Arbitration, mediation and conciliation are the main Alternative Dispute
Resolution Mechanism which is generally adopted by the people to resolve their
disputes in an informal manner. They try to reach a solution by settlement or
negotiation with the assistance of a third neutral party and have turned out to
be an effective alternative to the litigation process.
What is alternative dispute resolution?
When the method of resolution of the dispute chosen by the parties is other than
the arbitration, in the form of mediation, negotiation, conciliation, Lok Adalat,
online arbitration, then it is Alternative Dispute Resolution (herein referred
to as ADR). ADR opens the way in the field of business and tends to solve the
matter more efficiently and effectively.
It is basically a dispute settlement through negotiations. In the arbitration, a
dispute is decided by imposing an award, but ADR is more likely to find a
solution to the dispute by negotiating between both the parties. The purpose of
ADR is more than merely giving a remedy to the parties. It aims to ensure that
the contract operates properly.
Mediation is an ADR method where a neutral and impartial third party, the
mediator, facilitates dialogue in a structured multi-stage process to help
parties reach a conclusive and mutually satisfactory agreement. A mediator
assists the parties in identifying and articulating their own interests,
priorities, needs and wishes to each other. Mediation is a peaceful dispute
resolution tool that is complementary to the existing court system and the
practice of arbitration.
Mediation is a structured process with a number of procedural stages in which
the mediator assists the parties in resolving their disputes. The mediator and
the parties follow a specific set of protocols that require everyone involved to
be working together. This process permits the mediator and disputants to focus
on the real problems and actual difficulties between the parties. Moreover, the
parties are free to express their own interests and needs through an open
dialogue in a less adversarial setting than a courtroom.
The main aim of mediation is to assist people in dedicating more time and
attention to the creation of a voluntary, functional and durable agreement. The
parties themselves posses the power to control the process- they reserve the
right to determine the parameters of the agreement. In mediation, the parties
also reserve the right to stop anytime and refer a dispute to the court system
or perhaps arbitration.
Conciliation is another dispute resolution process that involves building a
positive relationship between the parties of dispute; however, it is
fundamentally different than mediation and arbitration in several respects.
Conciliation is a method employed in civil law countries, like Italy, and is a
more common concept there than is mediation. While conciliation is typically
employed in labour and consumer disputes, Italian judges encourage conciliation
in every type of dispute.
is an impartial person that assists the parties by
driving their negotiations and directing them towards a satisfactory agreement.
It is unlike arbitration in that conciliation is a much less adversarial
proceeding; it seeks to identify a right that has been violated and searches to
find the optimal solution.
Conciliation tries to individualize the optimal solution and direct parties
towards a satisfactory common agreement. Although this sounds strikingly similar
to mediation, there are important differences between the two methods of dispute
resolution. In conciliation, the conciliator plays a relatively direct role in
the actual resolution of a dispute and even advises the parties on certain
solutions by making proposals for settlement.
In conciliation, the neutral is usually seen as an authority figure that is
responsible for the figuring out the best solution for the parties. The
conciliator, not the parties, often develops and proposes the terms of
settlement. The parties come to the conciliator seeking guidance and the parties
make decisions about proposals made by conciliators. In this regard, the role of
a conciliator is distinct from the role of a mediator. The mediator at all times
maintains his or her neutrality and impartiality.
A mediator does not focus only on traditional notions of fault and a mediator
does not assume sole responsibility for generating solutions. Instead, a
mediator works together with the parties as a partner to assist them in finding
the best solution to further their interests. A mediator's priority is to
facilitate the parties' own discussion and representation of their own
interests, and guide them to their own suitable solution- a good common solution
that is fair, durable, and workable.
The parties play an active role in mediation, identifying interests, suggesting
possible solutions, and making decisions concerning proposals made by other
parties. The parties come to mediator seeking help in finding their own best
Each of the ADR (alternative dispute resolution) processes addressed herein,
arbitration, mediation, and conciliation, provides important benefits to parties
and may be seen as complementary to the judicial process. In the United States,
mediation has emerged as perhaps the most predominant ADR process because it
affords the parties the opportunity to develop settlements that are practical,
economical, and durable.
For commercial disputes, mediation also offers the opportunity to create
innovative solutions to business disputes that further the unique interests of
the parties in an analytical framework that is broader than traditional legal
rights and remedies. In this sense, the mediation process may be used to secure
business solutions to business disputes
, because it encourages the
parties to consider all the dimensions of a dispute, including both legal issues
and business interests. In all parts of the world, including North and South
America, Asia, and India, large and small commercial entities are recognizing
the business benefits of mediation.
How does mediation differ from adjudication?
Adjudication is simply another adversarial method of dispute resolution in which
one party wins and the other loses. Mediation however is non-adversarial and
seeks to find a solution to the dispute which is acceptable to both parties,
thus also attempting to preserve the business relationship.
Are adjudication decisions confidential?
Although adjudication proceedings are confidential, decisions by adjudicators
are enforced by the High Court and there are certain rules and requirements for
the conduct of such proceedings. Adjudication is not the Wild West of dispute
How arbitration, mediation and conciliation are different from each other?
Mediation and conciliation both are an informal process. Whereas, arbitration is
more formal as compared to them. In mediation, the mediator generally sets out
alternatives for the parties to reach out an agreement. The main advantage of
the mediation is that the settlement is made by the parties themselves rather
than a third party. It is not legally binding on the parties.
Arbitration is a process where the parties submit their case to a neutral third
party who on the basis of discussion determine the dispute and comes to a
Dispute resolution through conciliation involves the assistance of a neutral
third party who plays an advisory role in reaching an agreement. The process
adopted by all the three is different but, the main purpose is to resolve the
dispute in a way where the interest of the parties is balanced.
Arbitration, mediation and conciliation are considered as the main alternative
dispute resolution mechanism to litigation. Business people prefer these
mechanisms more convenient because it does not require a lot of lengthy
procedures like courts. Here, dispute resolution is more informal as compared to
litigation in courts. Over the recent years, they have turned out to be more
effective than the litigation process. Access to justice is there without the
involvement of the court. Parties are more comfortable as they can freely
express their own views, needs and interest.
- Halsbury's Laws of England para 501 (vol.2, 4th edition).
- Inserted by the Code of Civil Procedure (amendment) Act, 1999.
- DK Sampath, Mediation 8 (NLSUI, 1991).
- Justice K.G. Balakrishnan, former Chief Justice of India (Law Day
address to the Nation on November 25, 2008).
- Sriram Panchu, Mediation Practice and Law, The path to successful
dispute resolution, 255.