This article is meant to ease the beginning of a thoughtful and deliberative process involving the parties and investor states, by highlighting the “broad-brush” distinctions between arbitration and mediation, and distinguishing between these two dispute resolution processes through different models of arbitration and mediation that exist in order to develop the process of investor state mediation. Investment treaty arbitration is used to address disputes between states and foreign investors, yet some changes need to take place, as states and investors have expressed concerns that pertain to costs that are associated with the arbitration process. Some states refuse to comply with the arbitral awards and others are hesitant into signing new bilateral investment treaties, whilst citizens have began to show an unrest at the concept of investment treaty arbitration. Hence, according to Welsh and Schneider “both investors and states are advocating the use to mediation to supplement investor state arbitration”.
A noticeable raise in the number of investors accessing investment treaty arbitration has had a joint effect with heavy costs in investment treaty arbitration and the size of some of these arbitral awards where both state and investors have greater concerns regarding this issues. Investment arbitration is only available for states if the parties voluntary comply with and enforce the arbitral awards that are introduced by the system, where issue lies with compliance as some of the arbitral awards are not in the interest of the nation. According to Coldfelter “the current investor state arbitration process tends to focus the parties on their legal rights—and the need to resolve ambiguities regarding such legal rights”. Some commentators believe that arbitration may diminish the parties mutual interests that have the potential of maintaining the currently troubles business relationships. This implies that arbitration should not be the means or cause of repairing a business relationship that has been already broken. Grant Keser, the Chief Execute officer to Metalclad stated that said that “arbitration had been so dissatisfying that he wished his company had relied upon its political options”; to resolve the dispute, after his company won a 17 million dollar arbitral award against Mexico. This denotes that the parties who have won or lost will seek a process that has fewer transaction costs and that will allow them to focus more on how to resole their disputes in order to reach to valid solutions.
There are a few approaches that some investor states, international bodies and scholars have begun the rules to enforce mediation, as it could reduce the probability of investor state disputes, or if they have arisen, some form of solution can be developed. Some of these forums include for the parties that are in dispute to conciliate, they have to be neutral and to negotiate. Hence, some States have begun to practice such procedures, especially those disputes that can be resolved with communication before the submission of arbitration by exchanging information at the rise of a dispute and enforcing negotiation techniques. However, some stakeholders and commentators believe that the mediation process is unnecessary and prefer to practice arbitration, as mediation cannot be exported into the investment treaty context owning to its legal and political issues, and that they believe that parties that are involved in investor-state disputes cannot reach to solution by themselves and that mediation will not help them reach their dispute settlement goals.  Mediation is currently an integral part of civil litigation where parties see it as a fair and valid process especially in the federal and state courts in the U.S. The federal rules of Civil Procedure are filled with directive that require lawyers to negotiate with each other before they approach a court that are evolving with disputes that relate to litigation. 
Arbitration vs. Mediation: According to Welsh and Schneider: “Mediation is presumptively interest-based. Arbitration is presumptively rights-based. Mediation is like a meeting that is focused on facilitating the parties’ communication, negotiation and decision-making”. Arbitration on the other hand is focused establishing decision making process. However, a key difference is the “degree of control over the outcome”.  Arbitration is focused on enabling the arbitrator’s decision-making. Mediation looks for a binding resolution that will enable the parties to reach a voluntary agreement where it assists parties in order to exchange ideas in negotiation. On the other hand, only decision making power is present only for the arbitrators, as they have the control to decide upon the outcome for parties to issue binding awards. In the international context, arbitration awards are much easier to enforce than the judgement of the court or negotiated agreements, whereas in the U.S the arbitral awards will be more binging by most courts.  In common law countries if the lawyers are involved the arbitrators may interrupt the parties presentations when they are presenting their cases in sequential order by imposing questions. If lawyers are involved in the process the parties will testify only in response to the lawyers or arbitrators questions. The process is part of a direct cross examination of witnesses and a the admissibility of documents into evidence even closing arguments are taken into consideration. This process is structured in order to ensure that the arbitrator has substantial information that is needed to make their binding decision. Mediation on the other hand attains a less structured approach, where the process being with pre-mediation submission statements with the mediator. On the day of the mediation, the parties will meet in a conference room, and begin by the mediators opening statements where each party has the opportunity to state their case. The mediators and parties may either stay together throughout the process or be sent into caucus, in different rooms with the mediator. If the parties are separated and they reach a resolution, they may reconvene in order to be part of a joint meeting and confirm the terms of the settlement. This process is structured in order to reach a decision that can be thoroughly accepted and practiced.  According to Stephen “though the mediator does not have the authority to impose a solution, his assessments and suggestions have the potential to be extremely influential”. Hence, mediation is known to be an interest based process, and arbitration on the other hand is a rights based process.
