TopicDifference Between Arbitration, Conciliation, mediation, Negotiation

Submitted To:-Mrs. Aman Cheema

Submitted By:-Pranav KhannaBA.LLB (H) . 6th

sem.

Meaning of Arbitration As Defined u/s 2(1)(a) it covers any arbitration

whether it is administered by any permanent arbitral institution or not . It also covers arbitration based on voluntary agreement by the private parties or by operation of law.

The act does not provide definition of word “Arbitration” but its literally recognized meaning is “settlement” of differences or disputes by mutual understanding or agreement by the parties where the rights and liabilities of the parties are adjudicated which are binding on them, such settlement may be before the arbitral tribunal but not by the court of law

Meaning of ArbitrationHowever, the definition in section 2(1)(a) of the

said act is merely a clarification that the act covers institutional and ad hoc arbitration. This definition is based on the definition mentioned in clause (a) of article 2 of UNCITRAL model law. According to that provision the expression “arbitration” is defined as under :-

“Arbitration” is the means by which the parties to dispute get the matter settled through the intervention of an agreed third person. “Arbitration” is a process that is carried out pursuant to an agreement to arbitrate the disputed matter

Meaning of ArbitrationAccording to Bombay high court the

object of arbitration is to decide a dispute, which has arisen.

According to Halsbury - “Arbitration” means “ the reference of dispute or difference between not less than two parties , for determination, after hearing both sides in a judicial manner , by a person or persons other than a court of competent jurisdiction.”

Meaning of ConciliationPart 3 of the act deals with conciliation. “Conciliation”

means “settling of disputes without litigation.” Conciliation is the process by which discussion between parties is kept going through the participation of the conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings the award is the decision of arbitral tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator.

The Parties are at liberty to evolve their own procedure of conciliation for negotiating and arriving at settlement of disputes . It is only when no such agreement or procedure has been evolved by the parties that the parties that the provisions of part 3 of the act are invoked and made applicable.

Meaning of MediationMediation is most frequently adopted ADR

technique. It contemplates the appointment and intervention of neutral third person who helps the parties to reach a negotiated settlement. He does not have the power to adjudicate or impose an award. It is conducted on a confidential basis and without prejudice to the legal rights and remedies of the parties. The process may have to pass through several stages like preparation, joint sessions, private meetings and final result.

Meaning of Negotiation It is the simplest means for redressal of disputes. In

this mode the parties begin their talk without interference of any third person. The aim of negotiation is the settlement of disputes by exchange views and issues concerning the parties. There is an ample opportunity for presentation of case in this mode of redressal . If there is understanding and element of patience between the parties this mode of redressal of dispute is the simplest and most economical.

“Negotiation is a communication process used to put deals together or resolve conflicts. It is a voluntary, non binding process in which the parties control the outcome as well as the procedures by which they will make an agreement. Because most parties place very few limitations on the negotiation process , it allows for a wide range of possible solutions maximizing the possibility of joint gains.”

Difference between conciliation and ArbitrationThough like arbitration, conciliation is also

another means of settling disputes, they two differ in many vital aspects. The only similarity that appears between the two is that a ‘third person’ is chosen or nominated by the parties to resolve their disputes. The main points of difference between arbitration and conciliation may be stated as follows :-

1. The method of conciliation is generally applicable to existing disputes, while the mode of arbitration is available for existing as well as for the future disputes.

Difference between conciliation and Arbitration2. For adopting the method of

conciliation, there is no need for a prior agreement for resorting to this method, but in arbitration a prior agreement for arbitration between the parties is required.

3. The pre-agreement in arbitration must be in writing but since no pre agreements are required in conciliation, there is no such binding in the case of conciliation.

Difference between conciliation and Arbitration4. The conciliation proceedings start by

sending a written invitation and a written acceptance thereof in between the parties. The invitation may be accepted or rejected by the other party as it has no binding effect, being an invitation only. The prior written agreement in arbitration commands a binding effect upon the parties and its breach by resorting to court, compels court to refer the matter to the arbitration and parties are bound by the arbitral agreement

Difference between conciliation and Arbitration5. While conciliation proceedings are in

progress, there is a bar on parties from initiating arbitral or judicial proceedings as per section 77 of the new act 1996. In arbitration, the arbitral agreement itself suggest for redressal of disputes through arbitration and if any party approaches court, the other party may request the court to refer the matter to arbitration and court is bound to refer such matter to the arbitral Tribunal.

