EDITED BY – KIRTEE KAMAL DAS

LLB 3rd SEMESTER (2022 batch)

UNIVERSITY LAW COLLEGE, GAUHATI UNIVERSITY

2015

ALTERNATIVE DISPUTE RESOLUTION

Paper: 3.5

Full Marks: 80

Time: Three hours

The figures in the margin indicate full marks for the questions.
1. Fill in the blanks with correct answer: : 1x10=10

(A) The Arbitration and Conciliation Act was passed in_______ (1945/1996)

Ans: 1996

(B) Arbitral award includes ________ award. (final/interim)

Ans: Interim

(C) Arbitration agreement is provided by Section________ [2(1)(b)/2(1)(a)]

Ans: Section 2 (1)(b)

(D) Arbitration award is ________ (final/ subject to appeal)

Ans: Final

(E) The member of arbitration in arbitral tribunal shall be _________ (even/

uneven)

Ans: Uneven

(F) Arbitration starts with arbitration agreement _________ (true/false)

Ans: False

(G) In __________ the United Nations Commission on International Trade Law

has adopted the UNCITRAL Model Law on International Commercial
Arbitration. (1985/1996)

Ans: 1985

(H) The principle of natural justice is incorporated in arbitral proceeding.

(true/false)

Ans: False

2. Answer the following: 2×6=12

(A) What is contractual arbitration?

Ans: In general, contractual arbitration includes enforcement of arbitration

between the parties to an agreement, defending against arbitration clauses,
participation in arbitration pursuant to an arbitration clause, and judicial
proceedings to compel arbitration and subsequent awards.

(B) What do you mean by mediation?

Ans: Mediation involves the intervention of a third person, or mediator, into a

dispute to assist the parties in negotiating jointly acceptable resolution of issues in
conflict. The mediator meets with the parties at a neutral location where the
parties can discuss the dispute and explore a variety of solutions.

(C) Define arbitral award.

Ans: The arbitral award is the decision or judgment rendered by the arbitrators
resolving the matter submitted for their consideration. It may be final,
interlocutory or by agreement of the parties. It is subject to the presumption of res
judicata, enforceability and presumption of legality.
 (D) What is Lok-Adalat?

Ans: Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum
where disputes/cases pending in the court of law or at pre-litigation stage are
settled/ compromised amicably. Lok Adalats have been given statutory status
under the Legal Services Authorities Act, 1987.

(E) What do mean by negotiation?

Ans: Negotiation allows the parties to meet in order to settle a dispute. The main
advantage of this form of dispute settlement is that it allows the parties themselves
to control the process and the solution. Negotiation is much less formal than other
types of ADRs and allows for a lot of flexibility.

(F) Mention the main provisions of the Legal Services Authorities Act, 1987.

Ans: An Act to constitute legal services authorities 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 by reason of economic or other
disabilities, and to organize Lok Adalats to secure that the operation of the legal
system promotes justice on a basis of equal opportunity.

The Legal aid is a constitutional right supported by Articles 21 and 39-A of the
Constitution of India. Article 21 of the Indian Constitution states that no person
shall be deprived of his life or personal liberty except according to procedure
established by law.

3. Discuss about the historical backgrounds of the Arbitration and Conciliations

Act. 10

Ans: Introduction

Alternate dispute resolution (ADR) has various modes of dispute settlement which
include, mediation, arbitration, conciliation, negotiation, and Lok Adalats. These
instruments are used by many countries for resolving disputes effectively. But in
India, alternate dispute resolution is still evolving. With the increased development
of the world economy and the impact of globalization, it is hard to keep up with the
ever-changing requirements of the current time period.

With a huge number of pending cases, the judicial administration through

traditional processes became difficult and hence called for the implementation of
such ADR practices. Moreover, the Malimath Committee recommended making it
mandatory for the court to refer the dispute for settlement through conciliation,
mediation, arbitration, negotiation through Lok Adalats but the most widely used
form of ADR worldwide is Arbitration because of the confidentiality, speed, and
flexibility that it offers.

A Brief History of Arbitration in India

 Arbitration in pre-British era

Arbitration has a long history in India and has been prevalent from the Vedic times.
In addition to the regular official courts, certain popular courts also existed side-by-
side in ancient India. The disputes regarding the boundaries of the property were
settled by the village elders. One of the earliest treaties that mentioned arbitration
as per the Hindu Law, was “Brihadaranyaka Upanishad“. Sage Yajnavalkya mentions
three types of popular courts—’Puga’ the local courts, ‘Srenis’ the people engaged
in the same business or profession, and the ‘Kulas’, who were members concerned
with the social matters of a particular community and all these three bodies were
the early arbitration courts in India. These popular courts continued to flourish in
India till the beginning of British rule. During British rule, the government courts
only accepted certain cases which were unsettled by the popular courts and came
as an appeal against the decisions of the popular courts. The popular courts tried
only civil cases and did not enjoy any power to entertain criminal cases. Earlier
many disputes were solved by a group of wise men of the community knows as
“Panchayat” and the members were known as “panchas”. The decision taken by
them was binding on the parties.

