Roza Khan
Master’s in Law, Amity University, Gwalior, Madhya Pradesh
Dr. Vartika Saxena
Assistant Professor (Department of Law), Amity University, Gwalior, Madhya Pradesh
ABSTRACT-
Alternative Dispute Resolution (ADR) processes, especially hybrid methods, are becoming
increasingly popular because of the growing complexity of commercial disputes and the need for efficient resolution. Among these hybrid methods, Med-Arb (mediation followed by arbitration) and Arb-Med-Arb (arbitration followed by mediation and back to arbitration) offer an important combination of conciliation and adjudication. The objective of this paper is to review whether Med-Arb and Arb-Med-Arb are legally compatible and whether due process issues arise with respect to their use in India and the United Arab Emirates (UAE).
The analysis will assess the extent to which the current legal frameworks in both jurisdictions are able to accommodate the hybrid methodologies of Med-Arb and Arb-Med-Arb as well as the major challenges associated with the use of these hybrid methods, including issues of impartiality, confidentiality of arbitration awards, and enforceability of arbitral awards. The Arbitration and Conciliation Act, 1996 (the Act) in India poses particular challenges for the implementation of Med-Arb due to its rules regarding the need for neutral parties in mediation. The UAE presents a more accommodating environment in its free-zones for mediation and arbitration compared to the Arbitration Act, but there are still ethical issues regarding the appointment of neutral parties playing dual roles.
Additionally, this paper highlights the pressing necessity of more explicit regulatory frameworks and superior practices to guarantee that the full benefits of hybrid ADR systems are provided without detracting from fundamental values of Justice and Fairness. With the rise in commercial activity across borders, a suitable structure for Med-Arb and also for Arb-Med-Arb is very important to improve both how quickly and how effectively disputes can be settled in India and the UAE.
Keywords: Alternative Dispute Resolution, Hybrid ADR, Arbitration, Mediation, Dispute Settlement
1. INTRODUCTION-
The nature of commercial disputes has become more complex and the pressure put on courts by the volume of cases continues to lead towards the use of Alternative Dispute Resolution (ADR) as an alternative to litigation. In India, the trend towards ADR has accelerated over the last few years as a result of increased backlog in the courts, public policy reforms and, finally, the general desire to resolve disputes efficiently.[1] Within this landscape of change, the introduction of hybrid forms of ADR—more specifically Med-Arb and Arb-Med-Arb—are seen as two innovative procedural models that combine the flexibility found in mediation with the finality found in arbitration.[2] Both forms are emerging as mechanisms/techniques that can provide for consensual resolution and enforceable outcomes in one single process.
Med-Arb consists of first conducting mediation then, if the mediation process fails, converting to arbitration. Arb-Med-Arb follows a different sequence where arbitration is initiated and then the proceedings are paused to conduct mediation, with proceedings resuming only if necessary subsequent to conclusion of the mediation process.[3] These hybrid forms of ADR are designed to reduce case duplication, reduce the costs incurred by the parties, enhance the parties’ autonomy by permitting increased exercise of control over both the process and the outcome of their dispute. The increasing importance of these hybrid forms is supported by the trend toward more cross-border commercial activity, the growth of various digital dispute resolution platforms, and the preference of institutional arbitrators for procedural innovation.[4]
Although the idea of hybrid alternative dispute resolution (ADR) systems being integrated into the Indian Legal System has appeal, there are still many unresolved questions regarding the legality and doctrine of such a hybrid approach under the current Indian legal system. The Arbitration and Conciliation Act 1996 provides a broad framework for procedural aspects of arbitration and conciliation; however, it does not explicitly include provisions to accommodate hybrid processes. On the other hand, the enactment of the Mediation Act,[5] and the ability of arbitration tribunals under section 30 of the Arbitration and Conciliation Act to facilitate resolution (settlement) through mediation indicate that there is a desire for mediation to be more formally included in formal ADR systems, and this has encouraged the use of hybrid alternative dispute resolution (ADR) systems. [6] However, because there is no clear statutory authority for hybrid ADR systems, parties have been able to use the hybrid ADR mechanism as long as they agree to do so and have not created an express agreement regarding the mechanics or process for the hybrid ADR.
The lack of provisions governing hybrid ADR systems creates significant due process concerns for both parties involved because there is significant debate over whether or not a party is using a neutral third-party mediator arbitrator when they serve as both the mediator and the arbitrator, and whether/how the appointment of the same person serves to create bias towards one of the parties due to the confidential information obtained by the mediator during the mediation process (using this information to prejudice one party against the other in the arbitration phase).[7] Additionally, the possible outcome of the arbitration process may impact the decision of parties to mediate because parties are likely to feel pressured into agreeing to a mediated settlement in order to avoid being forced into arbitration. Due to the lack of any standardised procedural safeguards and the existence of hybrid ADR systems in various forms, there is uncertainty as to how hybrid ADR systems can be enforced.
In contemporary times, challenges related to either the establishment or the development of Alternative Dispute Resolution (ADR) Institutions in India or Online Dispute Resolution (ODR) Institutions or Multilevel ADR Clauses (typically used within Contractual agreements or deals) have intensified considerably because of the rapid establishment of ADR Institutions and the development of ODR Institutions across the country and the increased usage of Multilevel ADR Clauses within Commercial Contracts.
Hybrid ADR Methods offer substantial potential to improve efficiency and lower costs associated with litigation; however, their legitimacy will ultimately be determined by their consistency with the basic tenets of Natural Justice and Procedural Fairness. In light of the above facts this paper will analyse the Legal Compatibility and the due process ramifications of Med-Arb and Arb-Med-Arb in respect to the Indian system of law. In addition, the paper will develop Comparative Insights concerning the UAE. By integrating a study of current (Legal and Institutional) developments, this study will attempt to answer the question, can Hybrid ADR evolve into a Reliable & Legally Sound mechanism for Resolving Disputes in India?
