Adr
Adr
Adr
HYPOTHESIS
For the project, the researcher presumes that :-
The results of ADR are often superior to court judgments-and even more clearly
superior to conventional settlements.
The direct involvement by the client can obviate or minimize difficulties arising from
the self-interest of lawyers
RESEARCH METHODOLOGY
In this project, the researcher has relied on the ‘Doctrinal Method’, which is primarily based
upon books, journals, news, articles and from various online sources and publications. A
comprehensive study is made in order to arrive at analytical & critical support of the arguments.
The segments are structured and written actively. The writing style is descriptive as well as
analytical. This project has been done after a thorough research based upon intrinsic and
extrinsic aspect of the assigned topic.
SOURCES OF DATA
Primary:
Cases
Laws
Secondary:
Journals
Articles
Websites
1
Contents
1. Introduction…………………………………………………3
Bibliography………………………………………………14-15
2
INTRODUCTION
“I realized that the true fiction of a lawyer was to unite parties… A large part of my time during
the 20 years of my practice as a lawyer was occupied in bringing out private compromise of
hundreds of cases. I lost nothing thereby- not even money, certainly not my soul.”
– Mahatma Gandhi
The word ‘Alternative ‘, as to the definition given in 6th edition of Oxford Advanced Learners
Dictionary, refers “a thing that you can choose to or have out of two or more possibilities.”
ADR is an abbreviation that stands for Alternative Dispute Resolution. It also stands for
Appropriate Dispute Resolution. ADR refers to all those methods of resolving a dispute, which
are alternatives for litigation in the courts. ADR processes are decision making processes to
resolve disputes that do not involve litigation or violence. Unlike the courts, which use
adversarial processes, ADR focuses on effective communication and negotiation. The term
“alternative dispute resolution” or “ADR” is often used to describe a wide variety of dispute
resolution mechanisms that are short of, or alternative to, full-scale court processes. The term
can refer to everything from facilitated settlement negotiations in which disputants are
encouraged to negotiate directly with each other prior to some other legal process, to arbitration
systems or minitrials that look and feel very much like a courtroom process. Processes designed
to manage community tension or facilitate community development issues can also be included
within the rubric of ADR. ADR systems may be generally categorized as negotiation,
conciliation/mediation, or arbitration systems.
ADR includes Arbitration, Mediation, Conciliation, Negotiation, Expert
Determination, Early Neutral Evaluation by third person, Mini-Trail, Dispute Resolution Board
etc. the approach of judges, lawyers and parties throughout the world is changing towards the
adoption of ADR instead of court litigation. Arbitral Institutions provide ADR services for
quicker, less costly and consensual resolution of civil disputes outside the crowded court
system. ADR provides creative options to the parties to resolve the disputes that are not
available in traditional Dispute Resolution forums. ADR promotes communication between the
parties. It helps the parties to work together to solve the real concerns underlying the conflict
by focusing on the parties’ real interest instead of their positions and claims.
ADR is not immune from criticism. Some have seen in it a waste of time;
others recognize the risk that it be only initiated to check what is the minimum offer that the
other party would accept. The delay in disposal of cases in Law Courts, for whatever reason it
may be, has really defeated the purpose for which the people approach the Courts for their
redressal. In many parts of India, rapid development has meant increased caseloads for already
overburdened courts, further leading to notoriously slow adjudication. As a result, alternative
dispute resolution mechanisms have become more crucial for businesses operating in India as
well as those doing businesses with Indian firms. So Alternate Dispute Resolution is necessary
as a substitute to existing methods of dispute resolution such as litigation, conflict, violence
and physical fights or rough handling of situations. It is a movement with a drive from evolving
positive approach and attitude towards resolving a dispute.
3
HISTORY OF ADR SYSTEM IN INDIA.
In India, the law and practice of private and transactional commercial disputes without court
intervention can be dated back to ancient times. Arbitration or mediation as an alternative to
dispute resolution by municipal courts has been prevalent in India from Vedic times. The
earliest known treatise is the Bhradarnayaka Upanishad, in which various types of arbitral
bodies viz (i) the Puga (ii) the Sreni (iii) the Kula are referred to. These arbitral bodies, known
as Panchayats, dealt with variety of disputes, such as disputes of contractual, matrimonial and
even of a criminal nature.[1] The disputants would ordinarily accept the decision of the
panchayat and hence a settlement arrived consequent to conciliation by the panchayat would
be as binding as the decision that was on clear legal obligations.
