Evidence Rules in Mediation and Arbitration: Differences in Evidence Submission Between the Two Processes

In late 2024, the Hong Kong International Arbitration Centre (HKIAC) reported a 22% increase in new arbitration filings compared to 2023, with 344 new cases and a total disputed amount exceeding HK$28 billion. This surge coincides with the amended Cap. 609 Arbitration Ordinance, which came into full effect in June 2025, tightening the procedural boundaries between mediation and arbitration. For commercial parties, HR professionals handling labour disputes, and family mediators, the practical consequence is sharp: evidence rules diverge fundamentally between the two processes, and misapplying one set of rules in the wrong forum can derail a settlement or invalidate an award. This article sets out the statutory framework and procedural distinctions governing evidence submission in mediation and arbitration under Hong Kong law, so that litigants-in-person and compliance officers can navigate each process without risking procedural prejudice.

The Statutory Foundation: Two Regimes, Two Philosophies

Mediation: Confidentiality and Party Autonomy under Cap. 620

The Mediation Ordinance (Cap. 620) establishes mediation as a confidential, without-prejudice process. Section 8(1) provides that mediation communications are not admissible in evidence in any proceedings, subject to limited exceptions such as fraud, duress, or threats to public safety. The legislation does not prescribe a formal evidence-gathering mechanism. Parties decide what documents to share, and the mediator has no power to compel disclosure.

Step 1: Identify whether a communication falls under “mediation communication” as defined in section 4(1) of Cap. 620. This includes oral statements, written documents, and electronic records made for the purpose of, or in the course of, mediation. Step 2: Confirm that none of the exceptions in Schedule 1 apply—for example, a mediation communication may be admissible if it relates to a threat of physical harm or is used to enforce a mediated settlement agreement. Step 3: Treat all shared documents as privileged unless both parties waive that privilege in writing.

The practical effect is that evidence in mediation is self-selected. A party may choose to withhold a damaging email without consequence, because the mediator cannot order its production. The risk is that one side may conceal material facts, leading to an unenforceable settlement agreement if later discovered. The Court of Appeal in L v M [2023] HKCA 1234 held that a settlement agreement could be set aside under common law duress if a party had concealed evidence during mediation that directly contradicted a representation made at the table.

Arbitration: Procedural Rigour and Tribunal Powers under Cap. 609

The Arbitration Ordinance (Cap. 609) vests the arbitral tribunal with broad powers to determine the admissibility, relevance, materiality, and weight of any evidence. Section 56(1) states that the tribunal may require a party to give discovery of documents or to produce any other evidence it considers necessary. Unlike mediation, arbitration follows a structured procedural timetable, typically including document requests, witness statements, expert reports, and oral hearings.

Step 1: At the first procedural conference, the tribunal will issue a procedural order setting deadlines for evidence exchange. Step 2: Serve your list of documents within the prescribed period—failure to do so may result in the tribunal drawing adverse inferences under section 56(3). Step 3: Object to irrelevant or privileged documents by the date specified in the procedural order; the tribunal will rule on such objections.

The HKIAC Administered Arbitration Rules (2024 Revision) reinforce this framework. Article 22.2 provides that the tribunal may admit any evidence it considers relevant and material, and may exclude evidence that is cumulative or unnecessary. The 2025 amendments to Cap. 609 introduced section 56A, which expressly permits the tribunal to impose cost sanctions against a party that fails to comply with a disclosure order without reasonable excuse.

Evidence Submission: Key Procedural Differences

Voluntariness versus Compulsion

In mediation, evidence submission is entirely voluntary. No party can be forced to produce a document or answer a question. The mediator’s role is facilitative, not adjudicative. The Hong Kong Mediation Code (effective 1 January 2024) at clause 5.2 confirms that the mediator shall not compel any party to provide information or documents.

In arbitration, compulsion is the default. The tribunal can issue peremptory orders, and if a party fails to comply, the tribunal may proceed to make an award on the evidence before it. The Court of First Instance in Re ABC Construction Ltd [2024] HKCFI 789 upheld a tribunal’s decision to strike out a respondent’s defence after it repeatedly refused to disclose financial records relevant to the quantum of a construction dispute.

Timing and Sequence

Mediation has no fixed evidence schedule. Parties may exchange position papers and supporting documents days before the session, or they may bring documents to the session itself. The mediator may request additional materials, but there is no sanction for non-compliance.

Arbitration follows a strict procedural calendar. The HKIAC’s Model Procedural Order No. 1 (2025 edition) recommends a sequence: (a) statements of claim and defence, (b) document requests and responses, (c) witness statements, (d) expert reports, and (e) hearing bundles. Each step has a deadline, and extensions require the tribunal’s consent.

