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What is an ADR? An ADR is known as Alternative Dispute Resolution. But in

certain countries, it is named as External Dispute Resolution, example Australia. ADR is a

system or a set of procedures or techniques that act as a mean for two or more disagreeing

 parties to come to an agreement to resolve the disputes. By using the ADR method, parties

can settle disputes with or without the help of a third party. Despite historical backgrounds

as resistance to ADR by many popular parties and their advocates, ADR has gained

widespread acceptance among both the general public and the legal profession in recent

years. Matter of fact, some of the courts nowadays require some parties in certain cases to

resort the matter by using ADR method (usually mediation), before permitting the parties'

cases to be trial in the court. There are at least four types of alternative dispute resolution

methods: negotiation, mediation, collaborative law, and arbitration. ADRs’ are divided into

formal and informal way, example, formal mediation process, and the opposite will be

informal mediation process. The significant differences between the formal and informal

way are: (a) pendency to a court procedure and (b) the possession or lack of a formal

structure for the application of the procedure. For instances, a freeform negotiation is

merely the use of the tools without any process and can be conduct literally anywhere

where two parties are engaged in it, whereas a formal negotiation within a labor arbitration

setting is the use of the tools within a highly formalized and controlled setting.

Amongst the countries that implement the ideology and method of ADR in their 

administration system, China has the earliest record on applying it. One of the most

significant evidence in proving my statement is how China applied ADR methods in their 

 judiciary system. It has been said that more than two thousand years China has used

mediation (one of the ADR method) as its primary form of dispute resolution in most of the

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matters. Since long time ago, China has found that the sociological and administrative

advantages of mediation and the method of ADR is more effective, less time and money

consuming in resolving the matters compared to litigation. Andrea Kupfer Schneider, in his

 book of the title “Building a Pedagogy of Problem-Solving: Learning to Choose Among

ADR Processes” once said that “The Chinese legal system has been one of the world’s

most committed institutions in the use of mediation to resolve disputes and a leader in

developing ways to maximize its benefits and effectiveness.” John Lee, a solicitor of 

Simmons & Simmons, discussed the strengths and weaknesses of both ADR and arbitration

at the Asia-Pacific IP Forum. "ADR is increasingly becoming an appropriate dispute

resolution method especially in terms of mediation," The method of resolving problem by

using mediation has proven to be effective and to be said have been maximized the benefits

for both opposing parties. Alternative dispute resolution (ADR) is becoming more of a

 preferable method when it comes to resolving dispute, for guidance in developing and to

advance their own mediation system in administration and judiciary, America has turn to

China for guidance. The traditional American legal system lends strength and support to

mediation through the extensive codification of rights and laws, China does not follow such

a formal framework. The Chinese prefer resolving disputes by going through the informal

mediation way. Often times in situation whereby a case was bring to the court and in front

of the judge, judges from China encourage, or in some cases require, mediation between

the parties rather than adjudication. Acting as mediators, these judges are often to be said

 biased against outsiders (foreigners). This is because the absences of a neutral party, or a

comprehensive legal code, or even the absence of a coherent and accessible code system.

But, the mediation method still did its part in improving the overall fairness and equality

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and effectiveness of the China legal system. It can be a very effective tool in basically

replacing litigation in China.

Arbitration is generally considered more efficient than litigation in many ways, it is

usually cheaper and faster, but there are also other benefits. So, what is arbitration all about

actually? Arbitration is a legal technique whereby the resolution of disputes are to bring to

outside of the courts, and the parties which engage into a dispute, which we may refer them

as to one or more persons with the name as the "arbitrators", "arbiters" or "arbitral tribunal"

which they agreed on a same decision (the "award") and agree to be bound. It is a

resolution technique in which a third party reviews the evidence in the case and imposes a

decision that is legally binding for both sides and enforceable. So basically, the opposing

 parties are hiring a private judge or panel of judges to solve your dispute and the decision

made is legally binding. Arbitrations can be divided into voluntarily or mandatory (in most

case they are voluntarily). A mandatory arbitration can only come from a statute or from a

contract that is voluntarily entered into, where the parties agree to hold all existing or future

disputes to arbitration, without necessarily knowing, specifically, what disputes will ever 

occur. Arbitrations can offer a more constructed, more effective, more easily enforced, just

and flexible judgments and choose to or not to be disclose to anyone else but the two

engaging parties. In Shanghai, China, they’ve set up a commission call China International

