Mediation Now Mandatory in Government Contract Disputes

A new policy requiring mediation clauses in government contracts has officially come into effect.

According to the Department of Justice (DoJ), these clauses mandate that contracting parties must first attempt mediation to resolve disputes before turning to arbitration or litigation.

To support this initiative, the DoJ has introduced The Government of the Hong Kong Special Administrative Region Mediation Rules (2025 Edition). These new rules will not affect the existing Government of the Hong Kong Special Administrative Region Construction Mediation Rules (1999 Edition).

The policy follows the issuance of a Policy Statement on the Incorporation of Mediation Clauses in Government Contracts on 6 November last year.

The DoJ anticipates that private organizations will take reference from this approach and adopt similar mediation clauses in their contracts, further promoting a “mediate first” culture.