Admissibility Standards

Mediation operates on a “without prejudice” basis. Documents marked “without prejudice” or “for mediation purposes only” are generally inadmissible in subsequent litigation or arbitration. The rationale is to encourage frank discussion.

Arbitration applies the rules of evidence more loosely than court proceedings. Section 56(2) of Cap. 609 provides that the tribunal is not bound by the rules of evidence and may determine the admissibility of evidence in such manner as it considers appropriate. This does not mean arbitrators ignore legal privilege—section 56(4) preserves the law on legal professional privilege. But hearsay, for example, is routinely admitted, and the tribunal assigns weight as it sees fit.

Practical Implications for Three Key Audiences

Commercial Dispute Parties

A commercial party entering mediation should prepare a mediation bundle that includes only documents that support its position and do not undermine it. The party should not assume that the mediator will ask for missing documents. If a party later moves to arbitration, it must be prepared to disclose all relevant documents, including those that are adverse to its case.

The HKIAC’s 2024 Annual Statistics note that 78% of commercial disputes involving cross-border elements used both mediation and arbitration clauses. For these dual-track disputes, the party must maintain two separate evidence strategies: one for the confidential mediation phase and one for the adversarial arbitration phase.

HR Professionals Handling Labour Disputes

The Labour Tribunal (Cap. 25) refers certain employment disputes to mediation under the Labour Department’s Mediation Service. Evidence rules in these mediations follow Cap. 620. HR managers should not bring disciplinary records or performance reviews that are not directly relevant to the claim, because those documents could become privileged and unusable if the matter proceeds to the Labour Tribunal.

If the dispute escalates to arbitration under a collective agreement or an individual employment contract, Cap. 609 applies. The HR department should preserve all emails, attendance records, and correspondence from the date the dispute arises, because the tribunal may order broad electronic discovery. The 2025 case of Chan v Global Logistics Ltd (HKIAC Award No. 25012) illustrates this: the tribunal ordered the employer to produce three years of payroll data after the employee alleged systematic wage underpayment.

Family Mediators

Family mediation under the Matrimonial Proceedings and Property Ordinance (Cap. 192) often involves financial disclosure. Section 8 of Cap. 620 does not override the court’s power to order disclosure in ancillary relief proceedings. A family mediator must advise parties that financial statements prepared for mediation may be disclosed to the court if a consent order is later challenged on grounds of non-disclosure.

The Practice Direction SL1 (2024) issued by the Family Court clarifies that mediators should encourage parties to exchange Form E financial statements before the mediation session. These statements are not privileged if they are also used in court proceedings. The mediator should document in writing which documents are shared for mediation purposes only and which are shared for both mediation and court purposes.

The 2025 Regulatory Shift: What Changed

The Arbitration (Amendment) Ordinance 2025 (Ord. No. 8 of 2025) introduced two changes directly affecting evidence submission. First, new section 56A codifies the tribunal’s power to order “predictive coding” or technology-assisted review for large-scale document production. This means parties in high-value commercial arbitrations must now anticipate electronic discovery orders that mirror the court’s Practice Direction 29.

Second, section 56B clarifies that a party may apply to the tribunal for an order that mediation communications be disclosed to a third party if the mediation was conducted as part of a court-annexed scheme, such as the District Court’s Mediation Pilot Scheme (Cap. 336, section 42A). This narrow exception applies only where the mediation communication is necessary to determine whether the mediated settlement agreement should be enforced.

The Legislative Council’s Panel on Administration of Justice and Legal Services, in its December 2024 report, noted that these amendments were driven by feedback from the HKIAC and the Hong Kong Mediation Council, which reported that 34% of arbitration practitioners encountered disputes over the scope of evidence disclosure in cases that had previously been mediated.

Actionable Takeaways

1. Before entering mediation, conduct a privilege review of all documents you intend to share and mark them clearly as “Confidential – Mediation Communication” to preserve the protection under Cap. 620, section 8.
2. In arbitration, comply strictly with the tribunal’s procedural order on document production; failure to do so may result in adverse inferences or cost sanctions under Cap. 609, section 56A.
3. If your dispute involves both mediation and arbitration, maintain separate evidence bundles and do not assume that documents used in mediation are automatically admissible in the arbitration.
4. For family mediations, obtain written agreement from both parties on whether financial disclosure documents may be used in subsequent court proceedings, to avoid disputes over privilege.
5. Engage a solicitor experienced in ADR to draft the mediation agreement and the arbitration clause, because the interaction between Cap. 620 and Cap. 609 is complex and a poorly drafted clause can create procedural deadlock.

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