Aim – The focus of this Article is to explain the Difference between Arbitration, Mediation and Conciliation – Three major tools of Alternative Dispute Resolution.
Alternative Dispute Resolution (ADR) is the method used to settle disputes outside the courtroom. Most of the people avoid getting involved in litigation, as the process is lengthy and expensive. Here is when ADR comes into the picture, to avoid costly and lengthy court proceeding parties opt to go for private agreements and settlement process which is known as ADR.
The main ADR alternatives to civil litigations are negotiation, arbitration, conciliation, mediation etc. These methods are expeditious, private, and generally much less expensive than a trial. ADR also give people a chance to determine how they can resolve a dispute.
Difference between Arbitration, Mediation and Conciliation
These three modes of ADR are the most effectively and efficiently used in the present world. But there is a huge confusion amongst people about the difference between the three as there are minor differences between these methods.
In case of conciliation and mediation the confusion is more as the terms are often used as synonyms. However, the Arbitration and Conciliation Act, 1996 clearly used these two terms as separate.Section 30(1) have used these two as two separate methods and the same is mentioned under Section 89 of the Civil Procedure Code (Amendment) Act, 1908.
Hence the difference between the three modes of ADR is explained in this Article.
The term Arbitration is defined under Section 2(1)(a) of the Arbitration and Conciliation Act, 1996. There are various landmark judgments which have defined Arbitration.One of such Judgment is of Collins v. Collins, this case defines Arbitration as “a reference to the decision of one or more persons, either with or without an Arbitrator, of a particular matter in difference between the parties.”
But there is no proper definition given under any law or act, for mediation and conciliation. The meaning of both Meditation and Conciliation is generally understood by their function and procedure.
In case of Arbitration the person resolving the dispute is known as an Arbitrator. An arbitrator is a neutral person chosen to resolve the dispute outside the court while in case of Mediation the person resolving the dispute is known as a Mediator.A mediator is the one who resolves disputes between people, organization, states or any other communities.
In case of Conciliation, a person resolving the Dispute is known as Conciliator. A conciliator is a person one who assists the parties in an impartial manner to reach a peaceful settlement of disputes.
In case of Arbitration, parties need to have an Arbitration agreement only then they can resolve their dispute via arbitration. Under Section 7 of the 1996 Act, the agreement must be writing to be enforceable. Also, consent of both the parties is also necessary it can be oral or written. An Arbitrator is appointed in cases involving major disputes, where the parties are unreasonable or in cases when specific area specialization is required.
While in case of Mediation or Conciliation no such agreement is required. Generally, the court sends matter which suits or can be resolved via Mediation and Conciliation or if the matter is such that the parties don’t want to bring the information in public then to keep it private they go for mediation and conciliation. A conciliator or Mediator is appointed in cases involving minor disputes.
In case of Arbitration the Arbitrator take his decision based on the facts, side stories and evidence of the case which may or may not be favorable to one party. Arbitrator conducts the proceeding strictly by legal restriction and is bound to follow the neutral approach in resolving the dispute.
In the case of Mediation, the mediator has the liberty to select any suitable method of resolve the dispute as there are no strict guidelines to follow.
While in case of conciliation the conciliator is bound to follow the process given under the Arbitration and Conciliation Act (Sections 61 to 81).
The Process of Arbitration as compared to mediation and conciliation, it more costly and lengthy process. In case of Arbitration, each part pays for its own expenses or Arbitrator. On the other hand, in case of conciliation and mediation, the cost of process and mediator and conciliator is equally divided among the parties.
An Arbitrator is a judge of the dispute and provides resolution measures which are binding on the parties unless parties beforehand agreed that the outcome of the proceeding won’t be binding.
In the case of mediation, a mediator does not deliver any judgment. A mediator is a mere facilitator who assists in developing option and dialogue between the parties to achieve a mutual agreement favorable for both the parties.
While in case of conciliation, the role of a conciliator is more than that of a mediator as a conciliator is considered has a pro-active role and is not merely a facilitator. A conciliator can as per Section 67(4) of the 1996 act can make a proposal for settlement between the parties when there is scope for settlement which is presented to parties and the parties have an issue then the conciliator has the right to reform the settlement proposal.
Edited by Sakshi Raje
Section 2(1)(a) in The Arbitration And Conciliation Act, 1996:
(a) “arbitration” means any arbitration whether or not administered by a permanent arbitral institution
28 LJ Ch 186: (1858) 26 Beav 306: 53 ER 916.