Arbitration and mediation are often contrasted in rather stark terms – the former typically requiring neutral, distanced arbitrator(s) who reached a legally binding decision; and the latter with a third-party mediator as a far more involved party who aims to guide the parties to their own mediated settlement.

The processes are seen as potentially complementary, in the sense of (usually) mediation preceding arbitration to try to avoid the need for it in the first place. As has been discussed in this blog post series, there are also recent proposals for mandatory mediation in civil litigation pre-action stage in England and Wales (https://www.akt.rs/en/publication/compulsory-alternative-dispute-resolution-a-path-towards-efficiencompulsory-alternative-dispute-resolution-a-path-towards-efficient-justicet-justice) and the Singapore Convention on Mediation is likely to provide an impetus to trans-border mediation as a stand-alone mechanism.

But what about intertwinement of arbitration and mediation within a single dispute resolution process? Can, for example, arbitrators suggest to the parties that mediation or some other form of direct settlement is desirable or warranted, or even perform the role of mediators themselves in the same dispute?

The question raises multiple issues that relate to impartiality concerns, but also issues of legal culture. On the one hand, common law jurisdictions that promote adversarial models of procedure generally adopt an attitude that it is none of the arbitrator’s business to promote an alternative mode of dispute resolution but rather fulfil their dispute settlement role. Furthermore, involvement of arbitrators as mediators or negotiation facilitators risks their involvement with parties’ position and information that might make them unsuitable to return to their role of an impartial arbitrator.

On the other hand, many jurisdictions (including China and Germany) do not necessarily see a problem with arbitrators adopting a far more active role, including openly encouraging settlements, mediation or other alternatives. The view, put succinctly, is that the most important consideration is it that the dispute is resolved, with the ultimate method of resolution to an extent being secondary.

Can there be a compromise to harness the respective advantages of both methods? An interesting example of such a compromise is offered by the new Arbitration Rules of the London Chamber of Arbitration and Mediation (LCAM) (https://lcam.org.uk/wp-content/uploads/2022/07/LCAM-Arbitration-Rules_compressed.pdf). A newly introduced Article 6 of these Rules encourages parties to make a good faith attempt to resolve the dispute through mediation either before or after the commencement of arbitration proceedings. During the arbitration proceedings, the parties can opt for a mediator from the LCAM panel of mediators and use the institution’s Model Mediation Procedure – importantly, arbitrators will not arbitrate and mediate the same dispute. Settlement reached in mediation can then be referred to the arbitral tribunal to make a consent award on agreed terms; should mediation fail, the tribunal can resume proceedings without any partiality concerns. The LCAM also provides a model Arb-Med-Arb clause to give effect to such an arrangement.

Mechanisms such as this one show an effective way forward for a more holistic approach to dispute resolution, as well as the advantages of institutions offering both arbitration and mediation services. Strict distinction between the processes, however, allows arbitrators to freely encourage the parties to try it (provided this is not done in a way that suggests some form of bias), and the mediators to perform their role without being concerned about the integrity of the arbitration process. As in many other areas of law, life and business, it seems the future is indeed hybrid.

Velimir Zivkovic