2. Understanding Hybrid ADR Mechanisms in the Contemporary Context
The hybrid ADR mechanisms of Med-Arb and Arb-Med-Arb have been given a newly revived interest recently in places like India where there is a significant push for efficient resolution of conflicts from both an institutional and legislative standpoint. With the passage of the Mediation Act of 2023 along with the ongoing applicability of the Arbitration and Conciliation Act (1996), the Indian ADR environment is in a progressive state of development towards more closely linked and flexible forms of dispute resolution. Consequently, hybrid forms are being talked about frequently in respect to their use within commercial practice and scholarly debate rather than just as prototypes.[8]
Med-Arb is a form of dispute resolution that generally features a single mediator/arbitrator who first acts as a mediator facilitating negotiations between the parties involved in a dispute through a mediation process and then, if mediation does not result in a total resolution or settlement of the dispute, the single mediator/arbitrator will act as an arbitrator and make a binding decision regarding the remaining issues that were not settled during mediation. One of the major benefits of Med-Arb is that it allows for procedural continuity and efficiency since the single mediator/arbitrator has developed a good understanding of the entire dispute prior to becoming the arbitrator, thereby minimizing the amount of duplicative work performed, as well as the time and cost associated with such duplication. With the development of institutional arbitration and ODR platforms, the Med-Arb process is now being used as an efficient means of resolving commercial disputes where time and finality are key considerations. Despite the numerous advantages associated with the Med-Arb process, issues of confidentiality and impartiality have been a major concern for practitioners of Med-Arb, particularly with respect to whether or not private communications between the parties made in the course of the mediation process will or will not be taken into consideration by the arbitrator when making his/her decision.
Both the Arb-Med and Arb-Med-Arb models seek to combine the flexibility, confidentiality, and party self-determination that mediation provides with the enforceability and finality of an arbitration. The applicability of both of these models in India has been bolstered by the judiciary’s pro-settlement attitude in their approach to the resolution of disputes, and the growing use of multi-tier dispute resolution clauses in commercial contracts.[9] Globally, the growing influence of countries with arbitration friendly legislation, such as the UAE, is shaping the development and use of these models.[10]
While both Med-Arb and Arb-Med-Arb are innovative methods of resolving disputes, the future of either of them will depend on their successful integration into the current Indian legal framework so there can be an appropriate balance of efficiency versus adequacy of the protections provided under the law.
3. Legal Framework in India: Contemporary Position
There has been a major change in India’s alternative dispute resolution (“ADR”) legal framework in the last few years and the government has now developed an express policy to create a more effective, institutionalised and less judicially intervened process.
The key legislation forming the basis of India’s alternative dispute resolution framework is the Arbitration and Conciliation Act 1996 (“the Act”). This legislation has been enhanced significantly through two series of 2015 and 2019 amendments, and is now in line with international best practices.[11] It is intended that India become recognised as an arbitration-friendly place to conduct arbitrations.
Additionally, with the introduction of the Mediation Act, there is now a distinct statutory regime for mediation that establishes a standalone statute for mediation as part of the overall alternative dispute resolution (“ADR”) ecosystem.
Despite this progress, there remains no explicit statutory recognition of hybrid ADR processes such as Med-Arb or Arb-Med-Arb within the current Indian legal framework. As a result, the current Indian legal framework continues to view arbitration and mediation (or conciliation) as separate and distinct processes regulated by separate and distinct rules of procedure and safeguards. The current structure of the legal framework provides both opportunities and challenges in connection with the adoption of hybrid ADR processes in the modern day.
Arbitration:
In India, the 1996 Act regulates arbitration according to the following principles: party autonomy, kompetenz-kompetenz and minimal judicial interference. The amendments to the Act have established time frames for arbitration, provided greater enforcement of arbitration awards and encouraged the use of institutional arbitration, which is becoming increasingly popular in the resolution of high-value commercial disputes, including international contracts. Section 30 of the Act allows the arbitral tribunal to facilitate a settlement between the parties, providing a potential way to incorporate mediation into arbitration proceedings. However, the Act does not formally recognize hybrid mechanisms as a method of dispute resolution.
Mediation and Conciliation:
Mediation has been governed by Part III of the 1996 Act (conciliation), but now has independent statutory recognition in the Mediation Act 2023. The new Mediation Act places a strong emphasis on confidentiality, voluntariness and enforceability of mediated settlement agreements,[12] and recognizes international outcomes of mediation in addition to aligning India with worldwide trends, such as the Singapore Convention on Mediation. The Act maintains a clear distinction between the roles of a mediator and an arbitrator, and therefore highlights the importance of neutrality and fairness in the conduct of both mediators and arbitrators.
Today, hybrid ADR processes in India are generally led by contract innovation and institutional rules rather than legislative authority. Multi-tiered dispute resolution provisions (incorporating negotiation, mediation, and arbitration) are often used in commercial contracts. Furthermore, the development of Online Dispute Resolution (ODR) platforms and specialised arbitration institutions has permitted creativity with respect to hybrid ADR processes (particularly with respect to commercial and technology-based disputes).[13]
Due to a lack of a well-defined legislative framework governing Med-Arb or Arb-Med-Arb, there is legal ambiguity or uncertainty around the enforceability of both systems, the validity of the procedural rules followed within each case, and whether challenges would be upheld based on either possible bias or violation of the principles of natural justice.While Indian courts are supportive of alternative dispute resolution (ADR), there is a desire for due process rights to not be compromised by any ADR mechanism that is applied.
