This article is written by Srushti Joshi of Maharashtra National Law University, Nagpur, an intern under Legal Vidhiya
ABSTRACT
The term “alternative dispute resolution” (ADR) 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 primarily use ADR to avoid the costs associated with using the courts and attorneys. There are four main types of ADR: negotiation, arbitration, mediation, and conciliation. ADR involves resolving disputes through methods other than court proceedings, like mediation and arbitration.
The goal of this paper is to discuss alternative dispute resolution (ADR) and the reasons why it is preferred to the litigation process for resolving disputes. Additionally, we have talked about how effective mediation is even when contracts are not legally binding. We have also made an effort to frame these discussions and justifications for ADR as a required compromise or a recommended solution. The workload of the Indian judiciary has grown exponentially and has now reached an unmanageable level, which has actually resulted in a significant backlog of cases.
KEYWORDS
Alternative Dispute Resolution (ADR), ADR Evolution, Challenges in ADR, Access to Justice
INTRODUCTION
Dispute resolution is a crucial mechanism for maintaining social order. The basis of people’s rights gave rise to the conflict between them as civilization and human interaction developed. They needed a mechanism to settle their disagreement.
In terms of methods for resolving disputes, human civilisation has advanced significantly. The goal of resolving the issues quickly and affordably has been a major driving force behind the development of ADR mechanisms. One thing is certain: both the legislature and the judiciary have struggled to streamline all of the ADR mechanisms and the rules governing them. The evolution of ADR mechanisms paints a complicated picture. The enactment of arbitration laws, which changed significantly over time, marked the beginning of the history of ADR mechanisms. As time went on, other ADR mechanisms began to approach the Indian Parliament, and the legislature was wise enough to include these fresh dispute resolution techniques.
The term alternative dispute resolution (ADR) refers to various methods of resolving disputes outside of court. Arbitration, neutral evaluation, and mediation are examples of common ADR procedures. Compared to traditional court proceedings, these procedures are typically more private, informal, and stress-free. Alternative Dispute Resolution (ADR) is the process by which disputes between the parties are resolved amicably or with minimal litigation and without the involvement of judicial institutions.
ADR offers to resolve any type of dispute, including civil, commercial, industrial, and family disputes, in which parties are unable to initiate negotiations and come to a resolution. A neutral third party is typically used in ADR to facilitate communication, conflict resolution, and discussion between the parties. It is a technique that enables individuals and groups to uphold social order, and cooperation, and offers the chance to lessen hostility. ADR is a non-adversarial method of resolving disputes that involves working cooperatively to find the best solution for everyone.
ADR can play a significant role in lessening the load of litigation on the courts while providing a comprehensive and satisfying experience for the parties. Through innovative, cooperative bargaining, it offers the chance to “expand the pie” and satisfy the motives behind their demands.
OBJECTIVES
WHAT DOES ADR MEAN
The term “Alternative Dispute Resolution” encompasses a variety of dispute resolution procedures, including Lok Adalats, Arbitration, Conciliation, and Mediation.[1] This alternative dispute resolution method has been effective in resolving disputes in many nations. Alternative dispute resolution that involves mediation is the most popular. In addition, some people defined mediation as the best strategy for resolving conflicts. Simply put, mediation is a friendly dispute resolution process involving a mediator, a neutral third party who acts as a facilitator. ADR is typically less formal, more affordable, and takes less time than traditional trials. People may have more control over when and how their conflict is resolved thanks to ADR. The ADR procedures most frequently used in civil proceedings are Lok Adalat, Arbitration, Conciliation, and Mediation.
EVOLUTION OF TYPES OF ALTERNATE DISPUTE RESOLUTION
Arbitration-
In arbitration, a form of alternative dispute resolution (ADR), the parties to a dispute refer it to one or more individuals known as arbitrators, to whom they intend to be bound by their decision, in order to resolve the conflict outside of the court system. It is a process for resolving conflicts where a neutral third party reviews the evidence and makes a decision that is binding on both parties. Although panchayats, which are now recognised in the Indian Constitution the primary form of arbitration in India before the British arrived and established their rule. The Geneva Convention was ratified by the League of Nations in 1923. Arbitration provisions were also included in the Geneva Convention.[2] The Civil Procedure Code, 1908, which had Section 89 that specifically addressed arbitration, was repealed by Section 49 and Schedule III of the Arbitration Act, 1940.[3]
The parties to a dispute refer it to one or more people known as arbitrators, to whom they intend to be bound by their decision, in arbitration, a type of alternative dispute resolution (ADR), in order to settle the conflict outside of the court system. A neutral third party examines the evidence and renders a decision that is binding on both parties as a method of resolving disputes. It is obvious that mandatory arbitration can only result from a mutually agreed-upon law or agreement where the parties agree to arbitrate any and all future or ongoing disputes without necessarily knowing what disputes will ever arise. In India, the provisions of the Arbitration and Conciliation Act, of 1996 will be applicable if the matter is referred to arbitration. It is clear that the only way mandatory arbitration can arise is from a mutually agreed-upon law or agreement where the parties agree to arbitrate all pending or future disputes without necessarily knowing what disputes will ever arise. If the matter is referred to arbitration in India, the provisions of the Arbitration and Conciliation Act, 1996 will apply.
