TOPIC – REASONS BEHIND INTRODUCTION OF ADR IN INDIA

B.B.A + LL.B (H)

SEMESTER – 7th

SUBMITTED TO- SUBMITTED BY-

VINAYAK PANDEY NEHA GUPTA

18GSOL1030056

SALONI SHARMA

18GSOL1030019

KAPIL KANDPAL

18GSOL1030017
Introduction

The system of dispensing justice in India has come under great stress for several reasons
mainly because of the huge pendency of cases in courts. In India, the number of cases filed in
the courts has shown a tremendous increase in recent years resulting in pendency and delays
underlining the need for alternative dispute resolution methods. It is in this context that a
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 and presided over by the Chief Justice of India.

It said: "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".

In a developing country like India with major economic reforms under way within the
framework of the rule of law, strategies for swifter resolution of disputes for lessening the
burden on [1]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 (ADR) by
establishing facilities for providing settlement of disputes through arbitration, conciliation,

ADR in India1

1. The Legal Services Authorities Act was passed in 1987 to encourage out-of-court
settlements, and the new Arbitration and Conciliation Act was enacted in 1996.
2. Procedure for plea-bargaining was included in the Code of Criminal Procedure in
2005. {Plea-bargaining is best described as a "pre-trial negotiation between the
accused and the prosecution during which the accused agrees to plead guilty in
exchange for certain concessions by the prosecution."}
3. Lok Adalat or "people's court" comprises an informal setting which facilitates
negotiations in the presence of a judicial officer wherein cases are dispensed without

1 https://www.google.com/url?
sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiGr53kw8zyAhUZeH0KHfewAi4QFn
oECAIQAQ&url=https%3A%2F%2Ffanyv88.com%3A443%2Fhttps%2Fblog.ipleaders.in%2Fan-introduction-to-alternative-dispute-resolution
%2F&usg=AOvVaw0F_iFjanZsnAtU31ii8dgf
 undue emphasis on legal technicalities. The order of the Lok-Adalat is final and
binding on the parties, and is not appealable in a court of law
4. The Courts are 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.
5. ADR provided procedural flexibility, saved valuable time and money and avoided
the stress of a conventional trial.
6. In a developing country like India with major economic reforms under way within
the framework of the rule of law, strategies for swifter resolution of disputes for
lessening the burden on the courts and
7. To provide means for expeditious resolution of disputes, there is no better option but
to strive to develop alternative modes of dispute resolution (ADR).
8. Which establishing facilities for providing settlement of disputes through arbitration,
conciliation, mediation and negotiation.

The Concept & its efficacy2:

“It is the spirit and not the form of law that keeps the justice alive.” LJ Earl Warren

The concept of Conflict Management through Alternative Dispute Resolution (ADR) has
introduced a new mechanism of dispute resolution that is non adversarial. A dispute is
basically ‘lis inter partes’ and the justice dispensation system in India has found an
alternative to Adversarial litigation in the form of ADR Mechanism.

New methods of dispute resolution such as ADR facilitate parties to deal with the
underlying issues in dispute in a more cost-effective manner and with increased efficacy. In
addition, these processes have the advantage of providing parties with the opportunity to
reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict
in a peaceful manner, and achieve a greater sense of justice in each individual case. The
resolution of disputes takes place usually in private and is more viable, economic, and
efficient. ADR is generally classified into at least four types: negotiation, mediation,
collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is inclu ded as
well, but for present purposes it can be regarded as a form of mediation.

