPR and CCPIT, and that shall be attached to this Procedure as Appendix D.
6. Presentation to the Mediator(s)
Before dealing with the substance of the dispute, the parties and the mediator(s) shall discuss preliminary matters, such as possible modification of this Procedure, place and time of meetings, and each party's need for documents or other information in the possession of the other.
At least 10 business days before the first substantive mediation conference, unless otherwise agreed, each party will submit to the mediator(s) a written statement summarizing the background and present status of the dispute, including any settlement efforts that have occurred, and such other information as the mediator(s) request or the party deems helpful to familiarize the mediator(s) with the dispute. It is desirable for the submission to include an analysis of the party's real interests and needs, and an assessment of its litigation risks. The parties may agree to submit jointly certain records and other materials. The mediator(s) may request any party to provide clarification and additional information.
The parties are encouraged, but not required, to exchange the materials they submit to the mediator(s), in order to further each party's understanding of the other party's viewpoints. The mediator(s) may request the parties to submit a joint statement of facts. Except as the parties otherwise agree, the mediator(s) shall keep confidential any written materials or information that are submitted. The parties and their representatives are not entitled to receive or review any materials or information submitted to the mediator(s) by another party or representative. At the conclusion of the mediation process, upon request of a party, the mediator(s) shall return to that party all written materials and information which that party had provided to the mediator(s) without retaining copies, or else certify the destruction of such materials.
In the case of joint mediators, the mediators shall meet and confer prior to the mediation to ensure that they share methods and styles of service as co-mediators. During the mediation, the mediators shall take care to maintain a useful and creative joint approach and shall confer privately as may be necessary and advisable.
At the first substantive mediation conference each party will make an opening statement.
The mediator(s) may facilitate settlement in any manner the mediator(s) believe is appropriate. The mediator(s) shall help the parties focus on their underlying interests and concerns, explore resolution alternatives and develop settlement options.
The parties are expected to initiate and convey to the mediator(s) as many proposals for settlement as possible. Each party shall provide a rationale for any settlement terms proposed to the mediator(s).
If the parties fail to develop mutually acceptable settlement terms, and if expressly requested to do so by both parties, before terminating the procedure the mediator(s) (a) may submit to the parties a final settlement proposal or (b) if qualified to do so, may give the parties an evaluation of the likely outcome of the case if it were tried to final judgment in a court of competent jurisdiction, subject to any limitations under any applicable mediation statutes/rules, court rules or ethical codes. Thereupon, the mediator(s) may suggest further discussions to explore whether these proposals or evaluations may lead to a resolution.
Efforts to reach a settlement shall continue until (a) a written settlement is reached, or (b) the mediator(s) conclude and inform the parties that further efforts would not be useful, or (c) one of the parties or either or both of the mediator(s) withdraw from the process. However, if there are more than two parties, the remaining parties may elect to continue following the withdrawal of a party.
If a settlement is reached, a preliminary memorandum of understanding or term sheet shall be immediately prepared and signed prior to the conclusion of the mediation session at which the agreement was reached. Thereafter, representatives of the parties shall promptly draft a formal, written settlement document incorporating all settlement terms. This draft shall be circulated, amended as necessary, and formally executed in a timely fashion. If litigation is pending, the settlement may provide for jointly consented disposition of the case. The parties also may request the Center to arrange for entry of the settlement agreement as an arbitral award, or request a court of competent jurisdiction to enter the settlement agreement as a judgment.
9. Failure to Agree
If a resolution is not reached, the mediator(s) shall discuss with the parties the possibility of their agreeing on advisory or binding arbitration, "last offer" arbitration, or another form of consensual dispute resolution, to be administered by the Center or by any other body of the parties’ choosing. If the parties agree, the mediator(s) may assist them in structuring a procedure designed to result in a prompt, economical process.
The mediator(s) shall not serve as arbitrators in the same or substantially related matter, unless the parties and the mediator(s) otherwise agree in writing.
The entire mediation process is confidential. Unless agreed among all the parties or required to do so by law, the parties and the mediator(s) shall not disclose to any person who is not a party to the mediation, including any judicial officer, any information regarding the process (including pre- process exchanges and agreements), contents (including written and oral information), settlement terms or outcome of the proceeding. If arbitration or litigation is pending, the participants may advise the tribunal or the court of the schedule and overall status of the mediation for purposes of arbitration or litigation management. Any written settlement agreement resulting from the mediation may be disclosed for purposes of enforcement.