The 1st Arbitration Act in India was introduced on 1st July 1899. This Act was
founded on the English Arbitration Act, 1889 and the Indian Arbitration Act, 1899
was applicable only to the presidency towns of Bombay, Calcutta, and Madras. A
uniqueness of this Act was that the names of the arbitrators had to be mentioned
in the agreement and the arbitrator could also be a sitting judge then. The Indian
Arbitration Act, 1889 was very complex, bulky, and needed reforms so a formal law,
a more specific arbitration Act came into force in 1940, during the British regime
itself. It applied to the whole of India but had many disputes, many criticisms and
lacked in quite a lot of areas when it came to its implementation. Yet it can be
credited for bringing uniformity in law across the country. The Arbitration Act, 1940
had a provision for protecting the agreement between the parties from being
debased and diluted by the mere presence of some lacuna in it.

The Act had a provision to distinguish between an application for setting aside an
award and also for a decision that the award is a nullity. One major setback was
that the rules for filing awards differed from one high court to another. Another
major drawback was that if the court-appointed arbitrator died during the
arbitration proceedings, there was no other provision in the 1940 Act for the
appointment of a new arbitrator. The Act was also silent about the shortcomings
inbuilt in individual private contracts. There was no provision in the Act to prohibit
an arbitrator from resigning at any time in the course of the arbitration proceedings
subjecting the parties to heavy losses, especially where the arbitrators acted mala
fide. It did make provision for arbitration without court intervention, but it failed
to achieve the desired objective and the entire process then became more litigation
oriented.

 Arbitration in the post-British era

The present date arbitration law is an amalgamation of several declarations and

ordinances passed by the Government of India to accept the challenges posed by
the economic reforms taking place in the country from time to time. After
independence, the Arbitration and Conciliation Act 1996 came into existence and
it had been modelled on the lines of the UNCITRAL (United Nations Commission on
International Trade Law) framework of laws. The aim was to modernize the Indian
arbitration law and make it consistent with the best global practices while also
making India a global centre for arbitration.
The Arbitration and Conciliation Act, 1996

The Act of 1996 contained amalgamated, strengthened, and amended laws relating
to arbitration. It was applicable to the whole of India and the purpose of the Act
was to:

1. Amend and consolidate the law for domestic arbitration, and also for
international commercial arbitration.
2. Define the law relating to conciliation.
3. Enforce foreign arbitral awards.
4. To make provision for an arbitral procedure that is just and effective.
5. Aimed at minimizing the supervisory role of the courts in the arbitral process.
6. For settling disputes, it permits an Arbitral Tribunal to use mediation,
conciliation, and other procedures during the arbitral proceedings.
7. One of the objectives of the Act was to significantly cut down the grounds on
which an arbitrator award could be challenged before the court.

The Government of India amended the Arbitration and Conciliation Act, 1996 in
2015 and again in 2019. The aim was to again make arbitration a chosen mode of
settlement of commercial disputes, thus making India a hub of international
commercial arbitration.

Guru Nanak Foundation v. Rattan Singh & Sons (1981)

In this case, the Supreme Court stated that they saw the Arbitration Act, 1940 as
an alternate medium to resolve disputes less formally, more effectively, and
expeditiously. The Apex Court added that the way proceedings under the Act were
conducted and challenged without an exception in the courts, had defied its
purpose and had been clothed with the legalese of unforeseeable complexity.

Conclusion

Arbitration in India is not a new concept and it was already existing in ancient India.
But it can be said that arbitration is still in its development phase and it is not the
popular choice for settling disputes in India. The present arbitration system needs
to undergo further amendments so that it can be made more effective in the days
to come, both in the matters of domestic and international commercial arbitration.
Arbitration is correctly called one of the types of ADR which means it is a settlement
of disputes out of court, yet we have a lot of intervention by the court in the
arbitration process defeating the very meaning of ADR.

4. What is arbitration? Discuss about the advantages and disadvantages of

arbitration. 2+8=10

Ans: Introduction

It has been rightly said: “An effective judicial system requires not only that just
results be reached but that they be reached swiftly.” But the currently available
infrastructure of courts in India is not adequate to settle the growing litigation
within a reasonable time. Thus, there is a chain reaction of litigation process and
civil cases may even give rise to criminal cases. Speedy disposal of cases and
delivery of quality justice is an enduring agenda for all who are concerned with
administration of justice.

In this context, there is an imminent need to supplement the current

infrastructure of courts by means of Alternative Disputes Resolution (ADR)
mechanisms. Apart from bringing efficiency in the working of the judiciary,
measures are being taken all over the world for availing ADR systems for resolving
pending disputes as well as at pre-litigation stage. Efforts towards ADR have met
with considerable success and good results elsewhere in the world, especially in
the litigation- heavy India.

