HKIAC Mediation Rules Explained: How to Conduct a Compliant Mediation Process

The Hong Kong International Arbitration Centre (HKIAC) published its updated Mediation Rules in November 2024, taking effect on 1 January 2025. This revision is the first comprehensive overhaul since the original 2010 framework. The 2025 Rules introduce a mandatory pre-mediation conference, stricter timelines for the exchange of position papers, and a new code of conduct for mediators. For any party agreeing to HKIAC mediation in a commercial or construction contract today, these are not optional guidelines—they are binding procedural requirements. A failure to comply with a pre-mediation conference direction or a late submission of a mediation brief can result in the mediator issuing a costs sanction against that party. This article explains the key procedural steps under the 2025 HKIAC Mediation Rules, setting out what a party representative or in-house counsel must do to run a compliant process from initiation to settlement or termination.

The Scope and Application of the 2025 Rules

When the Rules Apply

The HKIAC Mediation Rules apply whenever parties have agreed in writing to refer a dispute to mediation under the HKIAC’s auspices. This agreement is typically found in a contractual dispute resolution clause. The 2025 Rules apply to all mediations administered by the HKIAC where the mediation agreement was concluded on or after 1 January 2025. For agreements concluded before that date, the 2010 Rules continue to govern unless the parties expressly opt in to the 2025 version.

The HKIAC’s 2024 annual statistics recorded 287 new mediation case filings, a 12% increase from 2023. The average mediation value was HK$ 4.8 million. These figures, published in the HKIAC Annual Report 2024, demonstrate the growing reliance on institutional mediation for commercial disputes in Hong Kong.

The Role of the HKIAC Secretariat

The Secretariat is the administrative body that receives the Notice of Mediation, appoints the mediator, and manages the procedural timetable. Under Rule 2 of the 2025 Rules, the Secretariat has the power to extend or shorten any time limit set out in the Rules, provided it does not prejudice the rights of any party. This is a significant change from the 2010 Rules, where time limits were largely immutable without party consent.

The Secretariat also maintains the HKIAC’s Panel of Mediators. Under Rule 9, the Secretariat will appoint a mediator from the Panel unless the parties have agreed on a specific individual. The Panel currently lists 148 mediators, all of whom must hold a recognised mediation qualification and have completed at least 50 hours of mediation practice.

Step-by-Step Procedure Under the 2025 Rules

Step 1: Commencing Mediation

The mediation process begins when one party files a Notice of Mediation with the HKIAC Secretariat. Rule 3 requires the Notice to contain:

• The names and contact details of the parties and their representatives.
• A copy of the mediation agreement.
• A brief description of the dispute, including the amount in dispute if quantifiable.
• Any proposals regarding the language of the mediation and the location of the mediation sessions.

The Secretariat must acknowledge receipt within three working days. The responding party then has 14 calendar days to file a Response to the Notice of Mediation. The Response must state whether the party agrees to mediate and, if so, its position on the appointment of the mediator. Failure to file a Response within the 14-day period does not prevent the mediation from proceeding; the Secretariat may proceed with the appointment under Rule 9.

Step 2: Appointment of the Mediator

If the parties have not agreed on a mediator within 21 calendar days of the Secretariat’s acknowledgement, the Secretariat will appoint one. Under Rule 9, the Secretariat will consider the parties’ preferences regarding the mediator’s qualifications, industry expertise, and language ability. The appointed mediator must confirm their availability and independence in writing.

The 2025 Rules introduce a mandatory declaration of impartiality under Rule 9.3. The mediator must disclose any circumstances that may give rise to justifiable doubts as to their impartiality or independence. This includes any past or present relationship with a party, their legal representatives, or the subject matter of the dispute. A party may challenge the appointment within seven calendar days of receiving the declaration.

Step 3: The Pre-Mediation Conference

The most significant procedural change in the 2025 Rules is the mandatory pre-mediation conference. Under Rule 11, the mediator must convene a pre-mediation conference within 14 calendar days of their appointment. The conference may be held in person, by telephone, or by video conference.

The purpose of the pre-mediation conference is to:

• Confirm the issues in dispute.
• Agree on the procedural timetable, including deadlines for the exchange of position papers.
• Determine the format of the mediation session (e.g., joint session, private caucuses, or shuttle mediation).
• Address any logistical issues, such as the venue, language, and the need for interpreters.

