THE TRANSITION FROM LITIGATION TO

ADR

What is ADR and the ODR mechanism?

Dispute resolution is the process of deciding a dispute or a conflict that has arisen between
transacting parties. The decision can be arrived at either in an amicable manner or adversarial
manner, either by the parties themselves or a neutral third party. The differences between the
parties are addressed by dealing with their transaction-related interests.The need to evolve
alternative mechanisms to reduce the burden of the Courts and provide speedy access to justice
alongwith the revival and strengthening of traditional systems of dispute resolution prompted the
introduction of ‘Section 89’ in the Code of Civil Procedure, 1908 and ultimately, the Arbitration
and Conciliation Act, 1996. The former opened the passage of statutory reference to ADR, either
by the Courts or the parties themselves.

Broadly, there are three methods of dispute resolution:

· Traditional Dispute Resolution

· Alternate Dispute Resolution

· Hybrid Methods of Dispute Resolution

Arbitration:

It is an adjudicatory process in the nature of adversarial proceedings wherein parties submit their
disputes to a neutral third party (arbitrator) for a decision. The parties have the independence to
chalk out the same in the agreement to arbitration. The said agreement which must necessarily
precede arbitration, should be a valid one as per the Indian Contract Act, 1872.

Mediation:

It is a voluntary, disputant-centered, non-binding method of dispute resolution wherein a neutral

and credible third party facilitates a settlement between the parties. It is a confidential and
structured process where the mediator uses special communication, negotiation and social skills
to assist the disputants in arriving at a mutually acceptable solution themselves.

Online Dispute Resolution or ODR is a process to settle disputes outside courts, combining
technology and alternative dispute resolution ("ADR") mechanisms. ODR covers disputes that
are settled over the internet having been initiated in cyberspace but with a source outside it i.e.
offline. Originally, arbitration was intended as an alternative to going to court for various kinds
of disputes but with time the method itself has become complex and expensive.

ODR Methods

Online Dispute Resolution can be seen as an online equivalent of ADR as it primarily involves
the use of negotiation, mediation or arbitration for dispute resolution.

Synchronous ODR is a method of dispute resolution where the parties communicate with each
other in real-time by using various video-conferencing applications.

Asynchronous form is where communication is not conducted in real-time but via email or other
such communication applications.

Online Mediation is coming out to be the most favorable form of dispute resolution with nearly
70% of ODR platforms using the same to reach a conclusion. Typically online mediation starts
with sending an email to parties that contain basic information about the proceedings followed
by virtual meetings to be conducted in the chat rooms.
Electronic Arbitration is a less popular method of online dispute resolution but it cover-up the
process up to a certain extent.

Alternative Dispute Resolution (ADR) is a way to settle disputes without litigation. Using ADR
procedures can avoid the acrimony that often accompanies extended trials and allows parties to
understand each other’s position and craft their own solutions.

The most common forms of ADR for civil cases are conciliation, mediation, arbitration, neutral
evaluation, settlement conferences and community dispute resolution programs.

Facilitation

Facilitation is the least formal of the ADR procedures. A neutral third-party works with both
sides to reach a resolution of their dispute. Facilitation assumes that the parties want to reach a
settlement. The negotiation is done through telephone contacts, written correspondence, or via e-
mail. Facilitation is sometimes used by judges at settlement teleconferences exploring
alternatives to taking the dispute to trial.

Mediation

Mediation is more formal but still leaves control of the outcome to the parties. An impartial
mediator helps the parties try to reach a mutually acceptable resolution to the dispute. The parties
control the substance of the discussions and any agreement reached. A typical session starts with
each party telling their story. The mediator listens and helps them identify the issues in the
dispute, offering options for resolution and assisting them in crafting a settlement.

Mediation can take many forms, depending on the needs of the parties, such as:
 · Face to face – parties directly communicate during the process,

· Shuttle – the mediator separates the parties and shuttles between each one with proposals
for settlement,

· Facilitative – the mediator helps the parties directly communicate with each other, or

· Evaluative – the mediator makes an assessment of the merit of the parties’ claims during
separate meetings and may propose terms of settlement.

When Should You Use Mediation?

Mediation should be considered when the parties have a relationship they want to preserve. So
when family members, neighbors or business partners have a dispute, mediation may be the best
ADR procedure to use. Mediation is also effective when emotions may get in the way of a
solution. A mediator can help the parties communicate in a non-threatening and effective manner.

Mediation is available to the parties at any point in the litigation process including through the
appeal.

· Neutral Evaluation

Neutral Evaluation is a procedure where each party presents their case to a neutral party who
gives an opinion on the strengths and weaknesses of each parties’ evidence and arguments and
how the dispute should be settled. It is effective where the subject matter of the dispute requires
an expert in the field. The evaluator’s opinion is often used to negotiate a settlement.

