Shenzhen Global Legal Leaders’ Dialogue Event 2020: Alternative Dispute Resolution

Mr. Hermann Knott, the moderator of this round table, started by introducing the panelists: Mr. Philip Hackett, Mr. Godson Ugochukwu, Mr. Paweł Sikora; Mr. Peter J. Pettibone and Mr. Jian Chen.

Experiences with dispute resolution in 2020

Mr. Hermann Knott then turned to the first topic which was the experiences with alternative dispute resolution in 2020, and asked Mr. Jian Chen about his experiences insofar. Mr. Jian Chen first answered in Chinese. Then he explained in English the rising importance of virtual hearings which became more and more acceptable because of the caseload and the financial pressure which the Parties are facing. Mr. Philip Hackett added the UK perspective and explained that initially everyone was under shock due to the pandemic. Then there was a tendency towards finding alternative ways of dispute resolution. The commercial courts in London already had provisions on the digital filing of claims and the remote taking of evidence. That is the reason why the Court system very quickly caught up with the situation. The judges were very flexible and so very rapidly remote hearings were being held. The same is true for arbitration: the system for digital submission and remote hearing was already in place. Therefore, there has been a very quick adjustment to the situation caused by the pandemic. Mr. Peter J. Pettibone added the US perspective and explained that the arbitration community adjusted very rapidly to virtual hearings. As a result, the acceptance of the new virtual is now widespread. Mr. Godson Ugochukwu added the African experience and explained that also in Africa dispute resolution was in person until the pandemic broke out. Now, the arbitration community is moving towards online-practices. However, this is not out of choice but out of necessity. Then, Mr. Hermann Knott asked Mr. Paweł Sikora to give the European perspective, in particular whether online-Arbitration has led to challenges of arbitrational awards for lack of due process. Mr. Paweł Sikora explained that although the legislation was in place the Courts were very reluctant to rely on it to hold online-hearings before the outbreak of the pandemic. However, since March/April 2020 the Courts very easily adapted.

Cost awareness in Dispute Resolution

Then, Mr. Hermann Knott asked the panelists about trends in Dispute Resolution Mechanisms whether it is rather ad hoc or institutional, fast-track etc. Mr. Godson Ugochukwu explained that cost considerations are a major factor insofar. Mr. Paweł Sikora confirmed this from his experience.

The future of alternative dispute resolution

Then, Mr. Hermann Knott turned to the future of alternative dispute resolution in particular to the impact of the Singapore Mediation Convention which was also signed by China. Mr. Jian Chen started by commenting on the future of Mediation in China. He explained that once the Singapore Mediation Convention becomes binding for China mediated settlement agreements may be enforced in China. Before the ratification of the Singapore Convention by China, Chinese Parties may rely on it to enforce mediated settlement agreements in jurisdictions where it has already become binding. The influence of state-owned enterprises is an important aspect as well. A further aspect is the increasing caseload that the Chinese Court system is facing. Against this background the Courts encourage Parties to resort to Mediation. Mr. Peter J. Pettibone added that from the US perspective Mediation is in advance as well. In some instances, Courts may even require the Parties to resort to Mediation before initiating Court proceedings, the so-called presumptive Mediation. Mr. Philip Hackett added that under the English Rules of Civil Procedure there are cost-penalties if the Parties fail to take up Mediation. Arbitration becomes more and more expensive. Against this background, the Parties are considering Mediation as a dispute resolution mechanism. A further argument for Mediation is when Parties want to continue doing business with each other. Mr. Godson Ugochukwu added that in Africa Mediation is in advance as well. In commercial litigation in Nigeria the Parties need to first go through Mediation before they can go to Court. Mr. Paweł Sikora added that in Poland Mediation is not very popular. A lot of Parties have the perception that Mediation is more suited for small family cases but not for commercial dispute resolution.

Discussion

Mr. Hermann Knott added that he had a case two years ago where the Party seeking Mediation, a client from Argentina, was considered weak by the other Party, a German pharmaceutical company, because it was seeking Mediation. Mr. Tianze Zhang then passed a question to his Chinese colleagues in Chinese. Mr. Hermann Knott commented that this question was about enforcement of an award and asked the Panel to comment. Mr. Philip Hackett explained that under English law one way to avoid enforcement of an award is to allege a fraud in the original transaction. Mr. Godson Ugochukwu agreed.