LIU Xiaohong
Professor and Former President of Shanghai University of Political Science and Law
Professor of University for Peace (UPEACE)
I am deeply grateful to the Supreme People’s Court for this invitation. At a time of profound reshaping in global supply and industrial chains, it is truly significant to have this opportunity to share observations and suggestions with you on the accessibility dilemma from the perspective of international commercial dispute resolution.
Before turning to the core issues, let me offer one observation on the current landscape. Supply-chain disputes today display a clear composite character. A single dispute is rarely confined to a simple sale, shipment, or contract of carriage; more often it pulls in multiple jurisdictions, multiple tiers of suppliers, and a web of linked contracts. The legal issues range from the sale of goods, to IP compliance, to data flows, and even to carbon border adjustment. The complexity of such disputes places ever higher demands on the accessibility of our dispute-resolution mechanisms. At its core, the accessibility of international commercial dispute resolution is a question of whether dispute-resolution services can reach all market actors at reasonable cost, within a reasonable time, and with predictable outcomes. Today, that accessibility faces three structural dilemmas.
The first dilemma: procedural fragmentation and the cost it imposes on access
Litigation, arbitration and mediation have long sat side by side—piled together, rather than working as one. When parties move between them, they encounter conflicts of jurisdiction, duplicate submissions of evidence, and incompatible procedures. This is not a mere procedural inconvenience. It translates directly into real costs for enterprises—in time, in money, and in lost business opportunities. The World Bank’s B-READY 2025 interim report shows that, of the 101 economies surveyed, commercial mediation is available and actually functioning in only 56%; in over 40% of economies, litigation remains the only mechanism for resolving commercial disputes. The composite nature of supply-chain disputes only amplifies this weakness: when a bundle of linked transactions must be dismantled and resolved piece by piece, fragmented procedures can drag an entire chain down with a single case.
The second dilemma: the absence of preventive functions, leaving disputes to spin out of control at an early stage
By the time many disputes reach arbitration or litigation, they are already deeply entrenched, and the cost of repairing the commercial relationship then climbs exponentially. UNCITRAL pointed the way in July 2025 with its Toolkit on the Prevention and Mitigation of International Investment Disputes, which aims to anticipate and address investor concerns before they harden into formal claims. Yet preventive mechanisms remain far less institutionalised in the field of international commercial dispute resolution than the machinery of adjudication at the back end. Most enterprises seek professional support only after a dispute has already erupted, by which time the mutual trust along the contract chain is often beyond repair. Viewed from the perspective of stable supply chains and industrial linkages, a bias towards adjudication over prevention not only raises the cost of dispute resolution, but also, at the macro level, undermines the trust that underpins cross-border commercial cooperation.
The third dilemma: a gap between the rules we have and the world we face
On digital trade, cross-border data flows, and green supply chains, the rules of dispute resolution remain unclear. Traditional dispute-settlement frameworks show their limits—in determining jurisdiction, in the applicable law, and in enforceability—and struggle to address the new disputes emerging around data flows and digital products. Foreign legislation such as the EU’s Corporate Sustainability Due Diligence Directive imposes new compliance demands on supply chains, yet the corresponding dispute-resolution rules are still at an exploratory stage.
Faced with these dilemmas, the way forward is to reshape the supply of dispute-resolution services through systemic thinking, and to build a three-dimensional path of prevention, tiered response, and empowerment. On that basis, I wish to put forward three proposals.
First, move from mere stacking to genuine fusion—and build a dispute-resolution chain for the whole life cycle
The Supreme People’s Court’s ‘one-stop’ mechanism for diversified international commercial dispute resolution has already accumulated valuable experience. As of now, it brings together 10 international commercial arbitration institutions and 4 international commercial mediation bodies; 18 intermediate people’s courts have established local international commercial tribunals, forming a national network. Building on this platform, the next step is to develop a tiered, sequential mechanism—early neutral evaluation, facilitative mediation, expedited arbitration, and litigation—with clear rules on the conditions and procedures for moving from one stage to the next. Given the composite nature of supply-chain disputes, we should also introduce the concepts of front-end diagnostics and modular resolution.
