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Alternative Dispute Resolution Mechanism In India

Alternative Dispute Resolution Mechanism In India

Why in news?

  • Supreme Court judge, Justice N.V. Ramana, has outlined a three-pronged approach, with special focus on alternative dispute resolution, to reverse the nearly 4 crore pendency in courts across the country.
  • Justice Ramana, who is next in line to be the Chief Justice of India as per the seniority norm, was speaking at the First Justice J.S. Verma Memorial ADR and Client Counselling Competition, organised by the Department of Law of the Maharaja Agrasen Institute of Management Studies (MAIMS) of IP University in association with National Legal Services Authority (NALSA).

What is Alternative Dispute Resolution (ADR)?

  • The process by which disputes between the parties are settled or amicably resolved without the intervention of judicial institution and any trial is known as Alternative Dispute Resolution.
  • The ADR mechanism offers to facilitate the resolution of matters of business issues and the others where it has not been possible to initiate any process of negotiation or arrive at a mutually agreeable solution.
  • ADR offers to resolve all types of matters including civil, industrial, and family, etc where people are finding it difficult to settle.
  • Generally, ADR uses a neutral third party who helps parties to communicate, discuss the differences and resolve the dispute.
  • ADR enables individuals and groups to maintain co-operation, social order, and provides an opportunity to reduce hostilities.

Background of ADR in India

  • Vedic period:
    • Since the Vedic period, Indians have used non-adversarial methods for resolving their disputes.
    • Yajnavalkya and Narada highlighted that Kula (family, community, caste disputes), SRENI (trade disputes) and Puga tribunals (community disputes within a locality) were resolving the disputes in ancient India
    • It even continued during the medieval period.
  • British India:
    • Britishers had given formal recognition to arbitration through legislation.
    • Arbitration, as a dispute resolution process was accepted as early as 1879 and found its place in the Civil Procedure Code in 1908.
  • 1987:
    • The Indian legislature enacted The Legal Services Authorities Act, 1987 by constituting the National Legal Services Authority as a Central Authority (Chief Justice of India as its Patron-in-Chief).
    • The Law Commission in its 129th report and Malimath Committee recommended making it mandatory for courts to refer disputes for resolutions through alternate means if the resolution so is possible.
  • 1996:
    • The Arbitration and Conciliation Act, 1996 makes elaborate provisions for conciliation of disputes arising out of legal relationship, whether contractual or not.
  • 1999:
    • In 1999, the Civil Procedure Code Amendment Act of 1999 was passed inserting Section 89 in the Code of Civil Procedure 1908, providing for the reference of cases pending in the Courts to ADR which included mediation.
  • 2005:
    • Procedure for plea-bargaining was included in the Code of Criminal Procedure in 2005. Plea-bargaining means pre-trial negotiation between the accused and the prosecution during which the accused agrees to plead guilty in exchange for certain concessions.
  • 2015:
    • In 2015, the amendment to Arbitration and Conciliation Act was affected to bring Indian arbitration closer to international standards such as the model law by UNCITRAL on international commercial arbitration.

Types of ADR

  • Arbitration:
    • The dispute is submitted to an arbitral tribunal which makes a decision (an “award”) on the dispute that is mostly binding on the parties.
    • It is less formal than a trial, and the rules of evidence are often relaxed.
    • Generally, there is no right to appeal an arbitrator’s decision.
    • Except for some interim measures, there is very little scope for judicial intervention in the arbitration process.
  • Conciliation:
    • A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute in reaching a mutually satisfactory agreed settlement of the dispute.
    • Conciliation is a less formal form of arbitration.
    • The parties are free to accept or reject the recommendations of the conciliator.
    • However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.
  • Mediation:
    • In mediation, an impartial person called a “mediator” helps the parties try to reach a mutually acceptable resolution of the dispute.
    • The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves.
    • Mediation leaves control of the outcome with the parties.
  • Negotiation:
    • A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement to the dispute
    • It is the most common method of alternative dispute resolution.
    • Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life.
  • Lok Adalats
    • The establishment of Lok Adalat system of dispute settlement system was brought about with the Legal Services Authorities Act 1987 for expediting the system of dispute settlement. In Lok Adalats, disputes in the pre-litigation stage could be settled amicably.

Advantages of ADRs | Alternative Dispute Resolution Mechanism In India

  • The resolution of disputes takes place usually in private – helping maintain confidentiality.
  • It is more viable, economic, and efficient.
  • Procedural flexibility saves valuable time and money and absence of stress of a conventional trial.
  • This often results in creative solutions, sustainable outcomes, greater satisfaction, and improved relationships.
  • The possibility of ensuring that specialized expertise is available on the tribunal in the person of the arbitrator, mediator, conciliator or neutral adviser.
  • Further, it offers greater direct control over the outcome. Personal relationships may also suffer less.

Issues regarding the ADR mechanism in India

  • Lack of awareness among the people about the availability of mechanisms.
  • Overlooked and/or ignorant parties are at a disadvantage of succeeding in an ADR.
  • Litigants who tried ADR are not satisfied and regularly dissociate themselves and go to formal courts for resolution.
  • ADR cannot pass injunctions (ordering parties to do or not do something).
  • It is not binding in nature which makes it difficult to get approval of Parties  unless they sign an agreement or mutually agree to resolve their disputes by ADR.
  • There is an issue of finding a neutral arbitrator as the unsatisfied party invariably blames the arbitrator for bias and non-fairness.
  • ADR process may not always yield a satisfactory resolution.
  • the Arbitration and Conciliation Act, 1996 has lost its basic structure and identity and is no longer what its legislators intended it to be.
  • Though there is a mandate to transfer cases to arbitration and conciliation, there is a lack of awareness among the lawyers and judicial officers also which bars the use of such provision.

Conclusion | Alternative Dispute Resolution Mechanism In India

  • The COVID-19 pandemic which saw shut down of majority of court proceedings is an important opportunity for India to build a strong ADR mechanism.
  • Efforts have to be taken by the judiciary, lawyers, government, and litigants to create an ecosystem conducive for mediation.
  • There needs to be an attitudinal change among people to make them go for ADR mechanisms with confidence and trust.
  • More speedy and successful ADR solutions will build confidence in the litigants and make them opt for ADR mechanisms.
  • The government can play the role by actively promoting ADR mechanisms by creating trained arbitrators, mediators, laying down procedures and terminologies, and incorporating required legal support.
  • Given the governments are the most prolific litigants in the courts, they can lead the way by unburdening the courts and build a culture of ADR and opt for ADR mechanism.
  • There is a need to build infrastructure for ADR procedures, Skilling of lawyers in ADR, providing required manpower, etc.
  • The ADR can now ride the digitization revolution and bring ADR to the doorsteps of the litigants.
  • The Department of Justice has compiled a list of twelve organizations that provide online mediation services. More such organizations will be required to increase the frequency with which mediation is used. Alternative Dispute Resolution Mechanism In India



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