The crucial variable is the degree of control exercised by the parties in a dispute. At one end of this range is negotiation, where the parties have total control and work to resolve the dispute without the involvement of an outside advisor.

Next comes mediation or conciliation, in which the parties enlist the help of a skilled, neutral facilitator in order to reach a voluntary settlement. The choice between these two terms is often determined by the degree of control granted to the facilitator: mediation usually implies a more passive, advisory role, while conciliation is often understood as a more active intervention where the neutral party sets the agenda, assigns tasks and even suggests solutions.

Finally, arbitration refers to cases where the parties choose a neutral individual or body (often a three-person panel) to which they present their case for a legally binding ruling. In other words, while successful negotiation or mediation implies that both parties agree to the decision, arbitration necessarily results in a ruling that favors one party over the other.

Negotiation, not counting the man-hours involved, can be essentially free of cost. Mediators and conciliators, or the centers that provide these services, usually charge flat hourly rates that are paid by the parties in a dispute.

By contrast, fees for arbitration services are usually calculated as a small percentage of the amount of money at stake in the dispute. In the case between Ecopetrol and TransGas, for example, arbitration would have been vastly more expensive than conciliation.