The process of settling a case of two parties without a court trial is known as
Alternative Dispute Resolution. (ADR). This is basically any settling of a case
outside the court. This method helps the two parties to cooperate and settle
down each case. The main goal is conflict settlement. In most cases, a neutral
third party will be there in the resolution of a case. It includes
mediation,Arbitration, Negotiation, and conciliation. The result should be a
mutually resolving agreement. This is the most flexible, faster, and
cost-efficient method of resolving a case.
This process is more informal than a
trial. This method is usually used by disagreeing parties who cannot come to a
proper agreement through litigation. This method of dispute resolution is also
known as Arbitration. In India, The Arbitration and Conciliation Act 1996
enables Arbitration among the citizens. Although the method of Alternate Dispute
Resolution differs from others in many ways, usually, this method may include a
third party to help in dispute resolution. Moreover, ADR is supported by many
courts instead of trial sessions.
ADR became a part of the law school curriculum.
Since this is the cheaper method, parties usually opt for this method. A
harmonious relationship between the parties can be maintained since the final
decision is mutually agreed upon. In most of the cases, appeal is not allowed.
This is mostly out of court process. There are no court fees involved in the
dispute settlement. The third-party, in some cases, can be determined by the
parties. The place to settle disputes can also be suggested by the parties.
Nowadays, virtual platforms are available to promote Alternative Dispute
Resolution. This is the most effective and speedy method of dispute resolution
History of Arbitration in India
Indian Arbitration Act of 1989 was the first statute regarding Arbitration in
India, but this was only applicable to the Presidency towns like Madras, Bombay,
and Calcutta. The second one that came into force was the Code of Civil
Procedure, 1908. The comprehensive legislation of Arbitration was laid down by
the Arbitration Act of 1940. This Act was based on the English Arbitration Act
of 1934. The Act of 1940 dealt with domestic Arbitration. The Arbitration and
Conciliation Act 1996 is the Act based on which Arbitration is carried out in
India.
This Act of 1996 deals with matters of domestic, international, and
commercial Arbitration. UNCITRAL (United Nations Commission on International
Trade Law), Which is a Model Law for International Commercial Arbitration,1985.
This was adopted on June 21, 1985, and contains 36 Articles. The aim is the
creation of uniform, arbitrary status.Arbitration was a method used before
independence in India.
The British Arbitration Act of 1899 was the primary
legislation. After independence, legislation was made in 1940 in the form of the
Arbitration Act. This was relevant until the new legislation, the Arbitration
and Conciliation Act 1996, came into force. The basic framework was based on the UNCITRAL Model Law. This Act was amended many times and made the process of
Arbitration easier. India established many centers of arbitral institutions in
many parts. Some of them are MCIA(Mumbai Centre for International Arbitration),
DIAC (Delhi International Arbitration Centre), and ICADR (International Centre
for Alternative Dispute Resolution.
The NITI Ayog has the force of Arbitration,
which was recently issued by the government of India. Internationally, India has
been recognized as a pro-arbitration jurisdiction. India made a significant
contribution to Arbitration, which can be evidently seen in the historical
changes that happened in the arbitration process.
There are many dispute resolution times, but there are five types of ADS;
Arbitration, Conciliation ,Mediation, and LokAdalat
Arbitration
Arbitration is a legal technique of resolution. This is a method in which a
dispute is settled outside the court. It is a procedure in which a dispute is
submitted as an agreement between the parties. The parties refer it to two or
more persons, namely the arbitrator. The decision taken by the arbitrator should
be bound to follow. The dispute is submitted to the arbitral tribunal and the
resolution taken by them is binding on all parties. This is a less formal
process, so the rules are more relaxed. The parties cannot appeal the decision
taken by the arbitrator. There is less judicial intervention in the arbitration
process. This provides more flexible results in dispute resolution
Conciliation
This is often known as the settlement of the dispute without litigation. This is
an independent process. There are effective methods of dispute resolution.It is
a non-binding procedure. There is an impartial third party who is called a
Conciliator. The conciliator helps the parties in dispute resolution. This is a
method in which a dispute is resolved by a mutually beneficial method. This
process is not a formal method of dispute resolution. The final decision depends
on the decision of the parties. If both parties are satisfied with the decision,
only then the process will become successful. If both parties agree with the
decision agreement, then it becomes binding.
