On October 19, 2018, the “ZhongYin Finance and Securities Dispute Resolution Summit Forum” sponsored by the Beijing Diversified Mediation Development Promotion Association and organized by ZhongYin (Beijing) Law Firm was held in Beijing. More than 260 attendees, including senior judges, arbitrators, experts & scholars, and lawyers practicing in the area of finance and securities, as well as representatives of practitioners in the financial industry, discussed new development trends, new approaches of dispute resolution, and other issues in the area of finance and securities.

Zhai Jingmin, the former Deputy Justice of Beijing Higher People's Court and the Chairman of Beijing Diversified Mediation Development Promotion Association, Guo Weihua, the Legal Director and Manager of Legal & Compliance Department of China Huarong Asset Management Co., Ltd., Department, Lin Haiquan, a former Judge of Civil Division II of the Supreme People's Court and a Researcher of the Civil and Commercial Law Science Research Center of Renmin University of China, Liang Wenhui, the Deputy Director of Lawyers General Office of Beijing Municipal Bureau of Justice, Yang Guang, the President of Beijing Chaoyang District Lawyers Association, Gan Lin, the Vice President of the Financial Street Division of the People's Court of Beijing Xicheng District, Jia Shen, the Deputy Director and Senior Arbitrator of China International Economic and Trade Arbitration Commission (the CIETAC), Lai Yun, the Deputy President and Director of Beijing Bingzheng Banking Consumer Rights Protection Promotion Center, Wang Shan, a former Member of Judicial Committee and the President of Civil Division III (Commercial Division) of the People’s Court of Beijing Xicheng District and a Mediator of Beijing Diversified Mediation Development Promotion Association, and Li Zheng, the Chairman of the Management Committee, Li Ju, the former Chairman of the Management Committee and a Senior Partner, Chen Yongxue, a Senior Partner, Li Baofeng, a Senior Partner of ZhongYin (Beijing) Law Firm, and other leaders and guests were invited to attend the forum. The forum was hosted by Liu Guangbin, the former Director and a Senior Partner of ZhongYin (Beijing) Law Firm.

1. The “ZhongYin Securities and Finance Dispute Mediation Center” was officially established.

With the implementation of the “Case-filing Registration System” in the judicial reform in China, the conflict between the loaded cases and the limited human resources ,as well as the heave burden resulted from that has become an increasingly prominent issue. To ease the tension of such dilemma, it has become a requirement of the present time to develop various dispute resolution mechanisms. In 2015, the General Office of the CCCPC and the General Office of the State Council issued the Opinions on Improving Diversified Mechanism for Resolving Contradictions and Disputes. The Supreme People's Court, the China Securities Regulatory Commission, and provinces and municipalities paid full attention to these opinions and introduced measures to implement the opinions, among which the approach of resolving disputes through mediation, which is more efficient, convenient and cost-effective than litigation, has gradually been recognized by all sectors of the sociaty.

ZhongYin (Beijing) Law Firm is one of the most influential law firms that practice in the area of finance and securities at the earliest in China. It has developed into a highly specialized and internationalized comprehensive law firm of large-scale. In response to the call of the state, and under the guidance of Beijing Diversified Mediation Development Promotion Association, in the face of the prominent contradictions in the current finance and securities industry, ZhongYin (Beijing) Law Firm has applied for establishment of the “ZhongYin Securities and Finance Dispute Mediation Center”. On the day of the event, President Zhai Jingmin, President Yang Guang, Chairman Li Zheng, Lawyers Liu Guangbin, Li Ju and Chen Yongxue jointly unveiled the nameplate of the “ZhongYin Securities and Finance Dispute Mediation Center”. The guests present congratulated the formal establishment of the mediation center and placed great hopes on the center.

Lawyer Liu Guangbin, Chairman Li Zheng, President Yang Guang, President Zhai Jingmin, Lawyer Li Ju and Lawyer Chen Yongxue (from left to right) attended the unveiling ceremony

Liang Wenhui, the Deputy Director of the Lawyers General Office of Beijing Municipal Bureau of Justice delivered a Speech

Deputy Director Liang Wenhui expressed his recognition on the establishment of the “ZhongYin Securities and Finance Dispute Mediation Center” and his hope to ZhongYin (Beijing) Law Firm to continue to strengthen its cultivation of and support to the mediation center. Lawyers are the main force of mediation and where the hope lies. The Deputy Director appealed to the attended lawyers to actively participate in diversified mediation and lawyers’ mediation, and work hard to create viable, reproducible and propagable practices in Beijing.

