Can arbitrators mediate?



With both mediation and arbitration gaining popularity as Alternative Dispute Resolution methods, it is not uncommon for disputes to go through both processes before the dispute is resolved. This luxury of choice can be a good thing for clients, but raises concerns over the role of the arbitrator in mediation.

Although there are institutionalised processes where court cases are mediated, can there also be mediation during arbitration? In Switzerland and Germany, for example, arbitrators discuss settlement possibilities with parties during case management meetings. But would this suggest that the arbitrator is partial and pre-judging the case? Arbitrators need to express themselves carefully when suggesting settlement terms, and avoid being accused of bias for suggesting that one party’s case is weaker than the other.

Going a step further, can an arbitrator act as mediator for the same case? Mediation requires open and frank (without prejudice) communication. In particular, private sessions are an opportunity for either party to freely discuss confidential issues or concerns with the mediator. With the arbitrator taking on the role of mediator, parties may be reluctant to reveal weaknesses in their case, or even speak candidly as a matter that is not settled will subsequently be adjudicated by the arbitrator.

Furthermore, if mediation fails and the matter returns to arbitration, the ensuing award is more likely to be challenged by disgruntled parties who may allege breach of natural justice or public policy on the basis that the arbitrator has acted on confidential or private information obtained when acting as mediator.

If parties insist on having the arbitrator act as mediator, possible safeguards would be to do away with private sessions, though confidential information may still be revealed by parties during joint session, and for parties to waive the right to challenge the award. Alternatively, parties may wish to re-assess if they are comfortable with the mediator acting as arbitrator after the mediation has ended.

To avoid such issues, it is generally better that the arbitrator and the mediator be different persons.

This article was adapted from the seminar “Mediation in Arbitration: Who should be doing what?” by David Owen QC on 8 May 2015. A review by Kenny Yang and Samuel Seow can be found at http://www.internationalarbitrationasia.com/articles/seminar-review-mediation-and-arbitration-who-should-be-doing-what/

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