According to Halsbury's Law Of England, the term arbitration and conciliation have been differentiated as;
"The term "arbitration" is used in several senses. It may refer either to a
judicial process or to a non-judicial process concerned with the ascertainment,
declaration, and enforcement of rights and as they exist in accordance with some
recognized system of law. An industrial arbitration may well have its function
to ascertain and declare, liabilities but not to enforce, what in the parties,
and such a function is non-judicial. Conciliation is a process of persuading
parties to reach an agreement, and is plainly not Arbitration; nor is the
chairman of a conciliation board an arbitrator.
"It is also emphasized that
Confidence, trust, and faith are the essential things for conciliation. These
processes have some differences when applied in domestic and international
dispute resolution. This is also an arbitrary dispute resolution. There is an
impartial person called a Mediator who will be there to resolve the dispute. In
the presence of the Mediator, both parties sit and resolve the problem.
The
Mediator does not interfere in the decision. This method is also informal and
out of court. The Mediator helps the parties to settle down the dispute. The
mutually decided decision will be the final binding. This is an efficient and
cheaper method of dispute resolution. This is a confidential procedure where the
parties are not compelled to disclose information. Like the judge in a court,
mediators act as decision-makers. Mediation is an interest-based procedure. This
is a party-centered process.
The task of a mediator is to make the process of
mediation efficient. Mediators use various techniques to make the process open
and easier between the parties. The process of mediation starts with a joint
session. The decision of mediation is mutually binding since the relationship
between the parties will be maintained. This can be done effectively by
improving these steps, that is, the determination of the type of
mediation. Identifying the parties involved, Identifying the interest of
participants, Analyzing the case, Developing the Settlement option, Identifying
the settlement position of each party, and considering a negotiation strategy.
Negotiation
This is a non-binding process in which there is no third-party intervention
seen. The most common method of dispute resolution is Negotiation. Mostly, this
occurs in business proceedings in some non-profit organizations and in some
legal proceedings. This also helps to resolve disputes like marriage, divorce,
parenting, and everyday life. Here, both parties come together and settle their
issue. One of the parties put forward the issue, and the other party will either
accept or reject it. This will continue until they reach a conclusion.
This
process of Negotiation takes place in individual, business, and government and
can be inferred from everyday life. There is no exact time; it depends on the
circumstances. It is a fundamental process in which a mutually accepted
agreement will be the final decision. When evaluated from the Indian context,
this is the common method of dispute resolution. Effective Negotiation in India
can be understood effectively by understanding the cultural, legal, and business
aspects.
Lok Adalat
Lok Adalat is a volunteer organization in India's legal system. Legal
Authorities Act 1987 was established to settle disputes out-of-court settlement.
It is a forum where pending cases and disputes are resolved. There is no
provision for appeal if the final decision is not satisfactory. There is no
court fee. The person deciding the case is called the Members of Lok Adalat.
Mainly, the cases referred are pending cases, any case that has not been filed
in front of the court.
The Lok Adalat can be set at the State level, High Court
level, District level, and Taluk level. A new advancement is Mobile Lok Adalat,
which is established in various parts of the country. The jurisdiction of
permanent Lok Adalat is up to 10 lakh rupees. There are National Level Lok
Adalat
National Lok Adalat
This is held at regular intervals. In a single day, it is held throughout the
country. This happens in all courts that range from the Supreme Court to the Taluk level.
Permanent Lok Adalat
This is organized under Section 22-B of The Legal Service Authority Act, 1987.
There is a permanent chairman and two members for permanent pre-litigation for
the settlement of cases like transport, postal, telegraph, etc. The decision
taken by the Lok Adalat is permanently binding. Lok Adalat, when translated into
Hindi, is known as People's Court. This is an informal and conciliatory approach
to resolving disputes in the country. This is one of the most effective methods
of dispute resolution.
Importance of ADR in India
Arbitrary Dispute Resolution provides scientific development techniques to
reduce the burden in court. This method reduces the pendency of cases in the
court in India. There are various methods of Arbitrary Dispute Resolution, such
as Arbitration, conciliation, mediation, Negotiation, and Lok Adalat.
