Conciliation in the Far East

Abstract

commercial contracts with Chinese parties often contain arbitration clauses worded as follows: > ‘All disputes arising from the execution of, or in connection with, this contract shall be settled amicably through friendly negotiation, the case shall then be submitted to the Foreign Economic and Trade Arbitration Commission of CCPIT, Beijing, for arbitration in accordance with its Provisional Rules of Procedure …’ The parties to these contracts envisage a two-steps dispute resolution procedure, first, settlement discussions with their contractual partner – sometimes also called ‘friendly consultation’ – and then, if this fails, arbitration. Newly promulgated Chinese laws encourage, or even prescribe, this procedure, for example, Article 14 of the Joint Venture Law of 1979, or Article 37 of the Foreign Economic Contract Law of 1985 which reads: > ‘Any disputes arising from a contract shall be settled by the parties, if possible, through consultations or through mediation of a third party. In case the parties are not willing to go through consultation or mediation, or no settlement is reached through consultation or mediation, the dispute may, in accordance with the arbitration clause provided in the contract or the written arbitration agreement reached afterwards, be submitted to a Chinese arbitration body or other arbitration body for arbitration’. This provision, it should be noted, mentions a third method of dispute settlement: mediation by a third party, in other words, conciliation. For Europeans, the terms ‘friendly consultation’ or ‘conciliation’ sound very modern and imprecise. Years ago, it certainly would have been impossible to give an explanation of what they really mean. This is so since our legal tradition is different. Western popular culture, from motion pictures to American ‘soap operas’, portray hearings in Anglo-American civil court cases as a place where lawyers act as duelists for the benefit of their respective parties. This impression is indeed …