Alternative Dispute Resolution (ADR): Arbitration Part V – Mediation as an Alternative to Arbitration

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Is Mediation A Good Alternative To Arbitration?

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Mediation provides an alternative to arbitration utilizing an independent third party to facilitate agreement.

Conciliation may also be considered being similar to mediation but also allowing the third party to propose a solution(s).

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Arbitration represents one method of alternative (non-litigation) dispute resolution (ADR); others include mediation and conciliation. Each also provides a private method of dispute resolution and is consensual in nature.

Mediation provides a means by which to resolve a dispute by utilizing an independent third party to facilitate agreement between the parties. Conciliation is similar but also allows the third party to propose a solution which the parties may accept or reject. The outcomes from both mediation and conciliation must be recorded in a contract to then become binding on the parties.

The benefits of mediation include, like arbitration, flexibility and control over the manner and process in which mediation is conducted.

Mediation can (by agreement) be quite informal, quick and cost effective. A key benefit is the involvement of the parties in the outcome(s). As these will be developed by the parties themselves (with assistance from the third party), the outcome(s) is more likely to be a commercially focussed and more applicable to the situation. The outcome will be mutually agreeable to the parties based on a win-win (albeit with compromises from both parties) rather than win-lose outcome thereby leading to higher compliance by both parties having been negotiated rather than imposed. The process may also lead to alternative outcomes being identified and agreed.

The main disadvantage of mediation is that there is no guarantee that the dispute will be resolved. Agreement and settlement of the dispute between the parties is voluntary and there is potential for the process to be exploited to prolong the dispute and as a means by which to defer arbitration or litigation proceedings.

The decision as to whether to adopt a mediation process will be largely dictated by the nature of the dispute (i.e. is it capable of being resolved through discussion/negotiation) and the parties willingness to actively engage in the process. If neither is apparent then arbitration or litigation may be a more effective means by which to resolve the dispute.

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Alternative Dispute Resolution (ADR): Arbitration Part IV – Challenging An Arbitration Outcome

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What Can I Do If An Arbitration Award Is Made Against Me?

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A final arbitration award is final and cannot be appealed in terms of its content.

A losing party can challenge the award on limited, largely procedural grounds and within a very limited time.

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As a general rule, a final arbitration award is final and cannot be appealed in terms of its content. However, a losing party can challenge the award on limited, largely procedural grounds and within a very limited time. Such a challenge can be made either before or when the winning party seeks recognition and enforcement of the award through a court.

In making such a challenge, the party can seek to have the award (a) nullified, (b) set aside (in whole or part), (c) varied or (d) remitted back to the Tribunal. UNCITRAL[1] Model Law refers to such a challenge as having ‘recourse’ against an award.

Article 34 of the Model Law sets out the grounds for setting aside an award prior to enforcement. Similar grounds are set out in Article 36 for challenging an award when the winning party seeks enforcement of the award through a court. These grounds are also set out in Article V of the New York Convention[2].

These grounds cover jurisdictional and procedural issues and include (i) incapacity of a party to the arbitration agreement, (ii), inadequate notice of proceedings or a party is prevented from presenting their case, (iii) the decision exceeds the authority or scope of the dispute, (iv) irregularity in arbitral proceedings, (vi) the subject matter is not capable of settlement under the law of the State and (vi) the award is in conflict with the public policy of the State.

An application for setting aside made under Article 34 must be made within 3 months from the date that the party receives the award or, in the case where an award has been corrected or request for interpretation addressed, then the 3 month time limit runs from the date upon which the Tribunal has disposed of the correction or interpretation.


[1] UNCITRAL (United Nations Commission on International Trade Law – www.uncitral.org)

[2] The Convention on the Recognition and Enforcement of Foreign Arbitral Awards – www.newyorkconvention.org (the ‘New York Convention’)

Alternative Dispute Resolution (ADR): Arbitration Part III – Arbitration Process

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What Process Does An Arbitration Follow?

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The steps in the arbitration process, requirements and time periods for each will generally be determined by the rules of the arbitration body or institution.

