Alternative Dispute Resolution: Mechanism in India

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Alternative Dispute Resolution: Mechanism in India

The Idea and its Practicality:

As the saying goes, “The spirit of the law, not its letter, is what gives life to justice.” Lord Justice
Earl Warren

With the advent of the idea of Conflict Management via Alternative Dispute Resolution (ADR), a new,
less adversarial method of settling legal disputes has become available. Legally speaking, a lawsuit
is a “lis inter partes,” however the Indian legal system has developed an alternative to adversarial
litigation known as the ADR Mechanism.

The parties to a disagreement can save time and money by using alternative dispute resolution
(ADR) techniques including mediation and arbitration. These processes also have the added benefit
of allowing the people involved to lessen their animosity toward one another, reclaim some
measure of control over the situation, come to terms with the decision, settle the dispute amicably,
and improve their sense of fairness. Disputes are best settled in private settings, where they can be
handled in a way that is more practical, cost-effective, and efficient. There are at least four distinct
forms of alternative dispute resolution (ADR): arbitration, mediation, collaborative law, and
negotiation. (Conciliation is sometimes considered a fifth kind, although for our purposes here it
can be seen as a subset of mediation.)

Alternative Dispute Resolution in India

It is Necessary because of the Heavy Caseload in the Courts. There has been a dramatic increase in
the number of cases filed in Indian courts in recent years, leading to pendency and delays and
underscoring the need for alternate dispute resolution techniques. In light of these concerns, on
December 4, 1993, the then-Prime Minister of India and the then-Chief Justice of India convened a
conference in New Delhi at which the Chief Ministers and Chief Justices of the States adopted a
Resolution.

It read: “The heads of government and the highest judges agreed that the courts couldn’t handle
everything and that some conflicts were better suited to being settled through arbitration,
mediation, or negotiation. They stressed the value of parties to a disagreement using alternative
dispute resolution, which can provide procedural flexibility, save time and money, and reduce the
emotional and mental strain of going to trial “.

There is no better option than to work toward developing alternative modes of dispute resolution
(ADR) by establishing facilities for providing settlement of disputes through arbitration,
conciliation, mediation, and neo-arbitration in a developing country like India with major economic
reforms underway within the framework of the rule of law.

Actions taken as a result of ADR:

Alternative dispute resolution (ADR) is an approach developed to create an effective and equitable
substitute for the conventional judicial system. This method of doling out justice moves quickly.
Arbitration, mediation, conciliation, mediation-arbitration, mini-trial, private judging, final offer

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arbitration, court-annexed ADR, and summary jury trial are only some of the alternative dispute
resolution methods available.

The scientific method has been used in the development of these methods in countries like the
United States, the United Kingdom, France, Canada, China, Japan, South Africa, Australia, and
Singapore. Alternative dispute resolution (ADR) has become popular in these nations, and for good
reason: it helps parties resolve their disagreements more quickly and cheaply, and it also creates a
more relaxed and informal setting in which to do so.

As a result, legislation known as “The Arbitration and Conciliation Act, 1996” was passed. The law
regarding Arbitration and Conciliation is nearly identical to those of developed nations. This Act
officially recognizes conciliation as a legitimate method for resolving conflicts. The new law also
protects against any potential bias or prejudice from the arbitrators’ nationality by requiring them
to be neutral and objective. As a result of the new 1996 Act, many adjustments have been
implemented to speed up the arbitration procedure. Foreign investors and businesses are more
comfortable moving forward with joint ventures, investments, transfers of technology, and
collaborations in India as a result of this legislation.

Alternative dispute resolution (ADR) is preferable to going to court since it is more malleable. Every
participant in a conciliation or mediation session has the right to walk away at any time. It has been
proven that using ADR to settle a legal dispute is both time- and cost-efficient. Instead than
causing tension between the parties, ADR helps them continue working together.

Federal Law Concerning Arbitration and Conciliation, 1996

This legislation formally establishes the Arbitration process in Part I, and the Conciliation process
in Part III. (The second part deals with enforcing foreign judgments according to the New York and
Geneva Conventions.)

Arbitration:

Only if the parties to the case have already entered into a valid Arbitration Agreement can the
arbitration procedure begin. A written agreement is required per Section 7. The arbitration
agreement must be included in the contract giving rise to the dispute or referenced from a separate
instrument signed by the parties. It is possible to infer the existence of an arbitration agreement
from letters, telex, or telegrams that document the agreement and were exchanged between the
parties. A valid written arbitration agreement can also be established by the exchange of a
statement of claim and defense in which one party alleges the existence of an arbitration
agreement and the other party does not deny it.

