(Adopted by China Council for the Promotion of International Trade/China Chamber of International Commerce on October 30, 2018. Effective as from December 12, 2018)

 

Chapter 1 General Provisions

Article 1 Purpose and Basis

These Rules are formulated for the purpose of resolving investment disputes through mediation in a fair and efficient manner, in accordance with the Investment Agreement under the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Investment Agreement under the Mainland and Macau Closer Economic Partnership Arrangement (hereinafter referred to as “CEPA Investment Agreements”).

Article 2 Scope of Application

A Hong Kong/Macau investor may submit its investment dispute with the Mainland department or authority undertaking the specific administrative act to the Investment Dispute Settlement Center (“Center”) of China International Economic and Trade Arbitration Commission (“CIETAC”) for settlement through mediation in accordance with Article 19 of the CEPA Investment Agreements.

Article 3 Application of the Rules

These Rules shall apply to the disputes submitted by the parties to the Center for mediation. Where the CEPA Investment Agreements provide otherwise, such provisions shall prevail.

Article 4 Voluntary Mediation

Mediation shall follow the principle of voluntary participation by the parties.

Article 5 Fair Mediation

Mediators shall conduct mediation fairly. Mediators shall not represent either party, and shall remain independent and impartial, and shall treat the parties equally.

Mediators shall cooperate closely and diligently carry out their duties as mediator. Mediators shall not be negligent or inefficient.

Mediators shall actively facilitate the communication and negotiation between the parties, and assist them in reaching a settlement agreement. 

 

Chapter 2 Mediation Proceedings

 

Article 6 Commencement of Mediation 

The mediation proceedings shall commence on the day on which the Center receives the Request for Mediation.

Article 7 Request for Mediation

The party applying to the Center for mediation (“Claimant”) shall:

(1) submit the Request for Mediation in writing signed and/or sealed by the Claimant, which shall, inter alia, include:

(a) the parties’ names, addresses, telephone numbers, emails and any other means of communication, and the same information of the investor’s investment-covered enterprise (if any) that has suffered losses or damages at the Mainland;

(b) the clause(s) claimed to have been violated and any other related clauses in the CEPA Investment Agreement;

(c) legal and factual grounds for the claims, including measures involved therein; and

(d) the approach of compensation sought and the estimated amount of compensation.

(2) submit the Claimant’s identification documents and Power of Attorney (if any).

(3) submit the documents proving that it is qualified as an investor protected by the CEPA Investment Agreement.

(4) the investor has proposed amicable consultation with the other party in accordance with Article 19.1 (i) of the CEPA Investment Agreement (Dispute Settlement between a Hong Kong/Macau Investor and the Mainland) at least one (1) month before its submission of the Request for Mediation in accordance with Article 7.1 of these Rules.

(5) for the measures undertaken by the other party that are claimed to be in violation of its obligations under the CEPA Investment Agreement, the investor has waived its entitled rights to initiate or continue any dispute settlement proceedings based on any other agreements between the Mainland and other parties.

(6) it is within three years since the date on which the investor became aware of or should have become aware of the alleged violation, and since the date the investor or its covered investment suffered from losses or damages because of the alleged violation. However, delays due to force majeure shall not be counted in the aforementioned three-year period.

(7) prepay the registration fee for mediation as per the Mediation Fee Schedule.

When submitting the Request for Mediation, the Claimant may enclose the evidence and other documents upon which the requests are based. The Claimant may declare in writing that part of or all of its evidence and other supporting documents be accessible to the mediators only.

Article 8 Acceptance of a Case

Upon receipt of a Request for Mediation and its attachments, together with the identification documents of the investor, if the Center finds after examination the formalities required for mediation application to be complete, it  shall accept the application and send a Notice of Mediation to both parties together with a copy of these Rules and the Panel of Mediators. The Re quest for Mediation and its attachments submitted by the Claimant shall also be sent to the Respondent, except for the evidence and other supporting documents that the Claimant has declared to be accessible to the mediators only.

Where after examination the Center finds the formalities required for mediation application to be incomplete, it may request the Claimant to complete or amend them within a specified time period.

After acceptance of a case, the Center shall designate a case manager to assist with the procedural administration of the mediation.

Article 9 Confirmation to Participate in the Mediation by the Respondent

The Respondent shall, within fifteen (15) days from the date of receipt of the Notice of Mediation, confirm in writing whether it agrees or declines to participate in the mediation proceedings. Where the Respondent does have difficulty in giving its reply within the said time period, it may apply for an extension before  the deadline.

Where the Respondent expressly declines to participate in the mediation proceedings or fails to give any response within the specified time period, the mediation proceedings shall be terminated.

Where the Respondent confirms in writing to participate in the mediation proceedings, both parties may, with the assistance of the Center, reach a consensus on matters such as the method of payment and the allocation of the mediation fee advance between the parties, the number of mediators and the approach of appointment, and the place of mediation.