The parties to the dispute can make proposals in relation to the place, language and applicable law.for the conduct of the arbitration.

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The main procedural steps for an arbitration are as follows:

Step 1 – Request for Arbitration

To commence an arbitration, a party (Claimant) must submit a written Request for Arbitration (Request) to the appropriate arbitration body or institution. The institution’s rules will specify the required content for such a request which will include a description of the dispute and relief sought as well as party arbitrator nominations together with supporting papers required (eg copy of arbitration agreement).

The Request may also include a Statement of Claim (Claim) together with proposals relating to place, language and applicable law.

The Request must also be accompanied by the required registration fee otherwise the request will be deemed invalid.

The date that the request is received usually determines the date upon which proceedings have commenced.

On receipt of the Request, the institution will forward a copy to the Respondent.

Step 2 – Answer to the Request & Counter-claims

The Respondent will have a period of time (normally capable of extension) from receipt of the Request within which to submit an Answer to the Request (Answer) and may, at the same time, submit a Counter-claim. The institution’s rules will set out the required content for the Answer (including preliminary comments on the dispute and relief sought as well as arbitrator nominations). The Answer should also contain any objection to the validity of the arbitration agreement and comments on the Claimant’s proposals relating to place, language and applicable law.

If the Request included a Claim then the Answer may be accompanied by a Statement of Defence (Defence). In addition, the Answer may also be accompanied by a Counter-claim (to include a description of the dispute and relief sought) and, if a Counter-claim is made, then this must be accompanied by the required registration fee to be valid.

On receipt of the Answer, the institution will forward a copy to the Claimant who will be provided with the opportunity to comment on ‘objections or pleas’ made by the Respondent.

Step 3 – Statement of Claim

Unless submitted with the Request, the Claimant will have a period of time from notification of establishment of the Tribunal to submit a Statement of Claim to the institution. The required content will be specified by the arbitrating body which will include a comprehensive statement of facts and legal arguments supporting the Claim together with relief sought.

Step 4 – Statement of Defence

The Respondent will be required to submit a Statement of Defence within a specified period from receipt of the Statement of Claim or notification of establishment of the Tribunal. The required content will be specified by the arbitrating body which will include any Counter-claim.

Step 5 – Further Written Statements

The Tribunal will have discretion to allow further written statements to be submitted allowing each party time to consider and respond to further arguments. If a Counter-claim is submitted by the Respondent, the Claimant will have a time period within which to respond.

Step 6 – Hearing

Either party may request that a hearing be held to enable oral arguments to be made and/or witness (including expert witness) evidence to be considered.

Step 7 – Closure of Proceedings

An Arbitrator or Tribunal will close proceedings only when satisfied that the parties have had adequate opportunity to present submissions and evidence.

Step 8 – The Award

The Arbitrator or Tribunal will be required to make its final Award within a specific time period from the date that the Arbitrator or Tribunal Chairman receives the file. The period may be extended by the Arbitrator/Tribunal or by the arbitrating institution.

The parties may also agree to adjust the time limits for the Award.

Alternative Dispute Resolution (ADR): Arbitration Part II – Arbitration Law and Rules

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What Law and Rules Govern Arbitration Proceedings?

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UNCITRAL Model Law and Arbitration Rules[1] provide an industry benchmark for the conduct of arbitration proceedings.

Even where these are not fully adopted by an arbitration institution, ‘the Rules’ normally provide the starting point for individual institutional rules.  

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The law and rules applicable to arbitration collectively govern the entire arbitration process and also provide the arbitrator(s) with the necessary powers to act. In both cases, these deal with procedural issues only.

The UNCITRAL Model Law and Arbitration Rules (‘the Rules’[2]) provide an industry benchmark and, even where not fully adopted by an institution managing an arbitration, these have been influential on the drafting of institutional rules.

