This paper reviews presents the advantages and disadvantages of mediation in Chinese commercial arbitration process to resolve disputes. Mediation can be considered as a principal means for resolution of commercial disputes, both domestically and internationally. Simply, to mediate means to act as a peacemaker between dispute parties. Basically, mediation is an informal mechanism in which the disputants are assisted by a neutral third party toward settlement. The mediators are appointed in a voluntary base to help disputants manage the resolution process. They should have no direct interest in the conflict and its outcome, and no power to render a decision, but just can control the process. Meanwhile, parties are entitled to accept or reject the outcome. Mediation shares the advantages of confidentiality, flexibility, and simplicity. Dispute of disadvantages still remaining, China’s mediation system has century’s history so far. Currently, China has used mediation method in arbitral proceedings so as to improve the efficiency of dispute resolution.

1. Introduction
 2. The Advantages of Mediation Process
  A. Speed
  B. Flexibility
  C. Confidentiality
  D. Lower cost
  E. Voluntariness
  F. Informality
  G. More satisfaction with outcomes
  H. Maintaining and improving business relationship
  I. Non-Binding nature
  J. Neutrality
 3. The Main Disadvantages of Mediation Process
  A. Not yet an alternative to arbitration
  B. Risk of disclosing some important information
  C. The mediation process may not be fast and inexpensive
  D. Diminishing the satisfaction of the resolution
  E. No right to appeal the decision
  F. No right to appoint their mediator
  G. A tactic of delaying the process
  H. The risk of using mediator’s comments
  I. There are no incentives for mediators to perform well
 4. Conclusion and Recommendations
 References

• Karwan A. Perot(Lecturer at the University of Kurdistan- Hewler Kurdistan Business School in Erbil, Iraq. B.A./ BSc./LL.B. (La Trobe Univ.), LL.M. (Melbourne))