Arbitration Vs Mediation

Though arbitration and mediation are used for the same kind of disputes, however there are few fundamental differences which needs to be understood by the disputing parties. Let us first discuss about arbitration.

 Arbitration is the process which is a part of the Alternative dispute resolution which comes under a purview of Arbitration and Conciliation Act 1996. This has also been amended in 2005. Arbitration is a like a court process wherein the parties have to provide evidences and testimonies which gets analysed by a group of arbitrators who can be either mutually appointed or can be appointed by the high court or the Supreme Court. Arbitration is different from the normal court proceedings in a way that, it is a lot less formal as compared to the court normal court case. The verdict or as it is commonly referred in arbitrational tribunal as “award” is binding on the both the parties and there is a laid down process for the execution of decision as well. Decisions made in the arbitrational tribunal can be implemented in over 142 countries worldwide. Arbitration is usually preferred for business disputes instead of the court proceedings because is less complicated and time consuming.

 Mediation is a process which is non – binding and mostly a single mediator conducts it. The main aim of the mediator is to establish communication between the parties which eventually resolves the issue. The mediator does not pass a decision as to who is wrong and who is right, however it provide all the means to effective resolve the dispute. The Mediation can be used in any kind of disputes and the trend shows that it has been extremely popular as it has been proved effective in solving the disputes. There are laws in several countries which requires the disputing parties to go for mediation before a formal case can be filed regarding the dispute. Though arbitration is quick in resolving disputes, it has been seen that, mediation is even quicker in doing the same. Because it is a faster process, it requires lot less expenditure. The process of mediation may be different in different scenarios, however mostly each party meet with the mediator separately first to explain their take on a dispute. Once this process is over, the mediator works on the possibility on giving a resolution which can make all the parties happy. Majority of the cases gets resolved by mediation and the disputing parties go for written settlement mentioning the points on which the resolution has been reached. After comparing the data, it has been observed that, parties have more faith in mediation in order to resolve the dispute than arbitration as well as litigation. In case the mediation does not yield any fruitful result and the parties could not reach any agreement, it is known as “Impasse”. 

 To conclude, I would like to state that, both the above processes can be used for solving disputes, however, it is very important to be aware of both the processes in order to choose which one suits you the best.