Critical Analysis of Med-Arb: National and International Implications

This essay provides a critical analysis of Med-Arb, a combined approach to dispute resolution that integrates mediation and arbitration. The essay explores the advantages of Med-Arb, such as its potential for quicker and more cost-effective settlements, and its ability to preserve business relationshi...Read More

Analysis on Med-Arb

CRITICAL ANALYSIS
In this essay, the discussion will be based upon the combination of Mediation and Arbitration
or Med-Arb with its relevance. It will also critically focus on the main issues like its
advantages, disadvantages, alternatives and the other related issues along with its importance
in aspect to national and international legislations.
The concept of Mediation and Arbitration is one of the legal procedures for resolving the
disputes by using both the features of Mediation and Arbitration. The mediation and
arbitration proceedings are dealt without the interference of the court1. It is a discretionary
procedure which states the mutual agreement between both the parties without any pressure.
In med-arb, the process begins initially with arbitration proceeding where the decision by
them is not binding upon the parties who are present for solving their disputes. It has been
viewed that med-arb is an advantageous method for the dispute resolution which enables for a
better settlement. If any issue is not being able to be decided by any of the parties then it’s
the arbitrator who becomes the medium in resolving the same2.
The mediation arbitration is an integrated form of dispute solving the dispute which
authorizes the mediator of an unsettled dispute for presuming the role of the arbitrator. In
Australia, each state and the jurisdiction of the territory is controlled by the uniform
Commercial Arbitration Act. All the involved parties must examine the possible advantages
and the disadvantages of med-arb while resolving their disputes. In this the mediator is
permitted for an unsettled dispute for taking the role of an arbitrator in respect to all the
disputed issues that are existing between the parties3. However, it is common for the parties
for having concerns that the possible conflicts built in the dual mediator or the arbitrator role
which can throw impact on the both mediation and the arbitration processes.
1 Dilyara Nigmatullina, Combining Mediation and Arbitration in International Commercial Dispute Resolution
(Routledge, 2018) 279.
2 Ida Kwan Lun Mak, Alternative Dispute Resolution of Shareholder Disputes in Hong Kong: Institutionalizing
Its Effective Use (Cambridge University Press, 2017) 276.
3 Stephen B. Goldberg and Frank E.A. Sander et al , Dispute Resolution: Negotiation, Mediation and Other
Processes (Wolters Kluwer Law & Business, 2014) 736.
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CRITICAL ANALYSIS
Some of the examples related to this concern are- Possible lacks of procedural fairness which
states that in general a mediator communicates with the parties in confidential premises
which means that if anything conveyed by either of the parties to the mediator then such
information has to be kept in private and not to be disclosed to any random person. An
apprehension of bias is meant by facilitating and conducting the proceedings by forming the
trust without considering the rules of evidence4. But when at the time of the failing of
mediation and the resuming of the arbitration by the parties, then the arbitrator passes an
award on the basis of the communications made by the parties in a confidential manner and
without being unfair.
In this aspect, the mediation process is the possession taken in most of the international
arbitration rules which must be kept wholly different from litigation and arbitration
proceedings. Due to such an issue regarding the disclosing of the private information and the
possible effect on the justified way of present litigation or proceedings of arbitration, this
concept of med-arb is less frequently used in common law and western jurisdictions5.
The advantages of merging arbitration and mediation are usually justified on the following
basis where all such matter related to the dispute including the parties and their appropriate
counsel will be dealt by any judge or an arbitrator who is familiar with their case and further
will be settled by them. Also, an arbitrator and the judge both have the knowledge to hold
mediation at the time of the proceedings. This procedure of med-arb is the best effective way
to settle a dispute at the earliest stage without any delay of time and also avoiding substantive
hearings and other high legal fees6. As with accordance to the New York Convention, any
kind of settlement initiated to the med-arb will eventually get recorded for the final award by
4 Anita Alibekova and Robert Carrow, International Arbitration and Mediation: From the Professional’s
Perspective (Lulu.com, 2007) 302.
5 Christian Lyhne Ibsen, ‘Conciliation, mediation and arbitration in collective bargaining in Western Europe: In
search of control’, (2019) European Journal of Industrial Relations.
6 Michael Mcllwrath and John Savage, International Arbitration and Mediation: A Practical Guide (Kluwer
Law International B.V.,2010) 515.
