International Commercial Dispute Resolution System Framework: A Comparative Study.

International Commercial Dispute Resolution System Framework
Executive Summary
This Research Project is based on a study to understand the International Commercial Dispute Resolution System Framework, also consisting of a comparative study between India and Australia ,and was conducted at CICA. Commercial disputes include disputes arising from, for example, a payment default on delivery of goods or a dispute concerning the payment and/or finalisation of projects. Usually a dispute settlement clause in a commercial contract indicates the forum at which an existing or a future dispute should be settled. This can be a local court via litigation as per the agreed applicable law or an arbitration court as per the agreed arbitration rules. In the absence of such dispute settlement clause, rules of international private law decide in which jurisdiction and at which forum a claim can be brought. This research project is intended to give an extensive understanding of the international dispute system framework used on a frequent level all over the world with a special reference to India and Australia. The project has helped to highlight the key parameters of the various resolution systems and also suggested reforms to the existing DRSs(Dispute Resolution system) prevailing in India presently.
Flow of the Project Report:
Introduction : Brief introduction and case study example to elaborate the title, various forms of redressal techniques. Company Profile Objectives include understanding the International Dispute Resolution and deducing the International Dispute Resolution system framework it also includes a comparative study of the system framework used in India and Australia. Research Methodology used is case study method so as to analyze real situations and cases to deduce inferences with respect to the objectives. Data Sources : Secondary Data analysis and interpretation Conclusions and Suggestions Appendix
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ABSTRACT
Disputes have existed in all cultures, religions, and societies since time immemorial, as long as humans have walked the earth. In fact, they also exist in the animal kingdom. Philosophies and procedures for dealing with conflicts have been part of the human heritage, differing between cultures and societies. Nations, groups, and individuals have tried throughout history to manage conflicts in order to minimize the negative and undesirable effects that they may pose.Disputes can develop in any situation where people interact, in every situation where two or more persons, or groups of people, perceive that their interests are opposing, and that these interests cannot be met to the satisfaction of all the parties involved. Because conflicts are an integral part of human interaction, one must learn to manage them, to deal with them in a way that will prevent escalation and destruction, and come up with innovative and creative ideas to resolve them. Dealing with disputes dispute management, or dispute resolution as it has come to be called in professional circles is as old as humanity itself. Stories of handling disputes and the art of managing them are told at length throughout the history of every nation and ethnic group who share the same history. Disputes have been recorded from the very early days of humankind. We find in The Bible and similar religious and historical documents in different cultures an account of conflicts that were resolved by various processes, including negotiation, mediation, arbitration, and adjudication. We also find accounts of various types of negotiations: between animals and humans, between two persons, between an individual and a group, between two groups, and between humans and God. The first negotiation in The Bible was between the snake and Eve, over the apple in the Garden of Eden. But not all conflicts in religious scriptures have been resolved by alternative/appropriate dispute resolution (ADR). One that was resolved by force and violence is the story of Cain and Abel. In The Bible we find among many stories of conflicts and their resolution, the story of Abraham and Lot negotiating, where Abraham, in order to avoid a fight, offers Lot a deal that Lot cannot refuse. Negotiation was conducted not only between people, but also between humans and God. Abraham negotiated with God over the fate of the people of Sodom and Gomorra. God also acted as a mediator between Abraham and Sara when she wanted Abraham to expel Hagar and her son. In the Muslim tradition we find the story of Muhammad who negotiated with God over the number of times that the followers will pray. Muhammad managed to reduce the number from the initial fifty times a day down to five, using as his main argument the necessity to leave enough time for people to do things other than pray. Throughout history, individuals and groups used a variety of ways to resolve their disputes, trying to reach a resolution acceptable to all parties. There is a common belief in all cultures that it is best to resolve disputes and to reach an agreed end to them, because conflict is a destructive force.
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In the twentieth century many reached the understanding that disputes are normal in human society, and not necessarily destructive, and that if they do not get out of hand they may have within them a potential for growth, maturity, and social changes, an opportunity for new ways of thinking and new experiences. Because conflicts are an integral part of human interaction, one should learn to manage them: to deal with them in a way that prevents escalation and destruction, and arrives at new, innovative, and creative ideas to resolve them. Much can be learned about the different ways in which conflicts have been prevented in the past. In older societies, resolving disputes was considered a unique ability reserved for the wise and the elders of the community or for religious leaders. More recently, conflict prevention has become a primary focus of interest for everyone, and this has resulted in an ever-expanding field of study and practice. The field of conflict resolution gained momentum in the last three decades of the twentieth century. It has developed into a widely accepted field of study, where skills and strategies are being taught, and changes in philosophical attitudes occur through training and enhanced self-awareness. The increasing academic activity and practical training initiatives have generated a vast and expanding body of research and publications. The field is characterized by diversity and complexity. It is diverse because conflicts exist in every facet of individual and social life: between business partners, employers and employees, among employees, between trading partners, among neighbors, between parents and their children, husbands and wives, an individual and society, and between countries. The field of conflict resolution has matured as a multidisciplinary field involving psychology, sociology, social studies, law, business, anthropology, gender studies, political sciences, and international relations. The discipline is complex because it deals with conflicts at different stages of their existence, and also because it is a mix of theory and practice, and of art and science, as Howard Raiffa demonstrated so brilliantly in his book The Art and Science of Negotiation (1982). The science is the systematic analysis of problem solving, and the art is the skills, personal abilities, and wisdom. Some conflicts may not be resolved easily, and can last many years. Sometimes these conflicts persist in spite of the fact that they cause heavy losses of resources, and even human life. According to a study at Stanford University (Arrow et al., 1995) there are three categories of barriers to resolving conflicts: Tactical and strategic barriers; these stem from the parties efforts to maximize short or long term gains. Psychological barriers; these stem from differences in social identity, needs, fear, interpretation, values, and perceptions of one another.
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Organizational, institutional and structural barriers; these can disrupt the transfer of information, and prevent leaders from reaching decisions that are in the interests of the parties in dispute. A conflict may store within it the potential for a future major dispute, but at the same time it also contains the possibility of future creative cooperation, provided the parties seek what is called the winwin solution. To accomplish this, one must learn to negotiate in a manner that is less competitive and adversarial, thereby invoking the potential for cooperation. By working together as joint problem solvers seeking joint solutions and not working against one another, the participants can enlarge the pie that is to be divided. This can be done either by negotiation, or with the help of an impartial third party who will act as mediator. Third-party intervention is used when a negotiation reaches an impasse. It is used to restore belief in the possibility of a beneficial resolution for the parties, future dialogue, and restored relationships, while leaving the control over the decisions with the parties.
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INDEX
Sr.No
1. 1.1 1.2 1.3 2. 2.1 2.2 3. 4. 5. 5.1 INTRODUCTION (Case study elaboration )
International commercial disputes resolution.
Chapter
Pg.No
Redressal techniques of international commercial disputes Scope of Study PROFILE AND CONCEPT Industry Profile Company Profile OBJECTIVES RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION Understanding the international dispute resolution (example cases ) Understand and deduce the international dispute resolution system framework :By comparing key dispute resolution systems in four countries
5.2
5.3
Comparing the system framework used in India and Australia
6.0 7.0 8.0
CONCLUSION SUGGESTIONS APPENDIX
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CHAPTER 1
INTRODUCTION
1.1 International commercial disputes resolution. 1.2 Redressal techniques of international commercial disputes. 1.3 Scope of Study.
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International Commercial Dispute Resolution System Framework : A comparative study between India and Australia
1.1 What is a international commercial dispute? International commerce refers to the buying and selling of goods between sovereign nations. International commerce allows countries to take advantage of competitive advantages in certain areas, while diminishing disadvantages in other areas. Various factors have to be considered while carrying out international commerce transactions such as Political policies and legal practices, Cultural factors, Economic forces, Geographical influences etc. hence there are chances of disputes arising amongst the stakeholders .International Commercial disputes include disputes arising from, for example, a payment default on delivery of goods or a dispute concerning the payment and/or finalisation of projects.
The obligation of the legal profession is.to serve as healers of human conflicts..we should provide mechanisms that can produce an acceptable result in the shortest possible time, with the least possible expense, with the minimum stress on the participants. That is what justice is all about
CASE EXAMPLE: VODAFONE v/s UNION OF INDIA CASE Facts of the Case:Hutchison (Hongkong) is a Non resident having no tax implications in India. Cayman Island (Mauritius) was a 100 % Subsidiary of Hutchison (Hongkong). Hutchison Essar was an Indian co. in which Cayman Island (Mauritius) was holding 67 % shares and Essar had total holding of 33 % only. Mauritius is considered as a tax Heaven Country, So Cayman Island was incorporated for this transaction exclusively. Vodafone is a co. incorporated in Nederland (UK), treated as foreign co. in India. Transactions: Cayman has acquired 67 % shares in Hutchison Essar initially, Hutchison (Hongkong) has sold Cayman Island to Vodafone (UK) @ $ 10 billion in 2007 and Vodafone has paid entire sum to Hutchison (Hongkong) without deducting any TDS. Impact: As per Indian tax law, this transaction was not taxable in India, because Buyer and seller both were non resident of India and company sold (Cayman Island) was also a foreign co. Directly there was no tax implication in India for such transaction. In case of issues related to implication of payment of TDS, a certificate from Chartered accountant is required, however it is recommended that if CA has any doubt he should take opinion of CIT But in given case No
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opinion of CIT was taken. Indirectly the controlling Interest of Hutchison Essar has been sold through this transaction. Because Cayman Island was only a paper co., which has no value in itself without controlling interest in Hutchison Essar (Indian Co.). Hutchison has sold shares of Indian co. in form of Cayman Island to Vodafone UK. But by this method they have saved capital gain taxes (Ought to be arisen in India) on such Transaction. Assessing officer (Indian Income Tax Dept.) has issued a show cause notice u/s 201 to Vodafone for imposing penalty u/s 271C (Total demand of Rs. 11000 Crore) on non deduction of TDS u/s 195 for amount paid to Hutchison (HK). Vodafone has not replied to that notice and filed a writ petition to challenge the jurisdiction of Income tax Department for issuing such notice, before Mumbai High Court. Honourable Mumbai High Court has rejected their petition with cost. Then Vodafone has filed an SLP before Supreme Court against such rejection. Honourable Supreme Court has transferred the case to Income Tax department with specific instructions to examine Facts and determine that whether dept. had jurisdiction or not for issuing such notice. SC asks Vodafone to appear before Income Tax Dept in such case. The court also made it clear that if the I-T Department passes any order for penalty, it would not be enforced, till Supreme Court further decides the main matter of tax dispute.
1.2 Redressal of these international commercial disputes : International dispute settlement is concerned with the techniques and institutions which are used to solve international disputes between States and/or international organizations. International disputes can be solved either by use of force (coercion) or by peaceful settlement. Techniques used for peaceful settlement of international disputes are negotiation, inquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice Negotiation, Mediation, Conciliation, Arbitration and Judicial settlement among others are the main pacific mechanisms for the settlement of International Commercial Disputes. Negotiation: parties to a dispute usually attempt to settle dispute through dialogue. It is the precursor to other means of settlement. Negotiation does not involve the use of third party. Through discussions the issues on dispute can be settled. Parties to a dispute may negotiation either through regular or officials specially designated. It should be noted that most States have Legal Advisers who know enough about International Law to recognise a vital claim when they see one and who can usually be relied upon to advise their own states to give way when their legal position is weak. Mediation: The third means of settlement is mediation. Here, a third party helps to bring out the facts of the dispute through investigations and makes a report which helps in the resolution of the matter. The mediation makes the proposal for the settlement of the disputes instead of contending himself with inducing negotiation.
