A Diversified Dispute Resolution Mechanism for Settling International Commercial Disputes in China

Globalization and international trade call for dispute resolution service competitions among various nations. China is building a Diversified Dispute Resolution Mechanism (DDRM) to connect litigation with alternative dispute resolution methods to enhance the efficiency and flexibility of its dispute resolution system and improve the legal environment for foreign investment. This Chapter demonstrates China’s latest development in international commercial dispute resolution from three perspectives: the construction of the Chinese International Commercial Court under the Belt-and-Road Initiative, arbitration reforms in FTZs, and the development of commercial mediation in China with the impact of the Singapore Mediation Convention on Mediation. These judicial reforms and legal practices prove that China is moving towards the modernization of its commercial dispute resolution system, but further legislative and judicial reforms are required.

Structure: The structure of this chapter consists of five sections. Section I summarizes the concept of a diversified dispute resolution mechanism (DDSM) in the background of China’s further integration into the world market and embracing international rules of commercial dispute resolution. Section II to IV demonstrates the framework of the DDSM from three perspectives: international commercial court, arbitration, and commercial mediation. Section II focuses on China’s International Commercial Court with emphasis on its jurisdiction, expertise in foreign law ascertainment, procedural reforms, and the construction of a one-stop international commercial dispute resolution platform. Section III concentrates on international arbitration reforms in the context of free trade zones. The FTZs serve as a judicial experiment for allowing foreign arbitration institutions to administer international commercial disputes in China, with practical challenges, such as the legality concern of foreign arbitration institutions, the scope of foreign-related disputes, and judicial support for the arbitration proceedings administered by foreign arbitration institutions. Section IV discusses the mediation legal framework in China, focusing on judicial mediation and commercial mediation, with a light touch on the impact of the Singapore Convention on China’s mediation development. Section V concludes with current challenges to China’s development in a diversified dispute resolution mechanism and provides recommendations for the future development of the DDRM.