2 http://www.legalservicesindia.com/article/224/ADR-Mechanism-in-India.html
Evolution of Modern Arbitration Law in India
Though arbitration prevailed in India, in the form of panchayats (which have been now given
recognition in the Constitution of India)3 before the Britishers came in and established their
authority. In 1923, the League of Nations gathered and agreed to the Geneva Convention.
The Geneva Convention also contained clauses for arbitration.4 The first arbitration dedicated
provision in the Civil Procedure Code, 1908 which had Section 89 providing for arbitration
but the same was repealed by Section 49 and Schedule III to the Arbitration Act, 1940 5. Prior
to enactment of the Arbitration Act, 1940, the Britishers enacted Arbitration (Protocol and
Convention) Act, 1937 wherein the Preamble of the Act stated that India was signatory as a
State to the Protocol on arbitration as established by League of Nations 6. The League of
Nations intended to bring the world closer through trade which made it realise the importance
of arbitration. As a result, the Protocol on Arbitration Clauses, 1923 came into existence.
There were several lacunae in the Protocol, hence, a need for amendment was felt. The
League of Nations came up with another Convention for Enforcement of Foreign Arbitral
Awards which was lacking in the 1923 Convention 7. This Convention of 1927 is also known
as the Geneva Convention of 1927. This Convention formed the basis for other enactment i.e.
the Arbitration (Protocol and Convention) Act, 1937. Section 3 of the Arbitration (Protocol
and Convention) Act, 1937 refers to the existence of the Arbitration Act, 1899. 8 The
Arbitration Act, 1940 came into picture repealing all the previous laws governing arbitration.
The Arbitration (Protocol and Convention), 1937 failed to achieve its objective. Then after
several years of work, in 1958, the world came up with a convention i.e the New York
Convention, which is still running its course till date. Then, the Arbitration Act, 1940 was
repealed and replaced by the Arbitration Act, 1960. The New York Convention inspired
another legislation in the Foreign Awards (Recognition and Enforcement) Act, 1961 which
was lacking in the Arbitration Act, 1960.
In 1981, in Guru Nanak Foundation v. Rattan Singh, Desai9, J. observed with regards to the
1961 Act that the arbitration system has become ineffective. The point was that even in cases
3 The Constitution (73rd Amendment Act), 1992; also refer to Article 40 of the Constitution of India.
4 League of Nations, Treaty Series, Publication of Treaties and International Engagements registered with the
Secretariat of the League of Nations
<https://treaties.un.org/doc/Publication/UNTS/LON/Volume%2027/v27.pdf>.
5 Section 89 (repealed),  Civil Procedure Code, 1908;
 WIPO Document, p. 26 <wipo.int/edocs/lexdocs/laws/en/in/in056en/.pdf>.
6 Preamble, Arbitration (Protocol and Convention) Act, 1937.
7 Convention on the Execution of Foreign Arbitral Awards signed at Geneva on 26-9-1927 also known as the
Geneva Convention, 1927.
8  Section 3, Arbitration (Protocol and Convention) Act, 1937.
9 (1981) 4 SCC 634
if the arbitrator passed an arbitral award, the parties used the provisions of the Act to
challenge the award. This observation presented the 1961 Act as an additional layer which
party may choose or not, prior to the litigation process. The lacunae in the provisions of the
1961 Act, made it redundant and people ended up approaching the courts for litigation.
Arbitration as a process was meant to be cost effective and time efficient, but the 1961 Act
failed miserably to achieve this objective. This Act would be further repealed and replaced by
the Arbitration and Conciliation Act, 1996. In 1985, United Nations Commission on
International Trade Law (UNCITRAL) presented a comprehensive model for arbitration. The
present Arbitration and Conciliation Act, 1996 is based on that UNCITRAL model. The
Arbitration and Conciliation Act, 1996 has been subjected to two more amendments in 2015
and 2019.

Conclusion

Despite the few exceptions, ADR remains the solution of choice for most legal
disputes. Even as the number of pending civil cases continues to rise, ADR methods have
helped reduce the total number of cases ending in trial by more than 60 percent since the
1980s. ADR saves parties time and money. It keeps court staff from burning out. Barring
some fundamental economic or social shift, ADR’s popularity will likely continue to grow,
and the Hollywood notion of “trial” may become a thing of the past.