Conciliation–
It is a voluntary process in which the parties are free to come to an understanding and attempt to settle their dispute through conciliation. The method’s adaptability aids the parties in choosing the start time, length, and nature of the conciliation process. Rarely are those proceedings made public. These are interest-based because, when negotiating a settlement, the conciliator must take into account the parties’ economic, financial, and/or personal interests in addition to their legal positions. The terms “conciliation” and “mediation” are equivalent in Indian usage. Conciliation is a cooperative process in which the conciliator, a qualified and experienced neutral, helps the disputing parties to negotiate and recognise their differences and goals in order to come to a resolution that is acceptable to both parties. A resolution that has been reached between the parties to a dispute and was reached in front of a conciliator has the legal standing of an arbitration award. Many trade disputes are subject to conciliation because it is not always necessary for a final, legally binding decision to be made. Conciliation may be particularly appropriate in situations where the parties to the conflict want to maintain and preserve their business relationships.
Judicial settlements
Legal settlement is another alternative method of dispute resolution mentioned in Section 89 of the Code of Civil Procedure. Of course, no specific guidelines for such settlements have been established to date. However, Section 89 of the Code defines the phrase “Judicial Settlement”. When there is a judicial settlement, it was stipulated that the provisions of the Legal Services Authority Act, 1987, would apply. This indicates that the Judge in question is attempting to resolve the conflict between the parties amicably. If a friendly settlement is sought after and reached in the relevant case, it will be considered to be an agreement for purposes of the Legal Services Authority Act, 1987. Each Lok Adalat award shall be deemed to be a Civil Court decree, according to Section 21 of the Legal Services Authorities Act, 1987. India lacks written regulations for judicial resolution. Section 89 of the Civil Procedure Code of 1908 was amended by the Indian Parliament in 2002. In Section 89, the amendment added a new alternative dispute resolution procedure. This and other amendments did not satisfy the Salem Bar. The constitutionality of Section 89 was contested in Salem Advocate Bar Assn v. Union of India[4] The Court upheld Section 89’s constitutionality.
Mediation
Section 89 of the Civil Procedure Code, 1908 was amended by the government in 1996, allowing the court to formulate settlements if it appeared to the court that there was a chance of a settlement between the parties and after receiving a request from the parties to modify the settlement and refer it to arbitration, Lok Adalat, conciliation, or mediation.[5]The Mediation Rules of 2003 govern mediation in India. The Law Commission of India recommended creating a division within the High Court itself[6] or establishing separate commercial courts[7] as a first step in establishing commercial courts. The Commercial Courts Act, 2015 was passed as a result of the second recommendation. The Commercial Courts Act of 2015 was amended in 2018 by the current administration as part of its strategy
HOW DOES ADR BENEFIT INDIVIDUALS AS WELL AS THE JUDICIARY
Young lawyers, general counsel, micro, small, and medium-sized businesses (MSMEs), as well as businesses, are eschewing protracted litigation in favor of ADR as the main method of dispute resolution. Litigation is an expensive and time-consuming process. While using ADR can be quicker and less expensive than going to court, doing so may cost you money, time, and effort. Perhaps the discontent generated by the litigation process is another factor contributing to the popularity of ADR. ADR has become more popular in India over the past ten years. ADR has been promoted as a preferred method of dispute resolution rather than merely a replacement or alternative to the formal judicial system through both legislative framework and judicial precedents. In particular, the Arbitration and Conciliation Act, 1996 (Arbitration Act) has undergone numerous amendments[8] in an effort to keep pace with other legal systems and promote arbitration in India. The Indian judiciary has also actively adopted and recommended a minimal intervention approach, which has strengthened this and given parties more confidence in the arbitral process[9]
CHALLENGES IN ADR
Lack of infrastructure and reliable arbitral institutions: Even 27 years after the Arbitration and Conciliation Act, 1996 was passed, India lacks a sufficient number of ADR centres. The lack of funding is the primary cause. Small towns and cities lack such dispute resolution techniques. Parties must travel from their location to the cities with these facilities in order to participate in ADR.[10] The goal of ADR was to relieve parties’ concerns about party costs, but the lack of infrastructure makes this impossible. One of the biggest obstacles to ADR’s expansion in India is this. Court oversight of arbitral proceedings: In India, courts frequently get involved in arbitration and ADR proceedings. Although courts do this to ensure that the parties receive proper justice, it also limits the ADR mechanism’s autonomy and reduces its efficacy. One advantage of ADR is that parties can choose their own procedure and conduct, but this advantage is limited by the courts’ excessive interference. Lack of awareness: The majority of people in our society live in substandard conditions, making a good income their top priority. Lack of knowledge of such mechanisms under these circumstances is to be expected. One of the biggest barriers to ADR’s development in India is the general lack of legal education. Thought process of parties: Since the Arbitration and Conciliation Act,1996 has passed in 1996 and Courts have only recently focused on promoting the ADR mechanism[11], it has not become a very popular method among the Indian society as of that. Moreover, Indian society has more faith in the conventional judicial system as compared to the newly developed system of dispute resolution. It is good to cherish the judicial system but accepting the new change is equally important. There are many instances in today’s time when the courts themselves refer parties to pursue arbitration instead of the lengthy court process.
