Modes of Alternative Dispute Resolution in India

It is a well-known fact that the Indian Judiciary system is overburdened with cases. Despite of fast track courts, the pending and unresolved cases are always piling up. In such times, Alternative Dispute Resolution (ADR) mechanism can be an efficient way to settle such disputes.

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. ADR is a mechanism of dispute resolution that is non adversarial, i.e. working together co-operatively to reach the best resolution for everyone. As a result, alternative dispute resolution mechanisms have become more crucial for businesses operating in India as well as those doing businesses with Indian firms.

The various Modes of ADR are listed below:

  • Arbitration:

A neutral party (Arbitrator) heads over the proceedings and decision of arbitrator is binding on parties and is called ‘Award’. The object of Arbitration is to obtain fair settlement of dispute outside of court without necessary delay and expense. The parties should, while entering into the contract, ensure that they insert an arbitration clause.

  •  Conciliation:

Conciliation is a less formal procedure similar to Arbitration. However, the major difference is that the decision can be challenged or rejected by either of the parties. However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both. The attempt to conciliate is generally based on showing each side the contrary aspects of the dispute, in order to bring each side together and to reach a solution.

  • Mediation:

 Here, an impartial person called the “Mediator” aids the parties in reaching an amicable resolution. The Mediator does not decide the output but leaves it in the hands of the parties. The basic motive of mediation is to provide the parties with an opportunity to negotiate, converse and explore options aided by a neutral third party, to exhaustively determine if a settlement is possible.

  • Negotiation:

Negotiation is a non-binding procedure. Here the parties, without any interference from a third party, negotiate the terms which are mutually beneficial. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. Negotiation is the most widely used ADR mechanism in India.

  • Lok Adalat:

Lok Adalat also known as the ‘People’s Court’ is based on Gandhian principles. There are no court fees and no rigid procedural requirements (i.e. no need to follow process given by Civil Procedure Code or Evidence Act), which makes the process quick and efficient. Pending cases can be transferred to Lok Adalat if both parties agree. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two other members, usually a lawyer and a social worker. The decision of the Lok Adalat is binding on the parties to the dispute and no appeal lies against the order of the Lok Adalat.


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