The Muslim rule in India saw the incorporation of the principles of Muslim law in the Indian
culture. Those laws were systematically compiled in the form of a commentary and came to be
known as Hedaya. During Muslim rule, all Muslims in India were governed by Islamic laws-
the Shari’ah as contained in the Hedaya. The Hedaya contains provisions for arbitration as
well. The Arabic word for arbitration is Tahkeem, while the word for an arbitrator is Hakam.
An arbitrator was required to possess the qualities essential for a Kazee– an official Judge
presiding over a court of law, whose decision was binding on the parties subject to legality and
validity of the award. The court has the jurisdiction to enforce such awards given under
Shari’ah though it is not entitled to review the merits of the dispute or the reasoning of the
arbitrato.[2]
ADR picked up pace in the country, with the coming of the East India Company. The British
government gave legislative form to the law of arbitration by promulgating regulations in the
three presidency towns: Calcutta, Bombay and Madras. Bengal Resolution Act, 1772 and
Bengal Regulation Act, 1781 provided parties to submit the dispute to the arbitrator, appointed
after mutual agreement and whose verdict shall be binding on both the parties.[3] These
remained in force till the Civil Procedure Code 1859,and were extended in 1862 to the
Presidency towns.
1
O P Malhotra, Indu Malhotra, Lexis Nexis, The Law and Practice of Arbitration and Conciliation (2nd ed., 2006)
2
Id, at 5 and 6.
3
Ivneet Walia, Alternate Dispute Resolution And The Common Man, (Feb. 28, 2009)
4
LEGISLATIONS OF ADR IN INDIA
4
Civil Procedure Code, 1908 as amended and implemented in 2002
5
Civil Procedure Code 1908, Order XXXII A Rule 3
6
Supra note 4
5
required to be proved. During the course of the proceedings, the intervention of the court was
necessary for the extension of time for making an award. Finally, before the award could be
enforced, it was required to be made the rule of the court. This Act did not fulfill the essential
functions of ADR. The extent of Judicial Interference under the Act defeated its very
purpose.[7] It did not provide a speedy, effective and transparent mechanism to address disputes
arising out of foreign trade and investment transactions. [8]
Arbitration and Conciliation Act, 1996:
The government enacted the Arbitration and Conciliation Act, 1996 in an effort to modernize
the 1940 Act. In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative
Committee (AALCC), the International Council for Commercial Arbitration (ICCA) and the
International Chamber of Commerce (ICC) met for a consultative meeting, where the
participants were of the unanimous view that it would be in the interest of International
Commercial Arbitration if UNCITRAL would initiate steps leading to the establishment of
uniform standards of arbitral procedure. The preparation of a Model Law on arbitration was
considered the most appropriate way to achieve the desired uniformity. The full text of this
Model Law was adopted on 21st June 1985 by UNCITRAL. This is a remarkable legacy given
by the United Nations to International Commercial Arbitration, which has influenced Indian
Law. In India, the Model Law has been adopted almost in its entirety in the 1996 Act.[9] This
Act repealed all the three previous statutes. Its primary purpose was to encourage arbitration
as a cost-effective and quick mechanism for the settlement of commercial disputes. It covers
both domestic arbitration and international commercial arbitration. It marked an epoch in the
struggle to find an alternative to the traditional adversarial system of litigation in India.
The changes brought about by the 1996 Act were so drastic that the entire case law built up
over the previous fifty-six years on arbitration was rendered superfluous. Unfortunately, there
was no widespread debate and understanding of the changes before such an important
legislative change was enacted. The Government of India enacted the 1996 Act by an
ordinance, and then extended its life by another ordinance, before Parliament eventually passed
it without reference to Parliamentary Committee.
Arbitration, as practiced in India, instead of shortening the lifespan of the dispute resolution,
became one more “inning” in the game. Not only that, the arbitrator and the parties’ lawyers
treated arbitration as “extra time” or overtime work to be done after attending to court matters.
The result was that the normal session of an arbitration hearing was always for a short duration.
Absence of a full-fledged Arbitration Bar effectively prevented arbitrations being heard
continuously on day-to-day basis over the normal working hours, viz. 4-5 hours every day.
This resulted in elongation of the period for disposal.
Veerappa Moily also said in the ADR congress held in the year 2010 that the 1996 Act,
although modeled along international standards, has so far proved to be insufficient in meeting
the needs of the business community, for the speedy and impartial resolution of disputes in
India.[10]
7
Hon’ble Thiru Justice S.B.Sinha, Judge Supreme Court of India, ‘ADR and Access to Justice: Issues and Perspectives’.
8
ustice R S Bachawat’s, LexisNexis, “Law of Arbitration and Conciliation”, preface commentary, (3 rd ed., 1999).