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Conciliation: The process of conciliation involves a third party investigation of the basis of the dispute and the submission of a report embodying suggestions for a settlement. Conciliation involves elements of both inquiry and mediation. This mode of settlement evolved from treaties providing for permanent inquiry commission. Conciliation reports are proposals and do not constitute binding decisions. Arbitration: According to the Oxford Advanced Learners Dictionary, arbitration is the process of having a dispute settled by a person or a group not involved in the dispute. The International Law Commission defined Arbitration as a procedure for the settlement of disputes between states by a binding award on the basis of law and as a result of an undertaking voluntarily accepted.
1.3 Scope of Study: This research provides me with an opportunity to explore the field of International Business. This research also provided a detailed insight into the functioning of the dispute resolution system of India as well as other prominent countries. The importance of a well organized ADR system will provide a basis for a strong foundation for international business transaction and also develop a sense of ethics and righteousness, apart from that it would provide me a great deal of exposure to the various systems prevailing and help me to deduce an effective solution in the context of the country.
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CHAPTER 2
PROFILE AND CONCEPT
2.1 Industry Profile 2.2 Company Profile
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2.1 Industry Profile
International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships. As with arbitration generally, international arbitration is a creation of contract, i.e., the parties' decision to submit disputes to binding resolution by one or more arbitrators selected by or on behalf of the parties and applying adjudicatory procedures, usually by including a provision for the arbitration of future disputes in their contract. The practice of international arbitration has developed so as to allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their respective legal systems. The resolution of disputes under international commercial contracts is widely conducted under the auspices of several major international institutions and rule making bodies. The most significant are the International Chamber of Commerce (ICC), JAMS International, the International Centre for Dispute Resolution (ICDR), the international branch of the American Arbitration Association), the London Court of International Arbitration (LCIA), the Hong Kong International Arbitration Centre, and the Singapore International Arbitration Centre (SIAC). Specialist ADR bodies also exist, such as the World Intellectual Property Organisation (WIPO), which has an arbitration and mediation center and a panel of international neutrals specialising in intellectual property and technology related disputes. See http://www.wipo.int/amc/en/. A number of arbitral institutions have adopted the UNCITRAL Rules for use in international cases. The most salient feature of the rules of the ICC is its use of the "terms of reference." The terms of reference is a summary of the claims and issues in dispute and the particulars of the procedure, and it is prepared by the tribunal and signed by the parties near the beginning of the proceedings.[14] In a more recent development, the Swiss Chambers of Commerce of Industry of Basel, Berne, Geneva, Lausanne, Lugano, Neuchtel and Zurich have adopted a new set of Swiss Rules of Commercial Mediation that are designed to integrate fully with the Swiss Rules of International Arbitration that were previously adopted by these chambers to harmonize international arbitration and mediation proceedings across Switzerland. For a recent paper on these two sets of ADR rules and how they may be combined
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2.2 Company Profile
CICA I
center for international commercial arbitration
The Centre for International Commercial Arbitration (CICA) is Indias pioneer international arbitral institution. Its membership includes leading practitioners and academics expert in the field of international and domestic commercial arbitration and all forms of dispute resolution. CICA's mission is to educate, promote and encourage the use of international commercial arbitration as a means of dispute resolution within India and the Asia Pacific Region. The key functions of CICA are as follows: 1. Administration of arbitrations and mediations under the CICA rules Where one of the sets of the rules apply parties must commence mediation or arbitration in accordance with the procedures set out in the relevant rules 2. Administration of arbitrations and mediations under an ad-hoc process In circumstances where the parties have agreed (in their contract or after a dispute arises), CICA may act as the administering institution in ad hoc arbitrations and mediations, whether conducted under a set of ad hoc provisions such as the UNCITRAL Arbitration Rules or otherwise. 3. ACICA as an appointing authority 4. ACICA as Stakeholder for Trust Funds CICA is able to act as stakeholder, holding funds on account for payment of arbitration or mediation costs, in circumstances where it is not administering the dispute (although it may have acted as the appointing authority).
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5. Panels CICA maintains both a panel of recommended arbitrators and a panel of recommended mediators. Membership of both panels is subject to an application process and members are approved by the CICA Board based on specified criteria and a vetting process. 6. Information on experienced international arbitration practitioners CICAs corporate partners include a number of law firms and experienced practitioners with an arbitration or ADR specialisation.
7. Information on arbitration agreements, rules and arbitration law and practice CICA can provide general information about alternative dispute resolution processes in India, and arbitration rules, law and practice.
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CHAPTER 3
OBJECTIVES
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Objectives of study :
To understand the International Dispute Resolution. A Study in detail with the help of case study analysis, of the various methods and techniques mainly used in the process of Dispute resolution on a commercial level viz: Negotiation ,Mediation, Conciliation, Arbitration.
To understand and deduce the International Dispute Resolution system framework. A comparative evaluation of the main systems prominent in four distinct countries and the deduction of key parameters of them .The countries in consideration are INDIA (Delhi Mediation Centre) , ISRAEL (Tel Aviv), California (San Mateo County), AUSTRALIA (Australian International Disputes Centre).
To compare the system framework used in India and Australia. Comparison of the Dispute Resolution system framework in INDIA and AUSTRALIA and deduction of inferences ,conclusions and possible suggestions.
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CHAPTER 4
RESEARCH METHODOLOGY
4.1 Definition of case study 4.2 Advantages in using case studies.
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Research methodology : Research methodology is a way to systematically solve the research problem. In the case of this project, case study method has been adopted. Case study research excels at bringing us to an understanding of a complex issue or object and can extend experience or add strength to what is already known through previous research. Case studies emphasize detailed contextual analysis of a limited number of events or conditions and their relationships. Researchers have used the case study research method for many years across a variety of disciplines. Social scientists, in particular, have made wide use of this qualitative research method to examine contemporary real-life situations and provide the basis for the application of ideas and extension of methods. Researcher Robert K. Yin defines the case study research method as an empirical inquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used.
4.1 Definition of case study
Case study method enables a researcher to closely examine the data within a specific context. In most cases, a case study method selects a small geographical area or a very limited number of individuals as the subjects of study. Case studies, in their true essence, explore and investigate contemporary real-life phenomenon through detailed contextual analysis of a limited number of events or conditions, and their relationships.
In some case studies, an in-depth longitudinal examination of a single case or event is used. The longitudinal examination provides a systematic way of observing the events, collecting data, analysing information, and reporting the results over a long period of time. For instance, studies on child language development can be conducted using this longitudinal case study method. Data collected through observations are recorded to ascertain the language development of a child. In another example, a researcher conducting a case study may examine the reading processes of only one subject over a period of time. In other words, a case study is a unique way of observing any natural phenomenon which exists in a set of data (Yin, 1984). By unique it is meant that only a very small geographical area or number of
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subjects of interest are examined in detail. Unlike quantitative analysis which observes patterns in data at the macro level on the basis of the frequency of occurrence of the phenomena being observed, case studies observe the data at the micro level.
A case study is an empirical enquiry that investigates a contemporary phenomenon in depth and within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident.
The case study inquiry copes with the technically distinctive situation in which there will be many more variables of interest than data points, and as one result relies on multiple sources of evidence, with data needing to converge in a triangulating fashion, and as another result benefits from the prior development of theoretical propositions to guide data collection and analysis.
4.2 Advantages in using case studies.
First, the examination of the data is most often conducted within the context of its use), that is, within the situation in which the activity takes place. A case study might be interested, for example, in the process by which a subject comprehends an authentic text. To explore the strategies the reader uses, the researcher must observe the subject within her environment, such as reading in classroom or reading for leisure. This would contrast with experiment, for instance, which deliberately isolates a phenomenon from its context, focusing on a limited number of variables
Second, variations in terms of intrinsic, instrumental and collective approaches to case studies allow for both quantitative and qualitative analyses of the data. Some longitudinal studies of individual subjects, for instance, rely on qualitative data from journal writings which give descriptive accounts of behaviour. On the other hand, there are also a number of case studies which seek evidence from both numerical and categorical responses of individual subjects
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. While cautions researchers not to confuse case studies with qualitative research, he also notes that case studies can be based entirely on quantitative evidence.
Third, the detailed qualitative accounts often produced in case studies not only help to explore or describe the data in real-life environment, but also help to explain the complexities of reallife situations which may not be captured through experimental or survey research.
A casestudy of reading strategies used by an individual subject, for instance, can give access to not only the numerical information concerning the strategies used, but also the reasons for strategy use, and how the strategies are used in relation to other strategies. As reading behaviours involve complex cognitive processes, each reading strategy cannot be examined in isolation but rather in relation to other strategies
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CHAPTER 5
DATA ANALYSIS AND INTERPRETATION
5.1 Understanding the international dispute resolution (example cases ) 5.2 Understand and deduce the international dispute resolution system framework :By comparing key dispute resolution systems in four countries 5.3 Comparing the system framework used in India and Australia
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Data analysis and interpretation: 5.1 Understanding the international dispute resolution (example cases ): As mentioned above the methods most generally used for International Commercial disputes resolution are Negotiation,Mediation,Conciliation,Arbitration .Below given is a brief description of the methods and a case study example: NEGOTIATION: The simplest and the most utilised method to resolve differences is negotiation; Negotiation means discussions between interested parties with a view of reconciling divergent positions; The parties are directly engaged; Successful negotiation requires a certain degree of mutual goodwill, flexibility and sensitivity.