Where the parties fail to agree on the method and allocation of the advance payment, the parties shall prepay an equal proportion of the mediation fee.

Where a party agrees to participate in the mediation but refuses to prepay its proportion of the mediation fee, the Center may notify the other party to prepay all the mediation fee.

Article 10 Reply

The Respondent shall, within 30 days from the date of giving its written confirmation to participate in the mediation proceedings, submit its reply (if any) in writing to the Request for Mediation as well as the facts and reasons the Request relied upon. The Respondent may declare in writing that part of or all of its evidence and other supporting documents be accessible to the mediators only.

Article 11 Copies of Documents

The parties shall make their submissions in quadruplicate. Where there are more than two parties or more than two mediators, additional copies shall be provided accordingly.

Article 12 Number of Mediators and Approach of Appointment

The parties may agree on the number of mediators and the approach of mediator appointment. Unless otherwise agreed by the parties, the mediation proceedings shall be conducted by two mediators.

Where there shall be two mediators, the Claimant and the Respondent shall, within thirty (30) days from the date of receipt of the Notice of Mediation, each nominate a mediator and notify the Center in writing of such nomination , or entrust the Center in writing to appoint a mediator for it.

Where the Claimant or the Respondent fails to nominate or entrust the Center to appoint a mediator within the above time period, or fails to nominate a mediator in accordance with their agreed approach within their agreed time period, the Center shall appoint a mediator for the party.

The parties or the Center shall nominate or appoint mediators from the Panel of Mediators.

Article 13 Mediator’s Acceptance of the Nomination or Appointment

The mediator shall confirm in writing whether to accept the nomination or appointment within ten (10) days upon receipt of the Notice of Nomination or Appointment from the Center.

If the mediator declines the nomination or appointment, or fails to reply within the above time period, a new mediator shall be nominated or appointed according to the same procedure that applied to the nomination or appointment of the previous mediator.

Article 14 Disclosure and Conflict of Interest

In case of accepting the nomination or appointment, the mediator shall, within ten (10) days upon receipt of the Notice of Nomination or Appointment, sign a Declaration of Independence and impartiality, and shall disclose in writing if there exist any circumstances likely to give rise to justifiable doubts as to his/her impartiality or independence.. If circumstances that need to be disclosed arise during the mediation proceedings, the mediator shall disclose such circumstances to the parties without undue delay. After the disclosure, with the approval of all parties, the mediator may continue to carry out his/her duties to mediate.

Even after the mediation proceedings are over, the mediator shall still be obligated to prevent conflict of interest or circumstances that may lead to conflict of interest.

The mediator shall not act as arbitrator, judge, or one party’s’ representative, consultant or witness in arbitration, litigation or any other proceedings for the same or relevant dispute, unless otherwise agreed by the parties.

Article 15 Confidentiality

Unless otherwise agreed by the parties, mediation shall be conducted in camera with no written record of the mediation process.

Unless otherwise agreed by the parties or stipulated in the CEPA Investment Agreements, the mediators, the parties and their authorized representatives, other participants to the mediation proceedings, and the staff members of the Center shall not disclose to any outsider any substantive or procedural matters relating to the case.

Article 16 Conduct of Mediation

Unless otherwise agreed by the parties, the mediators may conduct the mediation in any way they deem appropriate, including but not limited to:

(1) meeting with the parties or their authorized representatives separately or concurrently, and if necessary, after soliciting the opinions of the parties, the mediators may decide to meet with the parties without the presence of their agents;

(2) requesting the parties to provide supplement materials or relevant opinions;

(3) requesting the parties to put forward their oral or written settlement proposals;

(4) hearing witness statement(s);

(5) conducting on-site examination, or engaging relevant experts to provide consulting advice or an appraisal opinion with respect to professional or technical issues, with the approval of both parties; and

(6) providing suggestions and proposals to settle the dispute.

Article 17 Good Faith Cooperation

The parties shall cooperate with the mediators in good faith with utmost sincerity, including but not limited to:

(1) providing relevant documents, information and explanation as required by the mediators;

(2) making best efforts to meet the requirements of the mediators to hear from witnesses or experts; and

(3) facilitating the on-site examination by the meditators.

The parties shall comply with any time limit agreed by themselves or decided by the mediators.

Article 18 Settlement Agreement

The parties may reach a  settlement agreement by themselves or with the assistance of the mediators at any stage of the mediation proceedings.

Where the parties have reached a settlement agreement by themselves or with the assistance of the mediators, the mediators shall make a settlement agreement based on the settlement agreement. The settlement agreement shall, inter alia, include:

(1) the names and addresses of the parties;

(2) the mediators;

(3) the mediation requests and the matters for mediation;

(4) the settlement result on the approach and amount of compensation and other matters agreed by both parties; and

(5) the time and place of the conclusion of the settlement agreement.

