Muskan Dadia, Government Law College, Churchgate.
ALTERNATE DISPUTE RESOLUTION: THE NEW WAY FORWARD
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.
For Growing Popularity Of ADR In Recent Times
can decide the applicable laws( domestic, foreign etc) in order to solve the
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.
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.
Expensive- Expert witnesses and attorney fees
can be significantly expensive. The same is not required in 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.
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.
Cooperation – Parties through the process of
arbitration and mediation can come to a mutually agreed upon solution.
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]
characteristics of arbitration are:-
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.
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.
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.
is confidential- The parties are obliged
to maintain confidentiality and not divert information from the arbitrational
proceedings to third parties.
decision of the arbitral tribunal is final and easy to enforce.
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.
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]
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-
- A national of, or
habitual resident in, any country other than India or
- A body corporate
which has to be incorporated in any foreign country, or
- An association or a
body of individuals whose core management and control in a country which
is not India or
- 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]
Of Arbitrations Recognised In India As Per Rules And Procedures
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]
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
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
Like in mediation
proceedings, the ultimate decision to agree on the settlement remains with the
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
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]
features of mediation are:-
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
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.
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.
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
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
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.
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
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]
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.
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.
negotiation- In this type of negotiation, more than three parties negotiate
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.
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.
of ADR in India
in solving the large amount of backlog cases remaining in a quick and efficient
scientifically developed techniques used in this method reduce the burden on
the Indian courts.
is based on articles 14 and 21, dealing with the right to equality and the
right to life and personal liberty respectively.
motive is to provide social-economic and political justice and maintain
integrity in the society enshrined in the preamble.
also strive to achieve equal justice and free legal aid provided under Article
39-A relating to Directive Principle of State Policy (DPSP).
Adalats alone have disposed more than 50 lakh cases every year on average in
the last three years.
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
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:-
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.
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 :- international-arbitration-attorney.com/definition-of-arbitration/,
last accessed on 13th April, 2021.
[ii] Available at:- http://www.legalserviceindia.com/legal/article-1126-kinds-of-arbitration.html,
last accessed on 14th April, 2021.
[iii] Available at :- http://www.legalserviceindia.com/legal/article-1126-kinds-of-arbitration.html,
last accessed on 14th April, 2021.
[iv] Available at :- http://www.legalserviceindia.com/legal/article-1126-kinds-of-arbitration.html,
last accessed on 14th march, 2021.
[v] Available at:- https://www.dispute-resolution-hamburg.com/information/conciliation,
last accessed on 14th April,2021.
[vi] Available at :- https://www.wipo.int/amc/en/mediation/what-mediation.html,
last accessed on 14th April, 2021.
[vii] Available at:- https://www.negotiations.com/definition/negotiation/,
last accessed on 14th April, 2021.
[viii] Available at:- http://www.legalserviceindia.com/legal/article-1678-alternative-dispute-resolution-adr-.html,
last accessed on 14th April, 2021.