2025 is set to be a significant year for international mediation in Hong Kong.
The Hong Kong Department of Justice has announced that the negotiations of the Convention on the Establishment of the International Organization for Mediation (Convention) have now concluded and that the signing ceremony for the Convention will be held in Hong Kong in 2025.
The International Organization for Mediation (IOM) will be headquartered in Hong Kong and will be the first intergovernmental organisation dedicated to resolving international disputes through mediation. The IOM will seek to provide flexible, cost-effective and efficient mediation services for international disputes. The IOM is supported by a number of countries, including China, Indonesia, Pakistan, Laos, Cambodia, Serbia, Belarus, Sudan, Algeria, and Djibouti.
The negotiations of the Convention follow the signature of a Joint Statement on the future establishment of the IOM in 2022; and the establishment of a preparatory office for the establishment of the IOM in Hong Kong in 2023.
In the 2023 Hong Kong Mediation Lecture hosted by Herbert Smith Freehills, Dr SUN Jin, Director-General of the IOM preparatory office, outlined the goals, key features, and philosophy of the future IOM.
In the 2024 Hong Kong Mediation Lecture, Professor Shahla Ali observed that the last decade has witnessed an increasing interest in mediation as a mean to resolve investor-State disputes. For example, a 2023 study reported 13 cases resolved through conciliation under the ICSID conciliation rules, with 9 cases concluded/settled. Another ICSID report identified the resolution of 30 investment mediations in 2022. Professor Ali also noted Hong Kong's leading role in adopting innovative treaty language that encourages mediation in investor-State disputes (for example in its treaties with the UAE and Australia). This trend is also observed in a number of other treaties such as the Argentina-Japan BIT, Argentina-UAE BIT, Armenia-Japan BIT, Australia-Peru FTA, Belarus-India BIT, Canada-Moldova BIT, Central America-Korea FTA, CPTPP, EU-Singapore IPA, Kazakhstan-UAE BIT, Singapore-Sri Lanka FTA, UEA-Uruguay BIT, and the United States-Mexico-Canada Agreement.
On a broader level, the UNCITRAL’s working group III, which has been set up to consider reforms to the ISDS system, highlighted that one potential area of reform is the strengthening of alternative dispute resolution mechanisms, including recourse to investor-State mediation. Developments in this space will continue to be an area to monitor in 2025 and the years to come.
For more information, please contact Antony Crockett, Partner, or your usual Herbert Smith Freehills contact.
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