Negotiation does not have statutory recognition in India since this involves
self-counseling between two parties. The provision of ADR can be found in
Fundamental Rights, which is Article 14 and Article 21, which deal with equality
before the law
The aim of ADS is to provide social, economic, and political Justice to society.
Article 39A of DPSP (Directive Principle of State Policy) provides equal Justice
and free legal aid. This method has successfully cleared many backlog cases in
Indian history. Lok Adalat had settled down many cases, and more than 50 lakh
cases had settled in three years. There is a lack of awareness about this in
society.ADS is a more efficient method than traditional litigation. There is a
quicker resolution and cheaper method. Many processes, such as mediation and
Arbitration, offer confidentiality and privacy. The flexibility of the ADS
allows creative solutions. This method mainly helps to retain the relationship
between the party involved in the dispute resolution process.
The ADS method
helps in resolving cross-border disputes. ADS helps empower the weaker sections
of the society. Many International trade agreements are encouraged by the use of
ADS. That is, this method provides a faster, cost-efficient method to resolve
disputes. "Justice delayed is Justice denied."In India,the major problem faced
is the backlog of cases in the court;as a result justice is delayed. Many
International trade agreements are encouraged by the use of ADS. That is, this
method provides a faster, cost-efficient method to resolve disputes. "Justice
enforcement of Arbitration.
MCPC (Mediation and Conciliation Project Committee)
was established to provide mediation as an effective method of dispute
resolution. The statutory body that has been constituted to settle cases is Lok
Adalat. This is done by the process of conciliation and mediation. The main aim
is the settlement of disputes between the parties.NALSA(National Legal Service
Authority) provides free legal services. This will help the weaker section of
society. There is a judicial settlement by which judges assist in settlement.
Parties can opt for this provision. Mediation rules have been established to
regulate the mediation process. Online Dispute Resolution (ODR) is the online
platform for dispute resolution.
This is the use of new technology in dispute
resolution. The enforcement of arbitral awards is governed by the Arbitration
and Conciliation Act. This provides recognition and enforcement of domestic and
international arbitral awards. The Arbitrary Dispute Resolution ensures
confidentiality. This method is widely used to resolve disputes, especially
commercial disputes and agreements. These were the provisions that enabled
Alternative Dispute Resolution
How does ADR work?
The process of Arbitrary Dispute Resolution involves The Appointment of the
Arbitral Tribunal, the Procedure before the Arbitral Tribunal and the
Enforcement of Award.
Appointment of the Arbitral Tribunal
In the dispute process, they appoint an Arbitral Tribunal. Chief Justice of the
jurisdictional High Court or his nominee for the appointment of arbitral
Tribunal under section 11 of the Act. This is ordered after hearing the case.
Orders passed by the Chief Justice or his nominee are subjected to be challenged
by a Special Leave under an Article 136 of the Indian Constitution before the
Supreme Court.
The process begins with the existence of a valid agreement
between the parties. One of the parties initiates the process by sending a
notice of Arbitration to the other party. The party then appoints an arbitrator.
If the party fails to appoint the arbitrator or if the arbitration agreement
specifies a single arbitrator, a sole arbitrator is appointed. Parties have a
specific time to appoint their arbitrator.
Procedure before Arbitral Tribunal
The evidence is led before the arbitral Tribunal. The process of pleading,
affidavit in lieu of evidence, and cross-examination of witnesses is completed
in the reasonable period of life. There will not be any lagging in the process.
In such a case, this can be considered as a speedy process. The arbitral
Tribunal will arrange an initial meeting with the two parties to discuss the
procedure and matter involved. The Tribunal issues the timing, guidelines, and
other details for further proceedings.
Each party then submits their case and
disputes with evidence, and then the Tribunal will set a deadline for the
exchange of the document. Then, the hearing of the case will happen where
evidence is produced before the court after the hearing party has the
opportunity to submit the written arguments before the court. The Tribunal then
closes after the evidence and arguments have been provided.
Enforcement of Arbitral Awards
The Tribunal will close for the proper declaration of decision or to provide
remedies for the damages awarded. The party can challenge or annul the award.
