Editor's Note: The Third Seminar of the International Commercial Expert Committee of the Supreme People's Court and Reappointment Ceremony of the First Group of Expert Members was held successfully on Augest 25, 2022. Over 40 experts from more than 20 countries and regions focused on the theme of the Development, Challenges and Countermeasures of Cross-Border Commercial Disputes during the seminar. Extensive and in-depth discussions were held within the framework of four specific issues. The texts of speeches delivered by the participants would be posted on the CICC's website. 

THE INTEGRATIVE DEVELOPMENT OF PREVENTION AND SETTLEMENT OF INTERNATIONAL COMMERCIAL DISPUTES

Huang Jin

Vice President of China Society of Law, President of Chinese Society of International Law, 

President of China Society of Private International Law

The integration and development of international commercial dispute prevention and international commercial dispute resolution is a feasible path to achieve "rule of law health" for market players and the international community, which is in line with the law and the rule of law, and is conducive to promoting the construction of a perfect international commercial dispute governance system, promoting the construction of "One Belt and One Road" and the prosperous development of international trade and investment, promoting the change and construction of global governance and international rule of law system, and promoting the construction of a community of human destiny.

I. International commercial dispute prevention and international commercial dispute settlement are the two ends and two sides of the issue of international commercial dispute governance

Settlement of disputes refers to the activity of resolving and dealing with disputes through negotiation, mediation, arbitration and litigation after the occurrence of disputes. And prevention of disputes refers to the causes and factors that may arise before the dispute, take macro or micro effective measures to eliminate, and the subject of the dispute may cause the early defense and correction of matters, in order to prevent, reduce, avoid the occurrence of disputes activities. It can be seen that international commercial dispute prevention and international commercial dispute settlement are the two ends and two sides of the issue of international commercial dispute governance, and both of them are thought, studied and acted upon in relation to international commercial dispute governance. As we all know, the original intention of law and rule of law is to prevent, reduce, avoid, resolve and eliminate conflicts, disagreements, disputes, controversies and disputes in human society, and both dispute prevention and dispute settlement are the proper meaning of law and rule of law. In the past, our jurisprudence and legal profession is more inclined to the study of dispute resolution, and the study of dispute prevention is very insufficient, or to put it more broadly, it is more inclined to the study of clinical jurisprudence and neglects the study of preventive jurisprudence. We should recognize that dispute prevention is different from dispute resolution, and there is a difference between the two. Dispute prevention focuses on prevention before it happens, while dispute resolution focuses on resolving conflicts, disagreements, disputes, controversies and disputes that have arisen. However, the fundamental purpose of both is the same, namely, to avoid and eliminate conflicts, disagreements, disputes, controversies and disputes, to put an end to litigation, and to maintain social stability and normal order. In comparison, from the perspective of the effectiveness of social governance and good governance, the prevention of disputes before they occur is better than the settlement of disputes before they occur. It can be said that the existing system of international commercial dispute governance is flawed, for example, it emphasizes settlement over prevention, right and wrong over cooperation, and consequences over antecedents. Therefore, when we discuss the settlement of international commercial disputes, we cannot ignore the prevention of international commercial disputes; of course, when we discuss the prevention of international commercial disputes we cannot ignore the settlement of international commercial disputes either. To carry out the governance of international commercial disputes, we should learn to grasp both risk prevention and dispute resolution, and both hands must be strong. At present, in response to the prevention of international commercial disputes in the context of the century-long change and the century-long epidemic, relevant institutions and enterprises should especially strengthen the construction of three mechanisms, namely, the corporate compliance management mechanism, the early warning mechanism of investment and trade friction, and the dispute prevention intervention and correction mechanism.

II. The Integrated Development of Prevention and Settlement of International Commercial Disputes is an Inherent Requirement of Good Global Governance and the International Rule of Law