Arbitration

The process of Arbitration cannot exist without valid arbitration agreement prior
to the emergence of dispute. In this technique of resolution parties refer their
dispute to one or more persons called arbitrators. Decision of arbitrator is bound
on parties and their decision is called ‘Award’. The object of Arbitration is to
obtain fair settlement of dispute outside of court without necessary delay and
expense.
Any party to a contract where arbitration clause is there, can invoke arbitration
clause either himself or through their authorized agent which refer the dispute
directly to the arbitration as per the Arbitration clause. Here, arbitration clause
means a clause that mention the course of actions, language, number of
arbitrators, seat or legal place of the arbitration to be taken place in the event of
dispute arising out between the parties.

Advantages of Alternative Dispute Resolution

Justice Warren Burger, the former CJI of American Supreme court had observed:
“the harsh truth is that we may be on our way to a society overrun by hordes of
lawyers, hungry as locusts, and bridges to judges in number never before
contemplated. The notion that ordinary people want black-robed judges, well-
dressed lawyers, fine paneled court rooms as the setting to resolve their disputes,
is not correct. People with legal problems like people with pain, want relief and
they want it as quickly and inexpensively as possible”

The benefits or advantages that can be accomplished by the ADR system are
summed up here briefly:

 Time saved with ADR mechanism: Generally, court hearings take a long
time to be arranged, leading to lengthy waits for any issues to be resolved.
Conversely, an informal mediation can take place far quicker, increasing the
likelihood of a quick resolution.
 Takes into account the needs of both parties: Court is a far more rigid
institution and tends to resolve disputes in line with legal legislation.
However, ADR is more flexible and responsive to the individual needs of
those involved. Therefore, the outcome is more likely to be reflective of the
dispute.
 More likely to preserve existing relationships: the needs of both parties
are taken into account; the outcome is more likely to suit the needs of
everyone involved. This can help preserve existing customer relationships
somewhat, which can be useful if the relationship is expected to continue.
 For example, they’ve scheduled additional work from you, before a dispute
arose.
 Confidentiality: Such processes occur behind the privacy of closed doors,
not within the public sphere of a courtroom. Therefore, disputes can be
dealt with in a confidential manner.
 Faster resolution: The court system is overloaded. It cannot hold a trial for
every lawsuit that gets filed. As a result, it can take several years for a legal
case to go to trial. One of the benefits of ADR is that resolution is fast. A
settlement or arbitration award can be issued within a few weeks or
months of filing a lawsuit.
 Lower cost: The discovery process for going to trial can lead to an
exorbitant total cost that includes court reporter fees, attorney fees, and
the expenses associated with printing and mailing documents. More
importantly, a long, drawn-out court trial can require jurors, witnesses, and
the parties themselves to remain off of work for weeks. With ADR, the
process is shorter, and time is money.
 More flexibility: The ADR process is less rigid. Unlike a trial date that can
vary because of the backlog, ADR can be scheduled at any time. This not
only provides greater flexibility but also helps speed up the resolution of
the conflict.
 No biasness: A neutral third party is selected to preside over all cases that
go through ADR. The neutral third party should have no connections to
anyone involved in the lawsuit and no interest in the outcome of the
dispute.
 Enforceability of Awards: The United Nations Convention for the
Recognition and Enforcement of Foreign Arbitral Awards of 1958, known as
the New York Convention, generally provides for the recognition of arbitral
awards on par with domestic court judgments without review on the
merits. This greatly facilitates the enforcement of awards across borders.
DISADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION

There are undoubtedly many benefits to alternative dispute resolution. However,

it is also important to note alternative dispute resolution’s disadvantages.
Following are the drawbacks of alternative dispute resolution:

 Surrenders Appeal: Unlike litigation, where a party may appeal a decision

after it is made, alternative dispute resolution processes limit the ability of
the parties to achieve a different outcome after the process is resolved and
the decision is made. This can undercut the accessibility of the process for
some.
 Increases Spending: There are more out-of-pocket costs at the beginning of
the alternative dispute resolution process that would not be the case in
litigation. Parties will have to pay for a neutral, the space for the process,
and many other costs. This is why it is essential to weigh the costs of the
process with the costs at stake.
 Avoids Binding: Litigation results in a binding decision for the parties. Non-
binding can be an advantage of alternative dispute resolution. It can also be
a pitfall because the parties may go through the process and not reach a
resolution, putting them back at square one.
 Encourages Compromise: The collaborative nature of alternative dispute
resolution requires that the parties come to the table with the intent to
compromise their position in some way. While this may be a quick result, it
may not be the best possible result. A party must have a stellar
understanding of what they are entitled to when entering these processes.
 Stalls Process: Because the process is non-binding, some parties will
attempt to use alternative dispute resolution as a tactic to stall the
proceedings for some time. This can be to buy more time to gather
evidence or to cause the plaintiff to wait longer for their award. Spotting
when someone is going into a dispute resolution process without the intent
of attempting to settle is important when considering the process.
 There is no guaranteed resolution: The alternative resolution process does
not always lead to a resolution. This means that the parties could invest
 time and money in trying to resolve the dispute out of court and still end up
having to proceed with litigation and trial before a judge and jury.
 Limit on Awards: There is no equivalent of s.66 of the Arbitration Act 1996
(which provides that an award made by the tribunal pursuant to an
arbitration agreement may be enforced in the same manner as a judgment
or order of the court to the same effect) enabling ADR awards to be
enforced as if they were court judgment.[13] However, the awards are not
so easily enforceable. Arbitrations mostly resolve disputes that involve
money. They cannot issue orders compelling one party to do something, or
refrain from doing something; hence, they cannot give injunctions.

