This article is written by Anshul Parashar of 7th Semester of Banasthali Vidyapith University
The acronym “ADR,” which stands for “Alternative Dispute Resolution” refers to techniques used by parties to a dispute to reach a settlement outside of court. (ADR) refers to a collection of procedures and methods designed to make it possible to settle legal disputes outside of the courts. People mostly use ADR to avoid the costs associated with engaging the courts and attorneys. There are four primary types of ADR: negotiation, arbitration, mediation, conciliation, Judicial Settlement and lok adalat. ADR involves resolving disputes using methods other than court proceedings, like mediation and arbitration. ADR is a method of resolving conflicts outside of the courts with the assistance of a neutral third party. This method is often available when efforts by the client and the insurer to address any disagreements fail and reach an impasse.
Keywords: Alternative Dispute Resolution, Negotiation, Arbitration, Mediation, Conciliation, Judicial Settlement, Lok Adalat.
As a result of the idea of ADR has begun to gain considerable traction. The primary goal of ADR is to sort out the issue in an improved and timely manner. It seeks to provide inexpensive, quick, and less formal remedies to an aggrieved party. This presentation will also cover the government’s challenges and responses to the introduction of ADR in India.
Through the advancement of technology, the globe has become more globalized and commercial. Individuals from across the planet may now connect and negotiate business agreements and problems. The vast majority of individuals don’t currently have sufficient time to go to court, submit papers, and then wait for a hearing. Due to the inefficiencies and downsides of litigation, we are rapidly nearing a point where it will be superseded by alternative dispute resolution (ADR). Although India has not yet reached the point where ADR approaches have totally replaced litigation, the legal system has started to recognize the positive effects of ADR.
Tracings from Back Date
Arbitration isn’t a foreign concept in India. It had always been done since time immemorial. People in India believed in resolving disagreements within the four walls since it was seen as a way to safeguard their status and personality in society. As a result, the mechanism has had historical relevance in India since long ago.
Folks used to dwell in joint households with their clans in earlier times in India when there were Kulas and a caste system was prominent. The disagreements amongst the kulas were settled by the commander of the family, clan, or Kula. Similarly, when people had common commerce, corporations, or Shrenis, they would designate someone to settle conflicts within the Shrenis.
Pre-Independence: British rule: Many laws were enacted under the British rule within India, and the government of India changed dramatically. In 1772, the courts were given the authority to refer conflicts to arbitration, either at the insistence of the parties or at their own discretion. After a decade, in 1859, the Code of Civil Procedure came into force, with sections 312 to 327 mentioning arbitration, but in 1882, the provisions dealing to arbitration were removed.
The Indian Arbitration Act, 1899 was adopted in 1899 to give effect to an alternate dispute process in India. The act had its foundation on English legislation.
The CPC was then changed again in 1908, and section 89 with the second schedule granted the courts broad authority to submit conflicts to ADR mechanisms. The Indian Arbitration Act of 1899 and section 89 read with the second schedule of the Code of Civil Procedure of 1908 were two effective pieces of law to deal with arbitration at the time.
Following that, India ratified and adopted the Geneva Convention in 1937, and a corresponding legislation, The Arbitration (Protocol and Convention) Act, 1937, was enacted. The Indian Arbitration Act, 1899, as well as section 89 of the CPC’s second schedule, were abolished in 1940 and substituted with The Arbitration Act, 1940. Panchayats were quite effective at resolving problems in communities in India at the grassroots level.
Post-Independence Era: In India, the Arbitration (Protocol and Convention) Act, 1937, for the enforcement of foreign awards, and the Arbitration Act, 1940, for referring issues to ADR mechanisms, were currently in effect. The Foreign Award (Recognition and Convention) Act, 1961 was adopted in 1961, when India became a signatory to the New York Convention.
The Supreme Court defined the Arbitration Act, 1940 in an off-quoted statement in M/S Guru Nanak Foundation vs. Rattan Singh & Sons in 1981. It stated that “the way the hearings under the act are carried out and without exception questioned in courts has made attorneys laugh as well as legal philosophers weep.” Experience and legal reports demonstrate that actions within the act have grown exceedingly technical and associated with interminable prolixity, at every point offering a legal trap for the unwary.” India accepted and signed the UNCITRAL model law on commercial arbitration internationally in 1985.
Finally, in 1996, the Arbitration (Protocol and Convention) Act, 1937; the Arbitration Act, 1940; and the Foreign Award (Recognition and Convention) Act, 1961 were repealed and consolidated into a single piece of legislation, the Arbitration and Conciliation Act, 1996, which followed the UNCITRAL model law. To improve the act’s effectiveness and efficiency in 2002, the CPC reintroduced Section 89 with Order X (Rules 1A to 1C). The 1966 Act was revised twice, in 2015 and 2019. To deal with the ADR mechanism, however, we have a consolidated, single, effective, efficient, and good piece of legislation, ADR development in India. The codification of ADR in India can be traced back to the 1996 Arbitration and Conciliation Act.