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CRITICAL ANALYSIS
the process of the tribunal. Mediation under the facilitative approach can be advantageous for
an ongoing business aspect as this will preserve their relationship and leading to settling of a
dispute in a neutral manner. However, a settlement which is referred to mediation can also
cover the related aspects which are outside the range of instant dispute and further leaving a
positive outcome on their relationship between the parties7. In Asia, the existence of med-arb
is being successfully working and has solved various issues dealing with conflicts. For
Example, according to a current interview with the Global Arbitration Review, the general
secretary of China International Economic and Trade Arbitration Commission, it was stated
that approximately 20-30 per cent of the CIETAC’s cases are settled through this method
each year. Therefore, a study was reviewed relating to the JCAA arbitrations that conveyed a
successful result in 25 cases out of 48 where the arbitrators assisted the parties in reaching a
settlement8.
The disadvantages of the med-arb procedure is on the following aspects that are dealing with
the evaluative kind of mediation which does not lead to any sort of settlement so the risk
factor arises here, in this situation the parties will take the advantage and use information or
opinions of the mediator by improve their own arguments with the strength and weaknesses
and therefore, will attain benefit which they would not otherwise have had. Similarly, a party
will be unwilling towards discussing its position and crucial information with the mediator
because if in a situation where earlier made discussion with the mediator may influence the
proceedings of any dispute and giving away the final award upon becoming its arbitrator. It is
also very necessary to examine that whether the arbitrator is under any obligation to disclose
to the other parties all the relevant information to the arbitration including exchanging of the
information during the procedure of mediation on a private basis. An example, states the
7 Nadija -Marie Alexander, ‘New York Dispute Resolution Lawyer’, (2019) 11(2) SHC-SIMC’s Arb-Med-Arb
Protocol 85-87.
8 Mieke Brandon and Leigh Robertson, Conflicts and Dispute Resolution: A Guide for Practice (Oxford
University Press, 2007) 280.
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CRITICAL ANALYSIS
jurisdictions of Japan which do not identify without biased privilege, the parties can be
prevented from discussing their matter in an open manner during the mediation. However,
when the mediation process does not result into a settlement, it is possible that a party might
attempt to challenge a subsequent arbitral award by the grounds of public policy9.
The most common alternative used in the place of mediation and arbitration process is to
approach the tribunal or the courts for trial of any dispute as they are considered an effective
choice for getting faster justice, where there is proper judicial body sitting and giving their
judgements after giving a proper opportunity of being heard to both the parties. When there is
non-satisfaction from one place may also be rendered by going to the higher authority
through the further appeals, 2nd appeals, reviews and revisions. For example, there are many
cases which cannot be decided by the mediators such as the domestic cases related to
violence, divorce, etc that are needed to be taken directly to the family courts for efficient
justice. Secondly, it is stated through private judging where the active or the retired judges
are hired for the private trials. It is also known as by private litigation. The judges who take
the initiative under this procedure are highly experienced in matters relating to the evidence
and rendering of decisions. Also, the parties who have the ability to afford such service of
solving their dispute by private judges can have a substantial benefit by not waiting for their
cases to be heard or tried in the public courts10. This also has been an advantage for parties
who seek their trial in private rather than in public to maintain the aspect of confidentiality.
Then, another helpful mode of alternative dispute resolution is the in-house program which
deals with the ombudsmen office. It further begins with the filing of the complaints by either
of the parties by investigating and attempting to settle the issues before it applies to a more
formal complaints. Lastly, the alternative which is a fact-finding related to the research
9 Dilyara Nigmatullina, Combining Mediation and Arbitration in International Commercial Dispute Resolution
(Rutledge, 2018) 279.
10 Kwon and Hyung Kyun , ‘Adoption Med-Arb to Finra: The New Avenue For Securities Disputes’ Dispute
Resolution Journal, (2016) 71(1) Dispute Resolution Journal 123-135.
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CRITICAL ANALYSIS
method that has a motive to decide and clarify the dispute. If in a case any dispute cannot be
resolved on any basis then it has its own complementary role for the other alternative dispute
resolution which gets transferred to the arbitration and the mediation.
The cases which are not within the aspect of med-arb are relating to the domestic violence
cases that cannot be dealt in the presence of any council authority or the procedures or those
protective cases which will not be able to get justified by the concept and the procedure of
med-arb11. The disputes may not lie under the jurisdiction of the arbitration and therefore, the
third party will not be bound by its decision. If the party does not have sufficient monetary
resources for the implementation of an award in the arbitration which can eventually result in
causing a problem so, this is the reason med-arb is not an appropriate option. However, Med-
arb is released from two problems i.e. the logical and the practical problems and by which its
supporter states that letting the mediator to become the arbitrator can create actual or
conviction bias, the parties may also feel pressurized while accepting the recommendations of
the mediator because on the other hand the parties have the knowledge that the mediator
would become their arbitrator in the future if in a case the settlement was not derived by the
mediation process.
