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Alternative Dispute Resolution: Arbitration and Conciliation


Alternative dispute resolution has been widely used to refer dispute resolution by means other than court adjudication (Staff 231). However, the definition of alternative dispute resolution incorporates a wide range of court oriented initiatives which are designed to facilitate a more effective administration of justice while overcoming delays and other shortcomings associated with the normal court process. The Alternative dispute resolution association of Australia (ADRAA) defines alternative dispute resolution as a means of resolving conflict through processes that encourage the warring parties to reach their own solution (Staff 231). Alternative dispute resolution commonly falls into adjudicative and negotiation based processes. In adjudicative based processes, an independent individual makes a decision which binds the conflicting parties while the negotiation based process involves mediation by a third party whose role in the dispute is neutral and is expected to facilitate the resolution process (Staff 231).

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Similarities between Conciliation and Arbitration

Conciliation and arbitration have been successfully employed in the settlement of labour and other industrial disputes in various parts of the world. In solving labour disputes, conciliation involves the use of a mediator who attempts to reach a settlement fair to both employer and the employees. Failure to reach an agreement under conciliation may result in arbitration where the board or an individual proposes a settlement which binds both the employer and employees (Docherty 69). Compulsory conciliation and arbitration in labour disputes achieved lasting success in countries such as Australia and New Zealand. In Australia, industrial tribunals were established as early as 1896 under federal and state laws (Docherty 69). However, since the mid 1980s, both federal and state governments have put greater emphasis on collective bargaining as a means of solving disputes though the essentials of conciliation and arbitration system are still evident in most processes.

The conciliation and arbitration systems found in various parts of Australia have a number of similarities. They still retain an industrial relations commission which varies according to region (Palmer 193). For instance, in Western Australia, the industrial relations commission has a specified and limited jurisdiction while in South Australia; the same commission has an industrial relations division, an enterprise agreement division, as well as an employee ombudsman (Palmer 193). The initial framework of conciliation and arbitration provided for in the Australian constitution emerged in a bid to control industrial conflict in the region (Forsyth 143). Failure by these dispute resolution processes to resolve industrial disputes led to the country’s move towards collective bargaining.

Differences between Conciliation and Arbitration

The essential difference between conciliation and arbitration lies in the definition of the two terms. While conciliation refers to the process through which an independent third party assists the conflicting parties to reach an amicable solution, arbitration refers to the settlement of an issue in which the parties have failed to agree by an independent third party (Staff 109). Consequently, the conciliator has no mandate to impose a settlement on the parties while an arbitrator does. The role of the arbitrator in conflict resolution differs from the role of conciliator in that the conciliator is expected to be neutral and does not actively decide the disputes for the parties; on the other hand, the arbitrator decides cases on behalf of the parties. This serves to complicate the role of the conciliator since he is expected to be impartial in the dispute settlement, while he is still accountable to the law, under which he conciliates (Rodrigues 380). The Australian Disability Discrimination Law Centre acknowledges that the use of conciliation in dispute resolution on issues relating to equality complicates the role of conciliator (Rodrigues 380). The process received a lot of criticisms with most citing that the process individualized complaints and only served to intensify the equality dispute.

Arbitration proceedings are too technical and legalistic (Portus 72). On the other hand, conciliation proceedings involve mediation by a third party. The judicial power concerns itself with ascertainment declaration and enforcement of the rights and liabilities of the parties depending on the rights and liabilities of parties. In arbitration proceedings, the arbitral power ascertains and declares a binding action rather than enforcing what in the opinion of the arbitrator ought to be the respective rights and liabilities of the parties involved in the dispute (Portus72). Conciliation provides the conflicting parties with the opportunity to clearly outline the areas of disagreements and to consider a wide range of arguments and proposals in a bid to resolve the conflict (Palmer 196). If the parties reach an agreement, the conciliator may consent or certify the agreement. This is in contrast to arbitration process where a more formal process is adopted. This process involves advocates who present the cases for opposing sides and involves submission of evidence and examination of witnesses (Palmer 196).

Article 14 of the conciliation rules highly emphasizes on the strict duty of confidentiality between the parties involved and the conciliator on issues regarding both the proceedings and settlement (Dore 33). This provision was incorporated in the article since it was deemed necessary for the parties to reach an amicable solution. However, the parties may agree to any disclosure depending on the circumstances through the modification of rules under article 1(2) (Dore 33). On the other hand, arbitration rules do not contain a specific provision guaranteeing confidentiality of the proceedings despite the implication of concern for privacy of the parties (Dore 33). In the case of Esso Australian resources vs. Plowman, a dispute arose between Esso Company and Australian minister for energy and minerals regarding the confidentiality of arbitration proceedings.

Esso Company had commenced arbitration proceedings against two Australian public utility companies. The Australian minister for energy and minerals contended that emanating from his public duty to supervise public utilities and the chargeable interests for oil supplies; it was also his right to inspect documents produced for the arbitration (Noussia 81). Contrary to this view, Esso felt that the documents were confidential and consequently not subject to the supervision by the minister. The High Court of Australia ruled that the documents were not covered by the veil of confidentiality which demonstrated that their legal system was in agreement with the view that confidentiality is not part of the inherent nature of arbitration contract; rather, the duty of confidentiality exists subject to exceptions such as public interest (Noussia 81).

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Alternative methods of dispute resolution such as arbitration and conciliation have been widely used in Australia in the settlement of industrial, political, commercial, and other forms of disputes. Arbitration and conciliation have been successfully applied in solving conflicts such as labour disputes and disputes arising between various institutions in the country. However, these methods differ in terms of proceedings, process as well as application.


Docherty C. James. Historical organization of organized labour, Maryland: Scarecrow Press, 2004. Print.

Dore I. Isaak. Arbitration and conciliation under the UNCITRAL rules: a textual analysis, Massachusetts: Martinus Nijhoff Publishers, 1986. Print.

Forsyth, Anthony & Stewart, Andrew. Fair work: The new workplace laws and the work choices legacy, New South Wales: Federation Press, 2009. Print.

Noussia, Kyriaki. Confidentiality in international commercial arbitration: a comparative analysis of the position under English, US, German and French law. Berlin: Springer, 2010. Print.

Palmer, Gill. Employment relations, South Melbourne: Palgrave Macmillan Australia, 1997. Print.

Portus J. Hereford. Australian compulsory arbitration 1900-1970, NY: Taylor and Francis, 1971. Print.

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Rodrigues R. Paulo. Non Discrimination Law: Comparative Perspectives. Massachusetts: Martinus Nijhoff Publishers, 1999. Print.

Staff K J Mackie. A handbook of dispute resolution: ADR in action. London: Routledge, 2002. Print.

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