9
Supra note 4
10
ADR Congress India 2010, (March 6, 2012)
6
The Law Commission of India prepared a report on the experience of the 1996 Act and
suggested a number of amendments. Based on the recommendations of the Commission, the
Government of India introduced the Arbitration and Conciliation (Amendment) Bill, 2003, in
the Parliament. The standing committee of law ministry felt that provisions of the Bill gave
room for excessive intervention by the courts in arbitration proceedings.[11]
11
Government proposes major changes in Arbitration Act, The Times of India, April 9, 2010 .
7
MODES AND PRACTICES OF ADR IN INDIA
ADR can be broadly classified into two categories: court-annexed options (Mediation,
Conciliation) and community-based dispute resolution mechanism (Lok-Adalat).
The following are the modes of ADR practiced in India:
1. Arbitration:
The definition of ‘arbitration’ in section 2(1) (a) verbatim reproduces the text of article 2(a) of
the Model Law-‘arbitration means any arbitration whether or not administered by a permanent
arbitral institution’.[12] It is a procedure in which the dispute is submitted to an arbitral tribunal
which makes a decision (an “award”) on the dispute that is binding on the parties.[ 13] It is a
private, generally informal and non-judicial trial procedure for adjudicating disputes. There are
four requirements of the concept of arbitration: an arbitration agreement; a dispute; a reference
to a third party for its determination; and an award by the third party.[14]
The essence lies in the point that it is a forum chosen by the parties with an intention that it
must act judicially after taking into account relevant evidence before it and the submission of
the parties.[15] Hence it follows that if the forum chosen is not required to act judicially, the
process it is not arbitration.[16]
Institutional Arbitration
An institutional arbitration is one in which a specialized institution with a permanent character
intervenes and assumes the functions of aiding and administering the arbitral process, as
according to the rules of that institution. It is important to note that these institutions do not
12
Supra note 4
13
P.C. Rao & William Sheffield, Universal Law Publishing Co. Pvt. Ltd., Alternative Dispute Resolution: What is it and how
it works, at 26(1997 ed., 2006)
14
Supra note 4
15
Pride of Asia Films v Essel Vision (2004) 3 Arb. LR 169, 180 (Bom).
16
Supra note 4
8
arbitrate the dispute, it is the arbitrators who arbitrate, and so the term arbitration institution is
inapt and only the rules of the institution apply. Incorporation of book of rules in the
“arbitration agreement” is one of the principle advantages of institutional arbitration.
Institutional Arbitration, throughout the world, is recognized as the primary mode of resolution
of international commercial disputes. It is an arbitration administered by an arbitral
institution.[17]
Further, in many arbitral institutions such as the International Chamber of Commerce (ICC),
before the award is finalized and given, an experienced panel scrutinizes it. As a result, the
possibilities of the court setting aside the award is minimal.
Statutory Arbitration
When a law specifies that if a dispute arises in a particular case it has to be referred to
arbitration, the arbitration proceedings are called “statutory arbitration”. Section 2(4) of the
Arbitration and Conciliation Act 1996 provides, with the exception of section 40(1), section 41
and section 43, that the provisions of Part I shall apply to every arbitration under any other act
for the time being in force in India.[18]
2. Mediation:
Mediation is a process in which the mediator, an external person, neutral to the dispute, works
with the parties to find a solution which is acceptable to all of them.[ 19] The basic motive of
mediation is to provide the parties with an opportunity to negotiate, converse and explore
options aided by a neutral third party, to exhaustively determine if a settlement is possible.
Mediation is negotiation carried out with the assistance of a third party. The mediator, in
contrast to the arbitrator or judge, has no power to impose an outcome on disputing parties.
Despite the lack of ‘teeth’ in the mediation process, the involvement of a mediator alters the
dynamics of negotiations.[20] The concept of mediation is not foreign to Indian legal system,
17
A Consultation Paper, Proposed Amendments to the Arbitration and Conciliation Act, 1996, Ministry of Law and Justice,
Government of India,
18
Supra note 4
19
Sriram Panchu, LexisNexis, Mediation: Practice and Law, at 9, (2011).
20
Goldberg, et al Aspen Publishers, Dispute Resolution: Negotiation, Mediation, and Other Processes, at 107 (5th ed., 2007).
9
as there existed, different aspects of mediation. The Village Panchayats and the Nyaya
Panchayats are good examples for this. A brief perusal of the laws pertaining to mediation
highlights that it has been largely confined to commercial transactions. The Arbitration and
Conciliation Act, 1996 is framed in such a manner that it is concerned mainly with commercial
transactions that involves the common man rather than the common man’s interest.
