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

Corvus Ltd and Delta Ltd appoint an independent mediator to help resolve a licensing dispute. After two sessions no agreement is reached. Which statement about the mediator's role is correct?

A mediator helps the parties reach their own settlement but cannot impose one. The mediator is a neutral facilitator, not a decision-maker, so any outcome depends on the parties' agreement, unlike arbitration or court judgment, which are imposed.

  1. AThe mediator can impose a binding decision on the parties
  2. BThe mediator helps the parties reach their own settlement but cannot impose oneCorrect
  3. CThe mediator must apply strict rules of evidence and give a reasoned award
  4. DThe mediator's recommendation is automatically enforceable as a court judgment

Explanation

A mediator is a neutral facilitator who assists the parties to find their own agreement. The mediator has no power to decide the dispute. Imposing a binding decision describes arbitration or litigation, so option A is wrong.

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