Li Zheng, the Chairman of the Management Committee of ZhongYin (Beijing) Law Firm delivered a Speech

Li Zheng said that in the context of explosions of financial deleveraging and finance disputes, the “ZhongYin Securities and Finance Dispute Mediation Center” would play an important role in protecting the legitimate interests of the investors, settling disputes in the sector, resolving social conflicts, and promoting the healthy development of the securities market. The center mainly focus on mediation of disputes in the sector of securities and finance business nationwide. ZhongYin lawyers will continue to play a leading role in providing diversified dispute resolutions for clients in the area of finance and securities.

II. Explore new directions for diversified mediation in China

Zhai Jingmin, the former Deputy Justice of Beijing Higher People's Court and the Chairman of Beijing Diversified Mediation Development Promotion Association

Combining years of practical experience, Chairman Zhai Jingmin pointed out that: currently in China, the number of litigation cases is increasing in an explosive way every year, while the number of judges is far from enough. The reality raises new requirements on dispute resolution paths. At the same time, due to the influence of international factors, the diversified mediation has gradually gained the attention of all sectors of society. However, the professional mediation organizations for specific industry have been in a state of disorder and blind development for a long time, no efficient and convenient mechanism has been established for connecting mediation with litigation before courts, and the application of IT technology in mediation procedure and management is not deep enough. In view of the above situations, President Zhai proposed to cultivate mediation organizations, identify their duties and roles, define the scope of case acceptance, and actively encourage professional law firms to participate in professional mediation and commercial mediation. At the same time, he proposed to establish an exemplary mediation center, improve the mechanism for connecting mediation with litigation, build a communication and cooperation platform for mediation organizations and mediators, strengthen international cooperation and training, and promote the exploration in IT construction and other areas.

Li Baofeng, A Senior Partner of ZhongYin (Beijing) Law Firm

Starting from the historical law, combining the dispute mediation mechanism in contemporary Western countries, Li Baofeng described in detail the significance of diversified dispute resolution and the effective exploration of diversified dispute mediation mechanism. Through the introduction of and analysis on specific cases, he proposed to, with the help of the platform of “ZhongYin Securities and Finance Dispute Mediation Center”, to explore new directions for and new developments in finance and securities dispute resolution.

Guo Weihua, the Legal Director and Legal & Compliance Department Manager of China Huarong Asset Management Co., Ltd.

Dr. Guo Weihua emphasized that, since China is in a stage of social transformation and the securities market has moving into the freeway lane of development, the in-house of various companies face problems of fairness, efficiency and cost in resolving securities disputes. In view of the advantages and disadvantages of three dispute resolution methods, namely litigation, arbitration and mediation, the in-house of each company should change their thoughts on dealing with securities disputes and adopt diversified resolution methods. Meanwhile, the innovation in mechanisms for connecting litigation with mediation, connecting litigation with arbitration, and connecting arbitration with mediation has maximized the effectiveness of dispute resolution mechanisms, and the above innovation in dispute resolution methods and mechanisms has also enhanced the diversity of options available to the parties to a case, thus can effectively alleviate the courts’ burden caused by litigation explosion.

III. Study on application of law and rules of arbitration in finance and securities dispute resolution

Lin Haiquan, a former Judge of Civil Division II of the Supreme People's Court and a Researcher of the Civil and Commercial Law Science Research Center of Renmin University of China

Dr. Lin Haiquan delivered a speech on “Law Application in New Finance Dispute Resolution”. He elaborated on the issue by combining specific cases, indicating that the current finance disputes have gone beyond the statute law, resulting in a lack of clear legal basis for dispute resolution. Dr. Lin believes that, when it comes to law application in resolution of new finance disputes, one may face problems such as identification of legal nature, identification of nature of transaction behavior, standards of interest rate set for funds, and determination of validity of loan contract in civil-criminal mixed cases. Dr. Lin also sorted out the dispute resolution standards in judicial practice. The difficult problems in finance disputes such as identification of legal relation, validity of legal behavior, and identification of legal effect need to be solved through litigation, arbitration, and mediation, each of which has different advantages, and Dr. Lin compared the advantages and disadvantages of different dispute resolution methods.