Once the award is final and binding, parties can enforce it through legal channels.The specific procedure may vary based on the arbitration rules of the
parties.
How inexpensive is Arbitration?
In usual court proceedings, there is a mandatory payment of court fees, but in
the case of Alternate Dispute Resolution, there is no need for the payment of
court fees. That is, the absence of ad valorem court fees makes the process
affordable. Arbitration is a quicker dispute resolution method than the
traditional litigation procedure in court. The faster resolution means fewer
legal fees. This is a simple dispute resolution process. This will reduce the
time and money. Parties can choose their arbitrators by understanding their
expert fields. Thereby, dealing with the expertise topic, the case will be
resolved more easily, and as a result, money and time can be saved effectively.
In the Arbitration process, the discovery will be controlled and streamlined; as
a result, the cost will be less. In most cases, the arbitration award is final,
and as a result, there will not be any lengthy appellate process. Unlike the
traditional litigation, this process is not happening in the courtroom. This is
an out-of-court process in which the area and venue are selected by the
concerned parties. As a result, they can choose less expensive places and can
also choose virtual Arbitration; as a result, the travel and accommodation costs
can be saved. Since this process is less formal, the money can be saved.
Parties
usually choose small legal teams in Arbitration, which lead to low cost. Case
management is more efficient and focused; as a result, this can help to control
costs. The parties opt to do ADS at mutually scheduled times, and this avoids
delays and pending and subsequently reduces cost. The actual cost can vary due
to many factors. That is the complexity of rules , circumstances ,chosen
arbitrator etc.
Litigation and ArbitrationLitigation and Arbitration are two different methods
of dispute resolution. Litigation is a formal method taking place at the court.
There were many procedures involved in litigation. That involves filing a
lawsuit, a pre-trial procedure. Trial and judgment rendered by the judge. At the
same time, Arbitration is less formal and can be private.
There is a neutral
third party involved. The arbitrator listens to both sides and give a decision
that is binding. The decision maker in litigation is a jury or judge, but in
Arbitration, the decision maker is an arbitrator or a panel of arbitrators that
is often chosen by the disputing parties. In litigation, parties have less
control over the process and procedure. These are governed by court rules and procedures.
In Arbitration, the parties have more control in the process; they
select the arbitrator, select timings, and rule of procedure. Litigation is a
public process that involves court recordings and formal proceedings. At the
same time, Arbitration is a private proceeding where the decision is
confidential. In litigation, the decision of courts can be appealed to higher
courts; as a result, it is considered a prolonged process.
The arbitration
decision is legal and binding; it cannot be appealed to higher courts.
Litigation is time-consuming and costly because it follows many formal
procedures. Arbitration is more efficient and faster than litigation. The amount
of money may vary from one another. Litigation is a more adversarial process,
whereas Arbitration is more collaborative in nature. The litigation process is
more binding, but Arbitration can be binding or non-binding depending on the
party. Thus, it can be inferred that litigation is a more formal proceeding than Arbitration.Litigation and Arbitration are two different methods of dispute
resolution.
Litigation is a formal method taking place at the court. There were
many procedures involved in litigation. That involves filing a lawsuit, a
pre-trial procedure. Trial and judgment rendered by the judge. At the same time,
Arbitration is less formal and can be private. There is a neutral third party
involved. The arbitrator listens to both sides and give a decision that is
binding. The decision maker in litigation is a jury or judge, but in
Arbitration, the decision maker is an arbitrator or a panel of arbitrators that
is often chosen by the disputing parties.
In litigation, parties have less
control over the process and procedure. These are governed by court rules and
procedures. In Arbitration, the parties have more control in the process; they
select the arbitrator, select timings, and rule of procedure. Litigation is a
public process that involves court recordings and formal proceedings. At the
same time, Arbitration is a private proceeding where the decision is
confidential. In litigation, the decision of courts can be appealed to higher
courts; as a result, it is considered a prolonged process.
The arbitration
decision is legal and binding; it cannot be appealed to higher courts.
