The Regulation on Commercial Mediation Ushers in a New Chapter for Commercial Dispute Resolution (Mainland China)

To regulate commercial mediation activities, effectively resolve commercial disputes, protect the legitimate rights and interests of the parties, promote the development of the commercial mediation industry, and optimize the business environment, China's first administrative regulation specifically regulating commercial mediation activities—the Regulation on Commercial Mediation (hereinafter referred to as the "Regulation")—was promulgated on December 31, 2025, and shall come into force on May 1, 2026.  Its promulgation marks the end of the long-standing history of China's commercial mediation system lacking unified higher-level legal norms, and is a key measure to improve the diversified dispute resolution mechanism and align with internationally high-standard economic and trade rules.

The Regulation establishes a complete institutional system ranging from entity access to effectiveness guarantee.  Firstly, it clearly defines the scope of application, limiting commercial mediation to resolving commercial disputes in fields such as trade, investment, finance, transportation, real estate, engineering and construction, and intellectual property, explicitly excluding non-commercial disputes such as marriage and family, and labor and personnel disputes (Article 2).  Secondly, it strictly regulates mediation organizations and personnel, stipulating that establishing a commercial mediation organization must meet conditions such as the promoter being a non-profit legal person, having assets of not less than RMB 300,000, and having five or more commercial mediators, and implements a two-tier approval process of preliminary municipal-level review and provincial-level approval (Articles 8, 9).  A commercial mediator must meet one of four qualification categories, for example: having obtained legal professional qualifications through the National Unified Legal Professional Qualification Examination and having engaged in mediation work for not less than three years; or having engaged in the work of a lawyer, arbitrator, judge, etc., for not less than three years; or holding an intermediate or higher professional title in a relevant field, or having engaged in commercial mediation for not less than three years prior to the implementation of the Regulation and holding a bachelor's degree or above (Article 12).  Thirdly, it establishes core procedural rules, emphasizing that mediation must be based on the voluntary application of the parties, and shall not be conducted if one party refuses (Article 14); that mediation is conducted privately in principle, with mediators bearing strict confidentiality obligations (Article 19); and clarifying that online mediation has the same legal effect as offline mediation (Article 18).  Finally, it strengthens the effectiveness guarantee of agreements, explicitly stipulating that a commercial mediation agreement is legally binding (Article 22), and can obtain enforceability through judicial confirmation, with foreign-related commercial mediation agreements potentially enforceable abroad according to international treaties (Article 23).

It is noteworthy that the Regulation embodies forward-looking design in several aspects.  First, it highlights an international orientation, supporting domestic commercial mediation organizations to establish business institutions abroad, and also allowing foreign commercial mediation organizations to establish institutions to conduct business within regions such as pilot free trade zones and the Hainan Free Trade Port (Article 24); encouraging participation in the formulation of international rules and promoting the international mutual recognition of mediators' competence levels (Article 25); and supporting the alignment of rules and the connection of mechanisms for commercial mediation in the Guangdong-Hong Kong-Macao Greater Bay Area (Article 26).  Second, it encourages technology enablement, explicitly encouraging the use of technologies such as artificial intelligence and big data to improve the quality and efficiency of mediation (Article 18).  Third, it explores institutional innovation, allowing pilot regions such as pilot free trade zones and the Hainan Free Trade Port to pilot relevant systems under which commercial mediators independently carry out foreign-related commercial mediation activities (Article 24), drawing on flexible international practices.  Fourth, it establishes a dual-layer regulatory system, combining administrative supervision by judicial administrative departments with self-regulation by industry self-regulatory organizations (Articles 4, 5), and sets clear penalties for violations (Articles 28-30).

Overall, the implementation of the Regulation is of profound significance.  On one hand, it provides market entities with a new, efficient, flexible, and confidential option for dispute resolution, helping to reduce dispute resolution costs and maintain business relationships.  On the other hand, through systematic institutional provision, it aims to foster commercial mediation organizations with international influence and enhance China's discourse power and competitiveness in the field of international commercial dispute resolution (Article 6).  Furthermore, by improving the connection mechanisms with litigation, arbitration, etc. (Article 7), the Regulation effectively promotes the formation of a grand mediation framework featuring the organic linkage of "mediation + litigation/arbitration," becoming an important legal safeguard for optimizing the market-oriented, law-based, and internationalized business environment.  With the improvement of supporting rules and deepening practice, commercial mediation is expected to become an important pillar in China's diversified dispute resolution system, standing alongside litigation and arbitration.