Upholding the "Fengqiao Model" in Conciliation: A 16-Year SOEs Dispute Finally Resolved

Updated:2024-12-09 Views:4494

On the morning of November 25, 2024, the Guangzhou Salvage Bureau and Guangdong Zhanjiang Shipping Group Co., Ltd., the two parties involved in a long-standing construction contract dispute over a terminal project, visited the Guangzhou Maritime Court (GZMC). They jointly presented the court with a silk banner inscribed with the words "Upholding the Fengqiao Model in Conciliation, Demonstrating Legal Principles in Serving the People with Dedication", expressing their gratitude for the court's efforts in resolving a protracted dispute between the two state-owned enterprises (SOEs).

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"I feel an immense sense of relief. This construction dispute, which began 16 years ago, has troubled both SOEs for years. We are sincerely grateful to the maritime judges for their patience and meticulous legal explanations, their reconciliation proposals grounded in law, and their efforts in facilitating the resolution of this dispute. Their work has laid a solid foundation for new collaborations between the two SOEs," said Zhang Yongqiang, Party Secretary of the Guangzhou Salvage Bureau, in his note of appreciation.

"New leaders must address old issues. The maritime judges have helped resolve a dispute that had remained unresolved for years, enabling us to devote more resources and energy to the next phase of building a strong maritime province. Their exceptional legal expertise, meticulous work ethic, and profound commitment to serving the people are truly admirable," said Li Mianxiong, Party Secretary of Guangdong Zhanjiang Shipping Group Co., Ltd., with satisfaction.

The successful conciliation of this dispute and the mutually satisfactory resolution were the result of the diligent endeavors of the court's adjudication team. The two enterprises inked a construction contract for the relocation and renovation of a shipyard in December 2008, and the project commenced in September 2009. In March 2017, the project was halted due to the government's requisition of the land (and sea area), leaving the construction unfinished and the financial settlement incomplete. This led to litigation, with one party suing for the payment of project costs and damages and the other counterclaiming for losses resulting from delays. The dispute spanned a lengthy period, involving over a hundred volumes of documentation and multiple engineering projects, including a terminal, a dock, cofferdam, and wing walls. The amount in dispute stood at an estimated RMB 140 million, with numerous contentious issues and challenging appraisal tasks, making the case exceptionally complex to adjudicate. To ascertain the facts, the adjudication team organized 39 reconciliation meetings, convened 11 pre-trial conferences, and conducted 13 days of hearings. They thoroughly listened to both parties, identifying the focal points of contention and systematically and progressively straightening out the facts.

"The dispute spanned a long period and involved two SOEs. Resolving it through conciliation not only enabled the companies to settle their differences promptly but also revitalized valuable resources and assets," the adjudication team explained. After multiple deliberations, the team reached a unified adjudication strategy: thoroughly investigate the facts, identify the balance point between the interests of both parties, propose an optimal resolution plan, and actively conciliate between the two parties to achieve mutually beneficial, win-win, and even multi-win outcomes. Over the course of 23 days, the adjudication team conducted five rounds of face-to-face conciliation sessions and "back-to-back" analyses of litigation risks. Based on a clear understanding of the fundamental facts of the case, they promptly consolidated the outcomes of the negotiations and made timely adjustments to the proposed reconciliation proposal, taking into account the expectations of both parties. Ultimately, these efforts led to a settlement agreement of RMB 46.5 million, bringing the dispute to a successful resolution.

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At the exchange meeting, Chen Youqiang, Party Secretary and President of GZMC, reaffirmed the recognition given to the adjudication team by both parties. He highlighted that the successful conciliation of this case, which resolved a long-standing issue between two SOEs, exemplified judicial values and principles that are worthy of learning and emulation. First, the case demonstrated the high-level positioning of maritime adjudication in supporting the Maritime Power Strategy and the building of a strong maritime province. The adjudication team keenly understood the marine-oriented business characteristics of the two SOEs and actively facilitated reconciliation, enabling the companies to rid themselves of the burden of this historical dispute. This successful resolution vividly reflected the implementation of provincial directives to address historical maritime issues and optimize marine resource allocation, illustrating the maritime court's vital role in providing judicial support for the Maritime Power Strategy and the development of a strong maritime province. Second, the case reflected the two SOEs' willingness to confront challenges and their commitment to focusing on forward-looking development. Both enterprises demonstrated a readiness to embrace innovative thinking and resolve age-old issues with a pragmatic, results-oriented attitude. They broke free from the traditional approach of exhausting judicial procedures to resolve a dispute, instead achieving a substantive resolution. This proactive approach showcased their sense of responsibility and most importantly, provided a model and pathway for resolving similar disputes involving SOEs, thereby quickly releasing resources and assets. Third, the case embodies the principle of resolving conflicts to achieve mutually beneficial, win-win, and multi-win outcomes. The adjudication team firmly upheld the philosophy of "judiciary for the people" and approached the case with the mindset of "acting as if I were the litigant". The team neither avoided contentious issues nor resorted to vague compromises. Instead, they rationally considered the facts, patiently presented legal reasoning, and utilized the "Fengqiao Model" in the new era to resolve the dispute. They helped the two enterprises identify the greatest common denominator for reconciliation, thereby fostering new mutual trust and securing a win-win situation for both sides. Fourth, the case showed the exceptional professionalism of the maritime judges. Led by Judge Deng Feifei, the adjudication team meticulously combed through over a hundred volumes of case files, pinpointed the core issues among dozens of points of contention, and clarified the complexities of the opposing claims. They conveyed the court's genuine intent to facilitate reconciliation while also demonstrating their professional confidence in resolving the dispute if necessary. This professionalism ultimately led to the resolution of the dispute, earning high praise from both parties for a unified outcome that integrated political, social, and legal effects.