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Muskan Dadia, Government Law College, Churchgate.

Date: 12.06.2021


Alternate Dispute Resolution , often referred to in its short form- ADR, is a term that most of us have come across. Alternate dispute resolution is a method by which disputes are settled outside of a courtroom,  without any trial.

It has gained popularity in the past few years due to numerous reasons like the increased costs and time in litigation, etc.  As law students and practitioners , its only beneficial to be well versed with this method ,considering how widely it has begun to be used.

Reasons For Growing Popularity Of ADR In Recent Times

ü  More Flexibilty-  Parties can decide the applicable laws( domestic, foreign etc) in order to solve the dispute.

ü  Choose Your own Arbitrator or Mediator- Under this method, the parties can choose their own arbitrators or mediators with special expertise in the particular field, thus, bringing about speedy and efficient justice. Complex witness and evidence procedures are also not required.

ü  No Jury Involved- This process doesn’t incorporate the jury that often makes the process of imparting justice lengthy and tends to award judgements on basis of the passion invoked in them by the parties. More often that not , their punishments or awards are much higher or lesser than the actual rational value.

ü  Less Expensive- Expert witnesses and attorney fees can be significantly expensive. The same is not required in ADR.

ü  ADR Is Speedy- Trials can be unduly time consuming . The tedious process of appeals makes the bad worse. The same can be avoided by following the ADR processes.

ü  ADR keeps things private and confidential- The parties can choose and agree to keep the information exchanged during the proceedings confidential. In such a case, the final outcome must also be kept private. Even if litigation ensues, the information cannot be let out. On the other hand, proceedings of a trial are almost always made public.

ü  Fosters Cooperation – Parties through the process of arbitration and mediation can come to a mutually agreed upon solution.

Types Of Alternate Dispute Resolution


Arbitration is a dispute resolution process agreed between parties in which the dispute is submitted to one or more arbitrators who issue an award. Among alternative dispute resolution methods, arbitration is defined as a jurisdictional means of settling disputes because of the power given to arbitrators to decide a case and issue an award. Different from mediation and negotiations, the parties have no say on the solution found by the arbitral tribunal, which is imposed on them in a final and binding manner.[i]

The principal characteristics of arbitration are:-

1.     Arbitration is consensual – Arbitration can only be performed if both parties agree to it.  An arbitration clause is included in the relevant contract in case of a future dispute evolving under the relevant contract. A submission agreement is required between the parties to undergo arbitration in case of an existing dispute. It differs from mediation because  none of the parties can unilaterally back out.

2.     The parties choose their arbitrators – The Arbitration and Reconciliation act 1996 provides that Arbitrator can be appointed at the choice of parties to an arbitration agreement in regards to their dispute.

3.     Arbitration is neutral – Parties are allowed to choose the important facets like the applicable law, language and venue of arbitration. This ensures that none of the sides gets an undue home advantage.

4.     Arbitration is confidential-  The parties are obliged to maintain confidentiality and not divert information from the arbitrational proceedings to third parties.

5.     The decision of the arbitral tribunal is final and easy to enforce.

Types of Arbitration

Domestic Arbitration- Domestic arbitration is that type of arbitration, which happens in India, wherein both parties must be Indians and the conflict has to be decided in accordance with the substantive law of India.

International Arbitration- When arbitration happens within India or outside India containing elements which are foreign in origin in relation to the parties or the subject of the dispute, it is called as International Arbitration. The law applicable can be Indian or foreign depending upon the facts and circumstances of the case and the contract in this regard between the respective parties. To fulfill the definition of International Arbitration it is sufficient if any one of the parties to the dispute is domiciled outside India or if the subject matter of dispute is abroad.[ii]

International Commercial Arbitration- International Arbitration is considered to be commercial if it related to disputes arising out of a legal relationships irrespective of their contractual nature and are considered as commercial under the law in force in India and where at least one of the parties is-

  1. A national of, or habitual resident in, any country other than India or
  2. A body corporate which has to be incorporated in any foreign country, or
  3. An association or a body of individuals whose core management and control in a country which is not India or
  4. the government of a country other an India. In International Commercial Arbitration the arbitral tribunal is bound to decide the conflict according to the rules of law chosen by the parties as applicable to the substance of the dispute; any designation by the parties of the law or legal system of a given country can be interpreted, unless it has been expressed otherwise, one which directly refers to the substantive law of that country and does not refer to its conflict of laws rules.[iii]

Types Of Arbitrations Recognised In India As Per Rules And Procedures

Institutional Arbitration- Institutional Arbitration refers to one which is carried out by an arbitral institution. The parties have the choice of specifying, in the arbitration agreement, to refer the differences to be determined in accordance with the rules of as elected arbitral Institution. Arbitration and Conciliation Act 1996 provides that where in Part I except section 28, the parties are free to determine a certain issue, that liberty encompasses the right the parties have to authorize any person including an institution, to determine that issue. The Act also explicitly provides that where Part I refers to the fact that the parties have agreed or that they may agree, or in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement.[iv]

Ad hoc Arbitration- When parties agree among themselves and make arrangements for the arbitration without an institution involved, its called ad  hoc  arbitration. It can be domestic , foreign or international arbitration. The arbitration is not carried out according to the rules of a particular arbitral  institution . The geographical seat of the arbitration is significant because its national laws and rules will determine disputes.

Fast track Arbitration-  An arbitration method that is time dependent according to the arbitration and reconciliation  act. Its procedures are decided in a way that keep the process less time consuming and simple.


Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings. These proceedings are rarely public. They are interest-based, as the conciliator will when proposing a settlement, not only take into account the parties’ legal positions, but also their; commercial, financial and / or personal interests.[v]

Like in mediation proceedings, the ultimate decision to agree on the settlement remains with the parties.

