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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Calder Co and Dunmore Co use med-arb with one neutral for both stages. During mediation Calder privately told the neutral about a weakness in its own case. Dunmore later objects to the neutral acting as arbitrator. What is the main concern behind the objection?

The concern is that the neutral may use confidential information gained in private mediation when deciding as arbitrator, undermining impartiality and fairness. Combining the processes is lawful, and enforceability is not lost simply because mediation took place first.

  1. AThe neutral may be influenced by confidential information received in mediation, undermining perceived impartialityCorrect
  2. BThe arbitral award cannot be enforced because mediation preceded it
  3. CMediation and arbitration are legally forbidden from being combined

Explanation

A recognised risk of med-arb with the same neutral is that confidential disclosures made in private mediation sessions may affect the decision as arbitrator. Hybrid processes are permitted and the award is not unenforceable merely because mediation came first.

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