Arbitration Conciliation and Arbitration Settlement

In China, conciliation is an important part of the arbitration procedure. The conciliation procedure can only be initiated on a voluntary basis, which is not the necessary stage in the arbitration procedure. The arbitration tribunal, when hearing a case, will ask whether the parties involved in the arbitration are willing to conciliate. If the parties agree, the arbitration tribunal will preside over the conciliation. If the parties are unwilling to conciliate, the arbitration tribunal cannot initiate the conciliation procedure. Therefore, whether to initiate the conciliation procedure in the arbitration procedure depends on the voluntary choice of the parties.

Arbitration conciliation is a system in which the parties to arbitration reach an agreement on the basis of voluntary consultation, mutual understanding and accommodation under the auspices of the arbitration tribunal, so as to settle disputes. Paragraph 1 of Article 51 of the Arbitration Law stipulates that: before giving an award, an arbitration tribunal may first attempt to conciliate. If the parties apply for conciliation voluntarily, the arbitration tribunal shall conciliate. If conciliation is unsuccessful, an award shall be made promptly.

When a settlement agreement is reached between the parties through conciliation by the arbitration tribunal, the arbitration tribunal shall prepare the conciliation statement. The conciliation statement shall set forth the arbitration claims and the results of the agreement between the parties. It shall be signed by the arbitrators, and sealed by the arbitration commission. The conciliation statement shall have legal effect once signed and accepted by the parties. A conciliation statement shall have the same legal force as that of an award.

Arbitration settlement refers to the act of the parties to the arbitration to settle the disputes submitted by themselves through negotiation. Arbitration settlement is the performance of the parties’ exercise of the right of disposition. Article 40 of the Arbitration Law of the People’s Republic of China stipulates that after the submission of an arbitration application, the parties may settle the dispute among themselves through conciliation. If a settlement agreement has been reached, the parties may apply to the arbitration tribunal for an award based on the settlement agreement. They may also withdraw the arbitration application. If the parities fall back on their words after the withdrawal of the arbitration application, application may be made for arbitration in accordance with the original arbitration agreement.