Jia Shen, the Deputy Director and Senior Arbitrator of the China International Economic and Trade Arbitration Commission (CIETAC)

Deputy Director Jia Shen analyzed the finance dispute resolution rules of the China International Economic and Trade Arbitration Commission and the situation of accepted financial cases by the CIETAC in recent years. Combining more than 10 different types of financial cases accepted by the CIETAC, including cases of valuation adjustment, financial derivatives, export credit insurance, fund subscription, corporate bond issuance, syndicated loan, interest rate swap, and precious metal trading, he elaborated on the CIETAC’s rules of arbitration on finance disputes, and by case study, he elaborated on the application of relevant rules in practice.

Gan Lin, The Vice President of the Financial Street Division of the People's Court of Beijing Xicheng District

From the perspective of a judicial practitioner, and started from relevant legal issues involved in civil litigation, Vice President Gan Lin dissected the risks in relevant financial innovations and the countermeasures for the guests attended. Vice President Gan believes that, although the rapid integration of Internet and finance has further promoted financial innovation and improved the efficiency of financial resource allocation to a certain extent, too many innovative Internet plus finance models and their rapid expansion and lack of self-discipline have caused corresponding problems and risks. Online payment by bank card, umbrella trust, online stamp, coin and card exchange and the like are all products in the context of financial innovation, but all of them may cause damage to the legitimate rights and interests of the parties involved. In view of the new legal issues emerged in the development of financial innovation, it is necessary to strengthen research on law application, enhance supervision capabilities and efforts, to protect the legitimate rights and interests of investors, and maintain the stability of the financial environment.

IV. Share examples of finance and securities dispute mediation

Lai Yun, the Deputy President and Director of Beijing Bingzheng Banking Consumer Rights Protection Promotion Center

Director Lai Yun, who has deeply engaged in the banking industry for many years, shared his experience in practicing the “Fengqiao Experience” with the guests present. He analyzed the mediation of disputes in the banking industry from the perspective of specialization and resolution of practical problems, and emphasized that, in dispute mediation, one should, by adhering to the principle of “prevention first and education as main manner”, not only solve problems from root causes, but also seek both temporary and permanent solutions based on the actual situation. Director Lai believes that, the old Fengqiao Experience focuses on “not refer contradictions to the higher authority”, while the new Fengqiao Experience should focus on “autonomy, rule of virtue, and rule of law”. In the current social environment, it is more important to deal with contradictions and disputes by taking into account “law, reason, and emotion”. At the same time, Director Lai said that mediation of banking disputes requires not only the cooperation between government departments and regulatory agencies, but also policy support and the establishment of a platform for resource sharing. He proposed that all parties should work together to achieve win-win results, and adhere to the path of innovation and exploration to achieve sustainable development.

Wang Shan, a former Member of Judicial Committee and the President of Civil Division III (Commercial Division) of the People’s Court of Beijing Xicheng District and a mediator of the Beijing Diversified Mediation Development Promotion Association

In her speech, Mediator Wang Shan mentioned that, as the development of society and economy, finance disputes have gradually increased, and the purpose of litigation has been lagged behind, thus the realization of the interests of creditors has been affected. Taking the rapid mediation of loan disputes between Bank of Beijing and Huarong Zhongtou Financial Services Outsourcing (Beijing) Co., Ltd., Xinghong (Beijing) Asset Management Co., Ltd. and others as an example, she introduced the time cost advantage of diversified mediation to the guests present; and shared the characteristics and advantages of diversified mediation, such as the high degree of discretion for the parties to choose their own procedures, the confidentiality of mediation, the professionalism by using experienced legal practitioners as mediators, and the high recognition of mediation results by the parties; and she analyzed in detail the efficiency and convenience brought by diversified mediation to case solving.

In this forum, by combining actual cases of finance and securities disputes, the attendees discussed hot legal issues on finance and securities dispute resolution, triggering heated discussion and resonance among practitioners in finance and securities industry and legal profession. Under the guidance of Beijing Diversified Mediation Development Promotion Association, and with ZhongYin (Beijing) Law Firm as reliance, the “ZhongYin Securities and Finance Dispute Mediation Center” will provide a platform for finance and securities dispute mediation, and contribute to promote social stability, facilitate social harmony, and explore new approaches for dispute resolution.