As a result of these challenges, the current Indian legal system reflects a transitional state in its acknowledgement of the fact that these hybrid ADR models are becoming more acceptable in India but that doctrinal safeguards and legislative silence still limit the acceptance and continued development of hybrid ADR. The continued progress of these hybrid ADR mechanisms in India will depend primarily upon additional guidelines being created by regulators, the courts interpreting existing legislation appropriately based upon international best practice, and judicial decisions continuing to develop clarity as to which procedural requirements will apply to each type of hybrid ADR model.
4. Compatibility Concerns in India: A Contemporary Analysis
The use of hybrid ADR practices such as Med-Arb and Arb-Med-Arb within the Indian legal framework continues to present the legal issues of compatibility especially due to the ongoing legal changes and increased focus on ensuring procedural fairness. While India has shown progress with reforms to arbitration and the enactment of the Mediation Act, 2023, many of the basic problems associated with using hybrid practices—especially those that involve one neutral —remain unresolved.[14]
At the heart of the legal challenges facing Med-Arb in India is Section 80 of the Arbitration and Conciliation Act, 1996 which establishes the separation of roles between conciliators (mediators) and arbitrators as the basis for the Proceeding history. This section permits the impacted parties to waive this restriction with a written consent; however, increasing levels of scrutiny by the courts towards the enforceability of consent in practical situations may lead to significant difficulties. Increased likelihood that parties will need to demonstrate the existence of Informal, Voluntary and Unbiased Consent by demonstrating a complete lack of obstacles to the potential bias due to a previous relationship could cause further adverse results through the courts. Without demonstrable and irrevocable Consent, an arbitration award made by a neutral who has previously provided mediation to the parties may be subject to challenge before the courts pursuant to Section 34 of the Act, on grounds including but not limited to bias, breach of Natural Justice or breach of the rules governing procedural propriety.
As we work to promote conflict resolution through mediation, we are also very aware of how the need for confidentiality in mediation has increased significantly in today’s world. Newer approaches to mediation—such as those currently being implemented under the Mediation Act 2023—are much more focused than in past years on the protection of sensitive disclosures made between participants during mediation. In particular, if the same person serves as both the mediator and the arbitrator, it is quite likely that the arbitrator’s decision will be impacted (either consciously or unconsciously) by the confidential communications made during the mediation. This raises significant questions regarding the arbitrator’s ability to remain impartial and ultimately compromises the integrity of the adjudicative process.
Even though the Arb-Med-Arb approach appears to be more balanced than the traditional arbitration approach, the same challenges exist within that framework. The initial arbitration phase will still provide a procedural framework to partially protect the neutrality of the parties involved, but that will be contingent upon whether or not the mediation was facilitated by a different neutral or whether the parties implemented strict information barriers between the arbitration and mediation. There are many times in practice where to date, particularly in India where institutional ADR continues to evolve, that the same neutral is utilized to facilitate both the arbitration and mediation phases of the dispute resolution process. In those instances, the risk of “cognitive bias,” as well as reliance on privileged communications that occurred during mediation, will remain considerable. Therefore, any transfer of knowledge between the phases must be made sure to minimize the likelihood that any participants feel pressured into settling their dispute based on anticipated awards that may be made during the arbitration phase.
As a result of the increased use of hybrid processes, Indian courts have had a significant issue arise with the enforcement of hybrid awards that may not comply with due process. Courts place great weight on due process and will not enforce a hybrid award if they determine that the procedures used to reach the compromise between the parties were compromised in any way, including, for example, allegations of bias, lack of equal opportunity to present the case or that confidential information was misused.[15] There is a considerable burden on parties and neutrals when designing hybrid processes in such a way that they have robust safeguards, which should include clearly defined contractual terms, informed consent and clear procedures for transparency within the hybrid process.
The emergence of institutional arbitration as well as the plethora of Online Dispute Resolution (ODR) platforms has added new dimensions to this issue. While the existence of ODR platforms offers opportunities to develop hybrid processes in a more organized fashion, including utilizing separate neutrals, digitally secure confidentiality protocols and standardized rules, they also reinforce the issue that no uniform regulatory guidelines exist in India for the regulation of hybrid ADR processes. Therefore, the business practices across India regarding hybrid ADR processes differ greatly and could result in differing interpretations and potential litigation.
As such, compatibility between Med-Arb or Arb-Med-Arb in India is largely reliant upon the ability of process due process (i.e., how both parties’ respective interests are satisfied) to be dealt with. There will be room to experiment due to parties’ autonomy but cannot be at the expense of basic principles such as being fair (impartial), just, and transparent. Viability of hybrid ADR mechanisms in India is contingent upon future/continued legislative acknowledgment and judicial guidance as well as the formulation of best practices that produce a balance between efficiency and the demands of procedural justice.
5. Legal Framework in the UAE: Contemporary Developments
In recent years, the UAE has successfully developed into one of the world’s foremost jurisdictions for international arbitration by implementing numerous changes to its law and systems of arbitration. The enactment of Federal Arbitration Law No. 6 of 2018 is one such change, replacing existing provisions of law applicable to arbitration under the Dissolution Act and bringing the UAE’s laws concerning arbitration closer in line with internationally accepted standards established by the UNCITRAL Model Law.[16] By aligning their laws with internationally recognized standards, The UAE has greatly improved its ability to attract foreign investment; thus, there has been an increase in the number of arbitration proceedings being conducted in the UAE.