CASE STUDY EXAMPLES: French food group Groupe Danone (Danone) is the third largest food business in Europe. The group, which first built its factories in China in the 1980s, is currently one of the worlds leading global corporations in fresh dairy products and bottled water. The other party, Chinese beverage giant Wahaha Group (Wahaha), was established in 1987 in an east Chinese city Hangzhou and is now the biggest food and beverage enterprise in China.The cooperation between Danone and Wahaha started in 1996. That year, Danone SA (together with Hong Kong Peregrine Investments Holding Limited) and Hangzhou Wahaha Group Co Ltd paired up to sign an agreement to form five joint venture companies.1 They appointed Mr Zong Qinghou, the chairman of Wahaha, as chairman of the board of directors of the five joint ventures. At the beginning when the joint ventures were founded, Wahaha Group also set up five nonjoint ventures that produced beverage products. Following the financial crisis in Asia, Peregrine went bankrupt and its 10% share was purchased by Danone in 1998. As Danone accounted for a 51% stake of the joint ventures, it gained the controlling interest. As expected, the joint venture grew, with 39 sub-joint ventures and controlling market share in Chinas beverage business to date. A Trademark Transfer Agreement between Danone and Wahaha to the newly-formed joint venture was reached in 1996 when their cooperation started. However, the Trademark Bureau of China did not formally respond to this agreement. In 1999, instead of calling it a transfer, the parties signed two separate trademark licence agreements, titling both of them Trademark Use Agreement, one of which was sent for record purposes to the Trademark Bureau of China and the other was kept by
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the parties. One thing that needs to be pointed out is that the agreement kept by the parties contains a clause stating that the trademark of Wahaha can only be used for the joint ventures; while the one kept as a record in Trademark Bureau of China doesnt have that clause. At the same time Mr Zong Qinghou reorganised Wahaha Group, and established some non-joint ventures on the basis of shares from the worker and staff. The total number of these ventures has now reached 61 with total assets reaching 5.6 billion Yuan (AU$1.12 billion), and in 2006 alone total profits reached 1.04 billion Yuan (AU$208 million). Things went well for seven years until 2006 when Danone considered that some of the minority shareholders, along with other connected persons, had illegally set up numerous companies which manufactured and sold products that were identical or similar to those sold by the subsidiaries, and were making unlawful use of the subsidiaries trademarks, distributors and suppliers, so that it was not getting all the money that it should have, and that its Chinese partner was competing against the joint ventures. To end the problem Danone decided to buy out the Chinese partner. Danone requested to buy out a 51% share of the Wahaha non-joint ventures for an under-priced payment of 4 billion Yuan (AU$800million). The proposal was firmly rejected by Wahaha Group. Hence, the dispute between the two parties came to the table.Because of the complexity of the dispute, from late 2006 till now, the parties have gone through negotiation, litigation and arbitration, back to negotiation and mediation, and then to a truce situation. Determinant factors Chinese negotiators are more concerned with the means than the end, more with the process than the goal. Eight elements that underpinned the Chinese negotiation style are (1) Personal connections, (2) The intermediary, (3) Social status, (4) Interpersonal harmony, (5) Holistic thinking, (6) Thrift, (7) Endurance and relentlessness, and (8) Face or social capital. Buttery and Leung added tha Chinese prefer establishing complicated relationships while Westerners pay more attention to procedure. Therefore more factors than the eight named will affect the progress in Chinese negotiations. In light of the DanoneWahaha case, I propose to modify the eight elements above for the determination of the progress of negotiation between disputing parties in China: (1) Likelihood of legal success, (2) Public opinion, (3) Government conduct, (4) Involving other kinds of dispute resolution, (5) Relationship value, (6) The intermediary, (7) Expenses, and (8) Ethical problems aggressive behaviour. Likelihood of legal success In dispute resolution negotiations the alternative to accepting settlement via negotiation is to go to court. In negotiation, lawyers will settle if they think that what is offered is worth equal to or more than what they could realistically get if the matter went to court, bearing in mind the risks and expenses involved in litigation. In the DanoneWahaha case, the main legal issues are: Is the 1996 trademark transfer agreement legitimate and binding? If both parties signed two trademark licence agreements, one of them being registered and the second not, which one is legally effective? According to relevant Chinese statutes, the action of the Trademark Office2 was
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incorrect, and whether an agreement is recorded or not, does not have any effect on the validity of the agreement. Although legal practitioners were arguing about the legal effect of the unrecorded agreement, it seemed that Danone had a more favoured position from a legal point of view.
MEDIATION: Mediation: a mediator is more active and actually takes part in negotiations suggesting terms of settlement to the disputing parties; a mediator has to enjoy the confidence of the disputing parties and must be impartial/neutral; no effective mediation can be provided without the consent from the disputing parties; the use of mediation is not obligatory and the suggestions made by mediators are not binding for the disputing parties; examples: mediation of the Pope in the Argentina Chili territorial dispute over the Beagle Channel; mediation by the USSR between India and Pakistan in 1966; mediation of Algeria to end the hostages crisis between the USA and Iran; US mediation between Israel and Egypt in 1979 in Camp David; mediation of the UN Secretary General in Cyprus. CASE STUDY EXAMPLES: A Ukraine Company (Applicant) filed a complaint regarding the quality of a batch of steel joist provided by certain building materials company in Heibei Province to CCPIT Mediation Center. The Ukraine Company claimed that the exporter refused its compensation request by arguing that there was no quality problem when the goods were delivered at the destination. The Mediation Center contacted the exporter immediately, and the exporter submitted explanations
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on the reason of rust causing the quality problem, and confirmed its ground on refusing the compensation. CCPIT Mediation Center asked the Applicant to provide evidence for the reason of the rust, and contacted the exporter to seek the root for the dispute. After several times of persuasion, the exporter has agreed to choose mediation to solve the disputes.
Mediation Process and Result:
According to the CCPIT Mediation Rules, the Mediation Center has confirmed the location and time for the mediation conference with the parties, and a Mediator has been appointed. The mediation meeting was held in Beijing. After the parties made their statements, the Mediator noticed that even though Applicant was holding the inspection report and evidence for steel rust, he was not confident that the Respondent would compensate their loss. The delivery term for the goods was on FOB Tianjin basis. Thus all the risk was transferred when the goods was delivered through the gunwale. The Respondent declared that the steel rust was due to inappropriate storage, and the Respondent should not be held liable. The Respondent also claimed for the interest loss to the Applicant for the delay in making the balance payment. In the following separate sessions, the Mediator guided the parties to objectively assess their position in the case and persuaded the parties to overlook the trivial conflicts and try to settle the dispute. Under the assistance of the mediator, both parties reached a preliminary agreement that the Respondent would pay certain amount of compensation according to the condition of the goods. The Mediator drafted the settlement agreement and the parties confirmed on the currency of payment, channels of payment and the issuance of receipt. The parties signed the settlement agreement and also agreed that the payment should be supervised by the Mediator to make sure the appropriate performance of the agreement. In the end, the Respondent made the payment in ten working days after receiving relative materials from the Applicant, and the business relationship of the parties was maintained.
Case Analysis
1. In international trade disputes, when is the best time for the parties to use mediation? In one sense, the earlier the parties use it, the greater the costs saving. In the other the parties should calm down when the disputes arise, and try to negotiate with each other. If negotiation failed, the parties should seek mediation from a third neutral party, esp. Professional Mediation Centers.
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Otherwise a small misunderstanding will lead to mistrust and serious conflicts in the end. 2. Establishing a good business relationship in the long run is more important than sole profit in the short term. The business relation is one of the most important factors that determine the life of a company. A company should try to maintain its reputation and business relationships while seeking profit. 3. Take one step back will bring new opportunities. As a flexible and efficient way to resolve dispute, mediation is easier to be accepted by the parties with better solution than litigation and arbitration. It is a voluntary process, the neutral mediator assist the parties in the dispute to reach a settlement, who is not there to make decisions. Mediation seeks to maintain the business relationships of the parties, while focusing on the parties to negotiate a solution by themselves, not to judge who is right or who is wrong. Commercial mediation is of low cost, very flexible and the mediation meeting time, location and mediation approaches could be decided by the parties.
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CONCILIATION: Conciliation involves elements of mediation and inquiry. A third party (a commission set up by the parties) investigates the facts of a dispute and submits a report containing a suggested terms of a settlement. Conciliation is more formal and less flexible than mediation. Most conciliations were performed by commissions composed of several members but occasionally states may prefer a single conciliator. The use of conciliation, the report and recommendations made are not binding for the disputing parties. However, in practice, there some treaties providing for obligatory use of conciliation. CASE STUDY EXAMPLES: Advice about Reciprocal Health Agreement between Italy and Australia The complainant, an Italian visitor to Australia, required emergency hospital treatment for an infection in his left ear. He did not speak English and communicated through family members as interpreters. He was advised by a public hospital to go to a private hospital nearby as the emergency department was very busy and he would be seen more quickly there. He followed that advice and was charged $150 for emergency treatment. The following day, he was required to pay $1875 before he could be admitted to the private hospital for the administration of intravenous antibiotics. The hospital was asked whether he could have the treatment for free at the public hospital but advised him that because he was a visitor from Italy the cost would be greater. As a result of this advice he paid the money and was admitted to the private hospital. The information given to him was incorrect, since there is a Reciprocal Health Care Agreement between Australia and Italy. Treatment at the public hospital would in fact have been free. The claimant sought to recover the cost of the hospitalisation and incidental fees, including pathology fees. Prior to conciliation, the hospital had agreed, as a gesture of goodwill, to refund the sum of $750 plus the emergency fee, and to arrange the bulk billing of the incidental accounts. The patients wife was also accommodated free of charge during her husbands stay. The hospital maintained that it was not entirely responsible for what had occurred, as its staff could not be expected to know about payment arrangements for patients from overseas. Within conciliation, the hospital agreed to further reduce the complainants hospital costs and expenses, and accepted that it was in the interests of overseas visitors that they be correctly informed of the cost of health care. As a consequence of the complaint, it initiated a process of adding the Australian Governments Reciprocal Health Care Agreements to the standard information provided to admitting staff. Additionally, the Front Office managers will include this information in their internal education.
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ARBITRATION: Arbitration has been used for a long time by states as a method of international dispute settlement. Arbitration is carried our by an arbitral tribunal set up ad hoc to resolve a specific dispute. In arbitration, the disputing parties choose the arbitrators, the location and procedure of the tribunal, and determine applicable law. This is done by a special agreement called compromise. Arbitral awards are binding for the disputing parties.
CASE STUDY EXAMPLES: Zueblin Case On 22 December 2000, Zueblin International GmbH, Germany (Zueblin), entered into an agreement (the Agreement ) with Wuxi Woco-Tongyong Rubber Engineering Corporation, a wholly-foreign-owned enterprise in Wuxi, Jiangsu Province, China ( Woco) , under which Zueblin agreed to construct a factory for Woco in Wuxi, Jiangsu Province of China. The two-page Agreement incorporated the FIDIC Green Book General Conditions by reference in its appendix. The last line of the second page of the appendix to the Agreement provides: Arbitration 15.3 ICC Rules Shanghai shall apply (the Arbitration Clause). The parties disagreed on the payment of construction work. Woco brought the dispute to the Peoples Court of High-New Technology Development Zone of Wuxi, Jiangsu Province of China(the Wuxi District Court ) on 10 October 2002. Zueblin challenged the jurisdiction of the Wuxi District Court based on the Arbitration Clause. Woco later changed its contract claims to the tort claims. The Wuxi District Court decided that it had jurisdiction over the case, which was confirmed by the Wuxi Intermediate Peoples Court in Jiangsu Province (theWuxi Intermediate Court) on 20 February 2003. In the meantime, Zueblin filed its request for arbitration with the ICC Court on 23 April 2003. One week later, on 29 April 2003, Zueblin applied to the Wuxi District Court for the confirmation of the validity of the Arbitration Clause.
The ICC Court decided that the matter would proceed in accordance with the ICC Rules. The ICC Arbitrator rendered a Partial Award on jurisdiction on 10 November 2003,
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finding that it had jurisdiction over Zueblins claims. And the Final Award No. 12688/TE/MW was made in Shanghai on 30 March 2004, in favor of Zueblin (the ICC Award). On 2 September 2004, Wuxi District Court decided the Arbitration Clause invoked by Zueblin was invalid in accordance with the Reply of the Supreme Peoples Court (the Supreme Court) dated 8 July 2004. On 30 August 2004, Zueblin applied to Wuxi Intermediate Court for enforcement of the ICC Award. The Wuxi Intermediate Court reported the case to the Higher Peoples Court of Jiangsu Provice, which in turn reported to the Supreme Court in conformity with the reporting system in mainland China. After the Supreme Courts approval, Wuxi Intermediate Court rendered its decision on 19 July 2006, refusing the enforcement of the ICC Award because it was made based on the invalid Arbitration The Decision pointed out that, after a judicial review of the Zueblin Case, the Wuxi Intermediate Court confirmed that the Zueblin Case concerned the recognition and enforcement of a foreign award under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (theNew York Convention) . Simultaneously, the Wuxi Intermediate Court also held that the ICC Award of the Zueblin Case was an award not considered as domestic under the New York Convention. . In the Reply the Supreme Peoples Court opined that absence of the choice of applicable law by the parties, the Chinese law shall apply, which is the law of the state where the place of the arbitration takes place in accordance with the general principle for determination of the proper law of the arbitration clause (The parties agreed that the arbitration place is Shanghai). According to Article 16 of the Arbitration Law of the PRC, a valid arbitration clause shall include all of the following three items: (1) the parties common intention to settle their dispute by arbitration, (2) matters to be arbitrated and (3) definite arbitration institution. The Arbitration Clause in the Zueblin Case provided the parties intention for arbitration, applicable arbitration rules and the place of arbitration, without naming a definite arbitration institution. As a result, the said Arbitration Clause should be rendered invalid in accordance with the Arbitration Law of the PRC.
