Here’s a clear and concise comparison of Arbitration, Conciliation, and Mediation — three important Alternative Dispute Resolution (ADR) methods under Indian law:
1. Meaning & Nature
Basis
Arbitration
Conciliation
Mediation
Meaning
A formal, quasi-judicial process where a neutral third party (Arbitrator) gives a binding decision.
A less formal process where a neutral third party (Conciliator) helps parties reach a mutually acceptable settlement.
A voluntary and informal process where a Mediator facilitates communication to help parties arrive at their own agreement.
Governing Law (India)
Arbitration and Conciliation Act, 1996 (Part I)
Arbitration and Conciliation Act, 1996 (Part III)
Section 89 of CPC, 1908 and Mediation Rules, 2023 (now codified as Mediation Act, 2023)
2. Role of the Third Party
Basis
Arbitrator
Conciliator
Mediator
Role
Acts like a judge – hears both sides and passes an award.
Acts as a facilitator and advisor – may propose settlement terms.
Acts as a neutral facilitator – encourages negotiation and communication.
Authority
Has decision-making power.
Has no binding power; can only assist.
Has no decision-making power; only facilitates.
3. Outcome & Binding Nature
Basis
Arbitration
Conciliation
Mediation
Outcome
Arbitral Award
Settlement Agreement
Mediation Settlement Agreement
Binding Nature
Legally binding and enforceable as a court decree.
Binding once signed by parties (under Sec. 74 of the Act).
Binding when signed by parties (under Mediation Act, 2023).
Appeal / Challenge
Limited grounds under Sec. 34 of the Arbitration Act.
Can’t be challenged except on limited grounds like fraud.
Binding unless challenged under limited procedural defects.
4. Procedure & Flexibility
Basis
Arbitration
Conciliation
Mediation
Formality
Formal (like a court proceeding)
Informal
Very informal and flexible
Confidentiality
Yes
Yes
Yes
Voluntary Nature
Once agreed, parties must participate
Entirely voluntary
Entirely voluntary
5. Examples / Use
Arbitration
Conciliation
Mediation
Used in commercial, contractual disputes, construction, trade, etc.
Used in employment, consumer, and business disputes.
Used in family, matrimonial, property, and community disputes.
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