CMA Foundation · Fundamentals of Business Laws and Business Communication · Legal Methods and Court System in India
Which statement correctly distinguishes mediation from arbitration?
A mediator helps the parties reach a settlement of their own making and does not impose any decision, whereas an arbitrator decides the dispute and issues a binding award. The reverse description is wrong, and neither process requires a sitting High Court judge.
- AA mediator gives a binding award after hearing evidence, while an arbitrator only facilitates talks
- BA mediator facilitates a settlement that the parties themselves decide, while an arbitrator decides the dispute with a binding awardCorrect
- CBoth a mediator and an arbitrator must be sitting judges of the High Court
- DBoth always result in a decree passed by the Supreme Court
Explanation
A mediator assists communication and the parties control the outcome, so any settlement is voluntary. An arbitrator acts as a private adjudicator and the award is binding. The first option reverses the roles, and neither process requires a sitting High Court judge.
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