ARBITRATION:
The United Arab Emirates (UAE) Arbitration Law creates a clear and thorough system of rules that help to create, deliver and enforce arbitration decisions. By supporting several key principles of arbitration, such as allowing parties the freedom to choose how they wish to conduct their dealings (also known as party autonomy) and making it easy to make changes during the arbitration process (known as procedural flexibility), the Arbitration Law provides a sound way to resolve disputes through arbitration. Moreover, since 2015, as part of ongoing reforms, the UAE has taken many steps to create a better environment for arbitration through the consolidation of institutions (e.g., by creating the Dubai International Arbitration Centre) and improving the way arbitration institutions operate. Finally, the UAE Courts are becoming more supportive of arbitration by increasingly using a pro-arbitration policy when enforcing foreign arbitral awards that are subject to the 1958[17] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
MEDIATION:
Mediation in the United Arab Emirates (UAE) has historically developed in a fragmented way compared to arbitration; however, in recent years there has been much movement towards establishing a legally recognised mediation framework in the UAE. The Federal Decree-Law No. 40 of 2023, concerning mediation, has recently been enacted and establishes a legal basis for mediation, incorporating principles such as voluntary participation, confidentiality, and the enforceability of mediation agreements into law. This brings mediation practices in the UAE much closer to international norms.
Institutionally, free zones such as the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are very important in the promotion of Alternative Dispute Resolution (ADR) mechanisms. Free zones operate within a unique legal framework based on principles of common law, which allows them to develop sophisticated frameworks for arbitration and mediation. In today’s globalised world, the free zones have been effective in furthering ADR mechanisms due to their willingness to embrace new and innovative procedural methods (e.g., hybrid ADR systems). Institutions located in the free zones offer a comprehensive dispute resolution process that allows arbitration and mediation to be conducted under flexible rules that are consistent with an international framework.
The new technology being used for resolving disputes is changing the way we resolve disputes. Technology is being used in many ways such as using the internet for online dispute resolution (ODR) and for virtual hearings. The use of technology has also made it possible for practitioners to experiment with hybrid forms of dispute resolution such as Med-Arb and Arb-Med-Arb especially for commercial and cross border disputes where there is a strong need for efficiency and enforceability of a resolution.
Overall, the UAE currently has a progressive and adaptable legal framework in relation to alternative dispute resolution (ADR). However, there are still very limited explicit provisions in law with respect to hybrid models. Therefore, the law is primarily consisting of modern statutes, pro-arbitration judicial attitudes, and innovation from various institutions, all of which provide a fertile environment for the hybrid models to evolve and be accepted.
6. Compatibility Concerns in the UAE: A Contemporary Perspective
The UAE has established a modern legal framework based on international standards and supportive of alternative dispute resolution (ADR), however hybrid ADR formats such as Med-Arb and Arb-Med-Arb are still only implicitly referenced within the legislation. The Federal Arbitration Law does not clearly include these formats under its provisions, but the legislative focus on party autonomy and flexibility could allow for the parties to agree to these formats in their contracts. Currently, there is a developing trend towards hybrid models of ADR due to the increasing volume of cross-border commerce, institutional arbitration and online dispute resolution as well as the increased flexibility in ADR processes. However, there is still no express statutory conformity to hybrid models of ADR and there are still significant concerns about due process and compatibility.
A major concern involves achieving a balance between respecting parties’ autonomy and ensuring that parties benefit from procedural fairness and impartiality. The process for resolving any dispute will be designed by the parties in the United Arab Emirates, however the parties must comply with certain basic due-process principles when designing the process, such as having a right to a fair hearing and having the arbitrator be impartial to both sides of the dispute. There may be concerns about bias, for example if a mediator meets with a party in private to discuss settlement and that mediator also serves as an arbitrator and uses confidential information gained from the mediation to help render an arbitration award. In the last several years, courts in the United Arab Emirates have increasingly scrutinised arbitration proceedings to ensure that the award is made in accordance with the principles of fair procedure, particularly when the enforcement or annulment of an arbitration award is requested.
Free Zone Jurisdictions (DIFC and ADGM):
Today, Dubai International Finance Centre (DIFC) and Abu Dhabi Global Market (ADGM) have developed a legal framework that facilitates the integration of hybrid alternative dispute resolution (ADR) mechanisms. As both are financial free zones established under an independent legal system based on common law principles, they provide the ability for parties to combine different procedures together (for example, both arbitration and mediation) by using their own flexible arbitration and mediation rules that meet international standards.
The first is that there are currently a number of different ADR Institutions operating within these jurisdictions who promote and support structured hybrid ADR processes in a variety of ways. For example, where appropriate, structured hybrid ADR processes may utilise separate independent neutrals to address any perceived or potential bias in the hybrid ADR process.
The second is that the DIFC and ADGM have embraced global best practice ADR standards by providing confidentiality protection, procedural transparency, and enforceability, which are fully compliant with various international conventions at this time. As such, there is a greater likelihood that the respective courts and judicial authorities in the DIFC and ADGM will enforce hybrid ADR mechanisms, as long as the necessary procedural integrity is maintained.
Mainland UAE:
The mainland UAE is generally seen as more cautious than the rest of the UAE when examining hybrid ADR mechanisms. In the absence of detailed statutory or institutional guidance, these arrangements may come under closer scrutiny from the courts than conventional ADR arrangements. Courts in the mainland UAE commonly review the validity and enforceability of arbitral awards using general principles of arbitration law and public policy considerations. If a hybrid process is contested, particularly as a result of alleged bias, coercion in mediation, or an improper use of confidential information, the courts will likely evaluate whether the hybrid process met due process requirements as set forth in the applicable arbitration law.
In light of the country’s burgeoning status as an international arbitration centre, this scrutiny is increasingly pertinent today. They are becoming increasingly concerned with protecting their reputations as well as maintaining coherence with global standards. Thus, any procedural deviation from the procedural rules applicable to hybrid processes, such as non-existent clear party consent, inadequate separation of roles, or perceived impartiality, could have serious implications for the ability to enforce an award made through the hybrid process.
7. Contemporary Challenges and Practical Considerations:
Federal Decree-Law No. 40 of 2023 on Mediation marks a major milestone for the UAE as it borders on the formalisation of mediation; however, there is still uncertainty regarding how this new mediation framework interacts with arbitration law as it relates to hybrid mechanisms. This uncertainty is especially pronounced in situations where mediated settlements are converted into arbitral awards or circumstances in which processes move from mediation to arbitration or vice versa.