Conclusions: 1. The concept of international commercial arbitration should be interpreted in a broad way. An arbitration is considered international if the arbitration agreement involves any international element, including - but not limited to - items such as the place of business of each party, location of the permanent arbitration institutions, or the place of arbitration and so on, other than pure domestic arbitration without any foreign elements. 2. The term International arbitral awards refers to as awards with international elements. Such awards shall include not only those awards made in the territory of the state other than the state where the recognition and enforcement are sought, but also arbitral awards made in the territory of the state, where recognition and
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enforcement are sought. 3. An award not considered as domestic under the New York Convention is neither a local nor a foreign award for the court of the state where such award was made and where at the same time its recognition and enforcement are sought. 4. National courts are obligated to supervise international arbitration in accordance with both its domestic law and the New York Convention, to which the relevant State is a Party. Judicial review aims at placing the voluntary settlement of disputes by arbitration under the rule of law. The content of judicial review in international arbitration proceedings covers review of the arbitration agreement, the arbitration procedure and the arbitral award. 5. In the Zueblin case, both the ICC Arbitrator and the Chinese Courts were entitled to decide on the validity of the arbitration agreement and on their jurisdiction: The power of ICC Arbitrator was granted by the Arbitration Clause and the applicable ICC Rules, while the power of the Chinese Courts in Mainland China was based upon local law. 6. The ICC Award in the Zueblin Case should have been considered as a Chinese award according to international arbitration legislation and practice. This is so because it was made in Shanghai, mainland China, in accordance with the applicable ICC Rules and under the administration of the ICC Court, Paris, France. 7. For the Courts in mainland China, where the ICC Award was made and its recognition and enforcement are sought, the ICC Award on the Zueblin Case was neither a Chinese award in mainland China nor a foreign award, but an award not considered as domestic under the New York Convention. The legal reason is not that it was made under the ICC Rules and the administration of the ICC Court, but because of the stipulations of current Chinese Law. The Decision of the Wuxi Intermediate Court on the Enforcement of the ICC Award confused the foreign award with an award not considered as domestic under the New York Convention.
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5.2 Understand and deduce the international dispute resolution system framework :By comparing key dispute resolution systems in four countries
(OVERVIEW OF FOUR COUNTRIES) The three systems analyzed are courts in Delhi, India; Tel Aviv, Israel; and San Mateo County, California, Australian International Disputes Centre.
A. Delhi Mediation Center
With a population of over 1.2 billion people, India is the most populated democracy in the world. The federal constitutional republic consists of a multi-ethnic society where more than 400 languages are spoken. Despite various autonomous arbitral bodies and provisions for arbitration and conciliation for particular categories of cases (such as labor and family), litigation in India continues to rise. Currently, about thirty million cases are pending indifferent courts in India. With the present rate of disposal; it would likely take over 300 years to clear the backlog. Litigation reflects increased legislation, commercial activities of state entities, and awareness of citizens rights, and thus, an increased demand for the means to resolve such disputes. Since independence, several governmental committees have advocated for a reduction in court debts, including judicial education to enhance the capacity of judges in order to improve the quality of
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their output. Various arbitration and conciliation provisions have been adopted but not fully implemented. The Legal Services Authority Act of 1987 established the look adulates, or peoplescourts,5 throughout the country, which helped settle or otherwise dispose of a significant number of cases; however, litigation has continued to increase. In 2002, the Ahmadabad Bar Association developed a program for dispute settlement by mediation, which was followed by the setup of mediation programs in Mumbai, Chennai, and Madurai under Section 89 of the Civil Procedure Code. The Supreme Court approved the Civil Procedure Alternative Dispute Resolution and Mediation Rules in 2003. The former Chief Justice of India, R.C. Lahoti, studied all existing efforts and decided to constitute a Mediation and Conciliation Project Committee (MCPC) consisting of judges of the Supreme Court and High Court and Senior Advocates, to encourage mediation as the most viable ADR option to address cases in the district courts. The MCPC was constituted in April 9, 2005, with the objective of providing centralized direction and support for mediation. A pilot project was started in the Delhi district courts under the auspices of the National Legal Services Authority (NALSA), with trainers provided free of charge by the Institute for the Study and Development of Legal Services (ISDLS) of California. A judicial mediation system commenced in September of 2005 in the TisHazari District Court, with six trained judicial officers assigned one day per week, to deal with mediated cases. The disputants feedback was positive, since the system was not only free of cost and expeditious, but also friendly and devoid of the intimidation associated with the formal legal process. The initial success led to the establishment of the Delhi Mediation Center, which currently has four working centers at District Courts in Tis Hazari, Karkardooma, Rohini, and Dworka, with a fifth due to open in Saket. Each center is manned by a senior judicial officer of the rank of Additional District Judge, who administers the center and examines and assigns the cases for mediation to the mediators.
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The summary statistics as of December 2012 are as follows: Total number of cases referred 71,115/71,916 Number of cases fit for mediation 11,117 Number of cases settled 40,761 (69%)/42,954 Average time spent per case 75 minutes
B. Israel Judicial Court in Tel Aviv
The Israeli court system is a highly valued public service within enormous annual caseload. A comparative study of judiciary cases in seventeen countries determined that Israel ranked highest in the number of cases submitted per population (600,000 cases per year for a population of 7,645,000), sixth place in the number of judges per population (660 residing judges), and first place in judicial case load. In order to cope with the heavy caseload and keep the public faith in the judicial system, the Israeli court system has undergone extensive reform over the past decade. It has transformed itself from a traditionally adversarial institution with individual judges working
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independently of one another, to a more active system of interconnected departments. The direct result of the modifications has been a significant relief of the overburdened judicial system and substantial improvement of the systems efficiency. Based on British colonial law, the Israeli judicial system had been using the same traditional methods for nearly five decades. The transformation of the system was undertaken through two major changes. The first change involved the revision of existing casemanagement methods. The second was the introduction of ADR into the judiciary. Each of the policy shifts improved the systems efficiency, but it was the combination of the two that generated the most significant change. Israel introduced ADR to the judiciary system in 1992, following the amendment of the Courts Act of 1984. In the late 1990s, two commissions were appointed: the Or Commission13 and the Gadot Commission. The Or Commission was appointed to analyze the court systems structure, and the Gadot Commission was appointed to delineate the qualification of court-appointed mediators and their training program. The recommendations of both commissions set the baseline for the Case Management and ADR Programs. Cooperation between the Supreme Court President, the Honorable Professor Aaron Barak, and Professor Sander led to the first pilot in Tel Aviv Magistrate Court. The pilot was headed by the President and the Honorable Judge Dan Arbel and managed by the Honorable JudgeIlan S. Shilo. The program started as the multi-door court house model proposed by Professor Sander, and evolved in response to stakeholder and public feedback to meet the distinctive requirements of the Israeli system.
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C. San Mateo Superior Court:
Multi-Option Appropriate Dispute Resolution Project (MAP) The Superior Court of San Mateo Countys Multi-Option ADR Project (MAP) was based on the premise that the court should try to provide disputants with the most appropriate dispute resolution option for their particular case, whether that be litigation, mediation, or some other dispute resolution process. Mediation is viewed as just one option in the spectrum of dispute resolution processes available to disputants. The program began with a civil mediation program in 1996, prompted in part by delayed trial dates due to the newly implemented fast track rules. The stakeholders convened were from the community mediation program, the bar association board, and the bar association ADR committee, along with judges and the court CEO.MAP started small, focusing at first on offering mediation in general civil cases through a partnership with the local county bar, the community mediation center, and the Peninsula Conflict Resolution Center. In the civil program, judges can engage disputes in a two-part discussion about ADR options during their initial case management conference. First, the judge can mandate that parties meet with ADR staff to discuss and be educated about ADR options. The second step is either to voluntarily agree to proceed with ADR, or to decline ADR, in which case the parties have a trial date. Although the education about ADR may be mandatory, participation in mediation or another form of ADR is voluntary. Parties who decide with the judges or court staffs assistance to participate in mediation or another ADR option can select their
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neutral privately or by consulting the programs carefully screened list of panelists. In several of the MAP programs (civil, probate, and complex litigation), the parties are responsible for paying the neutral for his or her services except when pro bono or modest means assistance is needed. To provide this assistance, the staff screens parties based on income and works with the whole panel to make mediation and other ADR services fully accessible to all house the court. Initial success with the civil mediation program enabled the program to grow. Other forms of ADR, such as neutral evaluation, were added to the civil program. Two preexisting court programs small claims mediation and judicial arbitrationwere integrated into the project. An existing partnership with the local bar and community mediation center enabled the court to include juvenile dependency and a comprehensive family law ADR program. With respect to dependency, the court initially partnered with the community mediation center to hire a part-time coordinator to oversee volunteer mediators. Following the programs success, the court sought and received State trial court funding for a program coordinator position at the court. Now families at all stages of the dependency process have access to free mediation services to help clarify and resolve issues. With respect to family law, the San Mateo County Bar Association originated a small program that was later brought in-house tithe court through State trial court funding. For many years, and up until severe budget cuts beginning in 2008, a staff attorney-mediator was available on site at the court. There was, and still is, a panel of private attorney mediators and arbitrators to whom cases can be referred. Volunteer attorney mediators have been recruited and trained in order to replace the staff attorney mediator for the on-site mediations. The probate and complex litigation programs share with the main civil program market-rate private panels of neutrals with probono neutrals available based on need. The juvenile delinquency program employs restorative justice techniques to bring together juveniles and the persons victimized by their behavior. Volunteers trained by the community mediation center provide the mediation services, which are free to the parties, and court staff manages the program.
