Arbitration is a private dispute resolution process that parties can use instead of going to court to resolve their disputes. The parties must agree to submit their disputes to arbitration, which is a consensual process. The arbitration provision (sometimes known as an ‘arbitration agreement’) is normally included in the principal contract between the parties. After a dispute has arisen, however, the parties may consent to arbitration separately. A single arbitrator or a panel of arbitrators decides the dispute in arbitration proceedings (usually three in number). An arbitrator is comparable to a judge in that they are in charge of overseeing the proceedings to ensure fairness.
An institutional arbitration is managed by a specialised arbitral institution that has its own set of rules.The primary advantage of an institutional arbitration is that the parties benefit from an established format for the arbitration with a proven track record from an institution which specialises in assisting parties with the arbitral process.
Mediation is a structured and collaborative process in which people in conflict work together, with the assistance of a third person – a mediator – to understand the other’s perspectives, identify issues, generate options and alternatives for resolution, and come to a mutual agreement by which the disputes are settled. The phases of the mediation process – opening statements on the genesis of the relationship and the dispute, sharing of information on issues and interests considered important by the parties, and then forward-looking discussions leading to presentation and evaluation of options and finally the agreement – form the process cycle of Mediation.Mediation is a voluntary process – both for participating in the mediation and in the settlement. Trained mediators facilitate discussions in a non-adversarial, confidential setting.
Mediation provides several advantages over negotiation, and indeed adversarial processes. The presence of a third party helps parties overcome likely initial hostility, unwillingness to discuss the issues, and barriers to communication and trust that arise in situations of conflict, that persist in negotiation. Mediation assures autonomy of process and outcomes. Through mediation disputing parties are able to generate, consider and agree on terms that would best resolve their issues, rather than have a decision made for them. The discussions between the parties in mediation are protected by confidentiality, and if a settlement were not possible within the time the parties estimate, they retain the option of proceeding to arbitration or litigation. The disputing parties retain the right to terminate the mediation process at any time, and most importantly to decide how the dispute will be settled.
In Mediation, parties take responsibility for their conflicts, and determine the manner in which their dispute will be resolved. The settlement or solution goes beyond the binaries of remedies that litigation offers – of winning and losing, or right and wrong. Mediation helps sustain and build relationships. It realigns conflicts from the adversarial fight to a common problem that can be resolved through collaboration.
In India, Mediation can be initiated by the parties or may be compelled by legislation, the courts, or by a prior agreement between parties to attempt mediation.
The Institution offers a composite process comprising both Mediation and Arbitration through its Protocol for Med-Arb and Arb-Med-Arb, under which parties can first attempt mediation under the Mediation Rules. If mediation results in a settlement of the disputes, the process ends there. For issues that may remain without resolution, the parties will be seamlessly moved to the arbitration process under the Arbitration Rules.
Alternatively, parties (who may not have a prior agreement to mediate) may choose to attempt mediation after commencing arbitration. Again, the parties will resume arbitration, if all issues in dispute between them are not resolved through mediation.