In addition to this ambiguity, the growing trend of using ODR and virtual proceedings in the UAE adds further complexity to issues arising from lawful hybrid communication. ODR and virtual proceedings enhance the efficiency and accessibility of justice; however, procedural safeguards must be in place to protect confidentiality, ensure that the parties have provided informed consent, and maintain fairness when using lawful hybrid forms of communications.
The legal structure established in the UAE is generally favorable towards innovative ADR, the successful use of hybrid processes like Med-Arb and Arb-Med-Arb will largely depend on the careful design of procedures involved with them. To help protect the validity and enforceability of outcomes in an evolving dispute resolution arena in the UAE, it is critical for each party to expressly consent to participate in any applicable process, where it is determined necessary; keep the roles of participants separated, where it is considered necessary; and comply with all principles of due process.[18]
8. Legal Compatibility and Due Process Concerns
The increasing implementation of Med-Arb and Arb-Med-Arb represents a shift to efficiency and process innovation in resolving disputes. From one perspective, these two hybrid processes represent a dual role – a facilitator (mediator) and an adjudicator (arbitrator) – and therefore create significant ambiguity around their legal compatibility and due process requirements (in addition to creating ambiguity from the perspectives of function and use) especially in jurisdictions, such as India and the UAE, where statutory mandates necessitate fairness, neutrality, and integrity of processes.
Neutral Impartiality and Risk of Bias:
Independence and impartiality are fundamental principles underlying any due process. A mediator interacts with the parties in an informal setting, usually on a confidential basis. During these meetings, there may be discussions regarding confidential matters of the parties with private caucuses. The transition of a mediator to the role of an arbitrator creates a high risk of perception or reality that information disclosed during mediation could affect the arbitrator’s decision-making. This concern is prevalent under the Arbitration and Conciliation Act of 1996 where arbitrator independence and impartiality are required, and is equally applicable under the Federal Arbitration Law No. 6 of 2018 where due process is incorporated within arbitration.A challenge to the legitimacy of a decision may be based on any appearance of bias.
Confidentiality and Its Erosion:
Mediation is based on the concept of confidentiality between the parties so they feel free to share information (including protecting strategy or sensitive information), trusting it will not be used against them. However, hybrid mediation and arbitration blur the lines here because if the same mediator determines the outcome of the underlying dispute, then there is a risk that what may have been disclosed in confidence during the mediation could affect the result. This undermines the important level of trust parties must have to effectively mediate a resolution to their dispute. The Indian Mediation Act, 2023, establishes strong guarantees of confidentiality, whereas the UAE Federal Decree-Law No. 40 of 2023 contains similar confidentiality provisions protecting mediation communications. The challenge is aligning these confidentiality guarantees to the adjudicatory obligations imposed by arbitration with one set of facts and law.
Informed and Explicit Consent:
To continue to be reviewed by the courts, hybrid ADR mechanisms must have the importance of consent from the parties involved in such cases. It is not enough for the parties to agree to include hybrid ADR clauses, as they must give their informed and express consent that is preferably documented by clear contract language. The parties must also understand the implications of switching roles, including the potential impact on confidentiality and fairness. Courts in both India and the UAE commonly do a thorough examination of whether or not there was truly voluntary and informed consent in most modern commercial transactions, particularly those involving large sums of money, and when an imbalance in bargaining power exists between the parties.
Procedural Fairness and Equality of Arms:
Due process requires that both parties to litigation have equal opportunities for presenting their side of the dispute. If an arbitrator relies on evidence or information the arbitrator learned about the parties or their case outside of the formal arbitral record (e.g., through mediation), then the due process right to present a case in court may be violated. For example, impressions obtained through mediation can have an effect (maybe unknowingly) on the arbitrator’s assessment of evidence and arguments. In this circumstance, one of the parties to the arbitration could have an unfair advantage over the other based on what was said in confidence during the mediation process and, therefore, violate the principle of “equal treatment” that is fundamental to fair adjudication.
Challenges to Enforcement and Setting Aside of Awards:
The most notable legal risk with regard to the functioning of hybrid ADR is that there is an increased likelihood of challenge to an award resulting from the hybrid mechanism being made. In India, an arbitration award may be set aside under Section 34 of the Arbitration and Conciliation Act 1996 if the arbitrator was biased against a party, the Principles of Natural Justice were not observed, there has been some form of breach of due procedure, and so forth. Similarly, in the UAE awards may be declared null and void if due process has not been followed in reaching that award, or if the procedure followed contravenes public policy. In both jurisdictions, the courts are becoming more aware of ensuring that efficiency is not obtained at the cost of fairness. If the hybrid process lacks a clearly defined structure, or appropriate safeguards, the entire hybrid process may be rendered null and void.
There were major changes to the UAE’s arbitration system as of September 2023 after the adoption of new federal law number 15 of 2023 which amends the federal arbitration law of 2018 in order to enhance the UAE’s status as an international centre for arbitration whilst improving clarity and flexibility in relation to arbitration processes.
An important change is the relationship with arbitrators and their independence, as outlined in article 10, which prohibits direct relationships between arbitrators and parties to an arbitration, although it is not clearly defined what a relationship is and so may be open to interpretation. Article 10bis allows for an arbitrator who is part of an arbitration board or panel to act in relation to the arbitration proceedings provided there is express consent from both parties to do so. Failure by an arbitrator to comply may result in arbitral awards being challenged or annulled due to reasons of bias or lack of independence.
The amendments to the federal arbitration law also provide greater procedural flexibility. Article 23 permits the parties the autonomy to select the rules applicable to their arbitration; where the parties do not agree on the rules, the tribunal has the ability to determine what procedural rules are to apply. This enhancement of party autonomy is indicative of a general trend toward party controlled arbitration and brings the UAE arbitration framework into line with international best practices.