What exactly is ADR?
ADR encompasses a variety of dispute resolution procedures that assist disputing parties in reaching an agreement without going to court or litigating the subject. These strategies often involve a third party who assists them in resolving issues. ADR methods are frequently used in tandem with litigation, with judicial approval. ADR is the procedure through which problems between parties are managed or resolved peacefully without the involvement of a judicial institution along with the need for a trial.
ADR provides to resolve all types of disputes, including civil, commercial, industrial, and familial concerns, in which people are unable to begin any sort of communication and achieve a solution. In general, ADR employs a neutral third party to assist the parties in communicating, discussing differences, and resolving the conflict. It is a way that allows individuals and groups to retain cooperation and social order while also providing an opportunity to minimize antagonism.
ADR is a non-adversarial conflict resolution technique, which means that everyone works together to find the best solution for everyone. It can help reduce the demand of litigation on the courts while also providing a well-rounded and rewarding scenario for all parties involved. It allows them to “expand the pie” via creative, collaborative bargaining and meet the interests that drive their demands.
Types of ADR
- Negotiation is frequently an initial option for those seeking to settle a disagreement. Simply as in some circumstances, both sides can resolve disagreements by putting all of their cards on the table and seeking to negotiate a settlement. If necessary, dispute resolution experts can take directions and negotiate on the parties’ behalf. Because it is so clear, this type of ADR is typically disregarded. Because there is no neutral third party to aid the parties in their negotiations, the parties must collaborate collectively to obtain an agreement.
- A mediator is a neutral party who has been mutually instructed. Their function is to facilitate dialogue amongst the two parties involved in the issue in order to reach a compromise or resolution. The mediator will openly discuss the issues and attempt to assist the parties in reaching a solution, but will not normally express their own ideas or assessment.
In rare circumstances, the courts may request the parties first try mediation before presenting a case before a judge. Assume another party rejects to seek mediation. In that situation, the courts tend to take a pessimistic view of the party in question and may levy a costs judgment against them. A costs order is a directive issued by a court or tribunal addressing the payment of fees. The court might pass a costs order requiring one party to pay any or the opposing party’s entire claim.
- Conciliation is a prominent kind of alternative conflict resolution utilized in workplace issues. Additionally, conciliation is a required process prior to an employee can file a claim with the Employment Tribunal. The conciliator will address the issues and attempt to assist the parties in reaching an agreement, frequently offering their own judgment after analyzing the scenario and the various arguments. The conciliator’s opinion serves to assist parties in recognizing the roles they play in their disagreement and reaching an agreement.
- An arbitrator is an independent third party selected by the parties to decide the dispute. The arbitrator is expected to be an expert in the field in which the disagreement occurs, such as civil engineering. Before making a final decision, an arbitrator will take testimony from both sides. In the case of arbitration, you may elect to have a team of arbitrators supervised over by a chairman rather than just one arbitrator. When an arbitrator or arbitrator’s makes a final ruling, the choice made is legally binding, which means the court has the power to enforce it.
- Section 89 of the Code of Civil Procedure also mentions court settlement as an alternative option of dispute resolution. Of course, no formal rules regarding these settlements have been established to date. However, the word “Judicial Settlement” is defined under Section 89 of the Code. When a judicial settlement is reached, the terms of the Legal Services Authority Act of 1987 take effect.
This signifies that the Judge in question is attempting to resolve the issue between the parties amicably through a judicial settlement. If a friendly settlement is sought and agreed in the case at hand, it is assumed to be an agreement within the meaning of the Legal Services Authority Act, 1987. According to Section 21 of the Legal Services Authorities Act of 1987, each Lok Adalat award is deemed a Civil Court judgment. There is no clear advice on judicial settlement in India.
- The concept of Lok Adalats, or people’s courts, as constituted by the government in order to resolve disputes via conciliation and compromise, is gaining traction. It is a judicial institution and a conflict resolution organization founded for equitable treatment by citizens oneself, based on a settlement or agreement made through official discussions.
The first Lok Adalats were held in 1982 at Una village of Junagadh (Gujarat). Adalats also recognize cases within their area of authority that are pending in normal courts. Section 89 of the Code of Civil Procedure also allows for the appeal of pending civil cases to the Lok Adalat. When a case is referred to the Lok Adalat, the requirements of the Legal Services Authorities Act of 1987 are followed. Section 19 of the Legal Services Authorities Act of 1987 governs the holding of Lok Adalat.
Since the introduction of ADR methods, people now have a new way to resolve their issues. The speedy resolution of disputes in Lok Adalat has received considerable public support, providing ADR with a new momentum that will surely reduce the amount of cases lingering in the courts. ADR systems that enable access to justice are desperately needed. The ADR movement has to be promoted to evolve more quickly. This will considerably reduce the pressure on the courts while also providing immediate justice at a reasonable cost. They will actually achieve the goal of giving equitable treatment to the parties if they are completely applied.
