A Comparative Analysis between Arbitration and Mediation

A Comparative Analysis between Arbitration and Mediation


Constitution is the supreme law of the land. Parliament makes law on the basis of constitutional provisions. Article 13 of the Indian Constitution states that the State shall not make any law which may violate the provision of Part 3 of the constitution or in contravention of the Constitutional provisions. In India,ADR, i.e., Alternative Dispute Resolution is established on the basis of Article 14, Article 21 which deals with equality before law and right to life and personal liberty respectively. The Constitution is made by the people, for the people and of the people. That’s why its one of the motives is to make a welfare state by giving free legal aid by Article 39-A and Article 21 of the Indian Constitution. Thus the Alternative Dispute Resolution came to provide legal solution without the interference of the court.

Alternative Disputes Resolution:

According to National Data Grid, over 4.6 crore cases are pending in India; of which over 4.1 crore cases are pending at District and over 56 lakhs cases are pending at various High Courts across India and over 70 thousand cases are pending before the Supreme Court in India. As the name suggest ADR provides a less time consuming judicial process which helps in reducing the burden of litigation on courts. It gives a satisfying experience to the parties involved in case as ADR process are very informal as compare to the court proceedings. The proceedings of the Court are very technical in nature than ADR. So this ADR mechanism can provide:

1. Affordable and speedy trial with less technical process

2. Settlement of disputes through negotiation

ADR is processed by the modes of Arbitration, Conciliation, Mediation, Lok Adalat.

Provision of ADR:

Section 89 of the Civil Procedure Code, 1908 talks about the Alternative Disputes Resolution process. If it appears to the court that there are some elements of settlement which may be acceptable to the parties, the court shall formulate the terms and conditions of settlement and give them to the parties for observation. After receiving the observation from the parties, the Court may settle the matter of disputes through the process of the Arbitration, Conciliation, Mediation, and Judicial settlement including settlement through Lok Adalat. The act which deals with Alternative Disputes Resolution are The Arbitration andConciliation Act, 1996 and The Legal Services Authority Act, 1987.

In simple words any method of resolving disputes without litigation (outside the courtroom) is known as Alternative Dispute Resolution.

Guru Nanak Foundation v. Rattan Sing & Sons(1981)

in this case the Supreme court observed that the Arbitration act is an alternate medium to resolve disputes less formally and more effectively.

Arbitration:  it is an Alternative Dispute Resolution Process that takes place outside of Court. It is less formal than a trial. Instead of taking a case to a judge, the parties take it to the Arbitrator. So Arbitration is a procedure in which a dispute is submitted by the agreement of the parties to one or more Arbitrators who make a binding decision of the disputes. In Arbitration process those evidence which are not acceptable in the court can be admissible here that is Hearsay. After reviewing the presentation from both the parties the Arbitrator will make a final, binding decision.

Mediation:  It is an ADR process where a neutral third party that is mediator tries to settle the disputes with the consent of both the parties. It is a process where two or more people involved in disputes come together to try and find a fair and workable solution of their disputes. This process is done by mediator who is a neutral third party.

Difference between Arbitration and mediation:

Though Arbitration and Mediation are the process of Alternative Dispute Resolution, they are different from each other.

1. In case of Arbitration, the Arbitrator decides the matter of disputes after observing the circumstances and fact. In case of Mediation a neutral third party is appointed as a mediator and helps to the parties in disputes to solve their matter. Here the mediator works as a facilitator. They do not give any decision but help each party to come to an end of the disputes.

2. Arbitration is less expensive process than court proceeding but it is more expensive process than Mediation. On the other hand mediation is less expensive than litigation and arbitration.

3. The Arbitration proceedings are governed by the provisions of the Arbitration and Conciliation Act, 1996.But the proceeding of Mediation are not governed by any specific act or statute and it is flexible.

4. The decision of the Arbitrator is binding in nature but the decision which is made in the process of mediation is not binding in nature.

Similarity between Arbitration and Mediation:

The similarity between the arbitration and mediation is that both are the Alternative Disputes resolution process and both are less time consuming process rather than litigation. In both cases a third party is selected to resolve the disputes of the parties, one’s decision is binding ( Arbitration) and other is not binding in nature(Mediation). The mediator helps two parties in disputes to resolve their problems.


Alternative Disputes Resolution has been present in India for many years but it found a boost in recent times. This Alternative Disputes Resolution process is more applicable to the Civil Proceedings. If a question is asked which is better or more preferable between mediation and arbitration, the answer may be the mediation because it is a flexible process. It is cheaper than any other processes and the mediator helps the parties to find better solutions of their problems. Mediator does not force parties to listen to their solutions or choose their suggestion but it acts as a facilitator to resolve their problems by negotiation and communication skills. With time, more amendments and more case laws will appear that will help India at par with international standards of alternative disputes resolution.