Neutral Evaluation is best for cases with technical issues that need an expert and where there
aren’t significant emotional or personal barriers to reaching a settlement.

· Settlement Conferences
Settlement Conferences may be voluntary or mandatory depending on the judge. The parties will
meet with the judge or a referee to discuss a possible settlement of their dispute. The judge will
not make a decision but will assist the parties in evaluating the strengths and weaknesses of their
case.

· Community Dispute Resolution Program

In Michigan there are Community Dispute Resolution Centers that are staffed with trained
community volunteers who provide low-cost mediation as an alternative to costly court
procedures. This type of mediation is tailored to handle a wide range of private and public
conflicts such as landlord/tenant, business dissolutions, land use, public education or adult
guardianships/conservatorships. Most of the cases are referred by the courts.

· ADR vs Litigation

Simply stated, litigation is a formal, generally public process which resolves disputes through a
court with a judge or jury. It is subject to strict rules imposed by law governing the conduct of
the proceeding, such as the formal rules of evidence. Arbitration is private process whereby
parties work with a neutral third party to hear both sides and make a final and binding decision,
using agreed-upon rules governing how the process will work. Mediation is a negotiation
facilitated by a neutral third party. The mediator does not impose a decision, but helps the parties
come to an amicable resolution. Mediation is useful to help the parties can find common ground,
while arbitration is used as an alternative to litigation when the parties cannot resolve their
dispute and need a third-party to impose a decision.t is an uncontroversial fact that our country is
suffering from acute problem of population explosion. This in turn has given rise to diverse
problems including those of disputes, differences and conflict. Even our judiciary is suffering
from docket explosion of pending cases. To solve the problem of delayed Justice ADR
mechanism has been developed in response thereof.
Dispute resolution is an indispensable process for making social life peaceful. It tries to resolve
and check conflicts, which enable persons and group to maintain co-operation. Alternative
Dispute Resolution is a term used to describe several different modes of resolving legal disputes.

The goal of ADR is enshrined in the Indian constitution's preamble itself, which enjoin the state
to secure to all the citizens of India, Justice- social, economic and political- liberty, equality and
fraternity.

Challenges faced by indiviual in Litigation in comparision to ADR :

· Flexible: ADR provides a more flexible, alternative solution for a wide variety of disputes
whether small or large.

· Economies of Cost: The ADR processes are very cheaper and less formal then traditional
litigation as it is successful in avoiding expenses incurred for engaging Court barristers or
solicitors.

· Speedy Process: ADR is far quicker than the traditional litigation methods of going to
Courts, certain types of ADR supply very quick solution and ensure that the legal system
can operate more quickly with lesser damage.

· Freedom of Parties to Litigate: The freedom of parties to litigate is not affected by ADR
proceedings. Even a failed ADR proceeding is never a waste either in terms of money or
time spent on it, since it helps parties to appreciate each other's case better.

· Confidentiality: The results can be kept confidential to the parties so that the information
 disclosed during negotiations or Arbitration hearing cannot be used later even if litigation
ensures. The final outcome can also be made private if the parties so stipulate and agree,
on the other hand, most trials and related proceedings are open to the public and the
press.

· Control of Parties Over Process: One of the foremost advantage of the ADR process is
that dispute remains under the control of the parties themselves and any settlement
entered into is their own and does not represent a dictate from an outsider.

· Reduction of Work-Load of Courts: ADR helps in reduction of work-load of Courts as

the petty cases are easily solved through ADR process and thus helps Court to focus on
most important issues and cases.

· Free from Prejudice: Since both the parties of ADR come to terms on mutually agreeable
terms and that too out of their own free will, without having any fear of consequences of
winning or losing, the system on a whole is quiet free from prejudice.

· Win-Win Strategy: The ADR follows the strategy of win-win as the parties are brought to
settlement where nobody losses as this process mainly focuses on solving problems rather
than solving winners or losers.

· Expertise: ADR procedure permits to choose neutrals who are specialists in the subject
matter of the dispute.

The ADR mechanism is much advantageous and compliment to traditional legal system. The
framework of ADR mechanism has emerged comprehensive but its success depends much on the
will of the people to work it up in the right sprit and with good faith. The parties have to be made
aware and educated about the advantage of adopting ADR mechanism.
Challenge faced in adressing thier B2B and B2C dispute post pandemic situation.

