TaxTMI 
TaxTMI 
TaxTMI 
| Arbitration | Conciliation | Mediation |
| Arbitration is like litigation which is outside the court and which results in an award like an order | A conciliation is a form of arbitration but it is less formal in nature as compared to arbitration. It is the process of providing a harmonious resolution of disputes between the parties. | Mediation is when a neutral third party aims to assist the parties in arriving at a mutually agreeable solution |
| it is binding on parties whether they agree with it or not. | There is no right to enforce the decisions of the parties. | there is no binding decision without both parties agreeing to one. |
| An arbitrator has the power to enforce his decision. | A conciliator does not have the power to enforce his decision. | The decision made by the mediator is not enforceable like an arbitral award. |
| Prior agreement is required | Prior agreement is not required | Prior agreement is not required |
| Example: Damages in case of breach of contract, matters of the right to the office, time barred claims etc. | . Example: Resolving disputes between contractors and subcontractors etc. | Example: Commercial transactions in patents, trademark licenses, Joint ventures and R & D Contracts, music and film contracts etc |
| The result is the award given. and it is appleable | Result is agreement between the parties and not appleable. | The result is Settlement agreement and not appleable |
| No communication between the parties | Communication is permitted | Optimal communication is permitted |
| Consent of party is essential | Consent of party is essential | Consent of party is not required to quote the case for mediation |
| Arbitration and conciliation act 1996. | Section 74 of arbitration and conciliation act 1996 | Order XXIII , Rule 3, of CPC, for passing decree/order |
| An arbitrator plays the role of a neutral person, who makes decisions on a dispute based on evidence presented by the parties | The conciliator is more active than the mediator who also intervenes and act as an evaluator. He proposes a solution | The mediator only facilitates parties themselves find a solution. |
Does arbitration involve mediation?
The arbitration and mediation are two different form of alternative dispute reform. Mediation is
discussion oriented whereas arbitration is litigation oriented. Arbitration is a good way to settle the dispute if mediation does not work effectively or the parties cannot bring themselves to work out a solution that benefits both of them. Thus, both are an essential step of resolving business disputes.
Arbitration should follow mediation. It is possible to combine mediation with arbitration. In such a case, the dispute is submitted first to mediation under the WIPO Mediation Rules. Then, if a settlement is not reached within a defined period of time (it is recommended that the parties provide for either 60 or 90 days), or if a party refuses to participate or to continue to participate in the mediation, the dispute is referred for a binding decision through arbitration under the WIPO Arbitration Rules (or, if the parties so agree, through expedited arbitration). The advantage of the combined procedure is the incentive that it offers for a good faith commitment by both parties to the mediation process, since the consequence of a failure to reach an agreed settlement will be more tangibly measurable in terms of the financial and management commitment that would need to be incurred in the subsequent arbitration procedure.