At present, the world is experiencing a major change unprecedented in a century. The new epidemic is unprecedented; economic globalization has encountered a counter-current, unilateralism and protectionism are on the rise, the world economy is in the doldrums, growth momentum is insufficient, international trade and investment has shrunk significantly, and the division between the rich and the poor is getting more and more serious; Regional conflicts and hotspot issues are emerging one after another, terrorism, cybe security, major infectious diseases, climate change and other non-traditional security threats continue to spread; the two great powers of China and the United States are playing a strategic game in the century. The two great powers of China and the U.S. are playing a century-old strategy game, and the competition between China and the U.S. and Western countries is intensifying, confrontation is intensifying, and cooperation is decreasing. The world is facing increasing instability and uncertainty, and international relations and the world landscape are undergoing dramatic upheavals and profound adjustments, posing unprecedented challenges to global governance and the international rule of law. In such a context, the change of global governance and the construction of international rule of law should not only effectively respond to and resolve the contradictions, differences, disputes, controversies, disputes, and even wars in the world, but also be good at preventing potential contradictions, differences, disputes, controversies, disputes, and even wars, and controlling the already existing contradictions, differences, disputes, controversies, disputes, and wars from further escalation and deterioration. This requires us to adhere to the purposes established in the UN Charter of maintaining world peace and security, promoting international cooperation and development, respecting and safeguarding human rights, adhering to genuine multilateralism, maintaining the international system with the UN at its core, maintaining the international order based on international law, maintaining the basic norms of international relations based on the purposes and principles of the UN Charter, and accelerating the construction and implementation of an effective international dispute prevention mechanism.

III. The integrated development of international commercial dispute prevention and international commercial dispute settlement is the embodiment of the modernized and internationalized development of the "Hehe Culture" of China

The "Hehe Culture" is an important notion of traditional Chinese culture, which emphasizes harmonious co-existence, concerted effort and mutual cooperation, the pursuit of harmony in diversity, and coordinated development. In China, the "Hehe Culture" runs through Chinese people's understanding of the universe which considers that man is an integral part of nature, understanding of the world which underlines peace among all nations, understanding of nation which seeks harmony in diversity, understanding of family which embraces marital harmony, and understanding of morality which stresses good-heartedness, thus influencing each and every Chinese person in all respects and the construction of the Chinese social system and social governance. The "Hehe Culture" is a piece of wisdom fostered by the pioneering sages of the Chinese nation in its practice, manifested in the inter-dependent and harmonious status between human beings, between man and society, and between man and nature. This culture requires both the effective settlement and resolution of existing problems, differences, disputes, and conflicts, and the successful prevention and mitigation of potential problems, differences, disputes, and conflicts. Traditional Chinese culture places great emphasis on the settlement of lawsuits, the promotion of non-lawsuits, and the prevention of mischief, which can be exemplified by the following instances: First, Confucius once said that: "I am no different from the others in trying cases. The key lies in how to completely prevent lawsuits altogether!" What he said clarifies that the prevention of disputes and no lawsuits are his pursuits. Second, Xun Kuang, a statesman of Eastern Han Dynasty, when summarizing the military and political methodology, said that, "Prevention is to take precautionary actions before anything happens, remedy is to put a halt to the unfavorable situation, and admonishment is to put blame upon those who carry out faulty behaviors. Among them, prevention is the best strategy, followed by remedy, and admonishment is on the last move." Xun Kuang put forward three strategies; prevention, which is the strategy before anything happens; remedy, which is the strategy during occurrences; and admonishment, which is the strategy after the occurrences. From his perspective, the three options should be, ranking from best to worst, prevention, urgent remedy, and adjustment upon admonishment. Third, TheInner Canon of Huangdi also mentioned that: "The sages do not treat diseases but prevent them; do not cure disorders but prevent them; Taking medicine after having a disease and curing existing disorders is just like digging a well when thirsty or forging a weapon when a war is imminent – how late is that!" This saying emphasizes that the first choice of any brilliant doctor would be to prevent diseases, following a philosophical concept worshipping preventive treatment in traditional Chinese medicine. The above analysis reveals that in ancient China, prevention is prioritized and the combined use of prevention and settlement is emphasized in politics and military affairs, judicial activities, and treatment of diseases of traditional Chinese medicine alike. Of course, this concept is not easy to be realized, but remains to be an ideal and value to be pursued.

IV. The integrated development of international commercial dispute prevention and international commercial dispute settlement is an important part of the development of the system of the socialist rule of law with Chinese characteristics

Since the 18th CPC National Congress, the Chinese government has attached great importance to the development of the rule of law, and included the promotion of law-based governance in an all-round way in the "Four All-Rounds" Strategic Layout. President Xi Jinping has stressed on multiple occasions that the law-based way of thinking should be enhanced so as to effectively confront challenges and prevent risks through the law-based methods. In the 2020 Central Conference on the Work of Comprehensive Law-based Country Governance, he explicitly put forward that: "'Troubles and diseases should be removed and cured before happening.' The development of the rule of law should take precautions and preventive measures, on top of focusing on controlling the aftermaths and solving occurred problems. Considering the national conditions of China, we cannot afford to become 'a country of litigations'. If every dispute, big or small, goes to court, it would be unbearable for China considering that there are for 1.4 billion Chinese people. More efforts should be made to promote guidance and persuasion, improve preventive legal systems, stick to and develop the 'Fengqiao Experience's in the new era, perfect the integrated mechanism of solving social disputes through diversified and precautionary mediation, attach more importance to the foundational work at basic level, give full play to the effect of joint construction, governance and sharing at a basic level, promote the modernization of social governance in the city areas, and enhance social harmony and stability."