1. Document the Company’s State of Mind

It is important that your business continually document its efforts to respond to issues created by
the COVID-19 pandemic so that the company’s real-time state of mind can provide support for
why certain decisions were made. Various immunity statutes like the Public Readiness and
Emergency Preparedness (PREP) Act employ a “reasonable belief of compliance” standard that
may be proven by contemporaneous records of the company’s thinking at the time of its actions.
Although it may be difficult to imagine now, people, including judges, regulators and jurors, will
forget how desperate these times were. It would therefore be imprudent to rely on people’s
memories of the exigency of these circumstances in the calm days that come long after the crisis
has abated. Keep appropriate real-time records to remind key personnel of the reasoning behind
important decisions, and to substantiate your decision-making in this challenging context.

2. Be Aware of Upcoming Changes to Stay-At-Home Orders

Many states and localities are evaluating phased approaches for reopening businesses that were
previously ordered closed. Keep up to date on new developments that will impact whether (and
by what means) you, your suppliers, retailers, and/or competitors can return to business. Staying
ahead of these developments by working with knowledgeable counsel can give you a significant
competitive advantage and prevent a lawsuit. Visit our 50 State Emergency Order Tracker for
additional information.

3. Tread Carefully When Changing Consumer-Facing Policies

Before making changes to consumer-facing policies and/or procedures (e.g., refunds and
exchanges of goods, event postponements, service modifications, etc.), consult with attorneys in
order to minimize the risk of unnecessary exposure. Event planners, ticket sellers, professional
sports teams, and others have been targeted in class action lawsuits relating to cancelled events.
Plaintiffs’ lawyers are on the lookout for more targets. For additional information, see our recent
article on class action lawsuits resulting from the COVID-19 pandemic.

4. Be Proactive About Document Retention

If and when your company is impacted by a lawsuit, it is important that you have protocols in
place to ensure that all potentially relevant documents and electronic files are preserved.
Implementing a thorough and effective document retention program (and if necessary, a
defensible litigation hold protocol) can be challenging, particularly where personnel are working
from home, sometimes using their own computers, smart phones, and other devices. Likewise,
particular document retention policies (i.e., archival or deletion of emails after a period of
months) that are largely implemented on an automatic basis may need to be adjusted to account
for the remote use of personal devices.

5. Specific Issues to Consider

While every business has been and will continue to be impacted by this pandemic, the nature of
the impact varies from industry to industry and from business to business. The sections below
provide further guidance on particular issues faced by companies in manufacturing and consumer
finance, as well as in the broader context of labor and employment.

6. Keeping up with legislation

The business landscape is changing at a rapid pace. It seems like the government releases new
regulations that affect business owners almost every day.

In order to understand and follow new legislation and changes, business owners will need to
monitor news from the local, state, and federal government daily. Most importantly, make sure
you’re getting your information from an official source, such as a government website, a bank
representative, accountant, or other professionals in your network.

7.Employment issues
While ‘work from home’ policies have been implemented across the nation, health and safety
guidelines should be of prime importance and timely disseminated to employees. The Ministry of
Labour and Employment issued an ‘advisory’ on March 20, 2020 for employers of public and
private establishments to extend their coordination by not terminating or reducing wages of their
employees, more particularly the casual or contractual workers. During the outbreak, if any
worker takes a leave from work or is unable to work due to non-operation of workplace caused
by COVID-19, such worker shall be “deemed to be on duty” without any consequential
deduction in wages.

8.Delayed Litigations

With the courts hearing only urgent matters, material litigations filed by/against companies may
take a deep hit and impact its potential financial effect. The Supreme Court of India gave respite
to the litigants by extending the limitation period in all proceedings before all the courts/tribunals
in India. The apex court vide its order dated March 23, 2020, held that the period of limitation in
all proceedings, irrespective of the limitation prescribed under general law or special law,
whether condonable or not, stands extended from March 15, 2020 till further orders to be passed
by the Supreme Court of India in this regard.

THE SUPREME COURT OF INDIA IBI CONSULTANCY INDIA PRIVATE LIMITED

VS. DSC LIMITED [ARBITRATION CASE (C) NO. 53 OF 2016]

FACTS
The Petitioner, IBI Consultancy India Private Limited is the Indian subsidiary of the IBI Group
based in Canada. It is engaged in the business of providing system integration and maintenance
service for Toll and Traffic Management Systems.

The Respondent, DSC Limited, is a company registered under the Companies Act, 1956, having
two subsidiary Companies; firstly Lucknow Sitapur Expressway Limited (LSEL) and secondly,
Raipur Expressway Limited (REL), both of which are engaged in developing Expressways in
collaboration with the National Highway Authority of India (NHAI).

Vide email dated 16.02.2010 the Respondent Company sent a Request for Proposal (RFP) to the
Petitioner-Company inviting technical and commercial proposal for their LSEL and REL
Projects.