Conclusion

Alternative dispute resolution is the use of methods to resolve a dispute without

resorting to legal action. They usually involve the use of a neutral third party and
can help find a creative solution to resolve an issue.[16] ADR mechanism are of
different type it can range from mediation, arbitration, negotiation to Lok Adalat,
conciliation etc. Different type of methods is used for different needs for
example, National Lok Adalat is conducted every three months whereas
mediation process occurs with help of a appointed mediator.

ADR processes have a number of advantages. They are flexible, cost-efficient,

time-effective, and give the parties more control over the process and the results.
Parties who resolve their disputes through ADR are generally more satisfied
because they may directly participate in working out the terms of their
settlement. When appropriate settlement processes are available, many disputes
can be resolved more efficiently and with greater satisfaction to all parties.
Lengthy, costly litigation can be avoided, divisiveness minimized, and productive
results achieved.

5. Define arbitration agreement. Discuss about the main requirement of valid

arbitrations agreement. 2+8=10

Ans: Introduction
In recent years, arbitration has grown leaps and bounds worldwide. Due to the
underlying principles of party autonomy and confidentiality, it has flourished as a
standalone dispute resolution mechanism. The arbitration agreement forms a
binding procedure to be followed by the parties as well as the arbitral tribunal in
its decision making. The underlying principles of arbitration such as party
autonomy and confidentiality have made it an attractive choice of dispute
resolution among the parties, however, the technicalities involved in arbitration
can make it seem a tad bit daunting.

One must understand that unlike the traditional dispute resolution methods, the
arbitral process does not begin from the date the dispute arises. Regardless of the
dispute, the arbitration process starts when the parties enter into an arbitration
agreement. At the time of dispute, it is the arbitration agreement that mandates,
guides and establishes the arbitration proceedings. In other words, the facts
decide and guide the law, not the other way around. The arbitration agreement,
therefore, becomes a vital aspect of any agreement where the parties choose to
take their issues to arbitrate. and requires considerable brainstorming and
foresight.

Arbitration Agreement

An arbitration agreement is the raison d’être of an arbitration proceeding. It is

only through an arbitration agreement that parties can submit their issues to be
adjudicated by the arbitral tribunal. An arbitration agreement not only engenders
an arbitral tribunal but also gives shape to it. Therefore, it is crucial to understand
the position of the arbitration agreement under the statute.

In the 1940 Act, the Arbitration Agreement was defined under Section 2(a) as-

“A written agreement to submit present or future differences to arbitration,

whether an arbitrator is named therein or not.”

The vague definition was replaced in the 1996 Act by Section 7 which stated –
  Arbitration agreement:

(1) In this Part, “arbitration agreement” means an agreement by the parties to

submit to arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether contractual or
not.

(2) An arbitration agreement may be in the form of an arbitration clause in a

contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication

which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause

constitutes an arbitration agreement if the contract is in writing and the reference
is such as to make that arbitration clause part of the contract.”

In short, an arbitration agreement is formed when two parties enter into a

contract and agree in writing that any disputes arising between them out of that
contract will have to be resolved without going to the courts and with the
assistance of a neutral person: a third party appointed by both of the parties,
known as the Arbitrator, who would act as a judge and whose decision will be
binding upon the parties.

Also, the 1996 Act ascribes an inviolable position to the arbitration agreement.
Section 8 clearly states that after taking cognizance of a valid arbitration
agreement between the parties the court shall abstain from dwelling into the
merits of the dispute and refer the parties to arbitration.
An arbitration agreement once made, cannot be deterred when a dispute arises.
In Ravi Prakash Goel v. Chandra Prakash Goel, the Supreme Court held that where
there is an arbitration agreement present and applicable, the parties cannot take
recourse to the civil court without first undergoing arbitration. It is mandatory for
the courts under Section 8 of the 1997 Act, to refer the parties to arbitration
when there is an applicable arbitration agreement.

Forms of Arbitration Agreement

A fundamental requirement under Section 7 of the 1997 Act is that an arbitration

agreement shall be in writing. Besides that, Section 7 grants liberty to the parties
to form an arbitration agreement in multiple ways as enumerated below:

 A standalone separate Arbitration Agreement

A separate arbitration agreement can be formed in addition and reference to the

operative agreement between the parties.

 An Arbitration Clause

An arbitration clause can be formed in the operative agreement as to the section

of the agreement that deals with the rights and options of the parties in the event
of a legal dispute arising out of the contract. An arbitration clause is construed as
an arbitration agreement.