Every aspect of any proceeding conducted under this Procedure is a compromise negotiation subject to all judicial rules of any competent jurisdiction, including without limitation United States Federal Rule of Evidence 408 and all Chinese and American state counterparts, together with any applicable statute protecting the confidentiality of mediation. All offers, promises, conduct and statements, whether oral or written, made in the course of the proceeding by any of the parties, their agents, employees, experts and attorneys, or by the mediator(s) are confidential. Such offers, promises, conduct and statements are privileged under any applicable Chinese or American mediation privilege and are inadmissible and not discoverable for any purpose, including impeachment, in litigation between the parties. However, evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable solely as a result of its presentation or use during the mediation.
The exchange of any tangible material shall be without prejudice to any claim that such material is privileged or protected under any evidentiary principle of any competent jurisdiction, including without limitation the principles of work-product within the meaning of United States Federal Rule of Civil Procedure 26 and all American and Chinese counterparts.
The mediator(s) and any documents and information in the mediators’ possession shall not be compelled to be produced, by subpoena or otherwise, in any investigation, action or proceeding, and all parties will oppose any effort to have the mediator(s) or documents compelled or subpoenaed.
The mediator(s) shall promptly advise the parties of any attempt to compel them to divulge information received in mediation.
I. PARTIES IN THE DISPUTE
Postal Code: City, Country:
Postal Code: City, Country:
Postal Code: City, Country:
Postal Code: City, Country:
II. NATURE OF THE DISPUTE
The parties shall attach a description of the nature, circumstances and matters of the dispute giving rise to the claims and which are being submitted for mediation. If possible, both parties should also submit statements of remedies or possible solutions sought.
III. RULES AND PROCEDURES
The parties agree to be bound by the Rules and Procedures of the US-China Business Mediation Center, as amended from time to time. The mediation shall be administered by the Secretariat of the US-China Business Mediation Center pursuant to its Rules.
If the parties agree to modify the Rules, the modifications shall be included with the application form.
IV. VALUE OF THE CLAIM
Estimated value of the claim:
V. LOCATION OF THE MEDIATION
The place of the mediation shall be:
VI. REGISTRATION FEE & DEPOSIT
Registration Fee RMB:
Initial Deposit RMB:
VII. HOLD HARMLESS AND INDEMNITY
The parties agree to hold the US-China Business Mediation Center and its mediator(s) harmless for any loss, costs or damage that may result to either parties from the good faith performance of their duties. They parties agree to indemnify the mediators for any loss, costs, or damage they may bear as a result of carrying out in good faith, their duties as mediators.
VIII. PAYMENT PROCEDURES
For payment in RMB, please wire to
Legal Affair Department, China Council for the Promotion of International Trade
Lishilu Sub Branch Office, Beijing Branch, Industrial and Commercial Bank of China
Account # 00005208094001
For payment in American dollars, please contact CPR email@example.com
RETURN COMPLETED FORM TO EITHER:
|CPR Institute for Conflict Prevention & Resolution
575 Lexington Avenue, 21st Floor
New York, NY 10022 USA
|China Council for the Promotion of International Trade
No.1,Fuxingmenwai Street, Beijing
P.R China 100860
Party 1 (Please Print) Signature Date
Party 2 (Please Print) Signature Date
CPR-CCBIT Secretariat Signature Date
SCHEDULE OF FEES
The following fee schedules control mediations conducted under the auspices of the US-China Business Mediation Center.\
1. For Disputes Involving Less than $500,000:
$2,000 Administrative Fee
$8,000 Deposit Towards Neutral Fee
The party that initiates the claim is responsible for submitting one-half this amount ($4,000) with the initial submission. The responding party is responsible for submitting one-half of the amount ($4,000)with its response.
2. For Disputes Involving $500,000 or More:
$4,000 Administrative Fee
$16,000 Deposit Towards Neutral Fee
The party that initiates the claim is responsible for submitting one-half this amount ($8,000) with the initial submission. The responding party is responsible for submitting one-half of the amount ($8,000)with its response.
3. Mediators are paid an hourly rate of $300-500 USD. The Center shall determine the rate within the above range by considering the mediator’s prestige, expertise, the complexity of the dispute, etc.
4. Whenever the mediator’s fees deposited by the parties are insufficient to pay for fees to be incurred in the future, the Center shall advise the parties to pay the extra fees.
5. In addition to the fees quoted above, the parties may be required to submit further payments to reimburse the mediator(s) for their actual and reasonably incurred travel and other expenses in connection with the mediation.
FORM OF ENGAGEMENT
Agreement made (date)__________________________________________________, ________
and the following Mediators ________________________________________________________
A dispute has arisen between the parties (the "Dispute"). The parties have agreed to participate in a mediation proceeding (the "Proceeding") under the CPR/CCPIT Mediation Procedure [, as modified by mutual agreement] (the "Procedure"). The parties have chosen the Mediators for the Proceeding. The parties and the Mediators agree as follows:
Duties and Obligations
The Mediators and each of the parties agree to be bound by and to comply faithfully with the Procedure, including without limitation the provisions regarding confidentiality.
