MEDIATION SETTLEMENTS FOR CIVIL LITIGATION CASES ARE BECOMING MORE AND MORE POPULAR WITH THE MAINLAND CHINESE COURTS !

DA LIAN INTERMEDIATE PEOPLE'S COURT HAS RECENTLY SUCCESSFULLY SETTLED A SINO-HONG KONG JOINT VENTURE CONFLICT

According to a news report by the People's Court Daily last month, Dalian Intermediate People's Court(“the Dalian court”) has made great ways to successfully settle a sino-hong kong joint venture conflict via mediation approach, satisfying both parties.

In June 2002, a Hong Kong catering company(thereafter referred to as “the foreign partner”) executed an equity joint venture contract with a commercial company in Dalian city of the Northeastern Chinese Liaoning province(thereafter referred to as “the Chinese partner”) in order to establish a joint venture catering company. The foreign partner invested RMB3,200,000 and the Chinese partner invested RMB2,800,000; in additions, both partners further agreed the foreign partner was responsible for the joint venture construction investments of RMB3,000,000 while the Chinese partner should lease out a plot of its land to the joint venture. In September 2002, the joint venture was officially issued with business license. As the joint venture was in operations for some years, however, both parties constantly had different opinions and their arguments later on became so heated that they had to settle their conflicts with the Dalian court.

The judges carefully studied the case, summed up the core points of conflict, organized four times of evidences exchange and cross-examinations, and also held three times of trials, during which both parties via their lawyers/agents had heated arguments upon legal facts and application of law.

The judges reckoned, after several rounds of hot debates, that there were possibilities of mediating the case, therefore, the judges were determined to use the mediation method to settle the conflict, they also brought up with a mediation option of “to terminate the joint venture contract, liquidate the joint venture enterprise and each partner to take back the money they have previously invested into the catering company”.

At the earlier stages of mediation, both partners still insisted on different opinions and no progress was made. The judges had to actively help them make analysis of advantages and disadvantages, pointed out the liabilities that both partners had to bear for their cooperation, and also let both sides know that if they continued the lawsuit, both of them should not only invest more manpower and money, increase litigation cost, but also the aforesaid losses would definitely be further expanded.

In order to persuade both parties to come to a mediation settlement agreement, the judges additionally invited management staff of the foreign partner, via its lawyer/agent, to come to Dalian for direct meeting with the Chinese partner counterpart. They were both deeply moved by the judges' actual feelings, sincerities, good faith and minding-no-troubles mediations.

In earlier December 2007, both parties ultimately agreed to a mediation settlement option and reached the mediation agreement.

(Comments: The lawsuit parties at issue are so lucky to have the kind-hearted / Marathon-style Dalian judges in China. Please bear in mind, however, that in Mainland China you can not expect to encounter such kind of mediation judges constantly, even though most of the Chinese civil litigation judges prefer to try and close their cases via mediations for immediate or earlier settlements)