Litigation is time-consuming and costly because it follows many formal
procedures. Arbitration is more efficient and faster than litigation. The amount
of money may vary from one another. Litigation is a more adversarial process,
whereas Arbitration is more collaborative in nature. The litigation process is
more binding, but Arbitration can be binding or non-binding depending on the party.Thus, it can be inferred that litigation is a more formal proceeding than
Arbitration.
Advantages of Alternative Dispute Resolution
The main advantage is that this process is less time-consuming, and people
resolve disputes in a short time due to many factors, like the place people
choose, the arbitrator, and the absence of court fees. Due to the enhancement of
new technology, this can be done by virtual platforms. The final decision is the
aggregation of both parties' opinions that help to resolve the dispute easily.
Thereby, the relationship between parties will be there forever, especially in
case of family disputes.
The arbitrator is often chosen by the parties; hence,
they can appoint an efficient one with their consent; therefore, the decision
may be satisfactory. The time, place, and person are determined by the parties,
thereby reducing travel expenses and other insecurities. This process is speedy
when compared with the court cases. Thereby, by all these advantages, the
economic level is not a barrier in between. Anyone from any background can apply
for Arbitration. Justice will not be delayed and, hence, will not be denied.
These were the main advantages of Alternative Dispute Resolution (ADR).
Disadvantages of Alternate Dispute Resolution
As a coin, this may have disadvantages also. In some situations, the dispute may
not end up by ADR. In such cases, the invested time and money in the resolution
of a case will be wasted, and again, the parties plan to do litigation by formal
court proceedings. The decision is final; hence, it cannot be appealed further,
but in normal court proceedings, there is a chance of appeal to a Higher court.
In Arbitration, the full facts cannot be disclosed, and as a result, there is a
chance that the outcome is wrong. Arbitrators may not be experienced as judges,
and this may affect the outcome. There is a chance of the production of
unreliable evidence. But moreover, there are more advantages than disadvantages.
This method is useful for any people, especially the marginalized. The dispute
between two parties can be resolved more efficiently and effectively. There is
no time lag between the process. Since many cases are pending in the court,
these methods help in the easy remedy to avoid it." Justice delayed is Justice
denied." The major problem of denial of a case can be resolved by this method.
Conclusion
Alternative dispute resolution is an effective method of resolving a conflict.
This method is widely adopted by many countries, and in some countries, this is
in progress. The main advantage is that this will reduce the pending cases in
court.ADR process is in a formative stage, so there is much feasibility of
alternatives to litigation. The main thing that it ensures is equal Justice for
all. This method of dispute resolution is more efficient and effective. The
process and procedure are informal and less expensive when compared with others.
An alternative method of dispute resolution is speedy and convenient for
everyone. Nowadays, there is a virtual conference available, hence making the
process of dispute resolution more convenient. Through continuous research,
people should ensure that the Alternative Dispute Resolution is funded more and
officers are appointed subsequently. Otherwise, all the efforts to establish ADR
will be wasted. As Alexa Rosa said, "Learning from conflict is the best of all
experiences.
It brings out the true shrine in our souls".Likewise, through ADR,
people can understand great lessons from their conflict. The major advantage is
that there can be a major improvement in the communication and listening skills
developed other than anything.
For a better ADS, these two parties should
believe the third-party arbitrator. Due to the lack of awareness, people refused
to do ADS instead of a prolonged process, so proper awareness should be
provided. For a developing country like India, this kind of dispute resolution
can benefit a lot. Since the cost, court fee, and time are not too much.
Thereby, Justice can be obtained easily. Therefore, ADS should be promoted and
given more importance in the Indian Judicial system for a better society.
Works Cited:
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Sondhi, Aditya. "Arbitration in India - Some Myths Dispelled." Student Bar Review, vol. 19, no. 2, 2007, pp. 48–54. JSTOR, http://www.jstor.org/stable/44306675. Accessed 15 Oct. 2023.
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"Alternative Dispute Resolution." Complete Lawyer, vol. 12, no. 2, 1995, pp. 5–6. JSTOR, http://www.jstor.org/stable/23778837. Accessed 15 Oct. 2023.
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https://lawdit.co.uk/readingroom/adr-disadvantages
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Arbitration and Conciliation Act, 1996
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(Shonk Kate) (What is Alternate Dispute Resolution) Programme On Negotiation, Harvard Law School, 2024
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