Med-Arb is an acronym for Mediation-Arbitration, it involves a mode of dispute resolution involving both mediation and arbitration integrated. Med-Arb is a hybrid, two-tier process where the parties opt for a medium to resolve their disputes.
Med-Arb provides a unique set of advantages such as confidentiality, neutrality, enforceability, and finality. Mediation and arbitration, separately, are the two fastest-growing means of dispute resolution but when combined then the likelihood of successful conclusion of the dispute would increase considerably.
The adjudicating authority in Med-Arb may vary on case-to-case basis, either the same authority can adjudicate both arbitration and mediation proceedings or different adjudicators can be appointed for each mode.
Pre-requisites for initiating Med-Arb
Prior meeting of minds is very essential for the parties referring their disputes towards Med-Arb. The agreement between the parties should specify Med-Arb as a mode of dispute resolution if any dispute arises out of the said agreement. Apart from specifying the mode of resolving the dispute, the parties should also determine key factors material to Med-Arb proceedings.
The stages
The proceedings for Med-Arb can be initiated by any of the disputing parties. Mediation conducted under Med-Arb is binding on the parties, unlike typical mediation. The parties mutually agree in writing that the outcome of mediation shall be binding on them.
The mediation initiated under Med-Arb would be conducted similarly as typical mediation.
The mediator appointed by the parties would adjudicate over the mediation proceedings, he would propose suitable solutions to disputants after they have presented their claims and put forth their proposals.
Arbitration under Med-Arb may be initiated when the mediation proceedings end in a standoff. Either the mediator can take over the role of the arbitrator or a new arbitrator can be appointed to adjudicate the dispute, depending upon the agreement between the parties. The arbitrator shall arbitrate the dispute and after deliberate scrutiny pass an arbitral award. The arbitral award shall be binding on both parties.
It is highly recommended that the same person adjudicates over both mediation and arbitration, provided he is qualified to undertake both roles. Such individual would already be well versed with the dispute when the dispute is referred from mediation to arbitration.
Why is Med-Arb a preferred mode of dispute resolution?
Med-arb guarantees that the conflict will be resolved at the end of the journey either through an agreement as a result of mediation, or through an arbitration award if no agreement is reached or if no agreement is reached on all aspects.
It can be an efficient way of reaching an early settlement, avoiding substantive hearings and the significant legal fees these incur either by bringing the parties together (under the facilitative approach) or by giving an early indication of the likely outcome of the formal proceedings, and thereby encouraging the parties to settle.
Med-arb can be a wise choice when parties are facing intense pressure to reach a resolution by a deadline, as in a labor dispute. It can also be beneficial when disputants need to work effectively with one another in the future.
Mediation when referred solely, it does not bind the parties to the outcome of the mediation proceedings but when mediation is initiated under Med-Arb, owing to written agreement the result of mediation also becomes binding on the parties.
Types of Med-Arb
- Overlapping Med-Arb
In this form of Med-Arb two adjudicators are appointed; one for mediation and another for arbitration. The arbitrator appointed can attend the joint mediation sessions however, attending private sessions is not permissible.
Overlapping Med-Arb allows the arbitrator to get accumulated with the dispute at hand and it can be brought to usage when arbitration proceedings begin if mediation fails. With all the perks that overlapping Med-Arb brings along, it can prove to be expensive for the parties due to two adjudicators.
- Plenary Med-Arb
A single adjudicator is appointed in this type of Med-Arb who chairs both mediation and arbitration proceedings. The adjudicator cannot conduct private sessions in the present form of Med-Arb because he has to discharge the duty of arbitrator at a later stage and private sessions would violate neutrality.
Mediation conducted under this type of Med-Arb seems futile because it prohibits private sessions which are essential for extracting vital information from parties.
- Braided Med-Arb
Single adjudicator chairs both arbitration and mediation proceedings but it is slightly different from the plenary Med-Arb. Here the parties can intervene in the arbitration proceedings to commence mediation and reach out to settlement.
The arbitrator who upon commencement of mediation proceeding would take up the role of a mediator can provide his suggestions for making a settlement.
- Med-Arb (Optional Withdrawal)
This is a unique form of Med-Arb as it allows the parties to withdraw from the arbitration even if mediation has been unsuccessful. In other forms of Med-Arb, it is mandatory to resolve the dispute through arbitration if mediation has failed.
The choice of optional withdrawal renders the whole process of Med-Arb as futile as there is no finality of proceedings. This might turn up to be a costly venture for the parties as they have to start over with fresh dispute resolution proceedings once they exhaust all the options available under Med-Arb.
Governing Law for Med-Arb in India
It is imperative that this two-tier ADR consists of two individual ADRs which are governed by two different statutes i.e., mediation is governed by Section 89 of Civil Procedure Code 1908, High Court Rules, and Part of III of Arbitration and Conciliation Act, 1996 hereinafter referred to as ‘ACA’ and arbitration is governed by ACA.
Whenever the parties approach a private institute for resolving their dispute through Med-Arb then the rules and procedures of a particular institute would apply. The appointment of mediator and arbitrator is also undertaken by the referred institute.
The proceedings of respective ADR shall be conducted as per their respective governing laws or institutional rules and in case of any dispute arising out of Med-Arb, the court shall decide the dispute based on the relevant laws applicable on the Med-Arb.
Med-Arb: The Future
The world advances at a steady pace and so do the conflicts among the people. Trade and commerce have been escalating within and between the nations leading to several disputes arising occasionally. Keeping aside the commercial disputes we witness loads of civil disputes arising nowadays.
Med-Arb provides a unique opportunity to the disputing parties to resolve disputes outside the periphery of traditional courts. Approaching this mode of ADR allows the disputants to get their dispute resolved by an adjudicator of their choice who would be dedicated to their particular dispute.
Being a two-tier process, Med-Arb brings additional benefits during dispute resolution. One of the biggest advantages of Med-Arb proceedings is the binding nature of mediation proceedings. Disputants are willing to resolve their dispute through mediation itself, which is very unlikely when parties opt for only mediation. Apart from all the perks, it provides Med-Arb can be resourceful and less expensive.
Being a hybrid ADR, it requires no new law or rules to govern, mediation and arbitration proceedings are governed by their pre-existing laws and rules. Many international ADR institutions are also now providing services of Med-Arb and similar ADRs.
With courts burdened with the multitude of matters thus, Med-Arb allows the parties to try their dispute before a hybrid mode of ADR and avoid the time-consuming litigation procedure.
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