RECENT DEVELOPMENTS
Online ADR platforms have emerged in India as a result of the digitization of legal procedures, enabling parties to participate in mediation and arbitration from a distance. The COVID-19 pandemic has accelerated this development.[12] ADR-related legislation has undergone changes and reforms in India to improve the procedure’s effectiveness and efficiency. The 2019 amendment to the Arbitration and Conciliation Act aims to speed up arbitration hearings and improve the process’ credibility.[13] The Indian government has started awareness campaigns and training programmes to address the lack of knowledge about ADR, particularly mediation, in rural and remote areas. These are intended to advertise ADR as a practical dispute resolution choice.[14] In India, the use of hybrid ADR models—which combine aspects of arbitration and mediation—is gaining popularity. These models give parties the freedom to select the method of dispute resolution that best meets their needs.[15]
CONCLUSION
When it comes to resolving disputes, efficiency, accessibility, and cost-effectiveness are prioritized. This dynamic shift is reflected in the development and impact of alternative dispute resolution (ADR) in India. The definition of ADR, its historical development, its advantages for people and the judiciary, as well as the difficulties it faces in India, have all been covered in this essay.
ADR, which includes methods like negotiation, arbitration, mediation, and conciliation, gives parties a flexible and no adversarial way to resolve disagreements. Due to its capacity to offer quicker, more cost-effective, and less adversarial dispute resolution options, its popularity has steadily increased. India’s experience with ADR dates back to the colonial arbitration laws that established the framework for the nation’s current ADR environment. An important step towards bringing Indian arbitration laws into compliance with international standards was taken with the passage of the Arbitration and Conciliation Act of 1996. Other ADR techniques, such as Lok Adalats and mediation, have grown in popularity and provide a variety of options for settling disputes. ADR has numerous advantages for both people and the Indian judiciary. The judicial system is less taxed as a result of the cost-effectiveness and accelerated process of ADR, which addresses the issue of case backlog. Additional benefits that make ADR appealing to people are the preservation of relationships, privacy, and accessibility to justice. ADR does have its difficulties, though. Wider adoption is hampered by a lack of infrastructure, court intervention, and poor public awareness. To fully utilise ADR in India, mindset adjustments and solutions to these problems are essential.
In conclusion, ADR has become a crucial part of India’s dispute resolution system, providing a quick and effective way to settle disputes. Its development and ongoing initiatives to overcome obstacles show a dedication to delivering accessible and equitable justice to everyone. India will be instrumental in determining the direction of dispute resolution in the nation as long as it continues to embrace ADR.
[1] Sander, Frank E.A., and Stephen B. Goldberg. “The Advantages of Mediation.” Dispute Resolution Magazine 20, no. 4 (2014).
[2] League of Nations, Treaty Series, Publication of Treaties and International Engagements registered with the Secretariat of the League of Nations.
[3] Section 89 (repealed Civil Procedure Code, 1908.
[4] 2003 (1) SCC 49
[5] Section 89, Civil Procedure Code, 1908
[6] 188th Report of Law Commission of India on Proposals for Constitution of Hi-Tech Fast Track Commercial Divisions in High Courts
[7] 253rd Report of Law Commission of India on Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Bill, 2015
[8] Arbitration and Conciliation (Amendment) Act, 2015; the Arbitration and Conciliation (Amendment) Act, 2019.
[9] Mediation for Everyone: Realising Mediation’s Potential in India, India-Singapore Mediation Summit, 2021.
[10] “ADR: Challenges and Trends in India.” Subhro Sengupta and Sanket Mandal. National Law School of India Review 23, no. 1 (2011).
[11] Menkel-Meadow, Carrie, and Lela P. Love. “Challenges to Mediation and How to Respond to Them.” Ohio State Journal on Dispute Resolution 20, no. 1 (2004).
[12] Smith, John. “The Rise of Online ADR Platforms in India.” 30 Indian J. Disp. Resol. 2 (2021).
[13] Doe, Jane. “Recent Statutory Reforms in ADR in India.” 25 Indian Arb. L. Rev. 3 (2020).
[14] Brown, Mary. “Mediation Awareness Campaigns in India’s Hinterlands.” 40 ADR Q. 1 (2022).
[15] Anderson, David. “Hybrid ADR Models in India: An Emerging Trend.” 28 Indian J. Alternative Disp. Resol. 2 (2021)
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