Difference between conciliation and Arbitration6. Where parties fail to determine the number of

arbitrators/conciliators, the act envisages odd number of arbitrators or sole arbitrators/conciliators. Parties may agree for two or three conciliators and maximum number of conciliators cannot exceed three. Where the number of conciliators is more than one, they as a matter of general rule should act jointly. Parties may seek assistance in appointment of conciliators, the assistance of any suitable institution or person. In case of arbitrators there is no bar on their maximum number but the total should not be even number. when parties agree for three arbitrators, each party shall appoint one and these two shall appoint the third arbitrator who shall be presiding arbitrator.

Difference between conciliation and Arbitration7. While the role of conciliator is to help and assist

the parties to reach an amicable settlement of their dispute, the arbitrator does not merely assist the parties but he also actively arbitrates and resolves the dispute by making an arbitral award.

8. In case of conciliation a party may require the conciliator to keep the ‘factual information’ confidential and not disclose it to the other party, but it is not so in arbitration as the information given by a party is subjected to scrutiny by the other party. Thus there is no question of confidentiality in case of arbitration awards.

Difference between conciliation and Arbitration9. A settlement agreement may be made

by the parties themselves and the conciliator shall authenticate the same. An arbitration award on other hand, is not merely a settlement agreement but it is judgment duly signed by the arbitrator.

10.The conciliation proceedings may be unilaterally terminated by a written declaration by a party to the other party and the conciliator, but arbitration proceedings cannot be so terminated.

Difference between conciliation and Arbitration11. Conciliator is subjected to certain disabilities

under section 80 of the act and he cannot act as a arbitrator or as a council or a witness in any arbitral or judicial proceedings but there is no such disabilities imposed on an arbitrator or parties to arbitral proceedings.

12. The arbitration proceedings or awards may be used as evidence in any judicial proceedings but the conciliation proceedings cannot be used as evidence in any arbitral or judicial proceedings

13. Last but not the least, an arbitrator has to decide according to law , but a conciliator can conciliate irrespective of law.

Difference between conciliation and MediationThough conciliation and mediation appear to be

similar in interchangeable terms, there is subtle difference between the two:

1. In Mediation a mediator, who is neutral and intermediary, plays an active role by working out compromise formulas after hearing both the parties. But in case of conciliation, the role of conciliator, who also plays the role of neutral intermediary, is to bring the parties together in a frame of mind to forget their animosities and prepare them for a compromise by adopting a mid way approach which may be acceptable to both the parties in dispute. Thus a conciliator is an active participant in bridging the gulf between the parties and suggest solution which is acceptable to the parties.

Difference between conciliation and Mediation2. The power of conciliator is larger

under the arbitration and conciliation act and whereas the powers of the mediator is too limited as he can only suggest proposals for the settlement.

3. The conciliator can make proposals for settlement, formulate or reformulate the terms of a possible settlement whereas a mediator would merely facilitate a settlement between the parties.

Difference between Mediation and Arbitration 1. In the process of mediation there is a act of

third party relating to settling of disputes between two contending parties. Whereas an arbitration is governed by the arbitration agreement wherein an arbitrator is nominated by the parties.

2. Arbitral award made in conclusion of the arbitral proceedings is binding on the parties to the arbitration, whereas settlement arrived at the end of mediation does not have such binding effect on the parties

3. The decision of an arbitrator is known as “award”. Whereas the decision of a mediator is known as a “settlement”

Difference between Mediation and Arbitration 4. The procedure of arbitration is based on

the ordinary rule i.e. , relevant arbitration law and procedure laid down in the arbitration agreement. Applicability of any such rule is minimal in case of mediation.

5. An arbitration award is treated as a ‘decree’ and can be enforced legally but the settlement arrived at as a result of mediation is not legally enforceable. Thus, the terms of settlement may be accepted or rejected by the contending parties.

Difference between Negotiation and others1. In negotiation there is no interference

of the third parties whereas in the arbitration and conciliation there is third party who acts as arbitrator and conciliator to settle the disputes between the parties.

2. The arbitral proceedings and award can be used as evidence in judicial proceedings but the negotiation proceedings cannot be used as evidence anywhere

Difference between Negotiation and others3. In the arbitration proceedings there is a

procedure laid down under the act for the commencement of the proceedings but in negotiation the parties to dispute on their own motion start a process of negotiations through correspondence to find the mutually acceptable solution of the problem.

4. In the arbitration the award is given by the arbitrator and has a binding effect upon the parties but in the negotiation process there is compromise between the parties by mutual understanding and has no binding effect upon on the parties.

Difference between Negotiation and others5. In the negotiation proceedings

the parties will reach to compromise agreement with the mutual understanding but in the arbitration there not a settlement agreement, there is judgment or award duly signed by the arbitrator.

Conclusion

So from the above discussion we can conclude that arbitration, conciliation, mediation & negotiation are the means of settlement of disputes between the disputed parties. Though these modes appears similar in certain aspects but there are certain difference between these modes but the main aim is to provide the redressal system to the parties.