 Incorporation by reference

An arbitration clause contained in a separate contract can also be incorporated in

a contract being drafted. As per Section 7(5), any reference to a document
containing an arbitration clause shall also be construed as an arbitration
agreement provided that the referred contract is in writing and the reference is
made with the intention to make that arbitration clause the part of the contract.

In M/s Elite Engineering and Construction (HYD.) Private Ltd. v. M/s Techtrans
Construction India Private Ltd., the Supreme Court held that a general reference
to the incorporation of a separate arbitration clause will not be tenable in law.
The reference shall be clear and must indicate the intention of the parties to
incorporate.

 By communication

According to Section 7(b) of the 1996 Act, an arbitration agreement can also be
inferred from the exchange of letters, telex, telegrams, or other means of
telecommunication, which provide a record of the agreement between the
parties. In short, an agreement can be construed from the correspondence of the
parties where there is a clear and unequivocal intention to refer the disputes to
arbitration.

Recently, in Galaxy Infra and Engineering Pvt. Ltd v. Pravin Electricals Pvt. Ltd the
Delhi High Court held that the draft agreement exchanged by email between the
parties can be construed as a valid arbitration agreement.

In Pravinchandra Murarji Savla v. Meghji Murji Shah, it was held that it is the
substance of the agreement and not the form which is of importance.

Also, as per Section Section 7(c) of the 1996 Act and S.N. Prasad v. Monnet
Finance Ltd., where a statement of claims or allegations is made and is met with
‘non-denial’ by the other party, the presence of an arbitration agreement can be
construed. Even though the 1996 Act has left the field open with a plethora of
ways to form an arbitration agreement, it is always recommended as a standard
practice to choose to have an arbitration clause in a contract itself.

Drafting an Effective Arbitration Agreement

Supreme Court, in the cases Jagdish Chander v. Ramesh Chander and K. K. Modi v.
K. N. Modi directly tackled the question of what constitutes a valid arbitration
agreement. The Hon’ble Court arrived at a list of principles that should be
incorporated in an arbitration agreement. The principles are as follows:

1. The arbitration agreement must be in writing.

2. The parties shall agree to refer any dispute (present or future) arising out of
a contract to a private tribunal.
 3. The private tribunal should be empowered to adjudicate upon the disputes
in an impartial manner, giving due opportunity to the parties to put forth
their case before it.
4. The parties must agree to be bound by the decision of the arbitral tribunal.
5. The intention of the parties to refer the dispute to a private tribunal must
be unequivocally reflected.
6. There must be ‘consensus ad idem’ between the parties i.e. they should
agree to the same thing in the same sense.
7. The words shall contemplate an obligation and determination on the part
of the parties to invoke arbitration and not merely a possibility. For
example, use of the words such as “parties can if they so desire, refer their
dispute to arbitration” or “ in the event of any dispute, the parties may also
agree to refer the same to arbitration” shall not be construed as submission
to arbitration.
8. The agreement clauses shall not in any way specifically exclude any of the
aforementioned essentials. For example, a clause permitting the tribunal to
decide a claim without hearing the other side.

Although it is always preferable to draft clear and unambiguous clauses, an

arbitration agreement not mentioning the words “arbitration”, “arbitration
tribunal” and/or “the arbitrator” may still be considered a valid arbitration
agreement if the basic attributes of a valid arbitration agreement (as
aforementioned) are present therein.

It is to be noted that the aforementioned list is not comprehensive. To draft

effective arbitration agreements, contemplating some additional mechanisms can
help the parties overcome complications that may arise in the arbitral process

Conclusion

When the dispute resolution mechanism can have such far-reaching effects, it
shall be dealt with meticulous attention to detail. The interpretations by the
various High Courts and the Hon’ble Supreme Court highlight the need to
carefully draft the arbitration clauses in the agreement. Treating it like just
another boilerplate clause may as well be like playing with fire.
6. Discuss about the ADR provisions under C.P.C, Hindu Marriage Act, 1955.

2+8=10

Ans: Introduction

Despite the existence of a well-organized and established hierarchy of judicial

courts in India, suits in India including those of family matters suffer a setback
owing to inordinate delay. Judicial proceedings, due to tedious procedures,
loopholes in the law and mounting costs take a long time to resolve. This not only
causes inconvenience to the parties involved but also results in a backlog of cases
and overburdening of the courts.

Further, litigation does not always lead to a satisfactory result. While it is expensive,
it often ends up in bitterness. Alternative dispute resolution systems are not only
cost and time effective; they preserve the relationship between the parties by
encouraging communication and collaboration.

All matters which may form the subject-matter of civil litigation affecting the rights,
or in other words all disputes between parties relating to private rights or
obligations which civil Courts may take cognizance within the meaning of Section 9
of the Civil Procedure Code 1908 may be referred to as arbitration. This, therefore,
makes family disputes suitable for arbitration. However, this can be done within
the limits set by the law. An arbitrator cannot grant a divorce or an annulment but
can decide on certain other things such as how to divide property.