In India, mediation has not yet been very popular. One of the reasons for this is that mediation
is not a formal proceeding and it cannot be enforced by courts of law. There is a lack of
initiative on the part of the government or any other institutions to take up the cause of
encouraging and spreading awareness to the people at large.
3. Conciliation:
Conciliation is “a process in which a neutral person meets with the parties to a dispute which
might be resolved; a relatively unstructured method of dispute resolution in which a third party
facilitates communication between parties in an attempt to help them settle their
differences”.[21]
This consists in an attempt by a third party, designated by the litigants, to reconcile them either
before they resort to litigation (whether to court or arbitration), or after. The attempt to
conciliate is generally based on showing each side the contrary aspects of the dispute, in order
to bring each side together and to reach a solution.
Section 61 of the 1996 Act provides for conciliation of disputes arising out of legal relationship,
whether contractual or not and to all proceedings relating thereto. After its enactment, there
can be no objection, for not permitting the parties to enter into a conciliation agreement
regarding the settlement of even future disputes.
There is a subtle difference between mediation and conciliation. While in meditation, the third
party, neutral intermediary, termed as mediator plays more active role by giving independent
compromise formulas after hearing both the parties; in conciliation, the third neutral
intermediary’s role, is to bring the parties together in a frame of mind to forget their animosities
and be prepared for an acceptable compromise on terms midway between the stands taken
before the commencement of conciliation proceedings.[22]
4. Negotiation:
Negotiation-communication for the purpose of persuasion-is the pre-eminent mode of dispute
resolution. Compared to processes using mutual third parties, it has the advantage of allowing
the parties themselves to control the process and the solution.[23]
21
Garner, Black’s Law Dictionary (9th ed.,2009)
22
Supra note 10.
23
Supra note 13
10
Essentials of Negotiation are:
It is a communication process;
It resolves conflicts;
It is a voluntary exercise;
It is a non-binding process;
Parties retain control over outcome and procedure;
There is a possibility of achieving wide ranging solutions, and of maximizing joint gains.
In India, Negotiation doesn’t have any statutory recognition. Negotiation is self counseling
between the parties to resolve their dispute. Negotiation is a process that has no fixed rules but
follows a predictable pattern.
5. Lok Adalats:
Lok Adalat was a historic necessity in a country like India where illiteracy dominated other
aspects of governance. It was introduced in 1982 and the first Lok Adalat was initiated in
Gujarat. The evolution of this movement was a part of the strategy to relieve heavy burden on
courts with pending cases. It was the conglomeration of concepts of social justice, speedy
justice, conciliated result and negotiating efforts. They cater the need of weaker sections of
society. It is a suitable alternative mechanism to resolve disputes in place of litigation. Lok
Adalats have assumed statutory recognition under the Legal Services Authorities Act, 1987.
These are being regularly organized primarily by the State Legal Aid and the Advice Boards
with the help of District Legal Aid and Advice Committees.[24]
Legal Services Authorities Act, 1987:
The Legal Services Authorities Act, 1987 was brought into force on 19 November 1995. The
object of the Act was to provide free and competent legal services to the weaker sections of the
society to ensure that opportunities for securing justice are not denied to any citizen. The
concept of legal services which includes Lok Adalat is a revolutionary evolution of resolution
of disputes. Though settlements were affected by conducting Lok Nyayalayas prior to this Act,
the same has not been given any statutory recognition. But under the new Act, a settlement
arrived at in the Lok Adalats has been given the force of a decree which can be executed
through Court as if it is passed by it. Sections 19, 20, 21 and 22 of the Act deal with Lok Adalat.
Section 20 provides for different situations where cases can be referred for consideration of
Lok Adalat.
24
Supra note 18
11
SUGGESTIONS AND CONCLUSIONS
The evolution of ADR mechanisms was not of that much success. Thereby, the trend is the
imposition of responsibility and duty on Court
i) Courts are authorized to give directives for the adoption of ADR mechanisms by the parties
and for that purpose Court has to play important role by way of giving guidance. Power is also
conferred upon the courts so that it can intervene in different stages of proceedings. But these
goals cannot be achieved unless requisite infrastructure is provided and institutional frame
work is put to place.
ii) The institutional framework must be brought about at three stages, which are:
Awareness: It can be brought about by holding seminars, workshops, etc. ADR literacy
program has to be done for mass awareness and awareness camp should be to change the
mindset of all concerned disputants, the lawyers and judges.
