Beijing-Hamburg Conciliation Centre Hamburg

Where attempts by the parties to resolve their differences directly have not met with success con­ciliation offers a fast and inexpensive way to achieve a fair solution, with the assistance of neutral third parties, which respects the interests of both sides. The initiation of conciliation proceedings will not be regarded as a signal for terminating the relationship but – on the contrary – as indicating a continuing desire to put the relationship back on a basis acceptable to both partners.

As far as economic relations with the People's Republic of China are concerned, the establishment of the Beijing-Hamburg Conciliation Centre in Hamburg and of the Beijing Conciliation Centre in Beijing opens up the possibility of conducting conciliation proceedings on a secure institutional basis for the first time. For this purpose the two institutions - the conciliation centre in Beijing is part of the Chinese chamber for foreign trade, China Council for the Promotion of International Trade (CCPIT) - concluded a co-operation agreement in May 1987. Both sides maintain secretariats which are available for the administrative conduct of conciliation proceedings. Each secretariat maintains a list of recommended conciliators and, if the parties so wish, is prepared to recommend or appoint conciliators. In the course of conciliation proceedings the secretariats fulfil a function comparable to that of court clerks; they mediate communication between conciliators and parties, request advances on costs, send invitations to meetings etc.

The basis of any conciliation procedure is an agreement by the parties which may either be made generally for all future disputes resulting from a particular contractual relationship, or only after a specific dispute has arisen. The two conciliation centres recommend adopting a model conciliation clause developed by them.

Pursuant to the conciliation rules agreed between the German and Chinese organisations, the Beijing-Hamburg Conciliation Rules, proceedings begin by one party sending an invitation to the other to settle a specific dispute by conciliation. lf the invitation is accepted the next step is to appoint conciliators. The Beijing-Hamburg Conciliation Rules provide that generally each party appoints one conciliator, but both parties may also agree on a single conciliator.

The proceedings are administered by the secretariat agreed by the parties; if no such agreement is reached the two conciliation centres will jointly decide this issue. As a rule the secretariat in the respondent's country will be chosen. The parties may also agree that both secretariats shall administer the proceedings jointly.

The conciliators will request the parties to provide a brief written description of the dispute. They may request additional information and documentation. Information classified as confidential must not be passed on to the other party by the conciliators. In all other respects the procedural rules are flexible. According to the circumstances of each case oral hearings and further investigations may be conducted, and the conciliators have the right to make proposals for a settlement of the dispute at any time. In doing so they are to be guided by the principles of objectivity, fairness and justice and are to give consideration, among other things, to the rights and obligations of the parties, the usages of the trade concerned, the further circumstances surrounding the dispute and also the previous business practices of the parties.

Acceptance of a settlement proposal is voluntary. However, in individual cases the parties may agree in advance that they will accept a settlement proposal. In any case the result of conciliation proceedings is to be set down in a written settlement.

The conciliators and the parties must observe the confidentiality of the conciliation proceedings and may not publicise the contents of the settlement reached. The parties undertake not to initiate judicial or arbitral proceedings relating to the issue in dispute so long as conciliation proceedings continue except where this appears necessary for the preservation of their rights (e.g. attachments and temporary injunctions).

Conciliation proceedings may be terminated at any time by a statement by one party that it does not wish to continue the proceedings. The conciliators may also terminate the proceedings by stating that their efforts have failed. Upon the termination of conciliation proceedings the competent secretariat will fix the costs to be paid by the parties. These are determined by the cost schedules adopted by the two conciliation centres. The costs of the Beijing-Hamburg Conciliation Centre are approximately one third of the costs of a comparable arbitration. Generally each party bears one half of the costs except where the settlement achieved as a result of conciliation pro­vides for a different apportionment. Each party bears its own expenses.

Should conciliation proceedings have failed each party is free to pursue its rights though arbitral or judicial proceedings, as the case may be. A conciliator may generally also be appointed arbitrator in such subsequent proceedings. However, views and proposals expressed during conciliation proceedings, as well as admissions made by a party or its willingness to accept a settlement pro­posal, may not be referred to in arbitration.

The Beijing-Hamburg Conciliation Rules represent a flexible, uncomplicated set of rules in line with practical needs which will soon prove to be a quick, inexpensive and "face saving" way to solve big and small disputes in economic relations with the People's Republic of China, thereby also making a contribution to the furtherance of international economic relations.

Contact:
Beijing-Hamburg Conciliation Centre Hamburg
c/o Hamburg Chamber of Commerce
Legal department
Adolphsplatz 1
20457 Hamburg
GERMANY