Mediation and arbitration are two common alternative dispute resolution methods, but they differ in their purpose, process, and outcome.

In mediation, a neutral mediator assists the parties in communicating and negotiating to reach a mutually acceptable settlement. The mediator does not normally have the authority to impose a decision on the parties. The outcome depends on the parties’ agreement and acceptance of the proposed settlement.

In arbitration, an arbitrator or arbitral tribunal considers the dispute, reviews the parties’ arguments and evidence, and issues an arbitral award in accordance with the applicable rules, procedures, and law.

In general, mediation focuses on helping the parties reach a mutually agreed settlement, while arbitration focuses on resolving the dispute through an arbitral decision. The appropriate method depends on the nature of the dispute, the terms of the contract, and the parties’ objectives, including whether they wish to preserve their ongoing business relationship.