A key change in the rules is now to formally recognize the use of Virtual Hearings.[19] Although not mentioned specifically for arbitration, Article 28 of the 2016 Rules allows Arbitrators to conduct their hearings in person or virtually and provides that if the parties have not agreed upon a format for a hearing, then the Arbitrators may use their discretion in determining the format. This is especially pertinent after the COVID-19 pandemic and the increasing prevalence of digitalization and Online Dispute Resolution (ODR) in arbitration practice. Arbitration institutions will be responsible for making available sufficient technology and infrastructure to facilitate virtual hearings.
In addition, Article 33 broadens the powers of Arbitral Tribunals by providing them with additional authority over procedural matters and declaring confidentiality as the default position for all arbitral proceedings unless the parties agree otherwise. This serves to enhance both the efficiency and privacy of the arbitration process, which are two of the more important components of modern arbitration.
Simultaneously, there had also been significant economic and legal cooperation between India and the UAE through the signing of a new India-UAE Bilateral Investment Treaty 2024 on 13 February 2024 in Abu Dhabi, which became effective on 31 August 2024. The new BIT replaced the previous Bilateral Investment Promotion and Protection Agreement (BIPPA) which lapsed in September 2024. The new BIT is particularly important given the strong economic relationship between the two countries,[20] with the UAE accounting for about three percent of India’s foreign direct investment, while Indian nationals represent the largest population of expatriates residing in the UAE.
These events collectively represent a broader trend toward modernization, cross-border cooperation, and increased investor confidence, all of which have significant implications for the adoption and development of advanced ADR mechanisms, including hybrid types, in both jurisdictions.
9. Future Outlook:
Even though there are many doctrinal and procedural issues with Med-Arb and Arb-Med-Arb, both processes have a higher practical appeal to parties in India and the UAE than ever before because there is significant demand by commercial entities for dispute resolution options that are viable and can be executed quickly; such as through Mediation. Due to the current increasing volume of cross-border trade, digital and/or e-commerce, and more complicated commercial contractual relationships, hybrid ADR processes[21] are becoming a reliable option to fill the gap between consensual resolution of disputes and binding adjudication / awards.
In India, the trend is moving toward a stronger policy preference for settlement-oriented systems of Alternative Dispute Resolution (ADR). For instance, the courts have been very pro-arbitration in their decisions. There are numerous new pieces of legislation (including the Mediation Act 2023) that support the provision of hybrid processes (med-arb, arb-med-arb). The Arbitration and Conciliation Act (1996)[22] continues to be relied upon. Increasingly multi-tiered dispute resolution clauses (negotiation mediated arbitration), are included in many commercial contracts, especially in the infrastructure and technology, as well as in all banking and international trade sectors.
However, the absence of explicit statutory recognition for Med-Arb and Arb-Med-Arb creates uncertainty. Section 80 of the 1996 Act, which restricts role-switching between conciliators and arbitrators without consent, continues to be a key legal barrier. In the present scenario, courts are likely to interpret such provisions strictly in light of due process requirements, especially when awards are challenged. Consequently, while hybrid ADR is not prohibited, its enforceability depends heavily on precise contractual drafting and procedural safeguards.
Looking ahead, legislative clarification—particularly regarding role-switching and confidentiality— would significantly enhance the legitimacy and adoption of hybrid mechanisms in India. Additionally, the role of arbitral institutions is expected to become more prominent. Institutions can develop standardized rules and ethical guidelines governing hybrid procedures, thereby reducing uncertainty and promoting consistency. The rapid growth of Online Dispute Resolution (ODR) platforms in India further strengthens this outlook, as digital systems are well-suited to structured, multi-phase dispute resolution processes.
The United Arab Emirates (UAE) has evolved in terms of how hybrid alternative dispute resolution (ADR) mechanisms can be adopted within an environment supported by government and other types of institutions. The UAE’s existing modern legislative system provides a conducive environment for hybrid ADR mechanisms to flourish, as there are very well-developed and supported institutional frameworks (governmental and private-sector pertaining to business) that provide the infrastructure necessary for hybrid ADR systems. The Federal Arbitration Law No. 6 of 2018 establishes an overall progressive perspective on ADR collectively via the Federal Decree-Law No. 40 of 2023 on Mediation; whilst hybrid ADR mechanisms have not yet been codified, they can still be developed through party autonomy.
In jurisdictions such as the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) that are set up with a common law style (a private-sector governed “free zone”/”offshore”), established advanced institutional frameworks, and have made the necessary alignments with global best-practice models for ADR implementation; hybrid ADR models have been established as practical and potentially enforceable (Arb-Med-Arb where two different neutral Arbitrators will exist).
On the mainland of the UAE, adoption may be little more measured. Courts will be more likely to review hybrid processes using the due process and public policy lens, particularly in the absence of detailed statutory guidelines. Future developments will be dependent on prior decisions of the court, the rules developed institutionally, and how practical hybrids have been in resolving complex commercial disputes.
The ways hybrid ADR mechanisms are used will be dependent on how well parties are able to mitigate risks through procedural design, as there are legal uncertainties surrounding this type of procedure today. Some of the best practices that have become essential safeguards to the success of hybrid ADR mechanisms include the following:
Parties should expressly and clearly state in writing what the hybrid process will be in terms of its structure (e.g., sequence of process stages, role of neutral(s), legal consequences that occur when transitioning from mediation to arbitration). The parties should provide informed consent concerning their agreement to use the hybrid process, particularly regarding issues related to confidentiality and attorney’s fees.