The Mediators have no previous commitments that may significantly delay the expeditious conduct of the proceeding and will not make any such commitments.
The Mediators, the U.S. - China Business Mediation Center and their employees, agents and partners shall not be liable for any act or omission in connection with the Proceeding, other than as a result of its/his/her own willful misconduct.
Disclosure of Prior Relationships
The Mediators have made a reasonable effort to learn, and have disclosed to the parties in writing, (a) all business or professional relationships the Mediators and/or the Mediators’ firms have had with the parties or their law firms within the past five years, including all instances in which the Mediators or the Mediators’ firms served as attorney for any party or adverse to any party; (b) any financial interest the Mediators have in any party; (c) any significant social, business or professional relationship the Mediators have had with an officer or employee of a party or with an individual representing a party in the Proceeding; and (d) any other circumstances that may create doubt regarding the Mediators’ impartiality in the Proceeding.
Each party and its law firm has made a reasonable effort to learn and has disclosed to every other party and the Mediators in writing any relationships of a nature described in the paragraph above not previously identified and disclosed by the Mediators.
The parties and the Mediators are satisfied that any relationships disclosed will not affect the Mediators’ independence or impartiality. Notwithstanding such relationships or others the Mediators and the parties did not discover despite good faith efforts, the parties wish the Mediators to serve in the Proceeding, waiving any claim based on said relationships, and the Mediators agree to so serve.
The disclosure obligations herein are continuing until the Proceeding is concluded. The ability of the Mediators to continue serving in this capacity shall be explored with each such disclosure.
Neither the Mediators nor the Mediators’ firms shall undertake any work for or against a party regarding the Dispute.
Neither the Mediators nor any person assisting the Mediators with this Proceeding shall personally work on any matter for or against a party, regardless of specific subject matter, prior to six months following cessation of the Mediators’ services in the Proceeding. The Mediators’ firms may work on matters for or against a party during the pendency of the Proceeding if such matters are unrelated to the Dispute. The Mediators shall establish appropriate safeguards to insure that other members and employees of the firms working on the Dispute do not have access to any confidential information obtained by the Mediators during the course of the Proceeding.
The Mediators shall be compensated for time expended in connection with the Proceeding, plus reasonable travel and other out-of-pocket expenses. The Mediators fees shall be made out of a pool of funds established for this purpose at the Center. The funds in this pool shall be contributed equally by the parties, who agree that they shall promptly replenish the pool when notified by the Center. All funds in the pool that remain unexpended at the end of the Proceeding shall be promptly returned to the parties.
Party's Attorney Party's Attorney
The following code is applicable to any person acting as mediator under the auspices of the US-China Business Mediation Center (unless otherwise agreed by the parties):
1. Mediators shall be properly trained and shall maintain and update their education and practice in mediation skills. Mediators shall refuse appointment to a mediation for which they are not qualified.
2. Mediators shall disclose1 any circumstances that may affect their independence2 and impartiality3 or which may give rise to the perception of partiality or lack of neutrality.4 Mediators shall at all times act, and endeavor to be seen to act, with complete impartiality towards the parties and remain neutral in respect of the dispute. Mediators shall not accept an appointment or continue to act as mediator if they are unable to remain impartial and/or neutral.
3. Mediators shall ensure that prior to commencement of the mediation the parties have understood and expressly agreed:
• the purpose and general procedure of the mediation the role of
• mediators and of the parties
• the obligation of confidentiality on the mediators and on the parties mediators’ fee arrangement.
4. Mediators’ fees shall not be linked to the result of mediation.5
5. Mediators shall act diligently.
6. Mediators shall not coerce the parties.
7. Mediators shall keep confidential all information, arising out of or in connection with the mediation, including the fact that the mediation is to take place or has taken place, unless compelled by law or public policy grounds. Any information disclosed in confidence to mediators by one of the parties shall not be disclosed to the other parties without permission or unless compelled by law.
1 Mediators are required to inform the parties of the existence of any circumstances that may influence their
independence, impartiality and neutrality, even if it may not in fact influence their fairness towards the parties. The existence of such circumstances does not automatically imply unfitness to act as mediator.
2 Independence means the absence of any objective link (personal or business relationship) between the
mediator and one of the parties.
3 Impartiality refers to a subjective attitude of the mediator, who should not favor any one party over another.
4 Neutrality refers to the position of the mediator, who should have no direct interest in the outcome of the mediation.
5 If the linking of fees to the result of the mediation is not prohibited by the rules of the Center and if the parties requested such an arrangement, after full disclosure by the mediator of the possible consequences (as far as his/her financial interest in the outcome and his/her appearance of impartiality are concerned) and the mediator has conscientiously considered whether such an arrangement creates an appearance or actuality of partiality, then such an arrangement may be used without it being considered unethical.