How Are Arbitration and Mediation Different From Each Other? Can A Dispute Be Resolved Using Both of Them?
Arbitration and Mediation are Alternate Dispute Resolution (ADR) procedures. Arbitration is a process in which a binding decision is made by the arbitrator(s). Mediation is a process in which both the parties, with the interference of an independent third party known as Mediator, engage in a negotiation by discussing the key points to disputes and settle the issue. Although both Arbitration and Mediation are ADRs, they both are different in their own ways.
Arbitration is somewhat similar to Litigation, except in arbitration the disputes are settled in private. Arbitration is a formal and a structured process which generally arises as per the ‘Dispute Resolution Clause’ in the agreements. The arbitrator(s) shall be chosen only if both the parties agree. If they fail to do so, they shall appoint an independent body or a person to appoint arbitrator(s). In arbitration, there will be hearing just like in a court, and there may be pre-trial processes, preparation of written witness statements and the parties may be even cross examined during the trail. The Arbitrator shall give a detailed written decision after the trial.
Mediation, on the other hand, is a Non-binding process in which there will be only one Mediator who does not give judgement but facilitates discussion and eventual settlement of the dispute. Unlike Arbitration, Mediation is a much less formal process. Mediation can be voluntary, court order or required as a part of ‘Dispute Resolution Clause’ in the agreement. In maximum cases, the parties shall be sitting in different rooms while the mediator communicates with one party at a time. In most of the cases, where the parties fail to settle their dispute through Mediation, the dispute might go to Arbitration or Litigation. Mediation is a less expensive procedure than Arbitration but there is no guaranteed outcome in it while Arbitration gives a judgement.
Mediation-Arbitration: A better ADR
The Mediation-Arbitration, popularly known as Med-Arb, is that Alternate Dispute resolution in which both of the procedures can be used to settle the dispute. The disputed parties shall agree to this Med-Arb process. Initially, there will be a Mediation between the parties, in which both parties have a win-win solution. If they fail to negotiate through Mediation, the matter shall be passed on to arbitration where the Arbitrator(s) shall give a detailed decision. The Med-Arb procedure is a more preferred one recently, as the disputes can be resolved within a less time and with less expense.
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