The most common practice to safeguard impartiality in hybrid ADR is for the parties to appoint a different neutral for mediation than they do for arbitration. This provides substantially less
The Future of Hybrid ADR Mechanisms in India and the UAE
While the future of hybrid ADR mechanisms in both India and the UAE looks positive, the success achieved will be conditional. In India, achieving a balance between innovation and legal certainty will assist with the long-term success of the hybrid ADR mechanisms in that country. Legislative intervention and judicial clarification will be required in regard to existing ambiguities. In the UAE, institutional development and harmonisation between the arbitration practices in the mainland and free zones will determine its future direction.
10. Judicial Approach to Hybrid ADR: India and UAE
POSITION IN INDIA
While only a small number of Indian judicial decisions consider Med-Arb and other hybrid ADR methods, those decisions that have considered Med-Arb all indicate that Med-Arb is an acceptable method of resolving disputes. The Supreme Court of India has issued at least one definitive ruling addressing alternative dispute resolution (ADR) in the case of Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.,[23] reported at (2010) 8 SCC 24, that is strongly supportive of ADR as a valid method of resolving disputes. In that case, the Supreme Court recognised that civil disputes can be resolved through alternative methods of ADR (i.e. mediation, arbitration, or conciliation), pursuant to Section 89 of the Code Of Civil Procedure, 1908 (the “CCP”) at the discretion of the parties to the dispute. The Supreme Court also provided examples of contract language supporting the negotiation and implementation of ADR mechanisms, including examples that involved Med-Arb. In this way, the Supreme Court implicitly endorsed the validity and effectiveness of Med-Arb as an alternative dispute resolution mechanism in India.
In a manner whereby the same can be said about the case of Haresh Dayaram Thakur v State of Maharashtra[24], the Honourable Supreme Court acknowledged that Med-Arb is an innovative and realistic form of dispute resolution in more complicated commercial cases . The court found that mediators/arbitrators were skilled in both mediation and arbitration and therefore would make excellent neutrals to facilitate the Med-Arb process and that their experience would be instrumental in conducting the mediation-arbitration process.
Judicial validation for hybrid alternative dispute resolution can also be found in M/S Afcons Infrastructure Ltd & Anr v M/S Cherian Varkey Construction Company Pvt Ltd & Ors where the Kerala High Court upheld an arbitral award made as a result of both the failure of the mediation which was previously held by a neutral that presided over both parties present during the mediation. Additionally, the court offered no other basis for rejecting the award other than to note that the parties agreed to the Med-Arb process as set forth in the mediation-Arbitration agreement, and the arbitrator was truthful and independent throughout the hybrid process, thus validating that outcomes resulting from Med/Arb can be enforced through the courts.
Overall, the treatment of Med/Arb demonstrates that while Indian Courts have not yet developed an extensive body of case law on hybrid ADR, they are willing to accept hybrid ADR mechanisms, provided that there is party consent and the procedures comply with the requirements of fairness.
POSITION IN THE UAE
The UAE has no specific legal developments on Med-Arb or Arb-Med-Arb yet. However, there have been some decisions from arbitration-related courts addressing jurisdictional conflicts, enforcement issues and fairness of the process, which can provide useful information.
An example of this is Daman Real Capital Partners Company LLC v. Oger Dubai LLC[25] (Cassation No. 1/2016, The Judicial Tribunal), the first decision issued by the Dubai-DIFC Joint Judicial Committee pursuant to Decree No. 19 of 2016, which arose as a result of parallel proceedings – the annulment of a Dubai Courts decision and the enforcement of the same arbitration award in the DIFC Courts.
The primary issue before the Judicial Committee was which court had jurisdiction to hear the case to prevent conflicting decisions. The Judicial Committee ruled using the “first-seized” rule and held that because the Dubai Courts were first seized with the annulment of the arbitration award, they had jurisdiction, and also ordered the DIFC courts to cease from proceeding with the enforcement case.
This ruling has several implications for hybrid ADR, including:
(1) the UAE’s commitment to procedural consistency and conformity of outcomes is very strong; this is true in hybrid ADR arrangements, where two or more methods of dispute resolution are combined and
(2) due process and acceptable conduct of proceedings are key considerations when multiple jurisdictions and/or stages of procedure are involved;
(3) the enforcement/validity of arbitral awards in the UAE is very strictly governed by jurisdictional and public policy principles.
This ruling also reinforces the UAE’s judicial position in favour of arbitration and demonstrates that procedural irregularities or conflicting jurisdictional clauses may affect the enforceability of mediation awards in the hybrid ADR context. As such, if the process is not sufficiently structured and/or legally valid, there is likely to be a challenge to the enforceability of any result obtained through the hybrid ADR process.
In sum, while the UAE courts are yet to provide a definitive ruling on Med-Arb or Arb-Med-Arb, cases such as Daman v. Oger provide some guidance as to important principles (i.e., jurisdictional clarity, procedural fairness, and avoidance of conflicting decisions) that will apply to the validity of hybrid ADR.
11. CONCLUSION:
As commercial transactions become more complicated and time sensitive, it is likely that hybrid ADR mechanisms will have increasing importance for resolving commercial disputes. As hyper methods for resolving disputes develop, they not only reflect changes in the needs of alternative dispute resolution approaches but also challenge the adaptability of legal systems to maintain due process as they embrace procedural innovation. As an example of the evolution of dispute resolution, hybrid methods, such as Med-Arb and Arb-Med-Arb, combine the flexibility of mediation with the finality of arbitration to create a mechanism that provides clear benefits in terms of time, cost, and convenience when addressing today’s very complex commercial environment. However, the successful use of hybrid methods is dependent on addressing critical issues such as impartiality, confidentiality, and procedural fairness, all of which have an impact on the legitimacy and enforceability of the outcomes of such methods.
