Difference Between Arbitration And Mediation In India

Arbitration and Mediation in India can be understood as means of out of court settlement which is not actually a litigation process, but, somewhat similar and somewhat distinct. Both are alternative dispute resolution methods only. Understand the difference between arbitration and mediation in India with the explanation below.

Litigation is understood as a conventional method of dispute resolution through courts. The process starts with a first information report (FIR), complaint, petition, etc., as the nature of facts allow. The process usually takes a lot of time in conventional litigation because the number of cases is huge in lower and higher courts. To reduce this pressure of the entire justice system over courts, there was a need to settle suitable matters outside courts and decide accordingly. For that matter, alternative dispute resolution methods were devised. The alternative dispute resolution (ADR) mechanism in India includes appointment of a neutral party who either decides (arbitrates), mediates, conciliates or negotiates the matter. Thus, the ADR law in India follows arbitration, mediation, conciliation, negotiation and Lok Adalats respectively. Hereunder, specific attention has been given to the difference between arbitration and mediation in India and their individual concepts. In both the ADR methods, arbitration and mediation lawyers may represent their clients.

What is Arbitration in Law?

Arbitration process can be understood as a court process that takes place outside the court and without a properly recruited judge. Here, one or more neutral parties are appointed as arbitrators with consent of both the parties. An arbitrator may be a person of subject knowledge or someone from the legal background, as agreed upon by parties. To understand the difference between arbitration and mediation in India, understanding of arbitration is crucial. The arbitration law is governed by the Arbitration and Conciliation Act, 1996. The arbitration process starts with filing of application, facts of the case, presentation of evidence and witnesses before the arbitrator. After considering and adjudging the matter, the arbitrator decides the matter with the application of suitable law just like a judicial officer. Since the parties themselves opt for the arbitration process for alternative dispute resolution and the arbitrators are decided mutually by the parties, the decision is binding and there is no provision to rightfully challenge arbitration award unless the court allows.

Matters Subject to Arbitration in India

Mediation in India

An ounce of mediation is worth a pound of arbitration and a ton of litigation.

-Joseph Grynbaum

Mediation in India can be understood as the out of court settlement of disputes. Here, an impartial / neutral mediator is appointed to facilitate the parties to dispute in order to reach a settlement ground. Mediation vs arbitration itself refers to the mediator not imposing a solution for a dispute, but providing a conducive environment for parties through specialised communication and negotiation techniques to discuss and settle on a mutually acceptable agreement. Mediation is not a legally binding agreement and thus, there are no legal consequences for non-compliance by either party.

Matters for Mediation

• Divorce
• Child Custody
• Commercial contracts
• Employment contracts
• Joint Ventures
• Construction Projects
• Partnership differences
• Intellectual Property Rights
• Personal injury
• Professional liabilities

Arbitration Vs Mediation - What is the main difference between arbitration and mediation?

Both arbitration and mediation processes are fruits of a tree called Alternative Dispute Resolution (ADR). However, there is a world of difference between the purpose of mediation and arbitration. Mediation vs arbitration can be understood with the help of the table provided below.

Difference between Arbitration and Mediation

Similarities in Arbitration and Mediation

• Both proceedings are civil in nature
• Confidentiality is maintained
• Parties have choice of arbitrators or mediators
• Cost effective processes
• Fast, time efficient
• Enforceable decisions

Which is better mediation or arbitration?

To decide the superior among mediation or arbitration, preferability of parties and the facts of the case matter a lot. Where there is scope for mediation through which a middle ground can be reached by the parties, it is always preferable.  However, where there is no scope for compromise and one of either parties has to be declared a winner, arbitration is still better as compared to conventional litigation to save time. Difference between mediation and arbitration in India is evident throughout the process, but the agreement is binding in both the instances.