Know ADR and Difference Between Arbitration, Conciliation And Mediation By Nisha Shaw


Alternate Dispute Resolution (ADR) is a dispute resolution method that employs non-adversarial (i.e. out of court) ways to adjudicate legal controversies. ADR methods are informal, cheaper and faster, in comparison to the traditional litigation process. It includes arbitration, conciliation and mediation.

The primary difference between arbitration, conciliation and Mediation is based on the role played by the third party who is selected by the parties seeking a settlement, in consensus. That Arbitration is the process by which parties select an independent person, who renders a decision regarding the case. Conversely Conciliation attempts to make parties come to an agreement about the problem at hand. In Mediation, the mediator acts as a facilitator who helps the parties in agreeing.

Effects on industry:

Industrial disputes are always harmful to all the stakeholders-employees, society, management, Government etc. Resulting in loss of revenue, production profit and much more. However, it is the employees who are worst affected by the industrial disputes, as the consequences would be a lockout which may lead to loss of wages and even jobs. Industries are the backbone of the economy, and if the strife may continue for long, the whole economy may collapse. So, the settlement of industrial disputes should be done as soon as possible.

Arbitration, Conciliation and Mediation are such methods of resolving industrial disputes out of the court. So, look at the article to understand the differences between Arbitration, Conciliation and Mediation.

Content: For Differences amongst Arbitration, Conciliation and Meditation:

  1. Definition
  2. Comparison chart
  3. Key Features
  4. Conclusion

Definition of Arbitration:

Arbitration is a powerful means of resolving disputes between the organization and its employees. It is a process in which an independent third party analyses the bargaining situation, listens to both parties and collects necessary data and make recommendations which are binding on the parties concerned.

Arbitration is proved successful in resolving disputes between labour and management. The parties themselves establish arbitration and decision is acceptable to them. The decision taken by the arbitrator is accompanied by a written opinion providing reasons supporting the decision.

Further, the procedure is comparatively expeditious than courts and tribunals. However, the process is a bit expensive, and if there is a mistake in selecting an arbitrator, the judgement becomes arbitrary.

Definition of Conciliation:

Conciliation can be described as the method adopted by the parties for resolving the dispute, wherein the parties out of their free consent appoint an unbiased and disinterested third party, who attempts to persuade them to arrive at an agreement, by way of mutual discussion and dialogue.

Conciliation is characterized by the voluntary will of the parties who want to conciliate the dispute. Its basic component is confidentiality in which the parties and the conciliator are not permitted to share or disclose to the external party, anything associated with the proceedings.

The conciliator plays an advisory role, wherein he/she suggests potential remedies to the problem. The conciliation process completes with a settlement between the parties which is final and binding upon the parties.

Definition of Mediation:

Mediation is a form of alternate dispute resolution, wherein parties mutually appoint an independent and impartial third party, called as the mediator who helps the parties in reaching an agreement which is mutually accepted by the parties concerned.

Mediation is a systematic and interactive process, which employs negotiation techniques to assist the parties in finding the best possible solution to their problem.

As a facilitator, mediator attempts to facilitate discussion and build an agreement between the parties with an aim to settle the dispute. The decision made by the mediator is not binding like an arbitral award.

Comparison Chart:

Basis for Comparison








Arbitration is a dispute settlement process in which an impartial third party is appointed to study the dispute and hear both the parties to arrive at a decision binding on both the parties.

Conciliation is a method of resolving dispute wherein an independent person helps the parties to arrive at the negotiated settlement.


Mediation is a process of resolving issues between parties wherein a third party assist them in arriving at an agreement.


An arbitrator has the power to enforce his decision.

A conciliator does not have the power to enforce his decision.

The decision made by the mediator is not enforceable like an arbitral award.

Regulated by

The Arbitration and Conciliation Act, 1996

Arbitration and Conciliation Act, 1996

Code of Civil Procedure, 1908

Prior Agreement


Not Required

Not Required

Available for

Existing and future disputes.

Existing disputes.

Existing disputes.


Damages in case of breach of contract, matters of the right to the office, time barred claims etc.

Resolving disputes between contractors and subcontractors etc.

Commercial transactions in patents, trademark licenses, Joint ventures and R & D Contracts, music and film contracts etc.

Key Features:

  1. Arbitration refers to a method of resolving industrial disputes, wherein the management and the labour present their respective positions to the neutral third party, who takes a decision and imposes it. Conciliation is a method of resolving the dispute, wherein an independent person, who meet the parties jointly and severally and helps them to arrive at the negotiated settlement or resolve their differences. The process of dispute resolution in which a third party intervenes in an attempt to resolve it, by enabling communication between parties is called mediation
  1. The decision made by the arbitrator is acceptable to the parties concerned. On the other hand, the conciliator & Mediator does not have the right to enforce his decision.
  1. Arbitration requires a prior agreement between parties known as the arbitration agreement, which must be in writing. As against this, the process of conciliation doesn’t require any prior agreement.
  1. Arbitration is available for the current and future disputes whereas the conciliation & Mediation can be adopted for existing disputes only. 
  1. Arbitration is like a courtroom proceeding, wherein witnesses, evidence, cross-examination, transcripts and legal counsel are used. On the contrary, Conciliation is an informal way of resolving disputes between the management and labour and in mediation, the role of the third party is a facilitator, who facilitates interaction between the parties. 
  1. Minimizing the cost-exposure entailed in settling the dispute, maintenance of control over the dispute-settlement process and speedy settlement of disputes.


Industrial disputes are nothing but the differences and conflicts between the employer employees, stakeholders, society, management and Government of the organization. It can arise because of unfair labour practices, wage demand, Investment, political interference, labour laws and so on. The methods discussed above are alternative dispute resolution, undertaken with the view to agreeably and peacefully settling the disputes, out of court. You can choose any of these two methods, as per your choice and requirements.

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