Techniques of Alternative Dispute Resolution in India

This article was originally written as an academic paper and is republished here as a knowledge-sharing resource. It has been lightly formatted; statutory references reflect the law as it stood at the time of writing.

Techniques Of Alternate Dispute Resolution In India

“Great progress was made when arbitration treaties were concluded in which the contracting powers pledge in advance to submit all conflicts to an arbitration court, treaties which not only specify the composition of the court, but also its procedure.”

• Ludwig Quidde

Introduction

ADR or “Alternative Dispute Resolution” is an attempt to devise machinery which should be capable of providing an alternative to the conventional methods of resolving disputes. ADR offers to resolve matters of litigants, whether in business causes or otherwise, who are not able to start any process of negotiation and reach any settlement. It is a quest to find solutions to the perplexing problem of the ever increasing burden on the courts based on the principal of Equality before Law and Right to life and personal liberty respectively.

Why The Need Of Adr

The justice dispensation system in India has come under great stress for several reasons; chief of them being the huge pendency of cases in Courts. In India, the number of cases filed in Courts has shown tremendous increase in recent years for a variety of reasons resulting in pendency and delays underlining the need for alternative dispute resolution methods. It is in this context, the following Resolution was adopted by the Chief Ministers and the Chief Justices of States in a Conference held in New Delhi on 4th December 1993 under the Chairmanship of the then Prime Minister of India and presided over by the Chief Justice of India :-

'The Chief Ministers and Chief Justices were of the opinion that Courts were not in a position to bear the entire burden of justice system and that a number of disputes lent themselves to resolution by alternative modes such as arbitration, mediation and negotiation. They emphasized the desirability of disputants taking advantage of alternative dispute resolution which provided procedural flexibility, saved valuable time and money and avoided the stress of a conventional trial.

It was felt that in a developing country like India with major economic reforms under way within the -work of rule of law, strategies for swifter resolution of disputes for lessening the burden on the Courts and to provide means for expeditious resolution of disputes, there is no better option but to strive to develop alternative modes of dispute resolution by establishing facilities for providing settlement of disputes through arbitration, conciliation, mediation, negotiation, etc.

As the Arbitration Act of 1940 proved ineffective for early settlement of disputes by arbitration, the first major step taken in this direction was the enactment of Arbitration and Conciliation Act, 1996 which was brought into force with effect from August 22, 1996. This Act, based on the UNCITRAL Model Law on International Commercial Arbitration and the UNCITRAL Conciliation Rules, provides the basis for the growth of the ALTERNATIVE DISPUTE RESOLUTION (ADR) movement in India on scientific lines.

Advantage Of Adr

Following are the main advantage of ADR:

1. It is time and cost saving.

2. Autonomy for the parties to an international dispute.

3. Free choice to parties on applicable law, procedure and the language of the proceedings.

4. The possibility of ensuring that specialized expertise is available on the tribunal in the person of the arbitrator, mediator, conciliator or neutral adviser

4. Strict confidentiality

Acts Dealing With Adr

The Acts which deal with Alternative Dispute Resolution are:

Arbitration and Conciliation Act, 1996;

Legal Services Authorities Act, 1987;

Section 89 of the Civil Procedure Code, 1908.

Justice Malimath Committee Report (1989-90)

The Malimath Committee undertook a comprehensive review of the working of the court system, particularly all aspects of arrears and Law’s delay and made various useful recommendations for reducing litigation and making justice readily accessible to the people at the minimum cost of time and money. It underlined the need for alternative dispute resolution mechanism such as mediation, conciliation, arbitration, Lok Adalats etc. as a viable alternative to the conventional court litigation.

VARIOUS KINDS OF ADR TECHNIQUES

Arbitration

Arbitration is the process of hearing and determining of a dispute between parties by persons chosen or agreed to by them. The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay and expense. The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. Except for some interim measures, there is very little scope for judicial intervention in the arbitration process.