India has a strong legal framework for alternative dispute resolution (ADR) under the Arbitration and Conciliation Act, 1996, but hybrid ADR mechanisms are not expressly recognised in the Act. Section 80 of the Act prohibits the switching of roles between mediators and arbitrators without prior consent, resulting in uncertainty. Although the recently passed Mediation Act, 2023 further enhances the ability to use the mediation process, the interaction between mediation and arbitration is still underdeveloped; therefore, careful drafting and ensuring that procedural protections are in place is imperative.
Conversely, there is much more of a facilitative manner for parties in the UAE as it relates to Federal Arbitration Law #6 of 2018; and Federal Decree-Law 40 of 2023 regarding mediation – Particularly in DIFC and ADGM; but still require party autonomy and strict adherence to due process do to no express provisions for hybrid ADR.
Moving into the future, affording greater clarity through statutory law, institutional guidelines and professional standards are critical to providing a foundation for the establishment of legal certainty. Therefore, hybrid ADR methods have a great chance to succeed if, on the one hand, their efficiency is balanced by the fundamental tenets of fairness and justice.
[1] Hybrid ADR Mechanisms in India: Med-Arb and Arb-Med-Arb, Int’l J. Legal Rsch. & Analysis, https://ijlmh.com/wp-content/uploads/Evaluation-of-Hybrid-Models-of-ADR.pdf (last visited May 4, 2026).
[2] Laws Regulating Alternative Dispute Resolution in Dubai and India – A Comparative Study, iPleaders (May 1, 2026), https://blog.ipleaders.in/laws-regulating-alternate-dispute-resolution-dubai-and-india-comparative-study/
[3] GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION (3d ed. 2021).
[4] UNCITRAL Model Law on International Commercial Arbitration (1985), amended in 2006.
[5] Mediation Act, 2023, No. 32 of 2023, India.
[6] Arbitration and Conciliation Act, 1996, No. 26 of 1996, § 30, India.
[7] Sumeet Kachwaha, Arbitration in India (Wolters Kluwer 2022).
[8]Evaluation of Hybrid Models of ADR, Int’l J. L. Mgmt. & Human., https://ijlmh.com/wp-content/uploads/Evaluation-of-Hybrid-Models-of-ADR.pdf (last visited May 1, 2026).
[9] Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 S.C.C. 24 (India).
[10] Federal Law No. 6 of 2018 on Arbitration (U.A.E.).
[11] Arbitration and Conciliation Act, No. 26 of 1996, INDIA; Arbitration and Conciliation (Amendment) Act, No. 3 of 2016, INDIA; Arbitration and Conciliation (Amendment) Act, No. 33 of 2019, INDIA.
[12] Mediation Act, No. 20 of 2023, INDIA; United Nations Convention on International Settlement Agreements Resulting from Mediation, Aug. 7, 2019, U.N. Doc. A/73/17 (Singapore Convention on Mediation).
[13] ODR Developments in India, Int’l J. Legal Rsch. & Analysis, https://ijlmh.com/ (last visited May 4, 2026).
[14] A.J. Jawad, Reimagining India’s Dispute Resolution Framework, LiveLaw (2026), https://www.livelaw.in/articles/india-dispute-resolution-framework-525578.
[15] Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 S.C.C. 24 (India); see alsoArbitration and Conciliation Act, No. 26 of 1996, § 34 (India).
[16] U.A.E. Federal Law No. 6 of 2018 (Arbitration Law); UNCITRAL Model Law on International Commercial Arbitration, G.A. Res. 40/72, U.N. Doc. A/RES/40/72 (Dec. 11, 1985), amended by G.A. Res. 61/33, U.N. Doc. A/RES/61/33 (Dec. 4, 2006).
[17] Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S. 3; see alsoArbitration Developments in the MENA Region, DailyJus (2025), https://dailyjus.com/legal-insights/arbitration-for-in-house-counsel/2025/04/arbitration-developments-in-the-mena-region (last visited May 1, 2026).
[18] Oger Dubai LLC v. Daman Real Estate Capital Partners Ltd., DIFC CFI 013/2016; see also Arbitration Developments in the MENA Region, DailyJus, https://dailyjus.com/legal-insights/arbitration-for-in-house-counsel/2025/04/arbitration-developments-in-the-mena-region (last visited May 4, 2026).
[19] U.A.E. Fed. Law No. 15 of 2023 (amending Fed. Law No. 6 of 2018).
[20] India–UAE Bilateral Investment Treaty, India–U.A.E., Feb. 13, 2024.
[21] Evaluation of Hybrid Models of ADR, Int’l J. L. Mgmt. & Hum., https://ijlmh.com/wp-content/uploads/Evaluation-of-Hybrid-Models-of-ADR.pdf (last visited May 1, 2026).
[22] Mediation Act, 2023; Arbitration and Conciliation Act, 1996; see also A.J. Jawad, India’s Dispute Resolution Framework, LiveLaw (2025), https://www.livelaw.in/articles/india-dispute-resolution-framework-525578.
[23] Afcons Infrastructure Ltd. v. Cherian Varkey Constr. Co. (P) Ltd., (2010) 8 S.C.C. 24 (India); see also India’s Evolving Dispute Resolution Framework, LiveLaw (2025), https://www.livelaw.in/articles/india-dispute-resolution-framework-525578 (last visited May 4, 2026).
[24] Haresh Dayaram Thakur v. State of Maharashtra, (2000) 6 S.C.C. 179 (India); see also Haresh Dayaram Thakur v. State of Maharashtra, Indian Kanoon, https://indiankanoon.org/doc/1600086/ (last visited May 4, 2026).
[25] Daman Real Capital Partners Co. LLC v. Oger Dubai LLC, Cassation No. 1/2016 (Dubai-DIFC Judicial Tribunal); see also Oger Dubai LLC v. Daman Real Estate Capital Partners Ltd., DIFC CFI 013/2016 (Ct. First Instance), https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/oger-dubai-llc-v-daman-real-estate-capital-partners-limited-2016-difc-cfi-013 (last visited May 4, 2026).