Abstract

Arbitration and Mediation are private dispute resolution processes. In the case of Arbitration, an independent Adjudicator known as an Arbitrator is appointed (the appointment may be of an individual Arbitrator or a panel of Arbitrators) in accordance with the provisions of the Arbitration Agreement between the Parties or by an Order of a Court. The Arbitrator, after hearing the parties at length and considering the evidence presented in the respective case, passes a legally binding Award. On the other hand, in the process of Mediation, the intermediary i.e. the Mediator facilitates an amicable settlement of disputes between the Parties. The outcome of the mediation process is not binding on the Parties to the dispute. Both the processes, i.e. Arbitration and Mediation are advantageous than litigation in terms of time consumed, costs incurred, the flexibility of procedure and the formalities and complexities involved. However, in comparison to each other, they have their set of advantages and disadvantages. The merits of Arbitration and drawbacks of Mediation are: Firstly, the procedure adopted by the Arbitral Tribunal is similar to that of a Court and hence it reflects judicial propriety whereas the Mediator does not follow any formal procedure and secondly, the Award passed in Arbitration is binding upon the Parties, whereas such is not the case in Mediation. The advantages of Mediation and disadvantages of Arbitration are as follows: Mediation is less expensive and time-consuming as compared to Arbitration, the procedure of Mediation is less complex than that of Arbitration and the Arbitration process becomes mandatory if there is an Arbitration Agreement whereas Mediation can be terminated by the Parties at their will at any point of time during the process. Therefore, to combine the merits of both these processes and to address the shortcomings in them, the hybrid models which include the advantages of both, Arbitration and Mediation have been gaining prominence. These hybrid models are frequently to settle commercial, labour, industrial disputes. These mechanisms benefit the Parties to the dispute by offering a more efficient procedure than the traditional ones of standalone Arbitration or Mediation.

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