The major difference between conciliation and mediation is that sometime during the proceedings of the negotiation , the conciliator will propose a non-binding settlement. In mediation, by principle the mediator doesn’t do the same.

However, it is important to note that if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.

Basic features of conciliation –

v Informal method

v Voluntary participation

v No pressure or force on the parties.


In a mediation procedure, a neutral intermediary, the mediator, helps the parties to reach a mutually satisfactory settlement of their dispute. Any settlement is recorded in an enforceable contract. [vi]

The principle features of mediation are:-

·       Mediation is a non binding procedure controlled  by parties – The parties to  mediation cannot be forced to accept and implement the final outcome of the process. Unlike an arbitrator, the mediator is not the decision maker, his role is only to help both the parties reach a consensus. Moreover, the parties can choose to withdraw from the proceedings if they think that the process is not meeting their interests.

·       Mediation is a confidential process- The parties cannot be compelled to give out information that they do not wish to.  The confidentiality of the information enables the parties to negotiate freely, without the fear of publicity.

·       Mediation is an interest based procedure – In litigation, the case is decided upon on the basis of the facts and the applicable law. However, in mediation, the outcome can be steered by business interests as well.  Since the outcome is not binding, lesser risk is involved. Moreover, even if the desired settlement is not reached upon in mediation, the proceedings are not futile as they help establish major  facts and  issues of contention.

Types of Mediation

o   Facilitative mediation – In this type of mediation, the mediator tries to facilitate a mutually acceptable consensus. He keeps his ideas and thoughts regarding the case hidden.

o   Court mandated mediation – Although mediation is typically defined as a completely voluntary process, it can be mandated by a court that is interested in promoting a speedy and cost-efficient settlement.

o   Evaluative Mediation – Unlike facilitative mediation, the mediators express their opinions and suggestions to reach an outcome. They decide the matter based on legal principles and fairness in general.

o   Transformative Mediation- This type of mediation encourages parties to understand each other’s interests and needs. It aims to transform the relations of both parties into a more constructive bond.

o   E- mediation – This is an online form of  mediation without any interference from third parties. This is used either when both the parties are situated at great distances from each other or when the conflict between them is so strong that they cannot be in the same room.


Negotiation is an interactive process between two or more negotiators or parties seeking to find common ground on issues of mutual interest, where the negotiators or parties seek to make a mutually acceptable agreement that will be honoured by all.[vii]

Types Of Negotiation

Ø  Distributive negotiation – In such a negotiation , the parties bargain over a single product or issue, for example- price. In this case, one party wins and gets what it wants and the other party has to step back.

Ø  Integrative Negotiation- Here , more than one issue is in contention. Both parties mutually discuss and try coming to a consensus. Both parties gain something from this process. It’s a win-win situation.

Ø  Multiparty negotiation- In this type of negotiation, more than three parties negotiate together.

Ø  Team negotiation – This type of negotiation process takes place between the two teams. For example, negotiation strategies between the teams of two companies that are looking to merge are called team negotiations.

Ø  Positional negotiation- In this case, both parties lay down their positions at the very beginning and defend their positions against the attacks. They stick to their positions rather obstinately.

Importance of ADR in India

*     Help in solving the large amount of backlog cases remaining in a quick and efficient manner.

*     The scientifically developed techniques used in this method reduce the burden on the Indian courts.

*     It is based on articles 14 and 21, dealing with the right to equality and the right to life and personal liberty respectively.

*     Its motive is to provide social-economic and political justice and maintain integrity in the society enshrined in the preamble.

*     ADR also strive to achieve equal justice and free legal aid provided under Article 39-A relating to Directive Principle of State Policy (DPSP).

*     Lok Adalats alone have disposed more than 50 lakh cases every year on average in the last three years.

Disadvantages of ADR

§  There is no guaranteed resolution – A lot of times companies and individuals invest significant amounts of time and money into the proceedings only to not reach a consensus .

§  Arbitration decisions are final – With very few exceptions, the decision of a neutral arbitrator cannot be appealed, with fraud being an obvious exception. However, one can challenge the arbitrator’s decision in the following cases:-

1.     Decisions are patently unfair

2.     The decision exceeded the scope of the arbitration clause or agreement.

§  Limitations on arbitration – Arbitrators can only resolve disputes that involve money. They cannot issue orders compelling one party to do something, or refrain from doing something (also known as injunctions).

§  Warning – The parties pursing ADR must be careful not to let a Statute of Limitation run while a dispute is in any ADR process. Once the statute expires, judicial remedies may no longer be available.

§  Discovery Limitations- Some of the procedural safeguards designed to protect parties in court may not be present in ADR, such as the liberal discovery rules used in U.S. courts, which make it relatively easy to obtain evidence from the other party in a lawsuit.

Important Provisions Relating To ADR

  • Section 89 of the Civil Procedure Code, 1908 provides that opportunity to the people, if it appears to court there exist elements of settlement outside the court then court formulate the terms of the possible settlement and refer the same for: Arbitration, Conciliation, Mediation or Lok Adalat.
  • The Acts which deals with Alternative Dispute Resolution are
    i. Arbitration and Conciliation Act, 1996 and,
    ii.The Legal Services Authority Act, 1987[viii]

[i] Avaialable at :-, last accessed on 13th April, 2021.

[ii] Available at:-, last accessed on 14th April, 2021.

[iii] Available at :-, last accessed on 14th April, 2021.

[iv] Available at :-, last accessed on 14th march, 2021.

[v] Available at:-, last accessed on 14th April,2021.

[vi] Available at :-, last accessed on 14th April, 2021.

[vii] Available at:-, last accessed on 14th April, 2021.

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