THE USE OF MEDIATION TO RESOLVE FINANCIAL DISPUTE

The Use of Mediation to Resolve Financial Dispute

The Use of Mediation to Resolve Financial Dispute

Introduction

Hong Kong has long been a favored venue for international enterprise transactions granted its comprehensive lawful regime, stable economic environment and geographic position as a entrance to Mainland China. However, with advanced business and buying into opportunities, the need for an productive system of dispute tenacity has become clear. In latest years, a growing number of disputants are turning to alternate argument resolution means to resolve their economic arguments. This is largely due to the important economic inducements of choosing mediation or arbitration over litigation. While dissatisfaction with the cost of litigation is absolutely one of the prime drivers of this change, the spectacular increase in economic disputes and producing stresses on the prescribed court scheme has boosted the development of a growing number of alternate routes for argument tenacity in the East Asian region.

Mediation in Hong Kong financial Markets

With the establishment of the Hong Kong worldwide Arbitration Centre in 1985, localizedized and overseas disputing parties have successfully resolved a growing number of arguments through both arbitration and mediation.6 The latest Civil fairness Reform of 2009 has farther encouraged the development of alternative argument resolution in Hong Kong. With the implementation by the judiciary of its Practice Direction on Mediation (known as “PD 31”) on January 1, 2010, the Court amplified its efforts to familiarize parties and their lawful advisors with the mechanics of the Court's mediation regime.7 It is especially noteworthy that one of the new case administration forces granted the Court encompasses the making of an harmful charges alignment against a party where there has been an awkward refusal to mediate.

Hong Kong has incorporated the approach to mediation as defined in the UNCITRAL form regulation on worldwide financial Conciliation (2002). According to item 1, mediation is characterised as a process “whereby parties demand a third person or individuals to assist them in their try to reach an amicable town of their argument originating out of or pertaining to a contractual or legal relationship.”9 It should be documented that, in theory, a mediator will not assess the matter of a dispute and has no administration to enforce a solution upon the parties to the dispute. Mediation is advised a consensual and secret method undertook on a “without prejudice” basis.

Lehman Brothers Minibonds Collapse

Lehman Brothers Holdings Inc. (LBHI) filed for bankruptcy defence under section 11 of the US Bankruptcy Code on 15 September 2008. Subsequently, eight Lehman businesses were put into liquidation in Hong Kong, encompassing Lehman Brothers Asia restricted (LBAL). The international economic urgent situation that commanded to the collapse of Lehman, the fourth biggest investment bank on partition road, has been recounted as a “once-in-a century” event. Hong Kong, as an worldwide economic centre, has not escaped solely unscathed. Although Hong Kong banks have withstood the financial gale robustly in comparison with gazes in the joined States and Europe, the direct aim of public investigation rapidly ...