The concept of Mediation contrasts with arbitration. Arbitration usually replaces a court action ending with an enforceable decision of the Arbitration Tribunal. It is similar to a judgement but it is generally not appealable. Some parties may shy away from such arbitration proceedings for understandable fears but these are usually unfounded. The arbitration panel consists of impartial arbitrators with profound experience. Certainly the chairman is carefully selected by an independent institution such as the ICC or the DIS.
The procedure is usually governed by arbitration rules of e.g. the International Chamber of Commerce in Paris. Being a German and English lawyer I would like your company to also consider the rules of the German Institute of Arbitration in Frankfurt or of the London Court of Arbitration. All of these sets of rules are similar and make common sense. Generally, arbitration does not allow for an appeal. Once the decision is taken, it is enforceable. As a result arbitration can be faster and saving on costs, and it is definitely more confidential.
One is Mediation: Mediation is not strict alternative to court action in fact it is something which the parties may consider as an out-of-court attempt in order to settle a matter a dispute between the parties and it has certain benefits.
The first one is it is a proceeding which can be held absolutely and strictly confidential no press is involved the public is barred from having access to this kind of mediation process.
The second aspect is that is faster because the parties can set it up ad-hoc that means whenever a problem arises and they can reserve resolve it within a short time period depending on the attitude the part is adopt.
The third aspect is it is much more flexible the court normally addresses legal issues: a mediator can take into account all aspects of the relations between the parties they may want to continue their relations and this is simply just a dispute which is in the way and needs to be resolved quickly and also the court is subjected to very strict procedural rules whereas a mediator can agree with the parties to take an efficient approach outside strict rules as set out on the law.
..and the last but equally important aspect is that it is only an invitation to the parties to resolve the matter out of court but it is not a substitute in other words if they fail to agree they can still go to court and resolve the matter in such way.
However the statistics prove that if parties are willing to enter into a mediation process about seventy percent if not more of the cases and disputes are being resolved and by way of mediation by way of a settlement agreement.
Bertrand Prell on Alternative Dispute Resolution — Mediation