Impact of Judicial Intervention in the Field of ADR is a Boon or a Bane

Introduction

In developing country like India most of the people opt for the litigation process to resolves disputes, which burdens the court and a large number of pending cases which results in the delay of the resolution of the dispute, which ultimately led to dissatisfaction among the citizens and making true the belief that “Justice delayed is Justice denied”. To lessen the burden on the judiciary, Alternative Dispute Resolution has been introduced. ADR is a legal technique for the resolution of disputes outside the court, wherein the parties to a dispute refer the matter mutually by appointment of a third party namely Arbitrators whose decision (Award) they agree to bound. Opting ADR saves time and resources at the same time. The most famous ADR methods are the following: arbitration, conciliation, meditation, negotiation, and transaction. Arbitration clause is usually inserted into a contract made between the parties, that if there will be any disputes regarding the contract in future, the parties will go to the ADR for the resolution of disputes. Alternative Dispute Resolution is acknowledged in abundant fields of law and in business sectors both at National and International level.

ADR as a boon or bane

All people want speedy disposal of matters, no one wants to get trapped in yearlong litigation process. So, it becomes important to have a speedy disposal of matters, which can be done by Alternative Dispute Resolution. This method can be adopted in disputes relating to insurance trade, divorce and other family natters, trade, technology etc. ADR is not open to public unlike all the other cases in a court, all hearings and awards are private and confidential in ADR. ADR helps common man with an opportunity to showcase their dispute and reach a solution amicably without wasting unnecessary time in the complexities of litigation. ADR is more of corporate friendly as commercial parties enter into a contract with an Arbitration clause present in it. Most of the companies prefer Alternative Dispute Resolution as it is less complicated, least expensive, confidential and saves time also. Litigation takes usually year’s long time which affects the working of the company and their finance in the commercial sector.

Since ADR techniques is a part and parcel of judiciary or alternative speedy redressal of disputes mechanism, so it is obvious that intervention of judiciary will be present in ADR mechanism. Usually, the Judicial authority or courts does not intervene in between ADR proceedings. The concept of non-intervention is basically based upon the agreement between the parties in contract where by their consensual act they have decided to resolve any dispute arising out of the contract to arbitration or ADR techniques by invoking an arbitration or meditation clause, then the judiciary would not have any valid reason to intervene between the arbitration or ADR proceedings.

In case where one of the parties of suit does not possess arbitration agreement or contract, the provisions of the Arbitration and Conciliation Act gives judiciary powers to entail all such matters to intervention in arbitration matters. When the court is satisfied that the party will not obtain a copy of arbitration agreement in the normal course of arbitration proceedings then the judiciary has the power to engage and give appropriate orientation to the party to produce the Original Arbitration Agreement or its duly signed copy. Under Section 34 of the Arbitration and Conciliation Act, 1996 gives court some other instances where it can intervene in between the Arbitration proceedings and also mentions the grounds on which arbitration award can be set aside, some of which are as follows-

  • When the parties to the dispute are not fully aware of arbitration or ADR techniques;
  • If the Arbitral award addresses a subject which is not mentioned in the Arbitration agreement;
  • If the Arbitrator’s act is in the violation of the act’s policy framework;
  • If any award violated the fundamental principles of justice, morality and equality

These are some of the instances where the judiciary can intervene in between the ADR proceedings and can suggest amends in the arbitral process or the award given.

In the matter of NTPC vs. Deconar Services Private Ltd.[1], the Hon’ble Supreme Court established the principle of minimum judicial intervention and interference in between the Arbitration proceedings. The Hon’ble Supreme court held that they saw no reason to interfere with the challenged judgement and further dismissed the civil appeal.

Similarly in the case of Kwality Manufacturing Corporation vs. Central Warehousing Corporation[2], the judgement highlighted the limited scope of intervention of judiciary under Section 30/33 of the Arbitration and Conciliation Act, 1996. Moreover, it was also held that the court could not reassess or re-appreciate evidence while dealing with the challenge in arbitral award.

Our Judicial system has been burdened with a lot of pending cases before them for justice. The litigation process is a lengthy one and takes a lot of time and money of a person. For better business environment and efficient working of the country speedy dispute redressal system is required. Alternative Dispute Resolution is one of the best methods for speedy dissolution of cases, where the parties refer the dispute outside court to an arbitrator/mediator and the proceedings take place privately and is not open to public. The award is passed by the arbitrator on the basis of the facts provided in front of him and the parties have to obey the award. For an arbitration proceeding an arbitration clause must be present in the contract, then only it will be enforceable in the court of law. Both the parties have to bind by the arbitration clause and the award passed. But in some cases where there is injustice in passing the award or injustice against one party and the award passed is against the public policy or the arbitration process is not in compilation with the rules then the court can intervene and can set aside the award passed.

Conclusion

Therefore, it can be concluded that intervention of the Judiciary in the ADR proceedings is both a boon and a bane, it depends on the circumstances of the proceedings and the methods adopted by the Alternative Dispute Resolution system. The court of law has power to intervene in the ADR proceedings and the ADR also has power to restrict court of law form interfering. Court of law cannot intervene unless and until ADR proceedings are not followed according to the laws.


[1] NTPC vs. Deconar Services Private Ltd., (2014) Civil Appeal No. 6483

[2] Kwality Manufacturing Corporation v. Central Warehousing Corporation, (2001) Civil Appeal No. 7121

Aishwarya Says:

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