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

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

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.

The conciliator 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 solution.

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 resolution.

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 solution.

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.

Conclusion
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.

References:

1. Halsbury's Laws of England para 501 (vol.2, 4th edition).
2. Inserted by the Code of Civil Procedure (amendment) Act, 1999.
3. DK Sampath, Mediation 8 (NLSUI, 1991).
4. Justice K.G. Balakrishnan, former Chief Justice of India (Law Day address to the Nation on November 25, 2008).
5. Sriram Panchu, Mediation Practice and Law, The path to successful dispute resolution, 255.
6. https://www.tpsgc-pwgsc.gc.ca/gcc-bdm/differences-eng.html