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D. Australian Centre for International Commercial Arbitration (ACICA)
Established in 1985, its objective is to promote and facilitate the efficient resolution of commercial disputes in Australia and internationally by arbitration, with the aim of delivering expediency and neutrality of process, enforceability of outcome and commercial privacy to parties in dispute. A major partner of Australia's premier dispute resolution venue, the Australian International Disputes Centre, ACICA is a signatory to co-operation agreements with over 30 global arbitral bodies, a founding member of the Asia Pacific Regional Arbitration Group (APRAG) and the only Australian member of the International Federation of Commercial Arbitration Institutions (IFCAI).Through its Board of Directors and Members, ACICAs global and national outreach extends to business, academia, judiciary, industry and government. It provides a nominee to the Australian Delegation to the United Nations Commission on International Trade Law (UNCITRAL) Working Group II (Arbitration and Conciliation) in New York and Vienna and works closely with the Federal and State & Territory Governments in policy development and legislative reform. In 2011, the Australian Government confirmed ACICA as the sole default appointing authority competent to perform the arbitrator appointment functions under the amended International Arbitration Act 1974 (Cth). To give effect to this, ACICA has developed the Appointment of Arbitrators Rules 2011
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which establish a streamlined process through which a party can apply to have an arbitrator appointed to a dispute seated in Australia in circumstances where the arbitration is not being conducted under the ACICA Arbitration Rules or ACICA Expedited Rules. The ACICA Executive makes appointments with assistance from the ACICA Appointment Committee, comprised of well-known arbitral practitioners, and input from the ACICA Advisory Board, whose members include nominees from the Commonwealth Attorney-General, the Chief Justices of the High Court and the Federal Court, the President of the Australian Bar Association, the President of the Law Council of Australia and other industry representatives. Chaired by former Chief Justice of the High Court of Australia, the Hon Murray Gleeson AC, the ACICA Judicial Liaison Committee, whose members include Chief Justices of the Federal Court and other Australian State & Territory Courts and ACICA President Doug Jones AO, is an integral part of the Australian arbitration infrastructure attracting international arbitration business to Australia. In 2011, ACICA launched its Arbitration Rules incorporating the Emergency Arbitrator Provisions - a first for an Australian arbitral body. Designed to speed up the resolution of international commercial disputes, this innovation provides parties with greater flexibility including an option to seek urgent interim measures of protection from an emergency arbitrator before the arbitral tribunal is constituted. Necessarily, the growth of the economies of the countries in Australia's region, the participation of multi-national corporations and the vast flows of international capital there, produce a proportion of cases where disputes arise. Where this happens those involved in such disputes must make the hard decision which is well known to every lawyer in every country.
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The disputants must decide: To abandon the claim if the amount at stake is not worth pursuing and if bluff and bluster get them nowhere; To take the matter to a court of law with jurisdiction, if that course is open to them and justifiable in the circumstances; or To submit the matter to independent arbitration, by an expert acceptable to the parties, proceeding in private, pursuant to pre-arranged arbitral agreement or to post-dispute concurrence that this is the quickest, cheapest and most satisfactory way to a resolution.
THE FACILITIES WHICH THE CENTRE OFFERS:
Obviously, it is important that Australia should provide facilities such as will henceforth be housed in the Dispute Resolution Centre in Melbourne:
They offer a venue for an alternative system to the courts and a place in which, by agreement of the parties, arbitration can be efficiently and economically conducted. They provide facilities in which large scale and often complex disputes can be investigated and resolved more quickly and economically than the formal court system can offer. They offer a resource close to the heart of a major legal centre of Australia where skilled lawyers of integrity, experience and ability offer their services to help the parties and the arbitrators to cut through the detail of disputes, sometimes horrendously complex and to arrive at awards which will finally put the disputes to rest. They support the very important drive to sell legal services as a growth area and an export in which Australia has significant advantages.
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THE ANALYTIC FRAMEWORK 1. Goals a) What does the systems decision-maker(s) seek to accomplish? b) Which types of conflicts does the system seek to address? 2. Stakeholders a) Who are the stakeholders? b) What is their relative power? c) How are their interests represented in the system? 3. Processes and Structure a) Which processes are used to prevent, manage, and resolve disputes? b) If there is more than one process, are processes linked or integrated? c) What are the incentives and disincentives for using the system? d) What is the systems interaction with the formal legal system? 4. Resources a) What financial resources support the system? b) What human resources support the system? 5. Success and Accountability a) How transparent is the system? b) Does the system include monitoring and evaluation? c) Is the system successful? A. Goals The first element of the framework, the goals, seeks to identify the types of conflicts the system seeks to address, and to determine the systems objectives. Prioritizing the desired outcomes helps clarify the policy direction ex ante and assess the systems successes post. A courts essential function is to determine, according to the facts and the law, the rights of the parties coming before it. While time and cost savings for the court are often front and center, many courts have realized that a powerful parallel reason for implementing such a program is to improve the publics trust in, and satisfaction with, the courts. Parties can gain a sense of procedural justice through employing various forms of ADR, notably that of mediation: their voices can be empowered, and they can enjoy fair treatment, reduced hostility and costs, expedited resolution, and increased overall satisfaction. The trade-offs inherent in competing goals may affect the quality of the resulting system. Significant tension can arise among the goals of efficiency, fairness, and justice. For example, what goal is achieved if a court sanctions certain behaviors while punishing others? Is the primary aim to deter parties from future disputes? Can court services realistically guarantee satisfaction to all? Can court outcomes provide long-term durability of resolutions, or merely more short-term results? One might argue that these unavoidable conflicts might affect fairness in some cases but enhance efficiency in
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others. Indian disputes referred to mediation include business and commercial, insurance, matrimonial (divorce, custody, and dowry), intellectual property, labor and management, property, and tort recovery. Clearly, the driving objective of mediation referrals has-been to reduce the case backlog by offering a less time-intensive and less expensive process to resolve a wide range of disputes. The objectives of the Israeli program have been to adopted process options and case-management policies in order to provide optimal service within the limits of its resources. The focus has been on reducing case-processing time and lessening the volume of cases for the judges. Furthermore, the program aimed to introduce ADR to and encourage its use by the public. As noted above, in San Mateo Superior Court, cases in family, probate, civil, complex litigation, juvenile, and small claims each have access to ADR. The Multi-Option ADR Projects more-varied goals are outlined in its mission statement as follows: To increase the courts ability to resolve cases. To provide a flexible, tailored array of dispute resolution services, where the unique features of cases are given priority attention. To encourage early case preparation, with the benefits of saving both time and money. To promote an ongoing attitude of cooperation and collaborate in both the public and private sectors approach to handling disputes of all kinds, whether institutional, business, or interpersonal. To promote greater public satisfaction with the civil and criminal justice systems. To promote the usefulness of ADR to members of the public through educational efforts. Consistent among all three courts has been the goal of a more efficient case-handling system, with respect to both time and expense, for the court and the parties. However, that efficiency hasbeen balanced with the provision of parties with a more participatory and interest-driven process option still within the bounds of the court. Each court engaged a range of stakeholders for input, offered public education, and started with a pilot by geography orcas type before expanding the program. The Australian Centre for International Commercial Arbitration (ACICA) is an Australian international arbitral institution. Established in 1985 as a not-for-profit public company, its membership includes world leading practitioners and academics expert in the field of international and domestic commercial arbitration. ACICA aims to educate, promote and encourage the use of international commercial arbitration as a means of dispute resolution, and to promote Sydney and Australia as an international seat of arbitration. The objects of ACICA are to support and facilitate international arbitration and to promote Sydney and Australia as a venue for international commercial arbitrations. ACICA maintains a panel of international arbitrators and a list of experienced arbitration practitioners. It provides information on international arbitration and is involved in education through the provision of seminars.
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B. Process and Structure The second element of the analytic framework involves process options and structure. Other processes may focus on the prevention or management of certain categories of disputes, but courts are established to resolve disputes. It is useful to probe the incentives and disincentives (financial, relational, legal, or other) and consider: What role parties, their counsel, the judge, and the court ADR administrators should play in deciding whether to use ADR. What role they should play in selecting, providing, and timing the ADR process option. To what degree the court should encourage or require use of an ADR option. Whether certain cases should be exempt from specific (oral) ADR options. In the Indian programs, mediation may be recommended at any stage, but preferably after admission/denial. The referring judges assess cases for mediation based on party characteristics, case characteristics, legal issues, and the number of parties. In a bid to deal with case overload and provide respite outside court, the Chief Minister of the Delhi Cabinet, Sheila Diskhit, together with the Delhi High Court and the author, in his capacity as Principal Secretary, formed the Delhi Disputes Resolution Society. Under its auspices, eight mediation centers have been established throughout Delhi. The mission of these community mediation centers is not only to reduce the debts of pending cases, but also to target the cases at a pre-litigation stage and to promote social harmony. Types of cases served include those relating to family disputes(domestic violence, maintenance, custody, and separation),consumers, community disputes, commercial practice, schools, check bouncing, administrative tribunals, police complaints, and personal injury and accident compensation. The government plans to seek the services of retired judges and reputed advocates. Furthermore, the information technology department is working to establish software to avoid unnecessary paperwork and delays. The Israeli structure focuses on both ADR and case management. The first step in its structural overhaul was the establishment of a new legal division in 1997, the Case Management and ADR Department. The new departments responsibilities included implementing case-management methods, referring and monitoring cases referred to ADR, and providing legal assistance to the judges. The new elements of case management included constructing specialized departments, such as the department for torts. Classification and preparation were accomplished mostly by evaluating cases prior to pre-trial hearings. Providing judges with the relevant information and documentation of their respective cases by the first hearing had a significant impact on judicial time. The departments include the department for torts, the department for contractual claims and supply of goods, the department of banking loans and credit, the department for property, the department for libel, intellectual property, and complex commercial cases. The directions have been given in accordance with the judges guidance and based on the specific case. It enabled tailoring different case management procedures for each case as required.
