Topic

Difference Between Arbitration,

Conciliation, mediation, Negotiation

Submitted To:- Submitted By:-

Mrs. Aman Cheema Pranav Khanna
BA.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 Arbitration
However, 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 Arbitration
According 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 Conciliation
Part 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 Mediation
Mediation 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
Itis 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
Arbitration
Though 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
Arbitration
2. 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
Arbitration
4. 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
Arbitration
5. 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
Arbitration
6. 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
Arbitration
7. 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
Arbitration
9. 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
Arbitration
11. 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
Mediation
Though 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
Mediation
2. 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
others
1. 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
others
3. 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
others
5. 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.