April 01, 2011

PRC People's Mediation Law

Issuing Body: Standing Committee of the National People's Congress
Issuing Date: August 28, 2010
Effective Date: January 1, 2011

Mediation has a long history in China, and the constitution of the People's Republic of China even mandates a mediation system: "residents' and village committees shall establish sub-committees for public mediation, security, and health in order to manage public affairs and social services in their area, mediate civil disputes, help maintain public order, and convey the opinions and requests of the residents to the people's government along with suggestions for improvement." Until recently, however, there has been no law for the implementation of a mediation system, only administrative rules, such as the Rules on People's Mediation issued by the Ministry of Justice in 2002. Moving to fill that gap, the Standing Committee of the National People's Congress has enacted the People's Mediation Law (Mediation Law), which took effect on January 1, 2011.

As many Chinese citizens choose mediation rather than court when disputes arise, the people's mediation system essentially functions as an alternative dispute resolution system operating parallel to the formal court system. While many types of civil disputes may be resolved through people's mediation, two types, under relevant PRC laws, cannot be: 1) disputes that, in accordance with relevant laws and regulations, can only be resolved by special agencies or specifically cannot be resolved through mediation; and 2) disputes that have been handled or resolved by a people's court, public security bureau, or administrative agency.

Labor disputes may be resolved through people's mediation, so the Mediation Law is certainly of interest to businesses.

Definition of People's Mediation

Under the Mediation Law, the term "people's mediation" refers to the activities of people's mediation committees in helping and promoting parties to voluntarily reach mediation agreements through consultation on the basis of equality through persuasion, guidance, and other methods to resolve disputes among people.

Mediation Principles

In mediating disputes among people, people's mediation committees shall observe the following principles:

  • Conduct mediations on the basis of the voluntary participation and equality of the parties
  • Comply with PRC laws, regulations, and policies
  • Respect the rights of parties
  • Do not prevent parties from protecting their rights through other channels, such as arbitration, administrative proceedings, and courts

People's Mediation Committees

Under the 2002 Rules on People's Mediation, people's mediation committees are organizations that function under village committees or residents' committees and mediate private disputes under the guidance of basic people's governments and basic people's courts.

According to the Mediation Law, village committees and residents' committees can establish people's mediation committees. Enterprises and public institutions may establish people's mediation committees if necessary.

A people's mediation committee consists of three to nine commissioners, has one director, and may have several vice directors if necessary. In addition, the Mediation Law stipulates that  a people's mediation committee must have women members and, if it serves an area where many minorities live together, must include a member or members from the minority or minorities.

Rights and Obligations of the Parties Involved in People's Mediation

In accordance with the Mediation Law, parties enjoy the following rights in people's mediation activities:

  • To select or accept people's mediators
  • To accept mediation, refuse mediation, or require the termination of mediation
  • To require that the mediation be held openly or in privacy
  • To independently express intentions and voluntarily reach a mediation agreement

The parties have the following obligations in people's mediation activities:

  • To state facts honestly
  • To abide by rules during the mediation and to respect people's mediators
  • To respect the rights of the other party

Written or Oral Mediation Agreements

Under the Mediation Law, a written mediation agreement may be prepared once  an agreement is reached through the mediation of the people's mediation committee.

A written mediation agreement will take effect on the day it is signed or affixed with the seal or fingerprint of all parties, signed by people's mediators, and affixed with the seal of the mediation committee. Each party will get one copy of the written mediation agreement, and the people's mediation committee shall keep one copy.

If the parties decide that preparation of a written mediation agreement is unnecessary, an oral agreement may be adopted, with the content of the agreement recorded by people's mediators. An oral mediation agreement will take effect on the date the parties reach the agreement.

Both written and oral mediation agreements are legally binding. If any dispute occurs regarding the performance or content of a mediation agreement, a party may initiate a lawsuit in a people's court. In addition, if the parties of a mediation agreement deem it necessary, they may apply to the people's court for confirmation on the effect of the mediation agreement within 30 days after the effective date of the agreement. If after review the people's court confirms the effect of the mediation agreement, and if one party refuses to perform or fails to perform the confirmed mediation agreement, the other party may apply to the people's court for enforcement.

Conclusion

According to government figures, people's mediation committees helped resolve approximately 29 million disputes throughout China from 2005 to 2009. There were 4.94 million people's mediators in China at the end of 2009.

Issuance of the Mediation Law provides a more solid legal foundation for this important dispute resolution system and clear guidance on the people's mediation process for people's mediators and those who participate in the process.

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