Section 23(2) of the Hindu Marriage Act 1955

The Section 23(2) of the Hindu Marriage Act 1955 states that , “ Before proceeding
to grant any relief under this Act, it shall be the duty of the court in the first
instance, in every case where possible so to do consistently with the nature and
circumstances of the case, to make every endeavor to bring about reconciliation
between the parties.
Family Disputes and Family Law Arbitration

All families at certain times experience difficulties which can be termed as a family
dispute. Such disputes range from matters such as disputes between husband and
wife, relationship breakdowns, children’s welfare, financial support for children
and property settlement.

The Family Courts Act explains family disputes as:

 A suit between parties to a marriage for decree of nullity, restitution of

conjugal rights, judicial separation or dissolution of marriage.
 A declaratory suit with respect to the matrimonial status of a person.
 A suit between parties in a marriage with respect to the property of the
parties or either of them.
 A suit seeking for an injunction in the event of certain circumstances arising
in a marital relationship.
 A declaratory suit with respect to the legitimacy of any person.
 A suit for financial support or maintenance.
 A suit with respect to the guardianship or custody of a minor.

Family Law Arbitration

Family Law arbitration is a process in which a husband and wife, or ex-husband and
ex-wife, agree to submit one or more issues arising out of their present or prior
relations as spouses and/or their relations as parents of the same child or children,
to a neutral third party or parties for a resolution that will be final and binding on
them.

However, family law arbitration is not restricted to spousal matters alone. It also
entails finding a resolution to issues such as custody of children and their welfare,
maintenance and financial support and other ancillary issues.

C.P.C and Arbitration

At this juncture, it is essential to make a note of two important provisions of the

Code of Civil Procedure:
  Section 89 of the Code of Civil Procedure: Settlement of disputes outside the
Court
 ORDER XXXIIA 6 of the Code of Civil Procedure: Suits Relating to Matters
Concerning the Family.

Section 89 of the Civil Procedure Code

In order to implement the 129th Report of the Law Commission of India, all courts
were mandated that once the issues were framed, disputes should be referred
either to as arbitration, conciliation, mediation or judicial settlement for resolution.
It was felt that only in the event of failure of these alternate dispute resolution
methods, should litigation proceed.

In accordance with this goal, Section 89 was worded so as to provide parties with
an opportunity to opt for an amicable, out of court settlement.

ORDER XXXIIA 6 of the Code of Civil Procedure

It is essential to note that all proceedings under the Hindu Marriage Act and the
Special Marriage Act are regulated by the provisions of the CPC. When matters
regarding the family are concerned, an amendment can be made to the Code of
Civil Procedure in 1976. This amendment provided for the mandatory settlement
procedures in all matrimonial proceedings.

At this juncture, it is also indispensable to take a note of Section 9 (1) of the Family
Courts Act which states that ‘In every suit or proceeding, endeavor shall be made
by Family Court in the first instance, where it is possible to do so consistent with
the nature and circumstances of the case, to assist and persuade the parties in
arriving at a settlement in respect of the subject-matter of the suit or proceeding
and for this purpose a Family Court may, subject to any rules made by the High
Court, follow such procedure as it may deem fit.’
Conclusion

Therefore, although not compulsory, giving alternate modes of dispute resolution

a chance in the resolution of family matters is the norm of Indian legal system. This
practice should actually be given all the support that it can be given.

Opting for out of court settlements proves beneficial not only to the parties but
also to the general public. The parties are benefitted through reduced costs and
time lost, while the courts are a little less burdened. This allows for the speedy
redress of other suits.

7. Discuss about the main provisions of the Indian Constitution relating to A.D.R.
10

Ans: Introduction

Disputes are an unavoidable element of human interaction and society needs to

develop constructive and creative solutions to solve them. A dispute is a
manifestation of unresolved conflict. Conflict can simply be interpreted as the
product of differences that make people different and bring individual desires to
life. While conflict is unavoidable, there is no need for disputes.

Richard .E. Miller and Austin Sarat in their article note that: “Disputes are not
discrete events like births or deaths; they are more like such constructs as
illnesses and friendships, composed in part of the perceptions and understandings
of those who participate in and observe them. Disputes are drawn from a vast sea
of events, encounters, collisions, rivalries, disappointments, discomforts, and
injuries. The span and composition of that sea depend on the broad contours of
social life …The disputes that arrive at courts can be seen as the survivors of a
long and exhausting process.”

Constitutional Provision

 The Preamble

In the preamble itself, our Constitution expresses this ideal, which talks of justice
in all its forms i.e. social, economic and political. The Preamble guarantees all Indian
people justice, cultural, economic, and political rights. The expression “Justice”
speaks briefly of the and Legal Aid Camps, Family Courts, Village Courts, Mediation
Centres, Commercial Arbitration, Women Centres Consumer Protection Forums,
etc. which are but different facets of an effective alternative dispute resolution
system.

The Constitution of India is this country’s fundamental norm; it includes provisions

that signify a harmonious integration of individual behaviour with the general
welfare of society to achieve justice. A person’s behaviour or action is said to be
solely if it supports the community’s general well-being.

