THE ARBITRATION

AND CONCILIATION
ACT, 1996
Q. Can matters be settled outside the courts? If yes, then how?

Q. Is there any law or statutory provision which requires the matters to be

settled outside the courts?
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YES, the matters can be settled outside the courts. Refer to sec 89 of the
Civil Procedure Code.

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Reading sec 89, we reach to the conclusion that below mentioned
proceedings can be used for reaching an amicable solution between the
parties -

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(a) Arbitration;(b) Conciliation;(c) Judicial settlement including settlement
through Lok Adalat; or

(d) Mediation.
1. Arbitration -

Arbitration in India is governed by The Arbitration and Conciliation Act,

1996.

It is a form of dispute resolution where one or more parties are appointed

to adjudicate the dispute. I
They act as third parties. This third party should be neutral and this party is
referred to as an ’arbitrator’ while the decision of the arbitrator, which is
essentially a determination of merits in the case, is known as ‘Arbitral
Award’.
Before the arbitration process begins, an arbitration agreement is required
to be formed. The agreement should have all the essentials of a valid
contract.

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There are mainly 2 types of Arbitration recognized in the Act, i.e.
Domestic Arbitration and International Commercial Arbitration.
 MEDIATION

In mediation, a third neutral party aims to assist two or more disputants in

reaching a settlement. This third party is referred to as the mediator.

The mediator needs to properly communicate with both the parties and use

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proper negotiation techniques, in order to make one party fully aware of
the other party’s perspective, through empathy and dialogue. This process
is controlled by the parties.
It must be observed that the main aim of the mediation process is to build
relationships, and not to make a decision.

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 Conciliation

In conciliation, the third party, who is called the conciliator, talks to the

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parties involved separately so that the parties can arrive at a mutually
acceptable solution through facilitating talks between the parties.
 Difference between mediation and conciliation

In mediation, the mediator plays a more active role in the the process by

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proposing compromise solutions after hearing all parties while in the case
of conciliation, the conciliator has to bring the parties into such a state of
mind as to facilitate the parties to come to an acceptable compromise.
 LOK ADALATS

This concept mainly focused on reducing the burden of pending cases on

the Courts.

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Lok Adalats are governed under The Legal Services Authorities Act,1987.
Sections 19, 20, 21 and 22 specifically deal with Lok Adalats.
 LOK ADALATS

The decision of a Lok Adalat is like a decree of the Civil Courts.

Types of matters before Lok Adalats can be of both civil and criminal
nature.
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IMPORTANCE OF ADR-

Empire Jute Co. Ltd and Others v The Jute Corporation of India(2007 SC)
- The courts would not exercise their jurisdiction under Art 32 or 226 or
discretionary power under under Art 142 to grant relief to the parties if

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there was an alternate forum to resolve the disputes.
REFER TO ORDER X Rule 1A CPC -

Refer to sec 28 of ICA

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Read about UNCITRAL MODEL LAW - The United Nations Commission
on International Trade Law.

REFER BARE ACT

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Date of enforcement. - Given in the Act - 22nd Aug, 1996

But actual is different - 25th Jan, 1996 through an Ordinance - Held in the
case of Fuerst Day Lawson v Jindal Exports