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The criteria for referring cases to mediation in the Israeli program were eliminative. The courts directions were not binding, and it did not take any position on parties response. Cases were referred to mediation at every stage of the trial. The obvious advantages of ADR to the court and the public included time saved, reduction in overall costs, and improvement of parties relationships. The state also incentivized ADR by providing a full refund of court fees to those who used it to resolve their cases.The disputants choose between internal or external mediation. In San Mateo, disputants are informed of ADR options upon filing, whether they are in the civil, probate, complex litigation, small claims, juvenile, or family departments. Professional and highly skilled neutrals are provided by different methods and at different times in each program area. For example, in civil, probate, and complex matters, parties are given prescreened lists of market-rate neutrals (mediators, arbitrators and neutral evaluators),or they can select a neutral on their own. They are given time frame in which to submit a stipulation providing the court with the neutrals name and the ADR sessions date. They split the costs unless pro bono is requested and granted. In the small claims and two juvenile programs, mediations are provided free of charge by trained community volunteers overseen by court staff. In the family law ADR program, there are free staff volunteer mediators on site for short-cause matters, and a private panel of trained family law mediators and arbitrators who handle the first ninety minutes on a reduced-fee basis. Key factors that have contributed to the growth and development of the program include: Broad participation in the development and implementation of the program, from the judges, local bar, community mediation center, and other community partners. The use of professional ADR staff helps keep the program on track. For example, the program directors expertise and ability to engage a wide range of people (judges, attorneys, and disputants) have been critically important in securing the support needed for all aspects of the program. Appropriate referral of disputants to an ADR option that meets their needs. Otherwise, parties are likely to be dissatisfied with the program or the court.The disputants are referred to the Administration of Courts website for information about the different ADR options, and to the list of neutral parties involved. Internal mediation took place at the courthouse and was facilitated by court attorneys. Mediators approved by the Administration of Courts facilitated external mediation. High-quality neutrals and the ability to track success. Each of the programs provides evaluations to all participants, attorneys, and neutrals for all cases. In general international arbitrations in Australia are governed by federal legislation, the International Arbitration Act 1974 (Cth). The Act incorporates an internationally accepted law on arbitration known as the UNCITRAL Model Law on International Commercial Arbitration. However, parties are permitted to exclude this law. Where they do so the arbitration will be governed by the Commercial Arbitration Act of the State or Territory where the arbitration is
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held. In addition to giving force of law in Australia to the UNCITRAL Model Law, the International Arbitration Act implements two international conventions. The first is the New York Convention, which provides for the international enforcement of arbitration agreements and awards. The second is the Washington Convention which provides for a special system of arbitration for disputes between States (countries) and foreign investors. C. Stakeholders The third element influencing ADR implementation in different countries is the identification of stakeholders and their relative power. Stakeholders include the immediate parties in conflict, their counsel, the court itself, the courts employees, and the citizens within the jurisdiction. In examining the various stakeholders involved, one must ask how the introduction of a new system allows for the different stakeholder interests to be met. Many lawyers of various Delhi bar associations were not interested in adopting alternative dispute resolution practices, so the MCPC started the program with officers of the Delhi Higher Judicial Services. The Delhi High Court approved draft rules on mediation for the Delhi jurisdiction. After initial resentment, lawyers gradually began participating. The reform of the Israeli court system and the implementation of ADR were initiated by the Israeli judicial system. The president of the Supreme Court, the Honorable Judge Aaron Barak, supported and encouraged the use of ADR. Judge Baraks view was that, ideally, the courts would deal with disputes that had to be resolved through judicial rulings, while the remainderindeed, the large majorityof the cases would be dealt with by means of alternative methods, such as arbitration and mediation. Judge Barak emphasized that the importance of mediation is in off-loading the backlog of the courts; it is not its goal, but it should be its result.The Israeli Bar Associations approach was disjointed. Some voices strongly opposed any kind of change to case-management practices, while others supported the process and called for attorneys to get training as mediators and take an active role in therefore. From the stakeholders perspective, the neutrals represented the court and had to meet the highest standards of professionalism. Initially in Tel Aviv, there were no limitations placed on the number of people who could qualify for the external mediators panel, and the list kept growing rapidly, ultimately including thousands of mediators. As a result, there were too many mediators who were fully trained but lacking practical experience. This situation led to growing dissatisfaction among attorneys and disputants with the level of mediator professionalism. As a result, willingness to participate in mediation decreased in some courts. In response to this declining interest in mediation, the Rubinstein Commission established a pilot program of mandatory mediation. The program was launched by three Israeli courts in September 2008. According to the program, disputants in cases exceeding50, 000 NIS had to attend a pre-trial meeting called amah ut, an acronym for familiarity and coordination gathering.The major change is that the mah ut is facilitated by an external mediator chosen from a panel of mediators who have been rigorously examined. In the mah ut meeting, the disputants present their respective complaints and hear from the mediator about the various
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options available for resolving the case. It is then each disputants choice as to whether to proceed with mediation or go to trial. In San Mateo, minimum mediator qualifications for the civil, probate, and complex programs include a combination of training of at least forty hours and experience in at least five mediations, or other substantially equivalent background. References are requested of applicant neutrals and observation may be requested. Stakeholders included bar association and community mediation program members and other relevant agency and community group representatives who served alongside judicial officers on advisory committees formed for each new program. For example, the juvenile mediation program advisory committee consisted of not only probation, district attorney, and social worker representatives, but also mental health professionals from referring schools and juvenile liaisons from some of the local police departments, along with the ADR staff and juvenile judges. The ACICA Judicial Liaison Committee, with its expertise in judicial and arbitral experience, is an integral part of the Australia arbitration infrastructure to attract international arbitration business to Australia. The Hon Murray Gleeson AC (former Chief Justice of the High Court of Australia and Committee Chair), The Hon Justice Tim Anderson (Supreme Court of South Australia); The Hon Justice Richard Refshauge (Supreme Court of the Australian Capital Territory), The Hon Justice James Allsop (Chief Justice of the Federal Court of Australia); The Hon Justice James Douglas (Supreme Court of Queensland); The Hon Justice Clyde Croft (Supreme Court of Victoria); The Hon Wayne Martin (Chief Justice of the Supreme Court of WA); The Hon Justice Judith Kelly (Supreme Court of the Northern Territory); The Hon Justice John Middleton (Federal Court of Australia) and Prof Doug Jones AO (ACICA President)ACICA has several prominent arbitration experts on its board and also has the support of its eight corporate members, which are comprised of Australia's largest law firms and the world's largest professional services organisation. These are Allens Arthur Robinson, Blake Dawson Waldron, Clayton Utz, Corrs Chambers Westgarth, Freehills, Mallesons Stephen Jaques, Minter Ellison and PricewaterhouseCoopers.
ACICA has close associations with related organisations, including the Australian Commercial Dispute Centre ("ACDC"), the Chartered Institute of Arbitrators (Australian Branch), the Law Institute of Victoria and the Western Australian Institute of Dispute Management. In fact, the Law Institute of Victoria and the Western Australian Institute of Dispute Management provide ACICA's Melbourne and Perth registries, respectively. ACICA also has cooperation agreements with many arbitration organisations around the world. Further, ACICA recently established the Australian Maritime and Transport Arbitration Commission ("AMTAC"). AMTAC aims to capitalize on the skills and expertise of maritime
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lawyers, arbitrators, judges and scholars in Australia to make Australia an international leader in maritime and transport law.
D. Resources There are vital concerns regarding the extent to which the judicial system can provide adequate resources for the incorporation24 A hidden benefit was that many of the mediators not mediating court cases developed and implemented mediation programs in communities and schools instead. MICHAL RUBINSTEIN, REPORT OF THE COMMITTEE TO ASSESS WAYS TO INCREASE THEUSE OF MEDIATION TO DECREASE THE BURDEN ON THE JUDICIARY SYSTEM (2006).of ADR. How will the system be financed, and is its funding level adequate to achieve the stated goals? What impact do the amounts and sources of funding appear to have on the results of the system? On the human resource side, are neutrals adequately trained to provide quality and ethical services? Do other personnel in the system (internal and external to the organization) have sufficient skills, training, and supervision? A system can achieve its goals only if it is adequately supported. To avoid creating an elaborate set of processes with inadequate resources, stakeholders may be required to make hard decisions that, as noted above, may have an impact on fairness, justice, and the likelihood of success. Limitations influence different approaches to creating an ADR operation. Two major staffing models are used in court ADR programs. Courts with a staff-neutral model employ specially trained court staff to serve as the ADR neutrals. This model is used in a number of Federal Circuit Courts of Appeal and smaller number of district courts in the United States. The model was used in the Israeli program. Largely due to cost considerations, however, many courts use a panel model, relying on private practitioners to serve as ADR neutrals on a court-administered or court-sponsored panel. In the Indian program, judges and attorneys with ten years of practice and forty hours of training may be mediators. The cost is free for disputants and their court fees are refunded. The government pays lawyer mediators. The DMC, under the MCPC, conducts various training programs for judges and lawyers in Delhi and in the different states of India, including training aimed at increasing the awareness of mediation, highlighting the role of the referring judges and lawyers, and providing refresher courses for mediators with subject-specific training and more. It is important to note that in Israel there are higher attendance and resolution rates in cases using internal mediation than in those that are referred out, with an attendance study revealing internal mediation attendance rates at eighty percent versus the external mediation rate of fifty percent. Some external mediators have argued that having the option of internal mediation was the reason for the decrease in external mediation participation. Another argument was that internal . The rough division of court ADR delivery options into these two categories oversimplifies the terrain. For a more detailed discussion of five different models and their
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strengths and weaknesses, mediators used a more evaluative mediation style and that therefore the rate of resolution was higher. The higher attendance and resolution rates through internal mediation might be connected to internal mediations sponsorship by the courts, which perhaps increased public confidence in the process. Furthermore, internal mediators had an opportunity to handle a higher volume of cases and thus deepen their experience. In every dispute system design, the most important resource is human talent. All models rely on the generosity of the mediators, many of whom volunteer their preparation time and first ninety minutes or more. In order to continue to uphold the public mandate of providing such accessible and affordable services, judiciaries must find ways to increase their funding, and the state and the judiciary must keep and attract skilled mediators. Administration of arbitrations and mediations Appointment of arbitrators and mediators Information on experienced international arbitration practitioners Information on arbitration agreements, rules and arbitration law and practice In addition ACICA has a system of accreditation for international arbitrators and mediators and maintains a panel of international arbitrators. Further, ACICA has established a list of experienced arbitration lawyers and firms. ACICA is also involved with significant education initiatives, and has recently held a successful arbitration conference in Sydney. ACICA secured an outstanding line up of speakers for the conference, and some 215 international guests were in attendance from 21 countries. Educational initiatives are also undertaken with other bodies such as the Chartered Institute of Arbitrators (Australian Branch), ICC Australia and the Australian Corporate Lawyers Association. E. Success and Accountability The last element to assess is the success of the ADR programming each setting. On the ground level, one must ask to whom is the system accountable? Is the system transparent in terms of its operation, access to processes, and result? Does the system include an evaluative component, and, if so, what is studied, when, by whom, and for whom? Finally, is the system successful when measured against its goals and other relevant legal and societal norms? A systems success is best judged if outcomes are made available to, and studied by, independent evaluators. Unfortunately, barriers such as cost, privacy concerns, and difficulty often preclude independent evaluation from taking place. At a minimum, evaluation should begin with internal monitoring, including some combination of data collection on usage, surveys, and focus groups designed to obtain candid feedback from key stakeholders. Of course, independent external review is preferable and can provide more detailed and objective assessment. In India, the DMC issues newsletters and annual reports. As of December 2012, the DMC had settled over 70,000 cases, with an average success rate of seventy percent. The DMC pilot has led Whether or not internal mediation is necessary to establish an ADR system is a complicated Question to a national plan on mediation to encourage use of mediation as speedy, inexpensive, and highquality alternative to litigation.