The attainment of the common good, therefore, as distinct from the good of
individuals, is the essence of justice. Legal justice is part and parcel of social justice.
As often the culture gets upset when the legal justice is refused. A legal system
forms part of a state which maintains social stability by resolving disputes. In a
country aimed at protecting citizens ‘socio-economic and cultural rights, it is
extremely necessary to settle cases in India rapidly, as the courts alone cannot
handle the huge backlog of cases. This can be effectively achieved by applying the
mechanisms of Alternative Dispute Resolution.

 Article 21

Article 21 states that “no person shall be deprived of his life or his personal liberty
except according to procedure established by law”.

The word life and liberty are not to be read narrowly; it is supposed to be
interpreted in its widest sense.

 Right to a speedy trial

It has been described in Hussainara Khatoon I Vs. Home Secretary, Bihar that the
right to speedy trial is also a part of the right to life and personal rights. The
Supreme Court allowed Article 21 to expand goals as widely as legally possible.
The explanation for this liberal interpretation was very simple that Article 21 is
intended to alleviate the mental anguish, expenses and burden that a person has
to endure in litigation and which, combined with delay, which result in
deterioration of the accused’s capacity or ability to defend himself.

 Article 39-A Free Legal Aid

Article 39-A obliges the State to ensure that the operation of a legal system that
promotes justice on the basis of equal opportunities and, in particular, grants free
legal assistance, through appropriate legislation or schemes or in any other way,
ensures that opportunities for justice are not denied to any citizen on account of
economic or other disabilities

Through all of this we can see that the protection of justice is the most important
function of a state and helps in it by the processes of ADR. Hence a great deal of
legislation such as the Arbitration and Conciliation Act 1996; Section 89 of the
CPC; the 1987 Legal Services Authority Act to facilitate justice.

Conclusion

We can thus see that the constitution has given key importance to the alternative
conflict resolution process. The state has an obligation to pass a law to have an
alternative forum for dispute resolution. The same has been acknowledged by the
legislature and by different legislation in the context of the adoption of the
Alternative Dispute Resolution Process.

The need to create an alternative model of access to justice is deeply felt. It is said
that alternative dispute settlement methods are versatile, affordable, swift and
less formalistic in nature, making it a feasible alternative for the court of law to
adjudicate. In the case of a simple disagreement, there is an alternative approach
to the option of parties, aside from legal proceedings. The ADR framework serves
as a helping agent to climb up the ladder of justice for all.

8. Point out the salient features of the Arbitration and Conciliation Act., 1996.
10

Ans: Introduction
ADR means Alternative Dispute Resolution which includes various methods of
settling a dispute without getting into the intricacies of the court. It is a method
where parties try to resolve their disputes privately in front of a third-person
expert. The decision is binding on the parties like the decision of the court. It
includes methods like arbitration, mediation, conciliation and negotiation. These
work on the principles of justice, legal aid and speedy trial as given under Article
39A of the Indian Constitution. Even Section 89 of the Code of Civil Procedure,
1908 provides settling disputes by way of ADR. The proceedings are flexible and
creative. It provides satisfying solutions with reduced cost and time and thus, is an
emerging field in Law. The Parliament felt the need and passed an act regarding
this matter. The article deals with an act on arbitration and conciliation known as
Arbitration and Conciliation Act, 1996. It lays out the object, extent and
applicability and discusses the important provisions under the Act.

Salient Features of the Arbitration and Conciliation Act, 1996

Following are some of the key features of the Arbitration and Conciliation Act,
1996:

1. Replacement of three old statutes: The Act is a consolidation of three laws of

arbitration previously in force – viz, the Arbitration Act, 1940, the Arbitration
(Protocol and Convention) Act, 1937, and the Foreign Awards (Recognition and
Enforcement) Act, 1961 into one enactment. Though the three Acts have been
consolidated the provisions regarding each of the acts have been kept distinct
within the 1996 Act.

2. Necessity of Arbitration Agreement: The Act emphasizes the importance of the

Arbitration agreement without which arbitration proceedings cannot be
instituted. The arbitration agreement is a clause in a contract or an agreement
between parties stating that any dispute will be referred to arbitration
proceedings. The Act mentions that the arbitration agreement or arbitration
clause must contain the following information – the subject matter of dispute, the
timing of dispute (past/present/future), number of arbitrators, qualifications of
arbitrators, jurisdiction, and composition of the tribunal.
3. Application to Domestic and International Arbitration: The Act provides the
procedure not only for domestic arbitration but also includes International
Commercial Arbitration. The 1996 Act is a law that relates to the enforcement of
foreign Arbitration awards and ensures greater autonomy in the process of
arbitration and puts a limit on the intervention of the judiciary.

4. Procedural Advantage: Arbitral Tribunal has full powers to decide the

procedure to be followed unless parties agree on the procedure to be followed.
The Tribunal also has powers to determine the admissibility, relevance,
materiality, and weight of any evidence. The place of arbitration will be decided
by mutual agreement. However, if the parties do not agree to the place, the same
will be decided by a tribunal. Similarly, language to be used in arbitral proceedings
can be mutually agreed upon. Otherwise, Arbitral Tribunal can decide. The Act
allows parties to choose the substantive law to be applied by the arbitration
tribunal and this must also be mentioned in the arbitration agreement.

