What is the difference between arbitration and mediation?

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As alternatives to litigation, mediation and arbitration both share some similarities, but it is important to know the differences between the two before choosing which method is right for your situation.  In general, mediation can only end with an agreement between the parties, while arbitration can end with a decision by an arbitrator.

Mediation is a voluntary process and both parties must agree to mediate.  Furthermore, the mediator does not judge the dispute.  Instead, the mediator’s role is to help the parties come to an amicable agreement by themselves.  The end result of successful mediation will be an amicable settlement agreement that will legally bind the parties to what they agreed during mediation.

Arbitration involves a neutral third party who will hear both parties’ arguments and make a final decision regarding the outcome of the dispute.  This decision will usually award a “victory” to one party or the other, although arbitrators can come up with other creative methods of resolving disputes as well.  Arbitration can either be legally binding or not, depending on the parties’ agreement.

If you have any questions about arbitration in Japan, please contact our office for a legal consultation.