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The success of the Case Management and ADR program in Tel Aviv was measured by the goals defined at the outset. By September2000, just two years after the programs initiation, the average time it took to process and complete a civil case had been reduced from five years to two. The other goal, namely that of reducing case volume, had also been achieved.The evolution and success of the Israeli Case Management and ADR program was partly based on periodical re-examination of the programs performance. Monthly, semi-annual, and annual reports monitored the programs effectiveness. The relentless search for new methods to enhance judicial efficiency resulted in tangible success. Recent data assessing the progress of the mandatory mediation program (mah ut) can be found in the Rubinstein Committees intermediate report, which analyzed 1,213 pilot cases referred from three different courts (Jerusalem, Tel-Aviv, and Rishon Lezion).The research methods for the report included both qualitative and quantitative approaches. The report indicated that most of the disputants and their attorneys were highly satisfied with the mediators professionalism. During the pilot period of September 2008to March 2009, 52.9% of the disputants chose mediation to resolve their conflicts. Most of the attorneys and disputants participating in mediation were satisfied with the process, and 61.4% resolved the conflict through mediation. Sixty-five percent of the disputants said they would recommend mediation to family or friends. In San Mateo, the Civil and Probate ADR Program is a voluntary, market-rate program, with income-based, pro bono, and modest-means services available. Referrals are provided by trained and experienced neutrals who are attorneys, non-attorney professional neutrals, and retired judges. These professionals are all asked to respond to evaluations of the programs. There were 741 cases referred to the Civil ADR Program forth 2007-2008 fiscal year. The reduction in volume should be credited not only to the case management and ADR reform, but also to appointment of judges and to the 24th amendment of the Execution Act.30 The following statistics on the San Mateo ADR program come from SUPERIOR COURT OFCALIFORNIA, COUNTY OF SAN MATEO, MULTI-OPTION ADR PROJECT EVALUATION REPORT,JULY 2007 JULY 2008 (2009), only one quarter of the years data was captured, from October2007 to December 2007. In this quarter, of 170 cases referred tithe program, ninety-six responded to the survey. With respect to voluntary participation, seventy-three percent of cases referred tithe program proceeded to ADR, and twenty-seven percent did motor had not yet gone to ADR. Of those cases where ADR had been utilized, seventy-one percent settled fully and three percent partially settled. Twenty-six percent did not settle at an ADR session. In all cases in which an ADR process was chosen, mediation was utilized. The duration of the average ADR session was 4.0hours, with an average of 1.2 sessions. The types of cases included personal injury (thirty-six percent), business (twenty-six percent),real estate (thirteen percent), employment (nine percent), construction(five percent), professional malpractice (three percent),complex litigation (three percent), and other/insurance/intellectual property (five percent). Ninety-five percent of respondents thought that court time was reduced as a result of
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ADR, while five percent thought court time was increased. Eighty-five percent of respondents thought that ADR reduced costs, while fifteen percent thought ADR increased costs. Forty-nine percent of plaintiffs attorneys and twenty-eight percent of defense attorneys who responded to the evaluation thought that proceeding with ADR reduced litigation costs in the range of $10,000 or less. Forty-six percent of plaintiffs attorneys and fifty-six percent of defense attorneys estimated cost savings in the range of $10,000 to $50,000.39With respect to the timing of ADR sessions, forty-two percent were held after some preliminary discovery had been completed, thirty-percent after significant discovery, twenty-two percent when trial was imminent, and six percent within four months of filing.40Below are the results in terms of satisfaction rates, based on responses from plaintiffs, defendants, and counsel: The Australian Centre for International Commercial Arbitration (ACICA) is Australia's premier international arbitration institution. Following the successful launch of the ACICA Arbitration Rules (ACICA Rules) in 2005, ACICA has recently revised its Expedited Arbitration Rules (ACICA Expedited Rules), which were first published in late 2008. The ACICA Expedited Rules aim to 'provide arbitration that is quick, cost effective and fair, considering especially the amounts in dispute and complexity of issues or facts involved' (article 3.1 of the ACICA Expedited Rules). Further, ACICA have adopted an opt-in approach for these rules, requiring parties to explicitly select them (rather than the ACICA Rules) in their arbitration agreement board comprising representatives of the attorney general, the chief justices of the High Court and Federal Court, the president of the Australian Bar Association, the president of the Law Council of Australia and other industry representatives will oversee the appointment process. ACICA has ensured that the process can happen efficiently and that a nomination can be made without delay. Summary and Inferences: Delhi, India Goals Decrease caseload; centralize direction & support; improve accessibility; decrease cost, time; offer selfdetermination Tel Aviv, Israel Reduce time and cost; reduce caseload; implement ADR; increase public satisfaction San Mateo, California, USA Increase court capacity to resolve cases; provide ADR; promote public satisfaction; encourage early case analysis ACICA Australia provide arbitration that is quick, cost effective and fair, considering especially the amounts in dispute and complexity of issues or facts involved' government Advisory
Structure
Court coordinators; judges; referrals
Modified case management; ADR provision
Judges; Oversight Committee
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per party, case, legal profile; public education; DDRC training center
with internal, external and telephone
Stakeholders
Government Court Judicial staff Lawyers Client parties
Court Judicial staff Lawyers Client parties
(bench, bar, community); Advisory Committee (stakeholders); and Staff. ADR programs for civil/probate; complex litigation; family law; small claims; juvenile dependency and juvenile delinquency. Court Judicial staff Lawyers Client parties Community mediation centers
Committee Business, academia, judiciary, industry.
Government Court Judicial staff Lawyers Client parties Govt. funded; ACICA center of ADR, training; certification; paid by court; mediation, services,
Resources
State funded; DDRS as center of ADR need excellence; training; certification; judges & lawyers trained; paid by court; mediation service free
Significant human and political support; moderate financial aid
Success
>70,000 cases settled (70%). Faster, cheaper, reduced backlog. No independent evaluation.
Significant human and financial resources; need based fee waivers, certification; judges & aid otherwise market rate except in small claims and juvenile (which is free) Significant Indicators: % reduction in case cases resolved; time line; 49% cost; time; party (external) to 91% satisfaction (internal) cases settled
Increased efficiency, Reduced time consumption and cost, easy accessibility
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5.3 Comparing the system framework used in India and Australia : Position of ADR in India: Alternative dispute resolution in India is not new and it was in existence even under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to accommodate the harmonization mandates of UNCITRAL Model. To streamline the Indian legal system the traditional civil law known as Code of Civil Procedure, (CPC) 1908 has also been amended and section 89 has been introduced. Section 89 (1) of CPC provides an option for the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement. Due to extremely slow judicial process, there has been a big thrust on Alternate Dispute Resolution mechanisms in India. While Arbitration and Conciliation Act, 1996 is a fairly standard western approach towards ADR, the Lok Adalat system constituted under National Legal Services Authority Act, 1987 is a uniquely Indian approach. Reasons behind introduction of ADR in India: Alternative Dispute Resolution in India is an attempt made by the legislators and judiciary alike to achieve the Constitutional goal of achieving Complete Justice in India. ADR first started as a quest to find solutions to the perplexing problem of the ever increasing burden on the courts. A thought-process that started off to rectify docket explosion, later developed into a separate field solely catering to various kinds of mechanisms which would resolve disputes without approaching the Formal Legal System (FLS). The reasoning given to these ADR mechanisms is that the society, state and the party to the dispute are equally under an obligation to resolve the dispute as soon as possible before it disturbs the peace in the family, business community, society or ultimately humanity as a whole. In a civilized society, principles of natural justice along with the Rule of Law should result incomplete justice in case of a dispute. Rule of Law is defined as the state of order in which events conform to the law. It is an authoritative, legal doctrine, principle, or precept applied to the facts of an appropriate case. These definitions give us the indication that the Rule of Law is an authoritative concept which might lead to a win-lose situation in cases of dispute. Therefore, ADR uses the principles of natural justice in consonance with the Rule of Law, in order to create favorable atmosphere of a win-win situation. This is much needed in countries like India where litigation causes a great deal of animosity between the parties due to the agony caused byte long-standing litigation. ADR, thus, gains its momentum in India today. Alternative Dispute Resolution in India was founded on the Constitutional basis of Articles 14and 21 which deal with Equality before Law and Right to life and personal liberty respectively. These Articles are enshrined under Part III of the Constitution of India which lists the Fundamental Rights of the citizens of India. ADR also tries to achieve the Directive Principle of State Policy relating to Equal justice and Free Legal Aid as laid down under Article 39-A of the Constitution. The Acts which deal with Alternative Dispute Resolution are Arbitration and Conciliation Act, 1996 (discussed in detail later) and the Legal Services Authorities Act,
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1987.Section 89 of the Civil Procedure Code, 1908 makes it possible for Arbitration proceedings to take place in accordance with the Acts stated above. In India, the quest for justice has been an ideal, which the citizens have been aspiring for generations down the line. Our Constitution reflects this aspiration in the Preamble itself, which speaks about justice in all its forms: social, economic and political. Justice is a constitutional mandate. About half a century of the Constitution at work has tossed up many issues relating tithe working of the judiciary; the most important being court clogging and judicial delays. Particularly disturbing has been the chronic and recurrent theme of a near collapse of the judicial trial system, its delays and mounting costs. Here, the glorious uncertainties of the law frustrated the aspirations for an equal, predictable and affordable justice is also a question, which crops up often in the minds of the people. We are a country of a billion people. How do we design and structure a legal system, which can render justice to a billion people? The possibility of justice-delivery mechanism in the Indian context and the impediments for dispensing justice in India is an important discussion. Delay in justice administration is the biggest operational obstacle, which has to be tackled on a war footing. As Justice Warren Burger, the former Chief Justice of the American Supreme Court observed in the American context:The harsh truth is that we may be on our way to a society overrun by hordes of lawyers, hungry as locusts, and bridges of judges in numbers never before contemplated. The notion that ordinary people want black-robed judges, well-dressed lawyers, and fine paneled courtrooms 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.This observation with greater force applies in the Indian context. Therefore, this explains the need for Alternative Dispute Resolution in India. In a country, which aims to protect the socio-economic and cultural rights of citizens, it is extremely important to quickly dispose the cases in India, as the Courts alone cannot handle the huge backlog of cases. This can be effectively achieved by applying the mechanisms of Alternative Dispute Resolution. These are the reasons behind the introduction of ADR in India. THE PRESENT SCENARIO:The legal system in India is viewed by many as part of colonial legacy. Undoubtedly, judiciary is the important institution which has withstood many challenges during the last-more than fifty years to retain its integrity. But with the mounting pressure of cases-civil, criminal, revenue, industrial and others the workload of judiciary increased leaps and bound and it has now reached a stage of unmanageable magnitude and the cases remain undecided for years together for one reason or the other. The preamble to the constitution of India promises to secure socio-economic and political justice and equality of status and of opportunity to all the citizens. Art. 39-A contains a directive principle which holds that the state will ensure that the legal system operates in a manner so as to promote justice to all and to ensure that no citizen is denied the opportunities of securing justice by reason of economic or any other disability. But the ground reality is that the law hardly reaches the vulnerable sections of the society here majority of the people are illiterate, rustic and rural and are ignorant about existence of their legal rights and remedies. And those who are aware of their right, find it difficult to get them translated into reality because of the legal and procedural ordeals on has to undergo in the process of litigation