The mediator will issue a written Procedural Order following the conference. This Order is binding on the parties. Failure to comply with a direction in the Procedural Order may result in the mediator drawing an adverse inference or, under Rule 11.4, issuing a costs order against the non-compliant party.

Step 4: Exchange of Position Papers

Under Rule 12, each party must submit a written Position Paper to the mediator and exchange copies with the other side. The deadline is set in the Procedural Order but is typically 21 calendar days before the mediation session.

The Position Paper must contain:

• A summary of the party’s factual position.
• The relevant legal or contractual arguments.
• An outline of the party’s settlement proposals.
• Copies of key documents relied upon.

The 2025 Rules explicitly state that Position Papers are confidential and without prejudice to the parties’ positions in any subsequent litigation or arbitration. Rule 12.3 provides that the mediator may, after the exchange, request supplementary submissions or documents from any party.

Step 5: The Mediation Session

The mediation session itself is conducted in accordance with the Procedural Order. Rule 13 provides that the mediator has broad discretion to conduct the session in a manner they consider appropriate. The session typically begins with a joint opening statement, followed by private caucuses with each party.

The 2025 Rules introduce a time limit for the mediation session. Under Rule 13.2, the initial mediation session must not exceed two consecutive days unless the parties agree otherwise. This is a departure from the 2010 Rules, which had no such limit. The intention is to encourage focused and efficient negotiations.

The mediator may adjourn the session at any time and may reconvene it within 30 calendar days without requiring a fresh Notice of Mediation. If no settlement is reached within that period, the mediation is deemed terminated under Rule 15.

Step 6: Settlement or Termination

The mediation concludes in one of three ways:

• Settlement Agreement: If the parties reach an agreement, the mediator will draft a Settlement Agreement. Under Rule 14, the Settlement Agreement must be signed by all parties and is binding on them. The HKIAC recommends that the Settlement Agreement include a clause stating that it is governed by Hong Kong law and that the parties submit to the jurisdiction of the Hong Kong courts for any enforcement proceedings.
• Termination by Mediator: The mediator may terminate the mediation if, in their opinion, further efforts are unlikely to result in a settlement. Under Rule 15.1, the mediator must give written notice to the parties.
• Termination by Party: Any party may withdraw from the mediation at any time by giving written notice to the mediator and the other parties. The mediation terminates upon receipt of that notice.

The mediator must issue a final report to the HKIAC Secretariat within 14 calendar days of the conclusion of the mediation. The report confirms the outcome but does not disclose the terms of any settlement.

Costs and Confidentiality

Mediation Costs

The costs of the mediation are set out in the HKIAC’s Schedule of Fees, which is updated annually. As of 1 January 2025, the costs comprise:

• An administration fee of HK$ 8,000 per party.
• The mediator’s fee, calculated on an hourly basis at a rate of HK$ 3,500 per hour.
• Any disbursements, such as venue hire and transcription services.

Under Rule 16, the parties bear their own legal costs unless the mediator orders otherwise. The mediator may, in the Procedural Order or at any subsequent stage, allocate the mediator’s fee and the administration fee between the parties. This is a new power introduced in the 2025 Rules.

Confidentiality Obligations

Confidentiality is a cornerstone of the mediation process. Rule 17 of the 2025 Rules imposes a strict confidentiality obligation on all parties, their representatives, and the mediator. No party may disclose to any third party any information relating to the mediation, including the fact that mediation is taking place, the content of the Position Papers, or the terms of any settlement.

There are two exceptions:

• Disclosure is required by law or by a court order.
• Disclosure is necessary to enforce or challenge the Settlement Agreement.

The mediator is also prohibited from acting as a witness, arbitrator, or legal representative in any subsequent proceedings relating to the dispute. This is codified in Rule 18.

Key Takeaways

1. The 2025 HKIAC Mediation Rules introduce a mandatory pre-mediation conference within 14 calendar days of the mediator’s appointment; failure to attend may result in a costs sanction.
2. Position Papers must be exchanged at least 21 calendar days before the mediation session, and the initial session is capped at two consecutive days.
3. The mediator now has the express power to allocate the costs of the mediation between the parties in the Procedural Order or at any subsequent stage.
4. Confidentiality is absolute under Rule 17, with only two narrow exceptions for legal compulsion or enforcement of a settlement.
5. The HKIAC Secretariat retains the power to extend or shorten any time limit under the Rules, so parties should monitor procedural deadlines closely.

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