5. Party Autonomy: The concept of party autonomy is the central theme of the
Act. The expressions used in the Act – ‘unless otherwise agreed by the parties’,
‘with the agreement of parties’, `if the parties in dispute have expressly
authorized’ etc., strengthens the idea of party autonomy.

6. Minimal Interference by Judiciary: One of the major defects of earlier

arbitration law was that the party could access court almost at every stage of
arbitration – right from the appointment of an arbitrator to implementation of
the final award. Thus, the defending party could approach the court at various
stages and stall the proceedings. Now, the approach to court has been drastically
curtailed. In some cases, if an objection is raised by the party, the decision on that
objection can be given by Arbitral Tribunal itself. After the decision, the
arbitration proceedings are continued, and the aggrieved party can approach
Court only after Arbitral Award is made.

7. Arbitral Award: Decision of Arbitral Tribunal is termed as ‘Arbitral Award’. The

arbitrator can decide the dispute ex aequo et bono (In justice and in good faith) if
both the parties expressly authorized him to do so. The decision of the Arbitral
Tribunal will be by majority. The arbitral award shall be in writing and signed by
the members of the tribunal. The award should be dated and the place, where it
is made, should be mentioned. Copy of award should be given to each party.

8. Reasoned Award: The award must be in writing and signed by the members of
the Arbitral Tribunal. It must state the reasons for the award unless the parties
have agreed that no reason for the award is to be given. Previous to this Act
reasoning of the award by the arbitrator was not mandatory.

9. Enforceability of Award: Under this Act, every final arbitral award is

enforceable as a decree of the court of law and not required to be made a “rule of
court”.

10. Over-Riding Effect of the Act: Section 5 of the Act clarifies that
notwithstanding anything contained in any other law for the time being in force,
in matters governed by the Act, the judicial authority can intervene only as
provided in this Act and not under any other Act.

11. Applicability of the Limitation Act: For this purpose, the date on which the
aggrieved party requests another party to refer the matter to arbitration shall be
considered. If on that date, the claim is barred under Limitation Act, the
arbitration cannot continue. If the Arbitration award is set aside by Court, time
spent in arbitration will be excluded for purpose of the Limitation Act.

12. Aligning Procedure with the UNCITRAL Model Law: The Act has been enacted
taking into account the United Nation’s Commission on International Trade Law
(UNCITRAL) Model Law and UNCITRAL Conciliation Rules. This promotes
unification and harmonization of International Tarde Law by harmonizing
concepts of Arbitration and Conciliation of the legal system of the world.

13. Clear Distinction Between Arbitration and Conciliation: The provisions that
relate to the process of Arbitration are contained in Part I which includes Chapters
I to IX, while the provisions that relate to the process of Conciliation are dealt
with in Part III that includes section 61 to 81.

14. Conciliation: Conciliation is the amicable settlement of disputes between the

parties, with the help of a conciliator. Part III of the Act makes provision for
conciliation proceedings. In conciliation proceedings, there is no agreement for
arbitration. In fact, conciliation can be done even if there is an arbitration
agreement. The conciliator only brings parties together and tries to solve the
dispute using his good offices. The conciliator has no authority to give an award.
He only helps parties in arriving at a mutually acceptable settlement. After such
an agreement, they may draw and sign a written settlement agreement. However
after the settlement agreement is signed by both the parties and the conciliator,
it has the same status and effect as if it is an arbitral award.

In Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., (2006) 11 SCC
245 case, the Court gave beneficial features of the Arbitration and Conciliation
Act as follows:

 fair resolution of a dispute by an impartial tribunal without any

unnecessary delay or expense; party autonomy is paramount subject only
to such safeguards as are necessary in public interest; and
 the Arbitral Tribunal is enjoined with a duty to act fairly and impartially.

In the same case Court also gave the shortcomings of the Act as follows no
provision is made for expediting awards or the subsequent proceedings in the
courts where applications are filed for setting aside awards;

 an aggrieved party has to start again from the District Court for challenging
the award.

Conclusion

The Act deals with alternate dispute resolution methods which are effective, cost-
friendly, and time-saving. Due to the pendency of cases and rigid procedural laws
of the courts and to prevent litigation, people nowadays generally prefer settling
a dispute outside the courts with the help of ADRs like arbitration, conciliation,
mediation etc. The Act provides the procedure to be followed in arbitration
proceedings, arbitral tribunal, the conduct of the tribunal along with the arbitral
awards to be made in a dispute. The decision is binding on the parties and given
in the form of an arbitral award in an arbitration agreement. It also prescribes the
procedure of appeal to courts in case of discrepancies.

EDITED BY – KIRTEE KAMAL DAS

LLB 3rd SEMESTER (2022 batch)

UNIVERSITY LAW COLLEGE, GAUHATI UNIVERSITY