In the event that neither side is willing to participate in the nomination of an arbitrator, either party
may petition the Chief Justice’s office to appoint one. Reasonable doubt in the arbitrator’s
impartiality and the arbitrator’s lack of sufficient qualification as required by the arbitration
agreement are the sole grounds upon which a party can challenge the appointment of an arbitrator.
The Arbitration Tribunal shall be composed of a single arbitrator or such other number of
arbitrators as shall be selected.

The arbitration process leaves limited room for court intervention, save for a few interim steps. Any
disputes under the arbitration tribunal’s jurisdiction are within the tribunal’s purview. Therefore,
only the arbitration tribunal can hear a challenge to the tribunal’s jurisdiction. If the request is
denied by the tribunal, the party has little options beyond appealing the decision to a higher court.
party may petition the chief civil court of original jurisdiction to vacate the award on the reasons
listed in Section 34.

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After the deadline for appealing to have an award set aside has passed, or if the appeal is denied,
the award becomes final and binding on the parties.

Conciliation

Conciliation is a form of arbitration with fewer formalities. There is no need for an existing
agreement to begin this procedure. A conciliator can be appointed by either side upon request.
Although one mediator is recommended, two or even three can be used. If there are more than two
mediators, they must work together. It is impossible to mediate if one of the parties refuses the
other’s offer to do so.

All parties involved in the disagreement have the option of submitting statements to the mediator
outlining the context of the conflict and the specific issues at hand. An identical copy of the
statement is sent by both parties. The conciliator may make requests for additional information,
request a meeting with the parties, or make other forms of oral and written contact with them. The
parties can even provide the mediator their ideas on how to end the conflict.

When the mediator determines that conditions are favorable for a settlement to be reached, he may
draft the terms of the settlement and submit them to the parties for their approval. In the event that
both parties sign the settlement document, it will become legally binding and final.

One should be aware that in the United States, this method is quite similar to that used in
Mediation. Mediation, on the other hand, is a wholly informal form of alternative dispute resolution
in India, unlike conciliation.

Mediation

Mediation is a type of ADR (alternative dispute resolution) with the goal of facilitating agreement
between two (or more) disputants. Instead of agreeing to terms imposed by a third party, the
parties take the initiative and decide on the terms of any settlements they make. States,
organizations, communities, people, and other representatives having a stake in the result may
participate (as parties) in the disputes.

To facilitate the parties’ reaching an agreement (with tangible implications) on the disputed topic,
mediators employ relevant tactics and/or skills to start and/or improve discussion between the
disputants. A mediator is only considered neutral if all parties involved agree.

Mediating disagreements is an option for parties involved in many different types of conflicts,
including business, legal, diplomatic, workplace, community, and family issues.

For example, if unions and businesses need to reach an agreement, a third-party mediator could
help them do it. When a union representing the company’s employees goes on strike, the company
often employs an outside mediator to help the two sides come to terms on the terms of any pending
contracts or agreements.

Negotiation

To bargain for personal or group gain, to construct outcomes that satisfy a variety of interests, to
reach an agreement on a course of action, or to resolve a conflict all fall under the umbrella of
negotiation. It is the most common form of conflict resolution outside of court.

Personal settings like marriage, divorce, and parenting as well as professional and governmental
contexts like international trade and international law all necessitate some degree of negotiation.
Negotiation theory refers to the academic study of the topic. Professional mediators are also
known as negotiators. Union negotiators, leverage buyout negotiators, peace negotiators, and

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hostage negotiators are all examples of the types of specialized roles played by professional
negotiators.

The Lok Adalat:

The Lok Adalat system established by the National Legal Services Authority Act of 1987 is a
distinctively Indian alternative dispute resolution mechanism, in contrast to the more generic
approach used by the Arbitration and Conciliation Act of 1996.

Its literal translation is “people’s court.” Village elders have always played an important role in
mediating conflicts in India. The Gandhian-inspired Lok Adalat system is an improvement on it. For
the purpose of exercising jurisdiction as they see proper, the State Authority, District Authority,
Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal
Services Committee will hold mock courts (called Lok Adalats) on a periodic basis. People with
backgrounds in law, social activism, or judicial retirement often preside over these. It does not have
authority over cases involving crimes that cannot be “compound.”

Due to the lack of court fees and strict procedural requirements (such as those found in the Civil
Procedure Code or the Evidence Act), the process can be completed in a short amount of time.
Unlike in traditional courts, the parties involved can speak freely with the judge.

If both parties agree, a case that is already proceeding in a traditional court system might be
moved to a Lok Adalat. If a party petitions the court and the court, after affording the opposing
party an opportunity to be heard, believes there is a likelihood of settlement, the case may be
referred to a Lok Adalat.

