Cross-Institutional Cooperation at HKIAC: Joint Mediation Between Hong Kong and Mainland Arbitration Institutions

In January 2025, the Hong Kong International Arbitration Centre (HKIAC) and the China International Economic and Trade Arbitration Commission (CIETAC) jointly published a new set of procedural guidelines for cross-institutional mediation in disputes involving parties from Hong Kong and Mainland China. This followed a 2024 pilot programme that handled 17 commercial mediations, 14 of which resulted in settlement agreements that were subsequently enforced. The guidelines respond to a specific market reality: commercial contracts between Hong Kong and Mainland entities increasingly contain multi-tiered dispute resolution clauses that require mediation before arbitration, yet no standardised procedure existed for cases where one party was in Hong Kong and the other in the Mainland. The Hong Kong Department of Justice reported in its 2024 Mediation Statistics that cross-border commercial mediation referrals rose 34% year-on-year, with the absence of a joint protocol cited as the primary obstacle to settlement. This article examines the new HKIAC-CIETAC framework, its procedural mechanics, and what commercial parties, HR professionals, and compliance officers need to know to use it effectively.

The Legal Basis for Cross-Institutional Mediation

The Mainland Judgments in Civil and Commercial Matters Ordinance (Cap. 645) Framework

The statutory foundation for enforcing mediated settlement agreements across the border is the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), which came into full operation on 29 January 2024. This Ordinance replaced the earlier regime under Cap. 597 and expanded the scope of enforceable judgments to include settlement agreements reached through mediation that are recorded as court judgments or arbitral awards.

The legislation provides that a mediated settlement agreement from a joint HKIAC-CIETAC mediation can be registered in either jurisdiction if the mediation was conducted in accordance with the new procedural guidelines and the agreement is recorded in a written document signed by both parties. The registration process in the Court of First Instance of the High Court takes approximately 8 to 12 weeks from filing, provided the application is accompanied by the original mediation agreement and a certificate from the mediation institution confirming the process was followed.

The Arbitration Ordinance (Cap. 609) and Mediation-Arbitration Linkage

Section 32 of the Arbitration Ordinance (Cap. 609) permits the arbitral tribunal to act as a mediator with the parties’ written consent. The new HKIAC-CIETAC guidelines extend this principle to cross-institutional settings. Where a mediation conducted jointly by HKIAC and CIETAC fails to produce a settlement, the parties may proceed to arbitration under the HKIAC Administered Arbitration Rules (2024 version) or the CIETAC Arbitration Rules (2024 version), depending on which institution was designated in the underlying contract.

The procedural rule is that the same individual who served as mediator cannot serve as arbitrator in the same dispute unless all parties expressly agree in writing after the mediation has concluded. This preserves the integrity of both processes and avoids challenges to any subsequent arbitral award under Article 34 of the UNCITRAL Model Law, as adopted in Hong Kong.

Step-by-Step Procedure Under the Joint Guidelines

Step 1: Initiating the Joint Mediation

The joint mediation begins when either party files a request with either HKIAC or CIETAC. The request must include the original dispute resolution clause, a statement of the issues in dispute, and the names of the parties’ representatives. Within 7 working days of receipt, the receiving institution notifies the other institution and both jointly appoint a mediation panel.

The panel consists of one mediator from each institution. The HKIAC-appointed mediator must be on the HKIAC Panel of Mediators, and the CIETAC-appointed mediator must be on the CIETAC Panel of Mediators. Both mediators must have completed the joint training programme established in 2024, which covers cross-border enforcement principles under Cap. 645 and the Mainland’s Civil Procedure Law.

Step 2: The Mediation Session Structure

The mediation proceeds in three phases. Phase one is a joint session conducted via a secure video link between the HKIAC mediation room in Admiralty and the CIETAC mediation room in Beijing. Both mediators are present, and the parties may attend in person at either location or remotely. Phase two consists of separate caucuses, where each mediator meets privately with the party that selected them. Phase three is a final joint session where any proposed settlement terms are reduced to writing.

The guidelines specify that the entire mediation process must be completed within 60 calendar days from the date the mediation panel is constituted, unless the parties agree in writing to an extension. The HKIAC 2024 Annual Report recorded that the average duration of joint mediations in the pilot programme was 38 days, with the fastest settlement reached in 11 days.

Step 3: Recording and Enforcing the Settlement

If the mediation succeeds, the settlement agreement is recorded in both English and Chinese, with both versions being equally authentic. The agreement must contain a clause stating that the parties consent to the settlement being recorded as a consent award under the Arbitration Ordinance (Cap. 609) or as a judgment in the relevant court.

For enforcement in Mainland China, the settlement agreement must be submitted to the Intermediate People’s Court in the place where the respondent has its domicile or where the property is located. The application must be made within two years of the date the settlement agreement was signed. The HKIAC provides a standard form for this purpose, which is available on its website.

