Alternate Dispute Resolution

 Alternative Dispute Resolution ("ADR") refers to any means of settling civil legal disputes
outside of the courtroom.
 It refers to alternative methods to resolve disputes outside of the official judicial mechanism.
 The Courts will not be able to bear the growing no of litigations.
 Types of ADR
1. Adjudicatory: Arbitration…………..There is a third party as a private judge, impose solution.
2. Non-adjudicatory: Parties make their own decision (third party facilitates and guides the
negotiation for common ground, results in win-win situation)
1. Negotiation………….People solve their conflicts alone
2. Mediation………… A third party who try to mediate and suggest solution but can’t impose the
solution.
3. Conciliation …….It’s very similar to mediation because there is a third party who tries to resolve
the conflict with the parties.
The Act recognises only Arbitration and Conciliation.
Benefits of ADR:
1. Suitable for multi-party disputes
2. Flexiblity of procedures
3. Lower cost
4. Less complexity(Unstructured)(Parties control their own procedure)
5. Quick disposal
6. Time saving
7. Preservation of relationship
8. Voluntary, Private and Confidential

International Centre The International Centre for Alternative Dispute Resolution (ICADR)
was registered under the Societies Registration Act, 1860 on 31 st May, 1995. It is an
autonomous organisation working under the aegis of the Ministry of Law and Justice,
Government of India, with its Headquarters at New Delhi and Regional Centres at Hyderabad
and Bangalore. It has been established to promote, popularise and propagate alternative
dispute resolution methods to facilitate early resolution of disputes and to reduce the
burden of arrears in Courts.

Areas where ADR works

Almost all disputes including commercial, civil, labour and family disputes, in respect of
which the parties are entitled to conclude a settlement, can be settled by an ADR procedure.

ADR techniques have been proven to work in the business environment, especially in
respect of disputes involving joint ventures, construction projects, partnership differences,
intellectual property, personal injury, product liability, professional liability, real estate,
securities, contract interpretation and performance and insurance coverage.

Preamble of The Arbitration and Conciliation Act, 1996

…...It is an Act to consolidate and amend the law relating to

 domestic arbitration,

 International commercial arbitration and

 Enforcement of foreign arbitral awards

AND to define the law relating to conciliation and

….……….for matters connected therewith or incidental thereto.

United Nations Commission on International Trade Law (UNCITRAL)

 UNCITRAL adopted UNCITRAL Model Law on International Commercial Arbitration in

1985.

 The General Assembly of the United Nations has recommended that all countries give
due consideration to the said Model Law, for uniform arbitral prodcedure.

 The Arbitration and Conciliation Act, 1996 is based on United Nations Commission on
International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration.

Arbitration and Conciliation Act, 1996 (the conciliation was given recognition along with
arbitration)

The new Law is based on United Nations Commission on International Trade Law
(UNCITRAL), model law on International Commercial Arbitration.

Structure of the Act

1..4 Parts………….86 sections

Part 1--- Arbitration (Sec2 to 43)-Domestic and International Commercial Arbitration.Any

arbitration to be conducted in India would be governed by Part I, irrespective of the
nationalities of the parties

Part 2 …. Foreign Awards(Sec44 to 60)

Part 3….. Conciliaton (Sec61 to 81)

Part4…………Sec 82 to 86 Supplementary provisions

2.. 3 Schedules.. relates to Foreign Arbitral Awards and Protocol on Arbitration Clause
Applicablity of the Act

It extends to the whole of India : Provided that Part 1, 3, and 4 shall extend to state of J & K
only in so far as they relate to International Commercial Arbitration or International
Commercial Conciliation.

INDIAN COUNCIL OF ARBITRATION

In most of the industrialised countries, central or national arbitral organisations have been
established which provide facilities for arbitration of commercial disputes. They enjoy
unique prestige and confidence of the trade and industry. In India, the Indian Council
of Arbitration established in 1965 is the apex arbitral organisation at the national level.
The main objective of the Council is to promote the amicable and quick settlement of
industrial and trade disputes by arbitration. The Government of India, the Federation of
Indian Chambers of Commerce and Industry, the other important Chambers of Commerce
and trade associations in India as well as export promotion councils, public sector
undertakings, companies and firms are in its membership.
The Council provides facilities for settlement of international commercial disputes also by
arbitration. Its Rules of Arbitration have recently been revised based on the Arbitration and
Conciliation Act, 1996. These Rules are of international standard and they provide a
guarantee wished for by the trade for quick and just settlement of the dispute. It maintains a
panel of arbitrators consisting of Retd. Judges, Advocates, Shipping Experts, Chartered
accountants, Chartered Engineers, Businessmen, Foreign Nationals and Executives having
specialization in more than 20 fields. The Council has entered into arbitration service
agreements with important foreign arbitral institutions in more than 30 countries to
administer arbitrations under their rules if arbitration is held in India.
The Council also provides arbitration services for settlement of maritime disputes arising out
of charter party contracts and it has framed maritime arbitration rules for such disputes. The
Ministry of Surface Transport, Government of India has recommended the use of the ICA
arbitration clause in the charter party contracts so that dispute, if any, can be settled under
the ICA maritime arbitration rules.

DISPUTES WHICH CAN BE SETTLED BY ARBITRATION

1.Basically all disputes of Civil or Quasi Civil nature involving Civil Rights fall within the
jurisdiction of Arbitration.
2 Almost all disputes – commercial, civil, labour and family disputes in respect of which the
parties are entitled to conclude a settlement – can be settled by A.D.A. procedures.

3.Disputes involving joint ventures, construction projects, partnership differences,

intellectual property rights, personal injury, product liabilities, professional liability, real
estate securities, contract interpretation and performance, insurance claim and Banking &
non-Banking transaction disputes fall within the jurisdiction of Arbitration.

4.It is expanding to the areas or construction health care, telecommunication, entertainment

and technology based industries.

DISPUTES BEYOND JURISDICTION OF ARBITRATION

1.In any case dispute involving criminal offences are fully beyond jurisdiction of arbitration.

2.Even in case of civil rights following matter cannot be referred to arbitration:

(a) Matrimonial matters and matters connected with conjugal rights.

(b) Industrial Disputes and Revenue matters (Income Tax & other Tax matters).

(c) Testamentary matters under Succession act.

(d) Motor Vehicle Accident conversation.

(e) Matters under Indian Trust Act, Trusteeship of Charitable Institutions, Public charity
matters failing within the purview of Monopolies and Restrictive Trade Practices Act.

(f) Determination guardianship or wards.

(g) As per Section 24 of Indian Contract Act matters relating to unlawful consideration are
void hence these matters can not be referred for arbitration.