Lok Adalats emphasize cooperative problem solving. When negotiations fail, the case must be
brought before a judge again. If, however, the parties are able to settle on an agreement, the award
will be final and legally binding. A civil court has issued an order, and it must be obeyed. Because it
is a judgement by consent, the award is final and not subject to appeal under Article 226.

A Lok Adalat’s proceedings are legally binding, and each Lok Adalat is treated as an equivalent of a
Civil Court.

The government-established Lok Adalat (people’s courts) uses mediation and consensus-building to
resolve disputes. In 1986, Chennai played host to the first-ever Lok Adalat. Cases pending in
ordinary courts within Lok Adalat’s jurisdiction that are amenable to settlement through conciliation
and compromise are accepted.

A sitting or retired judge acts as chairman of the Lok Adalat, which also includes two other
members who are typically a lawyer and a social worker. You won’t have to pay anything to the
court. If a lawsuit is filed in ordinary court and later settled at the Lok Adalat, the filing money will
be reimbursed to the plaintiff. The Lok Adalat does not closely adhere to the procedure norms and
the Evidence Act when deciding the validity of a claim.

The main need of the Lok Adalat is consensus between the disputing parties. The Lok Adalat’s
ruling is final and legally binding on all parties involved in the case, and its order can be enforced in
court. In the event of a dispute, the Lok Adalat’s decision is final and cannot be challenged.

When it comes to monetary claims, Lok Adalat is extremely efficient. Since there is usually room for
negotiation and compromise in matrimonial, damage, and partition proceedings, Lok Adalat is also
an effective forum for resolving these types of disputes.

The public is fortunate to have access to Lok Adalat, a forum for the swift and inexpensive
resolution of legal problems.

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Benefits of Alternative Dispute Resolution in India

With so many cases pending in Indian courts, ADR has become increasingly important in the
country.

1. In order to alleviate the workload of the Indian judicial system, the country’s alternative
dispute resolution process employs tried and true methods backed by science.
2. Arbitration, conciliation, mediation, negotiation, and lok Adalat are only few of the
alternative dispute resolution methods available through ADR. In this context, negotiation
refers to parties engaging in mutual self-counseling in an effort to resolve the
disagreement; nevertheless, this method is not recognized by Indian law.
3. Articles 14 and 21, which guarantee everyone the same protections under the law and the
right to life and liberty, are also the cornerstones of ADR.
4. Motivated by a desire to uphold the preamble’s ideals of social, economic, and political
fairness, ADR seeks to resolve disputes amicably and keep the society it serves intact.
5. Equal justice and the right to free legal representation guaranteed by Article 39-A, Directive
Principle of State Policy, are two additional goals of alternative dispute resolution (DPSP).
6. Alternative dispute resolution has been effective in reducing the backlog of cases at all
judicial levels –
7. Over the course of the last three years, Lok Adalats have closed more than 50 lakh cases
annually on average.

The availability of such mechanisms, however, appears to be poorly known.

Important Provisions Related To ADR

1. 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.
2. The Acts which deals with Alternative Dispute Resolution are
3. Arbitration and Conciliation Act, 1996 and,
4. The Legal Services Authority Act, 1987

Benefits of Non-Conventional Dispute Resolution

1. Faster Dispute Resolution: Unlike Legal Proceedings, Most Cases Can Be Heard and
Decided in a Single Day
2. Less expensive than going via the court system, which can cost a lot of money.
3. Disputes are settled in an environment free of the formalities of the judicial system, using
only informal means.
4. In this society, people are not punished for expressing their opinions. In other words, they
can tell you the truth even if they don’t have to in court.
5. Quick and easy: when both parties may air their grievances on the same page, the
possibilities of mending fences are increased.

Conclusion

In conclusion, ADR is a fantastic method of obtaining justice. Reasons for the success of ADR
include its low cost, speed, expertise, accessibility, ability to mediate conflicts amicably, lack of
formality, lack of adversariality, and low cost. Any disagreement can be solved by following the

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effective procedures outlined in Alternative Dispute Resolution. This is due to the fact that ADR
methods have not yielded any workable answers to date. Reason being, in ADR both parties can ask
a neutral third party to mediate their dispute instead of going to court themselves. It is
recommended that both parties consult an expert, who is generally a lawyer. It is also necessary
that the parties agree to be legally bound by this judgment. Because ADR focuses on resolving
disputes through communication and compromise rather than litigation, it often results in positive
interactions with customers. Using ADR, parties can avoid going to court to settle their differences.
Every ruling the judge makes will only inflame tensions between the two sides. This is due to the
fact that ADR methods, and particularly conciliation, tend to be somewhat forceful. This is because
ADR is more proactive and offers suggestions for how to resolve the conflict. Therefore, there is no
doubt that ADR is a simple way to get justice for settling any disagreement that may arise.