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

Norvik Ltd and Salta SA agree in writing to 'arb-med': the arbitrator hears the evidence, writes the decision and keeps it sealed, then acts as mediator to encourage settlement. If no settlement is reached, the sealed award is opened and takes effect. Which feature distinguishes this from med-arb?

The distinguishing feature is the order. In arb-med the arbitrator makes the binding decision first and keeps it sealed, then tries mediation. In med-arb mediation is attempted first and the award is made only if it fails.

  1. AThe binding decision is made before the settlement attempt, though kept undisclosedCorrect
  2. BThe process cannot involve a neutral third party
  3. CThe mediation stage is conducted by a court judge
  4. DParties are barred from reaching any settlement

Explanation

In arb-med the arbitral decision is made first and sealed, and the mediation then takes place in its shadow. In med-arb mediation comes first and the decision is made only afterwards. The other options contradict the described process.

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