Alternative Dispute Resolution (ADR) provides an alternative to the conventional methods of resolving disputes. It offers to solve all types of matters including commercial, civil, family and industrial where people are not able to start any type of negotiation and reach a settlement. Generally, ADR uses an impartial third party who helps the parties to communicate and discuss the differences to resolve the dispute. It is a method that enables individuals and groups to maintain co-operation, social order and provides opportunity to reduce hostility. This mechanism has proven to be one of the most efficacious mechanisms to resolve commercial disputes of an international nature. In India, laws relating to resolution of disputes have been altered from time to time to facilitate speedy dispute resolution. The judiciary also encourages out-of-court settlements to alleviate the increasing number of cases pending in the Indian courts.
The Arbitration and Conciliation Act, 1996 established a new and efficient arbitration structure. This law is based on the United Nations Commission on International Trade Law (UNCITRAL) model of the International Commercial Arbitration Council.
The Legal Services Authorities Act of 1987 has been revised from time to time to endorse the use of these approaches in order to make the ADR process more successful in light of the challenging social situation. Section 89 of the Code of Civil Procedure, as amended in 2002, has introduced conciliation, mediation and pre-trial settlement methodologies for effective resolution of disagreements.
Forms of Alternative Dispute Resolution
Arbitration in India is governed by the law of arbitration which states that for adopting the arbitration method as a dispute resolution mechanism an agreement to that effect should be signed between the disputing parties. The parties can either choose for a separate arbitration agreement to be signed between them or include an arbitration clause in the main contract between the parties.
In this process of resolution, parties refer their disputes to one or more persons called arbitrators. The decision of the arbitrator is bound on parties and their decision is called an Award. The motive of Arbitration is to acquire fair settlement of dispute outside of court without necessary delay and expense. Any party to a contract can invoke the arbitration clause either himself or through an authorized agent. Arbitration clause is a clause which mentions the course of actions, language, number of arbitrators, seat or legal place of the arbitration to take place in the event of disputes arising out between the parties.
Section 8 of Arbitration and Conciliation Act, 1996 states that if any party disregards the arbitral agreement and files a lawsuit to civil court instead of moving to arbitration, the other party can apply the court for referring the matter to arbitration tribunal as per the agreement but not later than the submission of the first statement. The application must contain a certified copy of the arbitration agreement. The matter will be referred to arbitration if courts are satisfied with it.
Mediation is an alternative dispute resolution mechanism where a third neutral party aims to assist two or more disputants in reaching an agreement. This process is totally controlled by the parties. The mediator’s work is just to facilitate the parties to reach settlement of their dispute. Mediator does not impose his views and makes no decision about what a fair settlement should be.
It may be an organized settlement conference or an informal consultation among the parties. The dispute may either be pending in a court or potentially a dispute which can be filed in court. Cases suitable for mediation are disputes in commercial transactions, employment, divorce, personal injury, workers compensation, labor or community relations, construction, and domestic relations.
Conciliation is the process of providing a cordial resolution to the parties. A conciliator is hired by the disputants and works with them individually to resolve their differences. Separate meetings with the conciliator are held to reduce the friction between the parties. A conciliator improves communication and helps in interpreting issues to bring about a negotiated settlement. There is no need of prior agreement and cannot be forced on a party who is not intending for conciliation.
Conciliation is voluntary, bendable and private. The main difference between mediation and conciliation proceedings is that at some point during the conciliation meeting, the parties will ask the conciliator to provide them with a non-binding settlement proposal.
Parties may control the duration, structure, and substance of the conciliation proceedings through this mechanism. These proceedings are never public. The ultimate decision to agree on the settlement remains with the parties.
- Lok Adalat
Lok Adalat is a dispute resolution mechanism where cases pending in the court of law or at the pre-litigation stage are settled amicably. The award rendered under this act is considered to be a civil court decree and is definitive and binding on all concerned, with no right of appeal to any court of law.
The parties are free to initiate litigation by approaching the court of appropriate jurisdiction by filing a case by following the required procedure, in exercise of their right to litigate if they are not satisfied with the award of the Lok Adalat. There is no provision for an appeal against this award. The court fee originally charged in the court when the petition was filed is also refunded back to the parties if a matter pending in court is referred to the Lok Adalat and is resolved later.
- Adya Singh, ADR Mechanisms in India, White Code via Mediation and Arbitration Centre, https://viamediationcentre.org/readnews/OTI4/ADR-mechanisms-in-India
- Rishabh Saxena, All you need to know about ADR, Blog Ipleaders, https://blog.ipleaders.in/adr-alternative-dispute-resolution/
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