The Arb-Med-Arb Model: Shaping the Future of ADR in India

In a global economy where litigation is often viewed as both time-consuming and prohibitively expensive, the need for more efficient and flexible means of resolving disputes has led to the increasing popularity of alternative dispute resolution (ADR) mechanisms. Arbitration and mediation, in particular, have emerged as preferred methods for parties seeking faster, more cost-effective solutions without the lengthy delays and procedural complexities associated with traditional court proceedings. Among these mechanisms, the Arb-Med-Arb (AMA) model stands out as a promising hybrid approach, offering the unique advantage of combining the benefits of both arbitration and mediation.

By seamlessly integrating the two processes, AMA allows parties to explore amicable settlement options through mediation while retaining the security of a binding arbitral award if mediation fails.

This article explores the legal foundation of the AMA model in India, examines key judicial precedents that have shaped its development, and assesses its growing potential to revolutionize the future of ADR within the country’s evolving legal framework.

The Arb-Med-Arb process can be divided into three primary stages. First, the parties submit their dispute to arbitration, where a neutral arbitrator provides a faster and more flexible resolution forum than traditional litigation. At a mutually agreed stage, the arbitration may pause, and the parties attempt mediation to resolve the dispute amicably. Mediation is a confidential and non-adversarial process where a neutral mediator helps the parties negotiate a settlement. If successful, the settlement is recorded as an enforceable arbitral award. If mediation fails, the arbitration resumes, and the arbitrator issues a binding decision. This hybrid model provides the flexibility and efficiency of mediation while retaining the finality and enforceability of arbitration, making it a preferred approach in many disputes in India.

India’s legal framework for ADR, particularly the Arbitration and Conciliation Act, 1996 (ACA), supports the AMA model, although it does not explicitly mention it. Section 30 of the ACA allows arbitral tribunals to encourage settlements through mediation, conciliation, or other methods with the consent of the parties, effectively enabling the pause-and-resume mechanism central to AMA. Section 31 further facilitates the model by allowing mediated settlements to be recorded as arbitral awards, giving them the same legal enforceability as awards rendered after arbitration.

The recently enacted Mediation Act, 2023 strengthens the legal framework for mediation in India, requiring mandatory pre-litigation mediation for certain disputes and ensuring the enforceability of mediated settlements as court decrees. This legal development complements the ACA, creating a robust foundation for the AMA model in India. The confidentiality, neutrality, and enforceability that the legal framework guarantees make AMA an effective and efficient option for dispute resolution.

Internationally, countries like Singapore and China have successfully implemented the Arb-Med-Arb model, offering valuable insights for India. In Singapore, the SIAC-SIMC Arb-Med-Arb Protocol provides a structured pathway for integrating mediation within arbitration. Additionally, Singapore’s ratification of the Singapore Convention on Mediation ensures that mediated settlements are enforceable globally, reinforcing its reputation as a leading ADR hub. This comprehensive framework has positioned Singapore as a model for implementing AMA effectively.

China’s experience with the AMA model, particularly through the China International Economic and Trade Arbitration Commission (CIETAC), showcases the model’s effectiveness in handling large-scale, cross-border commercial disputes. CIETAC has played a key role in resolving disputes related to China’s Belt and Road Initiative, demonstrating how the AMA process can be streamlined for international contexts. India can draw from these examples to formalize its AMA process and establish itself as a global player in ADR.

While the AMA model has proven effective, challenges remain, particularly in the separation of roles between mediator and arbitrator. This was highlighted in the landmark case of Gao Haiyan v. Keeneye Holdings Ltd., where the arbitrator, after mediating between the parties, issued an arbitral award significantly lower than the settlement offer. The initial court found the arbitrator’s dual role to raise concerns of bias and proceeded to set aside the award. However, the Court of appeal later upheld it, citing insufficient evidence to deny enforcement. This case illustrates the importance of clear procedural boundaries in AMA to prevent any appearance of bias or due process violations.

Similarly, in Ku-ring-gai Council v. Ichor Constructions Pty Ltd., a procedural flaw occurred when arbitration resumed after mediation without obtaining proper written consent from the parties. This misstep forced the arbitration process to restart, resulting in significant delays and costs. These cases underscore the necessity of maintaining procedural safeguards and role clarity between mediators and arbitrators in order to uphold fairness and efficiency in the AMA process.

Despite these challenges, the Arb-Med-Arb model presents significant opportunities for India to strengthen its dispute resolution landscape. One of the key areas for improvement is the need for a formalized protocol akin to Singapore’s SIAC-SIMC model. While the Arbitration and Conciliation Act, 1996 and the Mediation Act, 2023 provide a solid legal framework, India would benefit from a clearer codification of the AMA process to ensure consistency and clarity in its application.

Furthermore, arbitral institutions in India must build capacity to handle complex AMA cases. This requires specialized training for arbitrators and mediators, ensuring they are equipped to manage hybrid disputes that involve both mediation and arbitration. Institutional development is crucial for the successful implementation of the AMA model on a large scale. Additionally, ratifying the Singapore Convention on Mediation would significantly enhance the international enforceability of mediated settlements, making India a more attractive venue for global dispute resolution.

The Arb-Med-Arb model has the potential to revolutionize dispute resolution in India by integrating the efficiency of mediation with the enforceability of arbitration. While the legal framework supports its use, further steps — such as the formalization of an AMA protocol, institutional capacity-building, and international recognition through the ratification of the Singapore Convention on Mediation — are essential for the model to reach its full potential. By learning from the successful implementations of AMA in countries like Singapore and China, India can enhance its ADR framework and establish itself as a leading hub for global dispute resolution. With proper safeguards, procedural clarity, and ongoing development, the AMA model promises to be a cornerstone of India’s future in dispute resolution.

About the author: Rishabh Gandhi is an Arbitration lawyer and former trial court Judge. Gandhi is also the founder of Rishabh Gandhi and Advocates.

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