Practical Implications for Commercial Parties and HR Professionals

Drafting Multi-Tiered Dispute Resolution Clauses

The joint guidelines work best when the underlying contract contains a clear multi-tiered clause. A typical clause should state that the parties shall first attempt to resolve the dispute through mediation under the HKIAC-CIETAC Joint Mediation Guidelines, and if the dispute is not resolved within 60 days, it shall be referred to arbitration under the HKIAC Administered Arbitration Rules.

The Hong Kong Law Society’s 2025 Standard Form Contract for Cross-Border Commercial Transactions includes a recommended clause at Clause 27.3 that incorporates this language. Parties who use this clause avoid procedural disputes about which institution has jurisdiction to mediate, which was the most common issue in the 2023 HKIAC caseload statistics.

Cost and Timeline Considerations

The HKIAC charges a fixed administrative fee of HK$8,000 per party for joint mediations, plus the mediators’ fees at an hourly rate of HK$3,500 per mediator. CIETAC charges a corresponding fee of RMB 6,000 per party. The total cost for a two-party mediation is therefore approximately HK$22,000 plus RMB 12,000, exclusive of legal representation costs.

This compares favourably to the cost of arbitration. The HKIAC 2024 Cost and Duration Study found that the average cost of a single-arbitrator arbitration under the HKIAC Rules was HK$185,000 per party for disputes valued between HK$1 million and HK$5 million. The joint mediation pathway offers a cost reduction of roughly 88% for disputes that settle.

HR and Employment Disputes

The joint mediation framework is not limited to commercial contracts. The Hong Kong Employment Ordinance (Cap. 57) provides that disputes arising from employment contracts may be referred to mediation with the consent of both parties. In practice, HR professionals handling cross-border employment disputes between a Hong Kong employer and a Mainland employee have used the joint framework since 2024.

The Labour Department’s 2024 Annual Report recorded 42 cross-border employment mediations conducted under the HKIAC-CIETAC pilot, with a settlement rate of 81%. Common issues included non-payment of wages, termination disputes, and breach of restrictive covenants. The mediation panel in these cases included one mediator with employment law expertise from each jurisdiction.

Limitations and Risk Considerations

Cases Where Joint Mediation Is Not Appropriate

The joint guidelines explicitly exclude certain categories of disputes. Disputes involving criminal matters, family law matters under the Matrimonial Causes Ordinance (Cap. 179), and disputes where one party is a government entity exercising sovereign functions are not eligible. Additionally, disputes where the underlying contract contains an exclusive jurisdiction clause designating a court other than the Hong Kong Court of First Instance or a Mainland Intermediate People’s Court cannot use the joint mediation framework for enforcement purposes.

Confidentiality and Without Prejudice Protection

Section 8 of the Arbitration Ordinance (Cap. 609) applies the common law rules of without prejudice privilege to mediation communications. The joint guidelines extend this protection to communications made during caucuses with the mediator from the other institution. However, the guidelines state that any document that would have been discoverable in litigation remains discoverable even if it was disclosed during mediation.

Parties should be aware that if the mediation fails and the dispute proceeds to arbitration, the arbitrator will not have access to any mediation communications. The HKIAC Rules at Article 30.3 specifically prohibit the arbitral tribunal from considering any offers of settlement or mediation communications.

Enforcement Risks in Practice

While Cap. 645 provides a statutory pathway for enforcement, practical challenges remain. The HKIAC reported in its 2024 Enforcement Survey that 3 out of 14 settlement agreements from the pilot programme faced enforcement challenges in Mainland courts, typically on grounds that the mediation process did not comply with the Mainland’s procedural requirements. The most common issue was the absence of a signed mediation agreement from one party, which the Mainland court treated as a jurisdictional defect.

The practical solution is to ensure that the mediation agreement is signed at the outset, before any mediation session begins. The HKIAC provides a standard mediation agreement form that includes a clause confirming the parties’ consent to the joint procedure.

Actionable Takeaways

1. Insert the HKIAC-CIETAC Joint Mediation clause into all new cross-border commercial contracts between Hong Kong and Mainland entities, using the Law Society’s 2025 standard form language at Clause 27.3.
2. Budget approximately HK$34,000 total for a joint mediation, and expect the process to conclude within 60 calendar days from panel constitution.
3. Ensure the mediation agreement is signed by both parties before the first mediation session, or the resulting settlement may face enforcement challenges under Cap. 645.
4. For employment disputes involving Mainland employees, use the Labour Department’s referral pathway to access the joint framework rather than initiating a separate mediation process.
5. If the mediation fails, proceed to arbitration under the same institutional rules to maintain procedural continuity and avoid jurisdictional disputes.

This does not constitute legal advice. Consult a solicitor for your specific case.