Acceptance: In this regard training of the ADR practitioners should be made by some
University together with other institutions. Extensive training would also be necessary to be
imparted to those who intend to act as a facilitator, mediators, and conciliators. Imparting of
training should be made a part of continuing education on different facets of ADR so far as
judicial officers and judges are concerned.
Implementation: For this purpose, judicial officers must be trained to identify cases which
would be suitable for taking recourse to a particular form of ADR. [25]
iii) ADR Mechanisms to be made more viable: The inflow of cases cannot be stopped because
the doors of justice cannot be closed. But there is a dire need to increase the outflow either by
strengthening the capacity of the existing system or by way of finding some additional outlets.
iv)Setting up of Mediation Centres in all districts of each state with a view to mediate all
disputes will bring about a profound change in the Indian Legal system. These Mediation
centres would function with an efficient team of mediators who are selected from the local
community itself.
v) Not many Indians can afford litigation. This kind of state of affairs makes common people,
especially rural people, cynical about judicial process. We must take the ADR mechanism
beyond the cities. Gram Nyayalayas should process 60 to 70 percent of rural litigation leaving
the regular courts to devote their time to complex civil and criminal matters.
vi) More and more ADR centers should be created for settling disputes out-of-court. ADR
methods will achieve the objective of rendering social justice to the people, which is the goal
of a successful judicial system.[26]
25
Supra note 11
26
Government of India, Law Commission of India, 222 nd report, ’Need for Justice-dispensation through ADR
12
CONCLUSION:
With the advent of the alternate dispute resolution, there is new avenue for the people to settle
their disputes. The settlement of disputes in Lok Adalat quickly has acquired good popularity
among the public and this has really given rise to a new force to ADR and this will no doubt
reduce the pendency in law Courts. There is an urgent need for justice dispensation through
ADR mechanisms. The ADR movement needs to be carried forward with greater speed. This
will considerably reduce the load on the courts apart from providing instant justice at the door-
step, without substantial cost being involved. If they are successfully given effect then it will
really achieve the goal of rendering social justice to the parties to the dispute.
13
BIBLIOGRAPHY
BOOKS;
Sridha, Madhubhushi , LexisNexis Butterworths, Alternative Dispute Resolution: Negotiation
and Mediation, at 1, (1st Ed. 2006).
Malhotra O P, Malhotra Indu, Lexis Nexis, The Law and Practice of Arbitration and
Conciliation (2nd ed., 2006)
Chowdhury Roy S.K and Saharay H.K - Law of Arbitration and Conciliation – Eastern Law
House – 2002.
Acharya.N.K – Law Relating to Arbitration and ADR – Asian Law House -2004.
N.D.Basu - Law of Arbitration and Conciliation - Orient publishing Co., New Delhi -
Orient Publishing Company, Delhi - 2010.
Singh Avtar - Law of Arbitration and Conciliation – Eastern Book Company – 2005.
Markanda, P.C. Law Relating to Arbitration and Conciliation, Wadhwa & Company, Nagpur,
2001
Sujan, M.A. Law Relating to Arbitration & Conciliation, Universal Law Publishing Co. Pvt.
Ltd., Delhi, 2001
Dictionary;
Black’s Law Dictionary
Websites;
http://adrandhra.blogspot.in/2013/07/evolution-of-adr-alternative-dispute.html
https://www.lawctopus.com/academike/arbitration-adr-in-india/
http://www.legaldesire.com/learn-law-the-concept-of-alternative-dispute-resolution/
http://www.assignmentpoint.com/arts/law/historical-background-adr.html
https://www.abyssinialaw.com/study-on-line/item/320-alternative-dispute-resolution-and-
historical-development
http://lawtimesjournal.in/alternative-dispute-resolution-india/
www.arbitrationindia.com
www.icai.org
14
Statute/Acts
Alternative Dispute Resolution and Mediation Rules, 2003
Code of Civil Procedure, 1908
Code of Civil Procedure (Amendment) Act, 1999
Civil Procedure Mediation Rules, 2003
Rules of Arbitration of the Indian Council of Arbitration
The Arbitration Act, 1940
The Indian Arbitration Act, 1899
The Arbitration and Conciliation Act, 1996
The Legal Services Authorities Act, 1987
UNCITRAL Model Law on Conciliation, 2002
Reports/Order;
222nd Report of Law Commission of India, 2009
114th Report of the Law Commission of India, 1986
176th Report of the Law Commission of India, 2001
129th Report of Law Commission of India, 1988
9th Report on the Arbitration and Conciliation (Amendment) Bill, 2003
15