In practice, the "Opinions on the Establishment of International Commercial Dispute Resolution Mechanisms and Institutions in the Belt and Road" jointly issued by the State Office of the Central Government in 2018 proposed to "…supported to establish mechanisms for the prevention and resolution of international commercial disputes, together with non-governmental organizations, such as commercial associations and legal service institutions from Belt and Road countries." In fact, in October 2020, the China International Chamber of Commerce (CICC) jointly initiated the establishment of the International Commercial Dispute Prevention and Resolution Organization (ICDRO) with business associations, legal service institutions, and university think tanks in Asia, Africa, Europe, and the United States. This is the first international non-governmental non-profit international organization that explicitly combines international commercial dispute prevention and resolution, which will provide commercial dispute prevention, mediation, arbitration and other legal services to protect the legitimate rights and interests of international commercial subjects in a fair and impartial, efficient and convenient manner, and promote the construction of "One Belt, One Road" and international trade It will promote the prosperous development of "One Belt, One Road" and international trade and investment. Therefore, it can be said that promoting the integration and development of international commercial dispute prevention and international commercial dispute resolution is a practical need to thoroughly study and implement Xi Jinping's thought on the rule of law, adhere to the overall promotion of domestic rule of law and foreign-related rule of law, strengthen the research and application of international law, and strengthen the legal services of "One Belt, One Road".  

V. To improve the international commercial disputes governance system by strengthening its prevention mechanism

The international commercial dispute governance system encompasses both dispute resolution and dispute prevention. Like dispute settlement, dispute prevention is an indispensable part of the international commercial dispute governance system. However, dispute prevention is different from dispute settlement in that it is more in line with the expectations of market players for equality and mutual benefit and win-win cooperation, and can to a certain extent make up for the limitations and shortcomings of the existing international commercial dispute settlement mechanism, which can avoid the generation and escalation of disputes and maintain and promote a normal and healthy international commercial environment and order by establishing and improving various effective dispute prevention mechanisms. International commercial dispute prevention is a complex and systematic project, and there are various ways and means of dispute prevention. As far as the world as a whole is concerned, it can be carried out both at the international level and at the domestic level. At the international level, it requires both intergovernmental international organizations to introduce dispute prevention mechanisms in their creation and operation, and international non-governmental organizations to do something to practice and promote the concept of dispute prevention and to develop and promote standard contracts and model laws. At the domestic level, with respect to a specific country, dispute prevention can be promoted by the government or proactively by enterprises, and the role of domestic industry NGOs can also be brought into play to introduce preventive legal systems and related policies, strengthen corporate compliance management, and enhance industry guidance and practice by commercial entities. For example, in the international commercial field, international NGOs can play a very important role in dispute prevention. The International Chamber of Commerce (ICC) is a notable example in this regard, and its codification of international commercial practices based on international trade practices and their widespread promotion are effective practices in dispute prevention. The key question now is how to integrate the development of international commercial dispute prevention and international commercial dispute settlement, and how to dovetail and connect them organically, instead of separating them and leaving them on their own. This requires us to build a more systematic, diversified, internationalized and rule of law international commercial dispute governance system, both at the international and domestic levels; in the legislative field, we should focus on improving the preventive legal system and the organic articulation and integration with the settlement legal system; in the law enforcement field, we should put prevention in front and strengthen the law enforcement path of prevention before settlement; in the mediation, arbitration and In the field of justice, we should establish the concept of integrating dispute resolution and dispute prevention, and lay the groundwork for dispute prevention while resolving disputes; in the field of law compliance, we should strengthen the concept of prevention before it happens, prevent disputes as much as possible, nip them in the bud, and effectively control the escalation of disputes; in the field of usage (legal services), we should establish a more diversified and perfect legal service system, build a large legal service platform In the field of usage (legal service), we should establish a more diversified and perfect legal service system, build a large legal service platform, and vigorously expand non-dispute resolution legal services.

Related Links: 黄进：国际商事争端预防与国际商事争端解决的融合发展

*The original text is Chinese and has been translated into English for reference only. If there is any inconsistency or ambiguity between the Chinese version and the English version, the Chinese version shall prevail.