This article is written by Purvika Kirmire of 5th Semester of GLC Mumbai, an intern under Legal Vidhiya
Abstract
If there is a society, there arises disputes as well and these disputes were resolved earlier by king or the monarch who was considered to be fountain of justice, later courts were constituted where a judge adjudicated a dispute and a strict procedure of law is followed, but with time number of disputes increased, burden of cases on courts increased and then came an alternative resolution mechanism known as ADR which is cost effective and time saving, it includes different theories of disputes resolution such as mediation, arbitration etc. which has been discussed in this article.
Keywords
Another/substitute, dispute, jurisdiction, justice, time-saving, lengthy, conventional, services, costs, litigation, flexible, award, conclusion, impartial, aided, mediate, literacy.
Introduction
ADR is an Alternative Dispute Resolution
Alternative means another or substitute, dispute means difference of opinion between two people, or when two people disagree on a point this gives rise to dispute, and resolution means solving that dispute/difference. This is a very conventional norm that whenever a dispute arises one approaches courts to get justice, to resolve the dispute but ADR provides different sets of dispute resolution mechanisms for the resolution of dispute outside court. One can seek justice outside the court by the means of ADR. It is a Substitution of Courts, in which instead of approaching court one approaches alternative means to resolve dispute.
Resolving disputes outside the court does not impact the judicial proceedings of the court. Which means that there is no change in the court’s jurisdiction. If the aggrieved parties are not satisfied with ADR, they can approach the courts. Commercial matters, business transactions, family disputes, and civil matters are some of the matters that can be resolved by alternate resolution mechanisms. But criminal matters cannot be resolved by ADR, it does not come under the purview of matters that can be resolved by ADR.
Why do we need ADR?
Currently, there are many pending cases in our courts, ADR reduces the burden of the courts by resolving disputes by alternate means.
The strict procedure of law is followed in courts and this is a lengthy process as well as time-consuming process, the lengthy process involves an examination of facts, examination of witnesses and evidence, etc., and then only courts deliver judgments and justice and this lengthy process leads to resolution of disputes after several years maybe 10 years or 15 years or even more than that. ADR efficiently resolves disputes and saves time. Keeping this principle of Justice delayed is equal to justice denied in mind ADR has become the need of the hour by which one can get a dispute resolved in a time-saving manner.
Some matters require speedy relief like Commercial matters, business transactions, joint ventures construction matters, civil matters, etc., and if they aren’t resolved quickly this can lead to great commercial and economic losses and may negatively impact the economy. By the means of ADR, we have adopted a secondary forum to get a speedy and conventional way to settle disputes without approaching the courts.
The importance of ADR is that it reduces the burden of courts, it is a time-saving dispute resolution process, litigation expenses are saved, the procedure is flexible because the technical procedure is not adopted
Theories of ADR are:
- Mediation
- Negotiation
- Conciliation
- Arbitration
- Lok Adalat’s
Provisions in Law regarding ADR
According to Sec 89 of CPC 1908, if the court presumes there exists a dispute that is likely to be settled outside, the courts in its discretion may formulate possible ways of settlement that would minimize costs and the burden of courts as well. Arbitration and Conciliation Act 1996, holds provisions regarding ADR focuses on arbitration and conciliation. Legal Services Authorities Act 1987 holds provisions regarding ADR
There are five different theories of ADR
Arbitration
Section 2 (1)(a) Arbitration & Conciliation Act defines Arbitration as any arbitration whether or not administered by a permanent arbitral institution. Arbitration is a mode of ADR. It is less formal than a trial. Parties under arbitration bring their case before an arbitrator or arbitral tribunal. The arbitrator is a partial and independent third party who is appointed with the consent of both parties to the dispute. Judgment is binding on parties to the dispute.
No right to appeal lies against the arbitrators’ decision, The Supreme Court has determined that an arbitrator may be a judge appointed by the parties and an award passed by him isn’t to be lightly interfered with. If there’s a dispute and if you approach court, it might take years to resolve that dispute. Businesses and especially their lawyer are known of this fact, therefore when they enter into an agreement, they put an arbitration clause in the agreement for easy redressal of dispute without going to courts which might take years to give a judgment. With this arbitration clause in the agreement if any dispute arises parties will not approach the court, they will appoint an arbitrator to resolve the dispute. Bombay High Court in the matter between Sunil Kumar Jindal v. Union of India[1], held that the arbitration agreement is not entirely void because the nomination process was unlawful. If there is a clear desire to arbitrate, the court may strike the unlawful element of an arbitration clause while leaving the rest intact.
In simple words when the dispute is submitted before an arbitral tribunal, if that dispute arises out of contract they will settle it via arbitration, arbitrators are appointed by the parties, there can be single or more arbitrators and whenever more, then the number should be uneven that is odd, who resolves the dispute. More than one arbitrator is said to be an arbitral tribunal. A judgment delivered by the arbitrator or the arbitral tribunal is an arbitral award.
In the case of Municipal Corporation of Delhi v. Natraj Construction Company[2] High Court of Delhi held that the term of limitation for calling for arbitration cannot be shortened to a shorter period than that allowed under the Limitation Act. It additionally ruled that Section 28(2) of the Indian Contract Act would apply to any agreement or stipulation between the parties setting a shorter statute of limitations, rendering it illegal.