Advantages of ADR
- It is less costly & requires less time.
- It is free of the complexities that plague the legal system.
- Everyone involved are free to be divergent in their opinions and can discuss them with one other without fear of exposure to the courts.
- There is no animosity between the parties because there is no winning or losing side. They also have their issues addressed, and their connection remains intact, allowing them to execute future commercial deals with one other.
- ADR is more suited to multi-party disputes since all parties can express their views in the same setting and at the same time, rather than coming to court repeatedly.
- It also provides a broader perspective on the disagreement.
- The parties frequently have a say in which ADR approach is employed. They may also have the option of selecting the people or entities who will resolve the disagreement.
- The method is also very adaptable to the needs of the parties.
- The parties can also choose to remain anonymous. The ADR procedure also allows the parties to concentrate on practical solutions.
- A broader range of concerns are discussed, and the parties’ joint future interests are protected.
- Risk management is also possible with an ADR system.
Disadvantages of ADR
- ADR is ineffective when the conflict is to be resolved using a precedent.
- When judicial and interim orders are required, ADR is ineffective.
- Whenever there is a requirement for enforcement, ADR is less appropriate.
- When actual professional evidence and analysis are required in a case, ADR is ineffective.
- When there is a power imbalance among the parties in a dispute, ADR will not work.
- If the case is difficult, the adjudicating authority must investigate small aspects and may require expert counsel and ideas. ADR is unlikely to be effective in this situation.
ADR procedures can be dated back to the establishment of arbitration rules, that have evolved greatly over time. Several ADR processes started to knock on the Indian Parliament’s door across time, and the Parliament was intelligent enough to include these new conflict resolution approaches. The Commercial Courts Act of 2015 and the Micro, Small and Medium Enterprises Development Act of 2006, for instance, ensure that these procedures are used in certain industries on a case-by-case basis. The current Indian administration is taking further steps to improve ADR processes, with the goal of making India an international centre for arbitration as well as other types of conflict resolution.
Subsequently, ADR is an excellent method for obtaining justice. It is while Alternative Dispute Resolution is simple to settle problems since it is less expensive, faster, has more experience, is more accessible, provides conciliation between parties, has less formality involved, and is less adversarial. Each issue that occurs shall be resolved with appropriate processes in Alternative Dispute Resolution. This is because Alternative Dispute Resolution does not provide any solutions to problems. It is because Alternative Dispute Resolution allows both parties to request that a third party go to court. However, both parties should ask the person, who is usually a lawyer or another expert. In addition, the parties have to agree to be constrained by this judgment. So, ADR provides several benefits to their clients as ADR is used to resolve minor disputes. ADR can be used to settle disputes outside of court. Each ruling that the judge does not make will create enmity between the parties. It is because ADR, particularly conciliation, puts a lot of pressure on the parties. This is due to the fact that Alternative Dispute Resolution plays a more interventionist part and also suggests viable solutions. So, precisely not get gainsay of ADR is a very simple way to get justice for any conflict that arises.
Other resolution of conflicts approaches include med-arb, mini trial, summary jury trial, and so on. However, arbitration, mediation, and Lok Adalats, among other ADR approaches, are the most regularly employed in India. ADR is gradually becoming the preferred method for parties around the world; however India still relies heavily on litigation. However, with the advancement of these ADR technologies and the desire to promote the availability of justice, ADR is becoming a requirement. All ADR procedures, including negotiation, should be given legal recognition because they are effective and convenient, and it would assist to reduce the burden on the courts.
- Avtar Singh, Law of Arbitration and Conciliation, (6th Ed. 2002).
- Tala Esmaili And Krystyna Gilkis, Alternative Dispute Resolution, Legal Information Institute, https://www.law.cornell.edu/wex/alternative_dispute_resolution
- P. Bhargava, Lok Adalat: Justice at the Door Steps (1998).
- Civil Procedure Code, 1882, Act No. 05 of 1908.
- Rituparna Padhy, Analysing Section 89 of CPC, LAW TIMES JOURNAL (2019).
- Civil Code of Procedure, 1908, Order X
- The Legal Services Authorities Act, 1987, No. 39, Acts of Parliament, 1987 (India).
- The Legal Services Authorities (Amendment) Act, 2002, No. 39, Acts of Parliament, 2002 (India).
- Francesca Altema, Alternative Dispute Resolution: How the Growth of This Practice Has Led to a Drop in Litigation, LAW STUDENT CONNECTION, http://nysbar.com/blogs/lawstudentconnection/2012/05/alternative_dispute_resolution.html
- Garg, Shashank Alternative Dispute Resolution- The Indian Perspective. Oxford University Press, India, 2018.
 Rituparna Padhy, Analysing Section 89 of CPC, LAW TIMES JOURNAL (2019).
 Civil Code of Procedure, 1908, Order X.