image credits- Key Differences
What is Arbitration?
Arbitration is one of the methods of Alternative Dispute Resolution (ADR) which is introduced in order to resolve civil disputes outside of the court procedures. In this case an individual decides the final outcome/award of the case after hearing and inspecting the disputed parties, evidences and other important documents.
The person/s appointed is called as the
arbitrator/s. The number of people appointed are always done in odd numbers,
i.e. 1, 3 5 and so on. Furthermore, the case in arbitration should be settled
by providing an award within 12 months from the date of completion of the
proceedings, if not it would move to the court.
What is Mediation?
Mediation is also one of the methods of Alternative Dispute Resolution (ADR) which is introduced in order to resolve commercial, civil, matrimonial, property disputes arising outside of the court procedures. In this case a neutral third party being an expert of law is appointed who then decides the best possible outcome /settlement of the disputed case after hearing the disputed parties and noting their concerns.
The person appointed is called the
mediator.
What are the similarities between Arbitration and Mediation?
1. Both can resolve civil disputes that arise between disputed parties.
2. These modes are applied with permission from both or all the parties.
3. Settlement done by either of the modes is outside of the court.
4. In case of Arbitration as well as mediation, the disputed parties can themselves choose the arbitrators and mediators.
5. The venue and place of the meeting is also decided by the concerned parties.
6. Both come under the ambit of Code of Civil Procedure, 1908.
What are the differences between Arbitration and Mediation?
1. Arbitration is formal, whereas mediation is informal.
2. Arbitrators need evidences in order to decide the case and awards. Mediators do not require any evidences in order to settle the case.
3. Arbitration is more expensive than mediation.
4. Arbitration is very similar to litigation as it requires filing of applications, facts, evidences, documents and even witnesses. On the other hand, mediation does not require any of these procedures or formalities. It is more like a friendly settlement.
5. In case of Arbitration there is an award declared which is to be paid by one party- to the other, thereby leaving the relation strained. In case of mediation, as there is scope for settlement, relations may not be left strained.
6. In Arbitration parties hardly have personal relationship and cannot even privately communicate with the Arbitrator. In mediation there is no restriction as it is important for the mediator to understand the parties individually in order to come down to settlement beneficial for all.
7. Arbitration awards are legally binding and are to enforce by the courts, whereas a mediation settlement is not necessarily enforceable.
8. Arbitration award should be done within 12 months from the date of completion of proceedings. In case of mediation, the process should be completed within a period of 3 months from the date the mediator received the appointment.
Also read - Institutions for settlement of Industrial Dispute - Industrial Dispute Act
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