ADR vs Mediation a detailed difference between them with cases
- 1. ARBITRATION VS MEDIATION FAIZA M BBA LLB(HONS.)-A SEC RRN:218031601018
- 2. WHAT IS MEDIATION? & WHAT IS ARBITRATION? MEDIATION - INFORMAL AND VOLUNTARY PROCESS NEUTRAL MEDIATOR FACILITATES COMMUNICATION AND NEGOTIATION • SETTLEMENT BINDING ONLY IF BOTH PARTIES AGREE • GOVERNED IN INDIA BY THE MEDIATION ACT 2023 • KEY BENEFITS: CONFIDENTIAL, FLEX IBLE, PRESERVES RELATIONSHIPS ARBITRATION- FORMAL, QUASI-JUDICIAL PROCESS ARBITRATOR(S) MAKE A BINDING AWARD ENFORCEABLE IN COURT GOVERNED IN INDIA BY THE ARBITRATION AND CONCILIATION ACT, 1996 • COMMON IN COMMERCIAL, CONTRACTUAL, AND INTERNATIONAL DISPUTES
- 3. WHEN TO USE MEDIATION? & WHEN TO USE ARBITRATION? MEDIATION - WHERE RELATIONSHIPS MATTER (FAMILY, BUSINESS PARTNERS, EMPLOYMENT DISPUTES) CONFIDENTIAL, PRIVATE DISCUSSIONS PREFERRED BOTH PARTIES OPEN TO NEGOTIATION • EXAMPLE: CORPORATE PARTNERSHIP DISAGREEMENTS ARBITRATION- COMMERCIAL AND CONTRACTUAL DISPUTES (CONSTRUCTION, TRADE, INTERNATIONAL BUSINESS) WHERE PARTIES NEED DEFINITE, ENFORCEABLE OUTCOME • SPEED AND NEUTRALITY REQUIRED (INTERNATIONAL DISPUTES)
- 4. KEY DIFFERENCES ASPECT MEDIATION ARBITRATION • Legal status Non-binding unless reduced into a written settlement agreement, enforceable as a contract under law. Binding arbitral award, enforceable as a decree of the court under the Arbitration and Conciliation Act, 1996 (s.36). • Decision-Making Authority Mediator has no adjudicatory powers; acts as a facilitator to assist parties in reaching consensus. Arbitrator acts in a quasi-judicial capacity with authority to render a final and binding determination. • Nature of Process Voluntary, consensual, and interest-based negotiation. Adjudicatory, rights-based, governed by procedural law and party autonomy. • Evidentiary Rules Informal; not bound by strict rules of evidence or procedure. Evidence and procedure regulated (though flexible), guided by principles of natural justice. • Confidentiality Proceedings and communications strictly confidential; inadmissible in subsequent proceedings. Proceedings generally private, but award may become part of public record if challenged in court.
- 5. ASPECT MEDIATION ARBITRATION • Finality of Outcome Settlement depends on mutual consent; no coercive enforceability unless registered as decree. Award has finality and enforceability akin to a court judgment, subject to limited judicial review (s.34 challenge). • Cost & Time Generally economical and expeditious, flexible in scheduling. More formal, can be costlier; faster than litigation but slower than mediation. • Impact on Relationship Preserves commercial, personal, or professional relationships by promoting cooperation. May strain relationships due to adversarial nature of adjudication.
- 6. CASE LAW MEDIATION: AFCONS INFRASTRUCTURE LTD. V. CHERIAN VARKEY CONSTRUCTION CO. (2010) 8 SCC 24 COURT EXPLAINED THAT MEDIATION IS VOLUNTARY AND FACILITATIVE, NOT ADJUDICATORY; SETTLEMENT ONLY IF PARTIES AGREE. ARBITRATION: GURU NANAK FOUNDATION V. RATTAN SINGH (1981) 4 SCC 634 THE SUPREME COURT EMPHASIZED ARBITRATION IS A FORMAL ADJUDICATORY PROCESS RESULTING IN A BINDING DECISION SIMILAR TO A COURT JUDGMENT.
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