Conciliation
It is a theory of dispute resolution outside the courts wherein an impartial third person who is a conciliator assists parties in reaching mutually agreeable solutions and helps parties to reach on conclusion that upholds their interests. It follows a simple procedure and is less formal than arbitration. This method is cost-effective as well as speedy. Some of the principles of conciliation are: when conciliation proceedings start there is no such person as claimant or plaintiff, the nature of proceedings is voluntary any party to the proceeding can commence and discontinue the proceedings, the procedure followed in conciliation is flexible in which the conciliator has discretion to adopt any procedural law to ensure speedy and inexpensive conduct of proceedings, decisions in this proceedings are recommendatory and disputes are settled by mutual agreement and not by imposed decisions. Parties are free to accept or reject the recommendations of a conciliator. A conciliator is an expert third party who acts as a facilitator as well as an evaluator and as an evaluator, he/she evaluates which party is wrong. The main function of the conciliator is to assist the parties in reaching an amicable settlement and to achieve this a conciliator is obliged to act independently and impartially and abide by the principles of objectivity, fairness, and just, ice, apart from assisting the parties to reach a settlement, conciliator can make proposals for a settlement and can formulate/reformulate the terms of the possible agreement. The conciliator settles existing issues only and the conclusion of conciliation is said to be settlement. The law applicable to conciliation is the Arbitration and Conciliation Act. This method provides the disputing parties with an opportunity to explore options aided by an objective third party to exhaustively determine if a settlement is possible.
Mediation
It is a structured process wherein an independent person and a neutral person by using his specialized communication skills and negotiation techniques assist the parties in reaching a conclusion favorable to both parties this is known as mediation. A third party who is involved assists the parties in settling the dispute, unlike conciliation where the third party is an expert. Disputed parties try to reach a mutually agreed solution in mediation. That independent and neutral person is a mediator who helps parties to communicate and mutually resolve disputes, he/she is a facilitator who opens up a way for the parties to communicate and provides a platform, creating a good environment for the redressal of dispute. The law applicable to mediation is the Civil Procedure Code 1908. When both the parties agree to settle the dispute, an agreement is made. It is a win-win process as none of the parties to the dispute loses, they agree upon a settlement with the consent of both the parties. It is a cost-effective procedure. Discussions done in the mediation process are not revealed outside. No party to the dispute who is under the mediation session, is under pressure to accept the opposite party’s decision or offer. Six steps are involved in the mediation process. The first step is where parties agree to mediate the dispute, the second step involves gathering of points of view of parties to the dispute, in the third step parties focus on interest, this step involves the creation of win-win options, then in this step, those options are evaluated, last step is the creation of an agreement with the consent of both the parties.
Types of mediation
Evaluative mediation: In evaluative mediation, the mediators are more likely to offer suggestions and recommendations as well as their personal opinions. The neutral third party is more active when it comes to making suggestions or proposals for workable solutions and actually seeking to mediate a settlement between the parties.
Facilitative mediation: also known as traditional mediation where an expert or professional mediator attempts to facilitate negotiation agreement between the parties in dispute. The mediator urges and encourages both parties to the dispute to reach their own free solutions by looking into each other’s more profound interests, as opposed to giving suggestions and recommendations or forcing a resolution.
Transformative mediation: Transformative mediation tries to alter (transform) party interactions, perceptions, and approaches to the conflict rather than pursuing a resolution (a settlement or agreement). Transformative mediators encourage the parties to the dispute to understand each other’s needs and interests while focusing on involving and enabling them to resolve their issues.
Court-mandate mediation: To engage the parties in mediation, a court may order mandatory mediation. Coercion into mediation is taking place, not coercion during mediation. Courts may compel mediation if there is a dispute between two parties who do not agree to resolve it through mediation.
Lok Adalat
It is the people’s court. One of the theories of ADR is based on the Gandhian principle. It provides a supplementary conventional forum to aggrieved parties for a satisfactory settlement of their disputes. A mode of ADR and is an Indian contribution to world jurisprudence. Parties try to reach a mutually agreed settlement to resolve disputes. First Lok Adalat was constituted in Gujrat on 14th March 1982. Lok Adalat is composed of one chairman who is a judicial officer either sitting or retired, and two members one is a lawyer and another is a social worker. It reduces the cost of litigation expenses because no court fees are charged and is also time-saving. If the case is filed in a regular court, the fee paid in such court is refunded if the dispute is resolved in the Lok Adalat. Matters like money claims, partition suits, matrimonial disputes, etc. can be settled via Lok Adalat. Justice delivery is efficient when compared to courts. It has statutory recognition by the Legal Services Authorities Act 1987, Section 19 of the Legal Services Authorities Act deals with the organization of Lok Adalat. It has the same power as ordinary civil courts like that of summoning, taking evidence, examination of witnesses, etc, Lok Adalat has been given the status of the civil court and every award made by it is final. But no resolution of criminal matters can take place in Lok Adalat. It is constituted based on article 39A of the constitution which deals with the provisions of equal justice and free legal aid which is a directive principle of state policy in which state shall provide free legal aid. The apex court in the state of Maharashtra v. Manu Bai[3] held that the right to free legal justice, and speedy justice is part of fundamental rights under Article 21 of the constitution and the state must organize legal health camps, and legal literacy programs from time to time at different places.
Conclusion
ADR being time-saving, cost- efficient, where no strict rule of law is followed has become one of the most important dispute resolution mechanisms. Both the parties to the dispute can through a neutral third resolve the dispute without approaching courts. Various agreement has an arbitration clause, which states that whenever a dispute arises parties can go for arbitration, this resolves dispute faster than that of courts.
[1] Sunil Kumar Jindal v. Union of India, Misc. Civil Application No. 543 of 2022
[2]Municipal Corporation of Delhi v. Natraj Construction Company 2023:DHC:2054
[3] State Of Maharashtra vs Manubhai Pragaji Vashi & Ors on 16 August, 1995
1996 AIR, 1 1995 SCC (5) 730
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