The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. Once the period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a decree of the court.

Conciliation

Conciliation is the process of facilitating an amicable settlement between the parties. Unlike the Arbitration there is no determination of a dispute. There need not be a prior agreement and it cannot be forced on a party not intending for conciliation. The proceedings relating to Conciliation are dealt under sections 61 to 81 of Arbitration and Conciliation Act, 1996. Conciliation is a less formal form of arbitration. This process does not require an existence of any prior agreement. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed. In case of multiple conciliators, all must act jointly. If a party rejects an offer to conciliate, there can be no conciliation. Parties may submit statements to the conciliator describing the general nature of the dispute and the points at issue. Each party sends a copy of the statement to the other. The conciliator may request further details, may ask to meet the parties, or communicate with the parties orally or in writing. Parties may even submit suggestions for the settlement of the dispute to the conciliator. When it appears to the conciliator that elements of settlement exist, he may draw up the terms of settlement and send it to the parties for their acceptance. If both the parties sign the settlement document, it shall be final and binding on both. Note that in USA, this process is similar to Mediation. However, in India, Mediation is different from Conciliation and is a completely informal type of ADR mechanism.

Mediation

Mediation aims to assist two (or more) disputants in reaching an agreement. The parties themselves determine the conditions of any settlements reached— rather than accepting something imposed by a third party. The disputes may involve (as parties) states, organizations, communities, individuals or other representatives with a vested interest in the outcome. Mediators use appropriate techniques and/or skills to open and/or improve dialogue between disputants, aiming to help the parties reach an agreement (with concrete effects) on the disputed matter. Mediation, a form of alternative dispute resolution (ADR) or "appropriate dispute resolution", aims to assist two (or more) disputants in reaching an agreement. The parties themselves determine the conditions of any settlements reached— rather than accepting something imposed by a third party. The disputes may involve (as parties) states, organizations, communities, individuals or other representatives with a vested interest in the outcome. Mediators use appropriate techniques and/or skills to open and/or improve dialogue between disputants, aiming to help the parties reach an agreement (with concrete effects) on the disputed matter. Normally, all parties must view the mediator as impartial. Disputants may use mediation in a variety of disputes, such as commercial, legal, diplomatic, workplace, community and family matters. A third-party representative may contract and mediate between (say) unions and corporations. When a workers’ union goes on strike, a dispute takes place, and the corporation hires a third party to intervene in attempt to settle a contract or agreement between the union and the corporation.

Negotiation

Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution. Negotiation occurs in business, non-profit organizations and government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Those who work in negotiation professionally are called negotiators. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers.

Lok Adalat

“While Arbitration and Conciliation Act, 1996 is a fairly standard western approach towards ADR, the Lok Adalat system constituted under National Legal Services Authority Act, 1987 is a uniquely Indian approach”. It roughly means "People's court". India has had a long history of resolving disputes through the mediation of village elders. The system of Lok Adalats is an improvement on that and is based on Gandhian principles. This is a non-adversarial system, where by mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences.

There is no court fee and no rigid procedural requirement (i.e. no need to follow process given by Civil Procedure Code or Evidence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts. Cases that are pending in regular courts can be transferred to a Lok Adalat if both the parties agree. A case can also be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party. The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 because it is a judgement by consent. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. Lok Adalat (people’s courts), established by the government, settles dispute through conciliation and compromise. The First Lok Adalat was held in Chennai in 1986. Lok Adalat accepts the cases which could be settled by conciliation and compromise and pending in the regular courts within their jurisdiction. The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two other members, usually a lawyer and a social worker. There is no court fee. If the case is already filed in the regular court, the fee paid will be refunded if the dispute is settled at the Lok Adalat. The procedural laws and the Evidence Act are not strictly followed while assessing the merits of the claim by the Lok Adalat. Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal process. No appeal lies against the order of the Lok Adalat. Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat as the scope for compromise through an approach of give and take is high in these cases. Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost.