Both arbitration and mediation employ a neutral third party to oversee the process, and they both can be binding. However, it is common to employ mediation as a non-binding process and arbitration as a binding process. In simpler terms, binding arbitration replaces the trial process with the arbitration process.
Conciliation is a method employed in civil law countries, like Italy, and is a more common concept there than is mediation. While conciliation is typically employed in labour and consumer disputes, Italian judges encourage conciliation in every type of dispute .
Mediation is another of the methods of alternative dispute resolution (ADR) available to parties. Mediation is essentially a negotiation facilitated by a neutral third party. Unlike arbitration, which is a process of ADR somewhat similar to trial, mediation doesn't involve decision making by the neutral third party.