The approach of compensation in the settlement agreement shall be limited to the following types :

(1) monetary compensation and any applicable interest;

(2) restitution of property, or monetary compensation and any other applicable interest as the alternative of restitution; and

(3) any other legitimate approach of compensation agreed by both parties.

After both parties and the mediators have signed and/or stamped on the settlement agreement,, the Center shall affix its seal on such agreement.

The settlement agreement is binding upon both parties. The investor may apply for enforcement of the settlement agreement in accordance with relevant rules and regulations of the place where the investment is made.

Article 19 Termination of the Mediation Proceedings

The mediation proceedings shall be terminated if any of the following circumstances arises:

(1) the Respondent expressly declines to participate in the mediation proceedings or fails to give any response within the specified time limit after receipt of the Notice of Mediation prescribed in Article 9 of these Rules;

(2) any party notifies in writing that the mediation proceedings shall be terminated;

(3) at any stage of the mediation proceedings, if in the view of the mediators the parties are unlikely to reach a settlement agreement, after soliciting the opinions of the parties, the mediators may notify the parties in writing to terminate the mediation proceedings;

(4) both parties have reached a consensus on the settlement of their dispute, the mediation proceedings shall be terminated after the settlement agreement has been issued; or

(5) other circumstances the require the termination of the mediation proceedings. 

 

Chapter 3 Supplementary Provisions

 

Article 20 Mediation Fee and Actual Expenses

The parties shall pay the mediation fee according to the relevant provisions of these Rules and the Fee Schedule. The Fee Schedule shall form a part of these Rules.

The mediation fee is composed of the registration fee, administration fee and the mediator’s fee. The Center may also charge the parties for other additional and reasonable actual expenses, including but not limited to the travel, accommodation and other actual expenses of the mediators and the case manager incurred in conducting the mediation at a place other than the domicile of the Center or for on-site examination, as well as the costs and expenses of the expert or appraiser appointed by the mediators.

Unless otherwise provided in these Rules or  agreed by the parties, the aforesaid expenses shall be borne by the parties on an equal basis.

Where the parties and mediators have reached special agreement on the mediator’s fee, such agreement shall prevail.

Article 21 Other Issues

Unless otherwise agreed by both parties, neither party may invoke any statement, recognition or compromise by the other party or by the mediators in the process of mediation as materials or evidence against the other party in any administrative review proceedings or judicial proceedings for the same dispute.

Article 22 Interpretation

These Rules shall be interpreted by the Center.

Article 23 Coming into Force

These Rules shall come into force as from December 12, 2018. 

 

Mediation Fee Schedule for

Investment Disputes under the CEPA Investment Agreements

 

For any investment dispute between a Hong Kong/Macao investor and the Mainland department or authority undertaking the specific administrative act submitted to the CIETAC Investment Dispute Settlement Center ("Center") for settlement through mediation in accordance with Article 19 of the CEPA Investment Agreements, the mediation fee should be paid in accordance with the CIETAC Mediation Rules for Investment Disputes under the CEPA Investment Agreements ("Mediation Rules") and this Fee Schedule.

The mediation fee is composed of the registration fee, the administrative fee and the mediator's fee.

I. Registration Fee

When applying for mediation, the Claimant shall pay a registration fee of RMB 5,000, which will cover the expenses for examining the application for mediation, initiating the mediation proceedings, and managing the archives. The registration fee is non-refundable and shall be credited into the prepayment of the party or parties filing the Request.

II. Administrative Fee

1. The administrative fee includes the pay for the case manager, postal service cost, communication cost, costs for using the rooms for mediation and office facilities, as well as other costs incurred by the institution to administer the mediation proceedings.

2. Administrative Fee Table  

1. Mediator’s Fee Table  

2. Where the parties and the mediators have reached special agreement on the mediator's fee, their agreement shall prevail, subject to the Center's approval.

IV. Other Issues

1. The amount in dispute referred to in the Administration Fee Table and the Mediator’s Fee Table shall be based on the sum of money involved in the mediation requests. If that amount is different from the actual amount in dispute, the latter shall be the basis for calculation. Where the amount in dispute is not ascertained at the time of applying for mediation, or where special circumstances exist, the amount of the mediation fee shall be determined by the Center in consideration of the specific nature and conditions of the dispute.

2. Apart from the mediation fee specified in this Fee Schedule, the Center may also charge the parties for other additional and reasonable actual expenses according to the relevant provisions of the Mediation Rules.

3. Where the mediation fee is to be charged in a currency other than RMB, the amount of the foreign currency shall be equivalent to the corresponding amount in RMB as specified in this Schedule.

4. Where a mediation only proceeds for a relatively short time and finally fails, and the amount of the administrative fee prepaid has exceeded RMB 24,500 and the amount of the mediator’s fee prepaid has exceeded RMB 52,000, the Center may decide to refund part of the prepayment but no more than 50% of the total exceeding amount.