Can Arbitration and Meditation be combined?

The latest issue of Business World (3 Sep 2012) has a cover story titled "The World of Arbitration" and provides an inside look on how the number of cases being settled through ADR is on the rise. What is very interesting for me is the side bar related to Mediation. BW writes:

When Standard Motors products of india (which made the standard brand of cars) was wound up, workers of the company and the banks fought a 12-year long legal battle in the courts over the rights to the proceeds. Finally, in 2006, came a commercial mediator who helped both parties reach a settlement in three months time.

Mediation, is a process whereby a mediator sits with both parties separately, goes through their arguments and defenses, and helps them reach a point at which both of them can agree. A mediation award is then ratified by a court and becomes binding on both parties. 

For example, in the ongoing border dispute between Assam and Nagaland, commercial mediator and Chennai-based advocate Sriram Panchu has been appointed to get parties to arrive at a consent..

Mediators say this is, perhaps, the most cost-effective way of resolving disputes, and leaves much less bad blood between the parties. Conciliation, another form of Alternate Dispute Resolution is slightly different — it involves positive suggestions by the conciliator on how each party can contribute to the consensus building.

Can the two processes, mediation and arbitration, be combined? Several developed economies are trying it out, with the mediator first trying to resolve issues that parties can agree on, and if there still remains any areas of disputes, that is arbitrated. 

Good to see that the main stream business media doing such a comprehensive cover story on ADR and also specifically talking about Mediation.

The article points out that prominent law firms such as J.Sagar, Advani & Co. etc have come together to form an arbitration bar, which they hope will take the lead in evolving best practices for the ecosystem around arbitration to follow. There seems to be some hope that the arbitration scene can be turned around without waiting for legislative reforms.

ADRs such as Arbitration and Mediation need to paid special attention by our legislators and Judiciary. It is imperative given the volume and backlog of cases and the heavy load on judiciary. A sustained push to move cases to judicial legislated mediation or even pre-emptive mediation is the need of the hour and I think that just as prominent law firms have come together to evolve best practices around arbitration, the case is fit for these firms to make a strong case for Mediation.