ADR in Asia Pacific – Part 2

Further to our earlier post highlighting material from our recently updated Guide to Dispute Resolution in Asia Pacific, we now feature in part 2 the responses from Indonesia, Japan, Korea, Laos, Macau, Malaysia and Myanmar to the question whether parties to litigation or arbitration in that jurisdiction are required to consider or submit to ADR procedures before or during proceedings. 

Indonesia

The parties to litigation are required to submit to mediation before regular court proceedings commence. The parties can appoint a professional mediator or ask the court to recommend a judge who is not scheduled to hear the parties’ case, although in practice the court typically orders its own mediator.

Japan

Parties to litigation can be ordered by the court, either on its own motion or on the application of one of the parties, to undergo a conciliation process before the formal proceedings.  This process is called civil conciliation proceedings. Mandatory conciliation before the formal proceedings applies mainly to family cases. The ADR law came into force on 1 April 2007. It regulates ADR processes and, in particular, restricts who can act as a neutral third party in an ADR process.

Korea

The Civil Dispute Mediation Act establishes a mediation committee within the court system. There is no private mediation board or committee in Korea. Instead of filing a lawsuit, parties may make an application for mediation to the mediation committee. Only one-fifth of the stamp fee (filing fees) otherwise required for an ordinary civil lawsuit must be paid with such an application, and mediation is carried out by a mediation tribunal comprised of the members of the mediation committee. The mediation tribunal's role is to facilitate an agreement by the parties. If an agreement is reached, the agreement is recorded in the form of a mediation protocol, which will have the effect of a judgment. If the parties are not able to reach an agreement, but their differences are not substantial, the mediation tribunal may then issue a mediation order after taking into account all the circumstances. If neither party objects to the mediation order, it will have the effect of a judgment. If either party objects, the case will be sent to the court for a normal lawsuit proceeding. If the parties cannot achieve a successful mediation, then the mediation tribunal will declare that the mediation has failed. If the applicant wishes to proceed further, it will have to pay the remaining balance of the stamp fee (four-fifths), upon which the court proceedings will proceed as a normal lawsuit.

During a lawsuit, if the court believes that there is a possibility of the parties resolving the dispute without proceeding to judgment or that it is more appropriate to resolve the case by mediation, the court may require the parties to take part in a mediation. The legal proceedings are stayed during the mediation, and then resumed if the mediation fails. The court may refer the case to the mediation tribunal, as discussed above, or it may conduct the mediation itself. When the court conducts the mediation itself, the judges who are in charge of the adjudication will handle the mediation as well. There has been a growing trend among courts to order the parties to attempt mediation in this manner, instead of rendering a judgment.

Laos

The Civil Procedure Law mandates mediation before a claim is filed into court in various types of cases including: (i) commercial cases; (ii) cases relating to land use right; (iii) labour disputes; and (iv) administrative disputes.

Under the Civil Procedure Law, small disputes or disputes which are not of high value must be first settled by the village mediation unit or relevant sectors. If the parties cannot reach a settlement, the justice office of the district must educate the parties and encourage reconciliation and mediation between the parties, based on the regulations of the village mediation unit. If the district justice office is unable to mediate such dispute, the dispute may be brought to a court for adjudication in accordance with law if a claim is filed. The judicial tribunal may also propose mediation before proceeding to trial upon receipt of a claim.

Macau

The parties may be invited by the arbitral tribunal, or the court in litigation proceedings, to attempt a settlement.

Malaysia

There is generally no compulsory requirement for parties intending to litigate to consider or submit to any prior alternative dispute resolution process.

The courts have recently introduced a "court assisted mediation scheme" where the judges take on the role of a mediator to try and get parties to achieve a mutually agreeable settlement of the dispute by way of mediation. If the mediation process is not successful, the parties proceed with the normal course of litigation. However, this scheme is not compulsory and parties to litigation may choose to refuse the court’s proposal to mediate the matter.

Myanmar

Alternative dispute resolution mechanisms (save for arbitration) have not yet been adopted in Myanmar. Parties are therefore not required to consider or submit to alternative dispute resolution.