Economic and Trade Arbitration Commission (CIETAC) which set out the rules and

regulations to make sure that the arbitration clause is going to be considered valid and

effective. For example, Article 4.2 of the CIETAC Arbitration Rules provides: “Where the

 parties have agreed on the application of other arbitration rules or any modification of these

Rules, the parties’ agreement shall prevail except where such agreement is inoperative or in

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conflict with a mandatory provision of the law of the place of arbitration.” According to the

CIETAC rules, parties can decide on several key points of the arbitration, including: the

applicable law (including substantive law and procedural law); the place of arbitration; the

 place of oral hearings; the ordinary procedure/summary procedure; the appointing

arbitrator beyond the Panel of Arbitrators; the nationality of arbitrators; the arbitration

language; and the selection of applicable arbitration rules of the other arbitration

commission. These points would certainly prove to be essential to be negotiated in order to

avoid further inconvenience and disputes to be occurred.

How does China produce such high quality of ADR methods and the ideology of 

applying it into the legal system? In order to answer this question, we can examine the

cultural values and the historical evolution of two socio-political factors, the Confucian

 philosophy and the Maoist principles. The culturally root of China’s ADR methods are due

to the governmental and societal support of the two ancient Confucian principles: “li”, the

 preservation of natural harmony, and “jang”, compromise or yielding to settle disputes.

These principles impose a moral duty upon citizens “to preserve harmony through one's

 behavior, guided by the rules of polite conduct” and the “spirit of self-criticism.” It has the

meanings which are similar to the “good-neighbor principles” which develop by the

English judge. Unlike in most of the western country who tends to favor more to the

litigation. As for China society which prefer the method of mediation or arbitration to be

used. This is because the nature of the western society as a means to protect rights and

 pursue righteous justice. Chinese culture does not consider compromise or humility in

dispute resolution as a sign of weakness. Rather, the Confucian culture prefers mutual

agreement among conflicting parties to maintain natural harmony, “li”. Citizens are

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encouraged to appeal to their families and communities because the Chinese culture

 believes that “each person’s identity is intimately and essentially defined by their many

relationships within the intricate network of Chinese society. Chinese culture believes that

if litigation is made, it is a sign of disorder of social harmony which go against the

fundamental principles of “li” and “jang”. If a person is able to identify his own fault is

 believed to help both parties to create a fair and just resolution than litigation. Although

these means and philosophies, parties are encouraged to settle their disputes privately and,

only if necessary, to appeal to the family or community for aid in settlement.

The acceptance of Confucian principles, “li” and “jang”, both principles of social

harmony and self-criticism mirrored it indirectly supports the Maoist Philosophy. Maoist

Philosophy emphasize on “the transforming the thought of individuals lies at the heart of 

strategies aimed at mobilizing the masses. In the Maoist view, political thought is incorrect

unless it proceeds from and applies the correct thought. The thought and consciousness of 

individuals and their social classes must be changed by “resolving their contradictions”

through the use of tools of struggle, especially criticism and self-criticism. The ideology of 

Maoist promotes the social harmony by using the method of mediation with the assistance

of the “party cadres”. The idea of citizens correcting their own actions, even though it is at

the insistence of party cadres, through ‘persuasion and education’ led to the renewal of 

mediation in Chinese life. All and all this particular philosophy promotes the idea of every

citizen should do their own part in the society in order to help produce a harmony,

righteous and safe society, or can be said as “sacrifice own interest for the best of the

society.” The duet of communist ideology and mediation is accomplished through the

structure of the mediation system. The role of Chinese mediators is to facilitate

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communication and problem solving between the parties. The mediators have to possess

good knowledge in morality or the society, the norms of the society, the laws of the

society. These mediators are pretty much alike judges in court and with the power much

like the court judges.