The key difference lies in their nature: Arbitration is a dispute resolution process itself, while consolidation is a procedural tool used within arbitration (or other legal proceedings) to combine related cases.
Here's a breakdown in a table format:
| Feature | Arbitration | Consolidation |
|---|---|---|
| Definition | A process where parties agree to resolve disputes outside of court, through a neutral third-party arbitrator or panel, who renders a binding (or non-binding, depending on the agreement) decision. | A procedural mechanism where two or more separate arbitrations (or legal cases) are joined into a single proceeding for efficiency and consistency. According to Arbitration Rule 46(2), consolidation joins all aspects of two or more arbitrations, resulting in a single Award. |
| Purpose | To resolve a specific dispute or set of disputes. | To streamline related arbitrations, avoid potentially conflicting awards, and reduce costs. |
| Scope | Encompasses the entire dispute resolution process from initiation to award. | Focuses solely on the procedural aspect of combining existing cases. |
| Outcome | A final and binding decision (award) on the merits of the dispute. | A single, unified proceeding, potentially leading to a single award covering all consolidated cases. |
| Example | Two companies, A and B, have a contract with an arbitration clause. A dispute arises regarding payment, and they submit the dispute to arbitration. | Company A has separate contracts with Company B and Company C, both containing similar clauses and related to the same project. Disputes arise under both contracts. A court or arbitral institution may consolidate the two arbitrations. |
In essence:
- Arbitration: Is the method of resolving a dispute.
- Consolidation: Is a technique used to manage multiple related arbitrations more efficiently. When consolidation occurs, the original arbitration proceeding may be incorporated into the new arbitration and thus discontinued.
