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June 10, 2010

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Mediator heals business rift for court system

A NONGOVERNMENTAL international trade organization has helped a local court solve a dispute concerning a foreign company by getting the two sides to reach reconciliation.

It is the first time in the country that a court has entrusted the China Council for the Promotion of International Trade to successfully mediate a commercial case involving a foreign company, judges of Shanghai Higher People's Court said yesterday.

The council's Shanghai mediation center is also helping mediate three other cases of this kind and is expected to solve the disputes.

In the first case, Fengli Overseas Co Ltd, a company registered in the British Virgin Islands, co-invested with Shanghai Chinastar Materials (Group) Co Ltd to form a car-service joint venture in July 2001.

Chinastar assigned two employees to be general manager and administrative manager of the joint venture.

Because the two investors had a dispute in 2008, the two managers from Chinastar were dismissed and a new general manager appointed. But the dismissed employee refused to pass the company's stamp, license and other documents to the successor.

Fengli sued Chinastar and the dismissed managers in Shanghai No. 2 Intermediate People's Court, asking them to hand over the materials. The defendants refused, saying they considered the new appointment invalid.

With the two sides so at odds, the court decided to invite the council's mediation center, which is more professional-oriented and more familiar with overseas business circles, to help.

With the center's efforts, the two investors agreed to tear up the co-investment contract and end the joint venture according to detailed rules.

The higher court said the same mediation mode will be adopted by other courts in the city since it can save more time than a trial and mediators can use their professional knowledge to bring peaceful solutions.


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