Arbitration/Litigation Fatigue? Is Mediation or neutral evaluation faster, cheaper and better? Reflections from the UK and India

The fundamental difference between mediation and arbitration/neutral evaluation is that, in mediation, the process is consensual and no one is bound unless they agree to be bound. In almost every other method of dispute resolution the parties are bound by a third-party adjudicator.

Mediation has traditionally not been a widely utilised process for resolving disputes in India but is presently being discussed widely in Indian legal circles, despite pre-action mediation having been made mandatory for many commercial disputes under section 12A of the Commercial Courts Act.

The backdrop to this change in the perception and profile of mediation, is that the Indian Government in June 2024 notified that state-owned entities would be prohibited from entering into contracts providing for disputes to be resolved by domestic arbitration (for disputes above INR 10 crore – equivalent to around £800,000).

Mediation has served as an ancient tradition in India through the Panchayat system and within merchant guilds where it was the preferred dispute settlement mechanism to safeguard trade stability and commercial trust. In the UK, mediation has been widely utilised as a dispute resolution method alongside both litigation and arbitration since at least the 1990’s, with the Court now having the power to mandate that mediation be attempted at any stage of the proceedings.

The panel will discuss merits and demerits of mediation on the one hand and arbitration/litigation on the other hand, in the context of the resolution of commercial disputes, with a focus on experiences in India and the UK.