Vide letter dated 07.06.2010 the Petitioner Company gave a proposal to execute the contract for
installation, erection and commissioning of the Toll Collection and Traffic Control Equipments at
NH-24. The proposal was accepted by the Respondent Company vide letter dated 14.06.2010
and the Contract was mutually finalized and executed on 30.08.2010 for the value of Rs.
1,55,20,700/-. In total, the Petitioner had entered into 6 separate contracts for the respective
LSEL and REL projects, with the Respondent Company.

The facts of the case suggest that, during completion of the projects, the Respondent-Company
defaulted in releasing the agreed payment to the Petitioner-Company and the IBI Group, despite
several verbal and written communications being exchanged between the parties.

A legal notice for invoking Arbitration Clause and appointment of Mr. Debashish Moitra as the
Arbitrator, was sent to the Respondent-Company on 24.04.2014. However, there was no reply
from the other side.

The IBI Group and the Petitioner-Company herein filed Petition Nos. 443,448,444 and 449 of
2014 under Section 11 of the Arbitration Act before the High Court of Delhi.

Further, the High Court disposed of the petitions while holding that since one of the parties to the
petition is an entity incorporated outside India, therefore, the arbitration of the dispute involving
such an entity would be an International Commercial Arbitration within the meaning of Section
2(1)(f) of the Act.

Further, it was held that for seeking appointment of an Arbitrator in a dispute involving such an
entity, an application will have to be filed before the Supreme Court under Section 11(9) of the
Act. Hence, the current Petition has been filed in accordance with the order dated 24.02.2015, of
the High Court of Delhi.

ISSUE BEFORE SC
Whether there is an existence of an Arbitration Agreement between the parties for the disputes to
be referred to Arbitration.
OBSERVATION
The Court observed that the existence of an arbitration agreement between the parties to the
petition under Section 11 of the Arbitration Act and the existence of disputes to be referred to
Arbitrator is a condition precedent for appointing an Arbitrator under Section 11 of the said Act.

It is also a well settled principle that while deciding the question of appointment of Arbitrator,
the Court must not delve into the merits of the case as it may cause prejudice to the case of the
parties. The scope under the Arbitration and Conciliation Act, 1996, under Section 11(6) read
with Section 11(9) is very limited to the extent of appointment of Arbitrator.

The Process of Arbitration

Arbitration is the process of bringing a business dispute before a disinterested third party for
resolution. Arbitration can be held ad hoc (internally by the parties) or with support from an
organization like the American Arbitration Association(AAA).

The parties select an arbitrator or a panel. Arbitrators don't have to be lawyers.' the parties can
select an expert in a field.

Arbitration hearings resemble a trial The third party, an arbitrator, hears the evidence brought by
both sides and gives an opinion. Opinions are not public record, as are trial judgments.
Sometimes that decision is binding on the parties. 

What Does Arbitration Cost?

Arbitration costs vary based on the complexity and detail of the case and the level of expertise
you want from the arbitrator. Typically the cost of arbitration includes:

· Administrative fees, including filing fees and final/hearing fees, and

· Arbitrator compensation. Arbitrator fees depend on how much work the arbitrator or
panel must do on the case, The arbitrator(s) may be paid per hour, per day, or per hearing.

· Arbitrator expenses. If an arbitrator has to travel to a case, the parties will have to pay
travel time, hotel, meals, plane ticket, and other travel costs.

Other costs might include a fee for a hearing room and meeting rooms. Each party may have
attorney fees, costs for expert witnesses (including travel costs), costs for copying and presenting
exhibits. 

Conclusion

Alternate dispute resolution involves methods of resolving disputes other than through litigation.
The methods are in addition to litigation and are by no means intended to replace litigation. Even
the strongest proponents of ADR agree that certain matters must be resolved through the courts.
However, there are other methods for resolving dispute which offer many advantages over the
adversarial route, which should be explored before litigation is commenced or proceeds too
far.mediation processes are fairly effective in creating both time savings and costs savings. The
meta-analysis shows that mediation results in improvements of at least 16% or 17% to
perceptions of time and cost savings, which is supported by documented savings in the areas of
time and cost. Depending on the characteristics of the mediation program, these improvements
could be at least 40%, but are more likely in the range of around 30%. In addition, the meta-
analysis shows that mediation results in improvements of at least between 3% and 6% to
perceptions of fairness and satisfaction. Thus, mediation processes clearly result in marginal, but
definite, improvements in perceptions of fairness and satisfaction. Depending on the
characteristics of the mediation program, these improvements could be into the 15% to 25%
range, but are more likely to be in the range of 10% to 15%.