Taking ‘the Rules’ as an example, these provide procedural rules and conduct for an arbitration and regulate the following key areas:

  • Introductory Rules – including notices and representation (this section also includes a model arbitration clause)
  • Composition of the Arbitral Tribunal – including number, appointment and replacement of arbitrator(s)
  • Arbitral Proceedings – including place, language, procedural steps, experts and default
  • The Award – including interpretation, correction and costs

A set of rules provides the necessary structure and framework for the conduct of the arbitration for all steps from commencement of arbitral proceedings through to notification of the final award.


[1] UNCITRAL (United Nations Commission on International Trade Law – www.uncitral.org): (1) UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission 1985, amended 2006 and (2) UNCITRAL Arbitral Rules adopted by the United Nations Commission 1976, amended 2010

[2] UNCITRAL (United Nations Commission on International Trade Law – www.uncitral.org): (1) UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission 1985, amended 2006 and (2) UNCITRAL Arbitral Rules adopted by the United Nations Commission 1976, amended 2010

Alternative Dispute Resolution (ADR): Arbitration Part I – What Is Arbitration?

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How does arbitration differ from going to court?

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Arbitration is a process by which parties seek to resolve a dispute by utilizing an independent third party to determine the case.

It is a formal, binding process with outcomes enforceable in court.

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Arbitration is a private dispute resolution process where a dispute is resolved by an award made by an independent third party or tribunal panel following the presentation of statements and case material by each party.

It is a formal process subject to rules and laws of arbitration (eg UNCITRAL[1]). It is also a binding process, the outcome(s) being not only enforceable in courts of law but the parties cannot raise the same issue again in further proceedings. In many cases, enforceability is not limited territorially following the New York Convention[2].

An arbitration award is final and may only be challenged (not appealed) on limited, largely procedural, grounds and within a very limited time. However, an arbitration award is not self-enforcing. It requires either the losing party to comply with the decision voluntarily or the winning party to apply to a court for enforcement.

Arbitration is a consensual process chosen by the parties as a means by which to resolve disputes. Agreement to arbitrate disputes must be provided for in writing and is normally included within the business contract between the parties. This should state the appointing authority, tribunal composition, place, language and rules to be applied to regulate the conduct of the arbitration.

A key difference between arbitration and litigation lies in the parties’ ability to control and manage many aspects of the arbitration process. This includes agreement on choice of arbitrator(s), time and place of hearings, language, method of presentation and nature of representation.

The above enables the parties (by agreement) to tailor the arbitration to meet their requirements which can make arbitration a quick, flexible and cost effective (although legal aid is not available) method for resolving disputes. As a result, the outcomes from arbitration are also likely to be more predictable.

By contrast to the above, litigation is non-consensual and, if adopted, the parties cannot choose the judge, hearing date, location or procedures to be followed. In addition, as court hearings are generally public, the parties cannot keep the dispute private. A party also cannot prevent the outcome from being appealed and, importantly, the parties are less able to control the costs of resolving the dispute.

Unlike litigation, arbitration is a stand-alone process specific to the individual dispute. This means that an arbitration award does not form a precedent nor is an award decision required to follow any such precedent. Being private between the parties, another party cannot be joined into the process (as with litigation) unless both parties agree to this.

Do I have to arbitrate rather than go to court?

Most modern contracts now include arbitration provisions.

Under UNCITRAL Model Law, a court may only hear the matter if it finds that the arbitration agreement is ‘null and void, inoperative or incapable of being performed’.

A national court is also limited in terms of its involvement or intervention with the arbitration process (referred to as ‘exclusion of national courts’). Where an arbitration agreement is in place, the court must not hear any matter that is capable of being determined by arbitration (arbitrable dispute).

If a party to an arbitration agreement commences legal proceedings on an arbitrable dispute then the other party may apply to the court to order the parties to deal with the matter by arbitration.


[1] UNCITRAL (United Nations Commission on International Trade Law – www.uncitral.org): (1) UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission 1985, amended 2006 and (2) UNCITRAL Arbitral Rules adopted by the United Nations Commission 1976, amended 2010

[2] The Convention on the Recognition and Enforcement of Foreign Arbitral Awards – www.newyorkconvention.org (the ‘New York Convention’)