CHINA Law and Practice Contributed by: Peibing Qi, Na Gao and Shanshan Heng, Fangda Partners
Fangda Partners 27/F, North Tower, Beijing Kerry Centre
1 Guanghua Road Chaoyang District Beijing 100020 China
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1. Dispute Resolution Methods 1.1 Main Dispute Resolution Methods In China, litigation and arbitration represent the pre- dominant and mainstream mechanisms for commer- cial dispute resolution. In recent years, driven by strong governmental support and promotion, alternative dispute resolu- tion (ADR) procedures – centred on settlement and mediation as the core dispute resolution tools – have gradually gained popularity in China. Such procedures include, but are not limited to, court-annexed media- tion, mediation within arbitral proceedings, and inde- pendent mediation conducted by commercial media- tion institutions. Also see 4.1 ADR Procedures . 1.2 Choice of Dispute Resolution Method Litigation Due to the relatively lower associated costs, court proceedings represent the most prevalent and main- stream means of commercial dispute resolution. Arbitration As arbitral procedures place greater emphasis on par- ty autonomy and contractual arrangements compared to litigation, and are subject to statutory confidentiality requirements, parties to commercial disputes involv- ing substantial amounts in controversy or requiring confidentiality typically agree to resolve disputes through arbitration.
ADR Procedures Courts and arbitral tribunals typically organise media- tion concurrently during litigation and arbitration pro- ceedings; however, currently independent commercial mediation procedures remain relatively uncommon in China. Labour Dispute Cases The law requires parties to first undergo labour arbitra- tion as a mandatory prerequisite before filing a lawsuit with the court. In disputes involving personal status relationships such as marriage and succession, the law provides that any arbitration agreement entered into by the parties is invalid, and such disputes may only be resolved through litigation. 1.3 Key Dispute Resolution Trends At present, the key development trend of dispute res- olution mechanisms in China is moving toward greater diversification. • With the implementation of the newly revised Arbi- tration Law in 2025 and the further improvement of the judicial framework supporting arbitration, arbi- tration is becoming the preferred dispute resolution mechanism for an increasing number of civil and commercial entities. • ADR procedures, as informal legal processes, are also gradually gaining wider acceptance among various parties. In particular, China will formally implement the Commercial Mediation Regulations on 1 May 2026, filling a gap in the legal framework for commercial mediation.
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