More concretely, three lines of effort deserve attention. First, deepen the institutional role of the International Commercial Expert Committee: give full play to expert evaluation opinions, and further clarify the procedural status and effect of early neutral evaluation, so that it serves as the first gate in the tiered system. Second, draw on the experience of the Shanghai International Commercial Court with ‘third-party funded mediation’, and bring more market-based and specialised mediation resources into the facilitative-mediation stage. Third, break down the silos between different dispute-resolution mechanisms, and further refine the procedural linkage rules that apply after mediation, arbitration and litigation are connected through the ‘one-click’ pathway.
Second, seize the enactment of the Commercial Mediation Regulations to unlock the institutional force of mediation
China’s first administrative regulation dedicated to commercial mediation—the Commercial Mediation Regulations—entered into force on 1 May 2026. It fills a long-standing legislative gap and establishes the legal framework for commercial mediation. I suggest that we use this opportunity to advance the Regulations’ implementation along three lines. First, issue implementing measures: building on recent local practice, we may explore higher-level supporting rules—in particular, clear standards for the judicial review of mediated-settlement agreements and concrete procedures to ensure that litigation-mediation linkage operates without empty formalities or hidden barriers. Second, pilot cross-border special arrangements in the free trade zones and the Guangdong-Hong Kong-Macao Greater Bay Area: within the framework already established by the Regulations for the filing and registration of foreign mediators, allow qualified foreign mediators to practise in the pilot areas, and explore mutual recognition of rosters and alignment of rules, so as to develop a replicable and scalable Chinese model. Third, substantively advance the domestic preparations for ratifying the Singapore Convention on Mediation: I suggest that some international commercial courts begin to explore enforcement pathways for qualified international commercial mediated settlement agreements, building up practical experience and laying a solid institutional foundation for eventual ratification.
Third, use technology empowerment and rule-making as twin engines to close the systemic gap
Technology empowerment is not a mere ornament; it is an institutional force that lowers costs and enhances accessibility. First, at the infrastructure level, I suggest building a national smart legal-information infrastructure for foreign-related matters, building on existing advances such as AI tools for ascertaining foreign law and the courts’ own inquiry platforms. We should draw on the best local practices, integrate case resources on foreign-related dispute resolution nationwide, and create one authoritative data platform, with a regular mechanism for publishing guiding cases. Second, we should embrace new technology and promote blockchain-based cross-border evidence storage and service, paired with electronic evidence. Domestic arbitration institutions should jointly develop guidance on admitting digital evidence to resolve the trust problem in cross-border proof. Third, by harnessing the latest artificial intelligence, we can free up precious human judgement for core dispute resolution and frontier issues. In supply-chain contracts, we may promote smart-contract clauses with tiered dispute resolution triggers: code sets the conditions for performance, and small disputes—such as late delivery or confirmation of logistics records—can be resolved automatically, controlling commercial risk while reducing the complexity of downstream resolution.
On the rule-making side, we should actively foster consensus on dispute-resolution rules for the digital economy and green supply chains. The Foreign Trade Law took effect on 1 March 2026 and, for the first time, covers digital trade and green trade. Building on this, I suggest that China take an active and leading role in negotiating and building digital-trade dispute mechanisms—embedding flexible and efficient digital dispute arrangements in regional trade agreements, and accelerating the supply of rules for emerging fields, so as to genuinely lower the institutional cost of access to justice for market actors. On green supply chains, disputes over carbon-border compliance and ESG due diligence are on the rise; I support arbitration institutions in developing specialised arbitration rules and expert guidance for these issues.
Colleagues, a stable and effective international commercial dispute-resolution system is the institutional bedrock of resilient global supply chains and industrial linkages. Its value lies not in procedural complexity, but in whether market actors can protect their rights, repair their relationships, and sustain their cooperation—fairly, affordably, and predictably. Let us meet complex disputes with composite thinking. Let us bridge the fractures of fragmentation with systemic mechanisms. And let us smooth the systemic gaps with the warmth of technology. Then dispute resolution will truly return to its first purpose: serving a fair and just international economic order.
Thank you.
