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Shambasiv (n/a)     29 December 2007

Arbitration & Mediation


What is mediation?

Mediation is a process in which a neutral third party (the mediator) assists the parties to a dispute to reach a mutually acceptable resolution.

How does the mediator assist the parties?

No two mediations are exactly alike because no two disputes are exactly alike. However, among the things that a mediator may do to facilitate settlement is to make certain each party is clear on what the dispute is really about and that each party understands (not necessarily agrees with) the position of the other parties.

A mediator may help to formulate alternatives and help a party clarify how those alternatives fit in with that party's goals and how they might work. A mediator also serves as a conduit for information between the parties, especially where the parties have difficulty communicating directly with one another.

Note that a mediator is not an advocate for any party. Mediators are trained to remain completely impartial.

What are some of the advantages of mediation?

Mediation can be much less expensive than litigation which generally requires payment of filing fees, fees for service of documents, court fees and, of course, advocate fees. Additionally, in mediation there is no resolution unless and until there is an agreement that you accept.

In litigation, a judge you do not know will decide for you how your dispute will be resolved. Thus, mediation offers you greater control over the outcome. Further, studies have shown that, not surprisingly, parties are much more likely to actually obey the terms of an agreement they entered than they are to obey a resolution that was forced upon them. This can help bring a sense of closure that allows you to put the dispute behind you and concentrate with your business and your life.

How long does it take?

There is no way to answer this question. Typically, a mediation session lasts from thirty minutes to four hours. However, some mediations are over in just a few minutes. Others, particularly in very large or complex disputes, may require multiple sessions spread over weeks or even months. IIAM has put a maximum time limit of 3 months for mediation.

It will be the policy of IIAM never to prolong a mediation where there appears to be no reasonable likelihood of settlement, but to continue to explore all such opportunities as long as they exist. IIAM will also make reasonable efforts to accommodate all special needs of parties and their lawyers.

What if I do not like the mediator's decision?

Mediators are not judges and they do not make decisions for the parties. No mediator can or will attempt to force you to accept a settlement. If the parties to mediation cannot agree on a settlement of any issues, the mediator will, after exploring all reasonable avenues of reaching an agreement, simply declare an impasse.

What is arbitration?

Arbitration is a method whereby parties can resolve their disputes privately. It is known as an alternative dispute resolution mechanism. Instead of filing a case in a court, parties can refer their case to an arbitral tribunal, which is the forum where arbitration proceedings are conducted. The arbitral tribunal will consider the questions over which the parties are in conflict and will arrive at a decision. This decision is known as an 'award'.

Arbitration is a streamlined legal procedure used for hundreds of years to resolve legal disputes efficiently and at low cost. In India the law relating to arbitration is governed by the Arbitration & Conciliation Act, 1996, which also governs the law relating to international arbitration.

Neutral, independent organisations like IIAM can administer arbitration as per the Act. IIAM provides the rules that govern the arbitration process and a code of conduct that governs the arbitratorsΓÇÖ actions. IIAM undertakes all administrative assistance required for arbitration and schedules the arbitration, collects the fees and processes the paperwork.

How does arbitration work?

Arbitration procedures are very similar to court. The only difference being that there are no hurdles of the strict rules of procedure or law of evidence, yet legally binding. After the claim is filed and the opposite side responds; the parties exchange information relevant to the case; the arbitrator hears both sides, studies the evidence, and decides the case.

The difference between a court proceeding and arbitration is that arbitration takes less time and typically costs less. The arbitration process is streamlined and not subject to delays and continuances that occur in the court system. The arbitration process typically costs less because it is faster and less complicated. Also, some parties do not feel the need to use an advocate in arbitration.

Arbitration often is contractual: two parties agree to use arbitration to resolve a dispute. The parties agree on what basis they want the arbitrator to decide the case.

The advantage of using the services of IIAM is an established Code of Procedure that governs how the arbitration will proceed and ensures that the arbitration is conducted in a fair and efficient manner. IIAM also have a panel of wide range of arbitrators and the parties will have the advantage of selecting the arbitrator apt for the issue at dispute.

What kind of matters cannot be referred for arbitration?

As per general practice, matters involving moral questions or questions of public law cannot be resolved by arbitration. For instance, the following matters are not referred to arbitration:

Matrimonial matters, like divorce or maintenance;
Insolvency matters, like declaring a person as an insolvent;
Criminal offences;
Dissolution or winding up of a company.

Can international disputes be resolved by arbitration in India?

Yes. International disputes can be arbitrated in India and it is advantageous to have India as the venue for international arbitration, if the resultant award is to be executed in India. If one of the parties to the agreement is an Indian and the other party a foreigner, either by its nationality or its incorporation as a body corporate or its management and control is exercised in any other country or it is the Government of a foreign country, it will be styled as ΓÇÿinternational commercial arbitration.ΓÇÖ The arbitration pursuant to such an agreement may take place in India or outside. If it takes place in India the resultant award would be considered as a ΓÇÿdomestic awardΓÇÖ and would be governed by the provisions of Part I of 1996 Act and the award so rendered can be executed as a deemed decree. On the other hand, if the arbitration takes places outside India the resultant award would be a ΓÇÿforeign awardΓÇÖ governed by the provisions of Part II of 1996 Act and it can be enforced only under the Geneva / New York convention, by making it a decree of the Indian court.

How much does an arbitration cost?

The party bringing the case is responsible for paying a nominal filing fee. The whole expenses incurred for institutional arbitration will be comparatively lesser than court expenses and taking into account the time advantage one gets in arbitration, the proceedings is much cheaper. IIAM has a scheduled fee structure enlisting the applicable arbitrator and administrative fees.

Can a party recover its fees if it wins in arbitration?

The winning party can request and be awarded the fees and costs it expended in the arbitration. The Act provides for such a relief.

How long does arbitration take?

The length of arbitration depends on a number of factors, including the types of claims being brought, the number of parties involved, and the ability to work with the schedules of the parties and their advocates. Most arbitration can be completed within three to six months, when the same can take years or decades together in courts.


 2 Replies

SANJAY DIXIT (Advocate)     14 February 2008

Thanks for rhe information.

anupam_advocate (n/a)     16 February 2008

Thanks for the valuable information.

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