Variations of mediation: Mediation focuses on the geographic industry context where mediators tend to have explicit consideration for their parties interests. Mediation is a process in which the parties and counsel agree to meet with a neutral mediator in order to settle their disputes, where the parties are helped to articulate their and the other parties interests, assesses the strengths and weaknesses of each party’s legal position and helps to reach an agreement from a wide range of solutions that can not be seen in the judicial action which is to the benefit of both parties. In some models of mediation the mediator focuses on the parties interests and understanding as to why they have such an interest in relation to their area of concern, by asking questions to help them to be thoughtful by being facilitative, humanistic, narrative and neutral. With the practice of these methods, parties have a change to practice reflective listening and to value communication and take full advantage of doing sessions as long as they are productive. Mediators can also benefit from reviewing legal documents, and pre mediation submissions from the parties in order rot learn about the parties interests and reasons for dispute before the mediation. In the investment treaty context it is important for the parties to maintain their ongoing relationships and to recognize any political situations in order to reach effective solutions even if they are not favorable. These factors imply that mediation is one of the facilitative methods if it is correlated with thoughtful preparation and involves the consideration of both legal issues and interests of parties. Such process will enable the parties to reach a mutual consideration where each of their underlying needs will be met in addition to their legal analysis, in other words, “it will be important for the mediator to offer a procedurally just process and to facilitate the parties’ ability to engage in a procedurally just process with each other. Investors and states will need sufficient opportunity to speak and be heard, but also to listen to each other, reflect upon what was said, demonstrate that they have listened to each other—and also make meaningful movement toward resolution.”
On a general basis, the mediation process offers a new procedure in comparison to negotiation, conciliation and arbitration, as it will offer a third party to facilitate the parties communication and the sharing of information in order to explicitly identify the parties interests. Here the term referred to “quasi-mediator” is relevant as it is referred to “meeting many of the needs that would otherwise fall to third party mediators using the model of mediation”. However, the key issue that one must take into consideration if a mediation is to be successful is the element of trust, if investors see these quasi-mediators as bias or not as altruistic, or even too overly openminded then the investors will not perceive the mediation process to be fair. Mediation that involves an outside mediator is perceived to be more fair and preferable, they will more likely to be trustworthy by the parties and they will willingly want to mediate instead of referring to the state jurisdiction system, which will promote and attract more foreign investors to mediate.
As a result, mediation is useful in an investor state relation but it will only be beneficial if it responds to the parties needs and if it compliments the other available processes in the dispute resolution system. Hence, the mediators must pay attention to identifying the key issues and goals of the parties. Once their goals are identified, they can reach to an outstanding outcome.
Mediation is beneficial if business relationships need to be preserved, where the disputes are less pressing. Arbitration on the other hand is useful if conflicts are time sensitive and routine. Nevertheless, each of the procedures is appropriate in its own way, and at the end of the day it is the parties interests which play a significant role and they are the ones which should determine which procedure to choose in order to overcome their differences.
 Nancy A. Welsh and Andrea K. Schneider. “Becoming Investor-State Mediation:., Penn State Journal Law and International Affairs,Volume 1, No. 1, (2012). P 86.
 Mark A. Clodfelter, Why Aren’t More Investor-State Treaty Disputes Settled Amicably?, in Mandatory Mediation and Its Variations and Dispute System Design in Investor-State Arbitration, in INVESTOR- STATE DISPUTES: PREVENTION AND ALTERNATIVES TO ARBITRATION II, 38-42 (Susan Franck and Anna Joubin-Bret, eds., 2011).
 International Centre for Settlement of Investment Disputes, The ICSID Caseload Statistics (2011), p. 155, available at http://icsid.worldbank.org/ICSID/Index.jsp
 Supra note 9 at 88.
 Id. at 89.
 Id. at 90.
 Donna Shestowsky & Jeanne Brett, Disputants “Perceptions of Dispute Resolution Procedures: An Ex Ante and Ex Post Longitudinal Empirical Study”, 41 CONN. L. REV. 63 (2008).
 Edna Sussman, “The New York Convention Through a Mediation Prism”, DISP. RESOL. MAG., (2009.
 Supra note 9 at 90.
 Stephen B. Goldberg & Margaret L. Shaw, “The Secrets of Successful (and Unsuccessful) Mediators”, 8 DISP. RESOL. ALERT 1 (2008).
 Supra note 9 at 91.
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