INTRODUCTION

Every community, country and culture has a lengthy history of using various methods of
informal dispute resolution. The possibility of humanistic dispute resolution is explored
with specific references to the controversial adjudicatory circumstances of divorce and
personal injury litigation. In both instances, adapted alternatives guide individuals to the
use of their own rational abilities for settling disputes. The term Alternate dispute
resolution (ADR) covers an agglomeration of dispute resolution procedures which are
alternatives to litigation. They usually entail helping the parties to arrive at a negotiated
agreement, often but not necessarily, with or without the help of a neutral third party.1

The earliest known mode of Alternate Dispute Resolution was the Panchayat system
created during the ancient vedic ages, where the head of a family or the chief of the
community acted as the Panchayat, and whose commands were believed to be the voice of
God and was obeyed unquestionably2. Further, the ancient Indian jurisprudence recognized
two methods, by which disputes between citizens could be settled, viz. judicial process in
the Court established by the King and the other by various categories of Arbitration
Institutions3.

Alternative Dispute Resolution (ADR) refers to any means of settling disputes outside the
courtroom. Most common forms of ADR are negotiation, conciliation, mediation and
arbitration. The nature of the dispute and of the parties involved will determine which
method of dispute settlement will be the most appropriate. These mechanisms impart upon
the parties an understanding of the origin and development of their conflict and provide
them with an opportunity to find how to achieve both a collectively and individually
satisfying resolution. Assisted by legal and nonlegal actors, the disputing parties could
define their own dispute resolution priorities, set their own goals, and bring their own
creativity and imagination to bear upon the fashioning of a solution to their controversy.
1
“Concise Law Dictionary” 57 (5th ed., Lexis Nexis, 2017).
2
Maine, “Ancient Village Communities” quoted in the 76 th Report of the Law Commission of India on
Arbitration Act, 1940, November, 1978.
3
Dr. Kane, “History of Dharmasastra” 230 (1946).
Such a dispute resolution framework not only enhances the level and quality of compliance
with outcomes, but also fosters a generalized commitment to a belief in self-empowering
nationality4.

HISTORICAL PERSPECTIVE

The era of Dharma Shastras followed the Vedic epoch, during this period scholastic
jurists developed the philosophy of basic laws. Their learned discourses recognized
existing usages and customs of different communities, which included resolution of
disputes by non-adversarial indigenous methods. One example is the tribunal
propounded and set up by a brilliant scholar Yagnavalkya, known as KULA, which dealt
with the disputes between members of the family, community, tribes, caste or races.
Another tribunal known as SHRENI, a corporation of artisans following the same
business, dealt with their internal disputes. PUGA was a similar association of traders in
any branch of commerce. These associations were invested with the power to decide
cases based on principles of justice, equity and good conscience. The arbitral bodies,
known as Panchayats, dealt with variety of disputes, such as disputes of contractual,
matrimonial and even of a criminal nature.The disputants would ordinarily accept the
decision of the panchayat and hence a settlement arrived consequent to conciliation by
the panchayat would be as binding as the decision that was on clear legal obligations.

The Muslim rule in India saw the incorporation of the principles of Muslim law in the
Indian culture. Those laws were systematically compiled in the form of a commentary and
came to be known as Hedaya. During Muslim rule, all Muslims in India were governed by
Islamic laws- the Shari’ah as contained in the Hedaya. The Hedaya contains provisions for
arbitration as well. The Arabic word for arbitration is Tahkeem, while the word for an
arbitrator is Hakam. An arbitrator was required to posses the qualities essential for a

4
Carbonneau Thomas “ Alternative Dispute Resolution: Melting the lances and dismounting the steeds” 6-12
(1st ed., University of Illinois Press,1989).
Kazee an official Judge presiding over a court of law, whose decision was binding on the
parties subject to legality and validity of the award. The court has the jurisdiction to
enforce such awards given under Shari’ah though it is not entitled to review the merits of
the dispute or the reasoning of the arbitrator.

During British period, ADR picked up pace in the country with the coming of the East
India Company. The British government gave legislative form to the law of arbitration
by promulgating regulations in the three presidency towns: Calcutta, Bombay and
Madras. Bengal Resolution Act, 1772 and Bengal Regulation Act, 1781 provided parties
to submit the dispute to the arbitrator, appointed after mutual agreement and whose
verdict shall be binding on both the parties. These remained in force till the Civil
Procedure Code 1859, and were extended in 1862 to the Presidency towns.

History of Alternate Dispute Resolution Legislations in India

Initial steps were taken place during British period for institutionalizing the alternative
dispute mechanisms by way of enacting the following legislations:
The Bengal Regulation Act 1772 The Act directed all parties in cases of disputed
accounts to submit their cases to arbitrators and whose decision shall be deemed to be a
decree and be treated as final.
The Regulation Act, 1781 This Act recommended judges to direct parties to approach a
mutually agreed person to settle the disputes among them. Award of the arbitrator could
not be set aside unless there were two witnesses that the arbitrator had committed gross
errors or was partial to a party.
The Regulation of 1787 laid down rules for referring suits to arbitration with the consent
of the parties. However there was no detailed provision to regulate the arbitration
proceedings.
Regulation XXVII of 1814 authorized Vakils to act as arbitrators, removing an age-old
bar on their acting as such.
Bengal Regulation VII of 1822 authorized Revenue Officers to refer rent and revenue
disputes to arbitrators and called upon Collectors to do the same.
The Bombay Presidency Regulation of 1827 facilitated amicable adjustments of
disputes of civil nature by means of arbitration.
The Code of Civil Procedure, 1859 Section 312 to 327 permitted references to
arbitration in pending suits, and the procedure for arbitration was explained under sections
313 to 325. It provided for arbitration without the intervention of courts.
Indian Contract Act 1872 This Act recognizes arbitration as an exception to Section 28,
where it says that, an agreement in restraint of legal proceedings is void. The Act
recognizes an agreement made to refer to arbitration, present as well as future disputes.
Indian Arbitration Act 1940 It was based upon the English Arbitration Act, 1934. This
Act made provision for: (a) arbitration without court intervention (b) arbitration in suits i.e.
arbitration with court intervention in pending suits and (c) arbitration with court
intervention, in cases where no suit was pending before the court.