While the purpose of med-arb is very low in the Western jurisdictions, and as per Asia it is a
common form of settling the dispute. The process of med-arb has been extensively popular in
the mainland China where it has identified the China International Economic and Trade
Arbitration Commission settle almost 20-30 per cent of their cases through med-arb. The
Med-arb is particularly contemplated in regard to the arbitration legislation of Hong Kong,
Japan, Singapore and in India12. It is therefore, examined by the procedural rules of certain
arbitration and mediation centres with relevance to their jurisdictions. For example, in aspect
11 Joel lee and Marcus Lim, Contemporary Issues in Mediation, Volume 3 (World Scientific,2019) 183.
12 Alexandra Alvarado Bowen, ‘The Power of Mediation to Resolve International Commercial Disputes and
Repair Business Relationships’,(2005) 60(2) Dispute Resolution Journal 58-65.
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CRITICAL ANALYSIS
to 2014 the Singapore International Arbitration Centre integrated with the Singapore
Mediation Centre to introduce med-arb protocol. The procedure of Mediation and
Arbitration in Asia is a well-known recognized procedure. The jurisdictions in Asia for
disputes begin with the formal arbitration or the proceedings of the litigation with having a
strong communication. The parties to the dispute have general motive for engaging into the
informal or formal process of mediation due to favouring of the negotiated settlement by the
views of commercial culture. In Japan, Arbitration Law of 2003 and the JCAA Arbitration
Rules enlightens an important aspect for proceeding dealing with the disputes regarding the
med-arb.
While further concluding the above statement where the parties have distinct views and
expectations regarding the processes by which there dispute will be settled depending upon
the legal and cultural backgrounds. The impact on parallel arbitration and litigation
proceedings are well suited to the parties who are entitled to certain reservations that are
related to the aspect of med-arb which is very popular in Asia. Mediation and Arbitration is
that creation of the law of arbitration and the contract which has a specific hand in giving to it
in a form of arbitration agreement and its subjects which lead to variations and giving him an
opportunity for achieving a resolution in a dispute. However, it is that process which has
many advantages like it is an out of court settlement done with the mutual consent of the
parties and without any means of fraud.
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CRITICAL ANALYSIS
Bibliography
A Articles/Books/Reports
Alexander, Nadija-Marie,‘New York Dispute Resolution Lawyer’, (2019) 11(2) SHC-SIMC’s
Arb-Med-Arb Protocol 85-87.
Alibekova, Anita and Robert Carrow, International Arbitration and Mediation: From the
Professional’s Perspective (Lulu.com, 2007).
Alvarado Alexandra Bowen, ‘The Power of Mediation to Resolve International Commercial
Disputes and Repair Business Relationships’,(2005) 60(2) Dispute Resolution Journal 58-65.
Brandon, Mieke and Leigh Robertson, Conflicts and Dispute Resolution: A Guide for
Practice (Oxford University Press, 2007).
Goldberg, B., Stephen and Frank E.A. Sander, Dispute Resolution: Negotiation, Mediation
and Other Processes (Wolters Kluwer Law & Business, 2014) .
Kwan, Mak and Lun, Ida, Alternative Dispute Resolution of Shareholder Disputes in Hong
Kong: Institutionalizing Its Effective Use (Cambridge University Press, 2017).
Kwon and Hyung Kyun , ‘Adoption Med-Arb to Finra: The New Avenue For Securities
Disputes’ (2016) 7 (1) Dispute Resolution Journal 123-135.
Lee, Joel and Marcus Lim, Contemporary Issues in Mediation, Volume 3 (World Scientific,
2019).
Lyhne, Christian and Ibsen Christian, ‘Conciliation, mediation and arbitration in collective
bargaining in Western Europe: In search of control’, (2019) European Journal of Industrial
Relations.
Mcllwrath, Michael and John Savage, International Arbitration and Mediation: A Practical
Guide (Kluwer Law International B.V.,2010).
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CRITICAL ANALYSIS
Nigmatullina, Dilyara, Combing Mediation and Arbitration in International Commercial
Dispute Resolution (Rutledge, 2018).
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