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MALIMATH COMMITTEE:-The report of the Malimath Committee (1989-90). The committee was headed by Honble Mr. Justice V.S. Malimath, the two other members being Honble Mr. Justice P.D. Desai and Honble Dr. Justice A.S.Anand.In India the situation is all the more worse. The Indian judicial system has been stretched almost to a breaking point right from the Apex court to the lowest subordinate courts. The Malimath Committee which is also known as the Arrears committee, undertook a comprehensive review of the working of the court system, particularly all aspects of arrears and Laws delay and made various useful recommendations for reducing litigation and making justice readily accessible to the people at the minimum cost o time an money. The Malimath Committee underlined the need for alternative dispute resolution mechanism such as mediation, conciliation, arbitration, Lok Adalats etc. as a viable alternative to the conventional court litigation. Alternative Dispute Resolution (ADR) is a term for describing process of resolving disputes in place of litigation and includes arbitration, mediation, conciliation, expert determination and early neutral evaluation by a third person. In many important respects, arbitration is similar/common with court based litigation than the other forms of ADR. Prior to the enactment of The Arbitration and Conciliation Act, 1996, none of these forms of ADR except arbitration have any statutory basis in India. Mediation and Conciliation require an independent third party as mediator or conciliator to assist the parties to settle their disputes. The expert determination requires independent experts in the subject of disagreement of the parties to decide the case. Such expert is chosen jointly by the parties and his decision is binding. ARBITRATION LAW IN INDIA: In our country, in the past statutory provisions on arbitration were contained in three different enactments i.e. the Arbitration Act 1940, the Arbitration (Protocol and Convention) Act 1937 and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Arbitration Act, 1940 laid down the framework within which domestic arbitration was conducted in India, while the other two Acts dealt with foreign awards. The Arbitration and Conciliation Act, 1996 has repealed the Arbitration Act, 1940 (10 of 1940) and the Arbitration (Protocol & Convention) Act, 1937 (6 of 1937) and the Foreign Awards (Recognition and Enforcement) Act, 1961 under section 85 of the 1996 Act. United Nations Commission on International Trade Law (UNCITRAL) prepared a Model Law on international commercial arbitration in 1985. The General Assembly of the United Nations has recommended that all member countries should give due consideration to the Model Law, for the desirability of uniformity of the Law of Arbitral Procedures and the specific needs of International Commercial Arbitration Practice. The United Nations Commission on International Trade Law (UNCITRAL) adopted the UNCITRAL Conciliation.1.The Arbitration and Conciliation Act, 1996.2. I bid Rules in 1980. The Arbitration and Conciliation Bill 1996 was passed by both the Houses of Parliament and received the assent of the President of India on August 16, 1996 and was enforced w.e.f. January 25, 1996 and the enactment came on the statute book as the Arbitration and Conciliation Act, 1996 (26 of 1996).The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay and expense. The parties should be free to agree as to how their disputes are to be resolved, subject only to such safe guards as are necessary in the public interest. In the matter governed by the provisions of the 1996 Act, the court should not intervene except as provided by those provisions. The main object of Arbitration is to exclude judicial intervention with the process of Arbitration. The Court is however required to direct the parties to resort to Arbitration as per the agreement and to provide alternative dispute resolution to those who cannot bear the cost and the time of ordinary civil
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court procedure as per the provisions of Section 89 CPC. There are separate enactments specially to settle disputes arising between employer and employee under the Industrial Disputes Act. Statutory tribunals are also some time lacking in their effort as they do not have the simplicity, transparency and practical approach to resolve the disputes, as in the Arbitration and Conciliation Act, 1996. The English Arbitration Act, 1996, provides that the provisions of law must not be construed as excluding the operations of rule of law consistent with those provisions, in particular any rule of law as to (a) matters which are not capable of settlement by arbitration, (b) the effect of an oral arbitration agreement or (c) the refusal of recognition or enforcement of an arbitral award on ground of public policy. The English Arbitration Act, 1996 must not be construed as reviving any jurisdiction of the court to set aside or remit an award on the ground of errors of fact or law on the face of award. Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitration, disputes are resolved with binding effect by a person or persons acting in a judicial manner in private, rather than by the regular court of law, that would have jurisdiction to adjudicate, but for the agreement of the parties to exclude it. The Arbitration and Conciliation Act, 1996 is a long leap in the direction of Alternative Dispute Resolution system. It is based on UNCTRAL model. Commenting on arbitration as an ADR technique, Mr. V.R.Krishna Iyar of the Supreme Court observed:Interminable time consuming, complex and expensive curt procedure implied jurists to search for an alternative forum less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to the Arbitration Act TRIBUNALS IN INDIA:-With the acceptance of Welfare ideology, there was mushroom growth of public services and public servants. The courts particularly the High Courts were inundated with cases concerning service matters. The Swarn Singh Committee therefore, interalia recommended the establishment of Administrative Tribunals as a part of Constitutional adjudicative system. Resultantly the Constitution (42nd Amendment) Act 1976 inserted Part XIV-A to the Constitution of India consisting of Articles 323A and 323B. Article 323A provides for the establishment of Administrative Tribunals for adjudication or trial of disputes and complaints with respect to recruitment, conditions of service of persons appointed to public services and other allied matters. Article 323B makes provision for the creation of Tribunals for adjudication or trial of disputes, complaints or offences connected with tax, foreign exchange, industrial and labor disputes, land reforms, ceiling on urban property, election to Parliament and State Legislatures, etc. Parliament has power to enact any law under Article 323A while both Parliament and State Legislatures can make laws on matters of Article 323B, subject to their legislative competence. Therefore, in some cases, expert bodies like Central Administrative Tribunals constituted under Section 4 of the Administrative Tribunals Act 1985, have been empowered to adjudicate matters relating to service conditions etc. Similarly the Consumer Disputes Redressed Mechanism provided for better protection of the consumers, thereby providing for the establishment of the District Consumer Disputes Redressed Forum at district level, State Consumer Disputes Redressed Commission, at the State Level and National Consumer Disputes Redressed Commission at the National Level to adjudicate the Consumer Disputes/cases under the Consumer Protection Act, 1986. The Income-tax Appellate Tribunal is empowered to hear appeals under Section 253 of the Income Tax Act, 1961, Central Excise and Gold Appellate Tribunal (now known as Central Excise and Service Tax Appellate Tribunal) is
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empowered to hear appeals under Section 35(b) of the Central Excise and Salt Act, 1944. The Debt Recovery Tribunals set up under the provisions of The Recovery of Debts due to Banks and Financial Institutions Act 1993 has been empowered to adjudicate cases relating to debts /loans of Commercial Banks and Financial Institutions. The tribunal system was evolved in our country to provide an alternative to the regular courts. The tribunals are presided over by the experts of the respective fields and the adjudication mechanism is cost effective, thus less costly in comparison to the regular courts and they are effectively resolving the disputes by taking much less time in comparison to the regular courts. CIVIL PROCEDURE CODE:-The use of ADR, is promoted by the enactment of section 89 of the Code of Civil Procedure which is inserted by Section 7 of the Code of Civil Procedure (Amendment) Act 1999. The courts also encourage the parties to use an ADR procedure in appropriate cases. The Governments including Central Government are committed to settle their legal disputes out of the court by ADR methods whenever the other party agrees for it. Normally ADR is an alternative way of settlement of the disputes or issues. ADR is simple, cheaper, quicker and less stressful to all parties, in comparison to adversarial litigation. CONCILIATION/ MEDIATION:-The term conciliation and mediation have not been used with any precision. To begin with the term conciliation1 was used more widely, while of late the term mediation has become more popular. By and large these terms are used inter changeably. Section 61 of the Act1 provides for application of Part-Ill of the Act to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto. The provisions of Part-Ill shall not apply where by virtue of any existing law which is in force; certain disputes may be in the exclusionary category of conciliation. Section 62 of the Act2 provides for commencement of conciliation proceedings. Section 63 provides for the number of conciliators and Section 64 provides for the appointment of conciliators. The parties may submit brief written statement describing the general nature of the dispute and the points at issue with a copy of such statement to the opposite party under Section 65 of the Act. The Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872 are not binding upon the conciliators as per the provisions of Section 66 of the Act. The conciliator assists the parties in an independent and impartial manner in their attempt to arrive at an amicable settlement of their dispute. The conciliator is guided by the principles of objectivity; fairness and justice by taking into account the rights and obligations of the parties. The conciliators are free to conduct the proceedings, by taking into account, the circumstances of the case and willingness of the parties, including any request by a party that the conciliator should hear oral statement requiring speedy disposal/ settlement of the dispute. The conciliator is free to make any proposal for settlement of dispute at any stage under Section 67 of the Act. Section 75 of the Act provides that the proceedings before conciliator shall be confidential. The parties shall keep all matters relating to the conciliation proceedings as confidential. The agreement is also confidential except where its disclosure is necessary for the purposes of implementation and enforcement of the settlement. Section 73 empowers the conciliator to formulate the terms of a possible settlement and submit the same to the parties for their observance. On observance, if the parties agreed, a written settlement agreement may be signed. The settlement agreement shall be final and binding on the parties and their representatives. The conciliator shall authenticate the settlement agreement and furnish a copy of such agreement to each of the parties under Section 73 of the act.
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Arbitration and Conciliation Act, 1996: Part I of this act formalizes the process of Arbitration and Part III formalizes the process of Conciliation. (Part II is about Enforcement of Foreign Awards under New York and Geneva Conventions.)Arbitration The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in writing. The contract, regarding which the dispute exists, must either contain an arbitration clause or must refer to a separate document signed by the parties containing the arbitration agreement. The existence of an arbitration agreement can also be inferred by written correspondence such as letters, telex, or telegrams which provide a record of the agreement. An exchange of statement of claim and defense in which existence of an arbitration agreement is alleged by one party and not denied by other is also considered as valid written arbitration agreement. Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. There are only two grounds upon which a party can challenge the appointment of an arbitrator reasonable doubt in the impartiality of the arbitrator and the lack of proper qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or a panel of arbitrators so appointed constitutes the Arbitration Tribunal. Except for some interim measures, there is very little scope for judicial intervention in the arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request, there is little the party can do except to approach a court after the tribunal makes an award. Section 34 provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award. The period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a decree of the court. ConciliationConciliation is a less formal form of arbitration. This process does not require an existence of any prior agreement. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed. In case of multiple conciliators, all must act jointly. If a party rejects an offer to conciliate, there can be no conciliation.Parties may submit statements to the conciliator describing the general nature of the dispute and the points at issue. Each party sends a copy of the statement to the other. The conciliator may request further details, may ask to meet the parties, or communicate with the parties orally or in writing. Parties may even submit suggestions for the settlement of the dispute to the conciliator. When it appears to the conciliator that elements of settlement exist, he may draw up the terms of settlement and send it to the parties for their acceptance. If both the parties sign the settlement document, it shall be final and binding on both. Note that in USA, this process is similar to Mediation. However, in India, Mediation is different from Conciliation and is a completely informal type of ADR mechanism. Lok Adalat Etymologically, Lok Adalat means "people's court". India has had a long history of resolving disputes through the mediation of village elders. The current system of Lok Adalats is an improvement on that and is based on Gandhian principles. This is a non-adversarial system, whereby mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These
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are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences. While in regular suits, the plaintiff is required to pay the prescribed court fee, in Lok Adalat, there is no court fee and no rigid procedural requirement (i.e. no need to follow process given by [Indian] Civil Procedure Code or Indian Evidence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts. Cases that are pending in regular courts can be transferred to a Lok Adalat if both the parties agree. A case can also be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party. The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 of the Constitution of India [which empowers the litigants to file Writ Petition before High Courts] because it is a judgment by consent. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. Permanent Lok Adalat for public utility services In order to get over the major drawback in the existing scheme of organization of Lok Adalats under Chapter VI of the Legal Services Authorities Act, 1987, in which if the parties do not arrive at any compromise or settlement, the unsettled case is either returned to the back to the court or the parties are advised to seek remedy in a court of law, which causes unnecessary delay in dispensation of justice, Chapter VI A was introduced in the Legal Services Authorities Act, 1987, by Act No.37/2002 with effect from 1106-2002 providing for a Permanent Lok Adalat to deal with pre-litigation, conciliation and settlement of disputes relating to Public Utility Services, as defined u/sec.22 A of the Legal Services Authorities Act, 1987, at pre-litigation stage itself, which would result in reducing the work load of the regular courts to a great extent. India the Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two other members, usually a lawyer and a social worker. There is no court fee. If the case is already filed in the regular court, the fee paid will be refunded if the dispute is settled at the Lok Adalat. The procedural laws and the Evidence Act are not strictly followed while assessing the merits of the claim by the Lok Adalat.Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal process. No appeal lies against the order of the Lok Adalat. Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat as the scope for compromise through an approach of give and take is high in these cases. Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost. Section 89 of the Code of Civil Procedure, 1908 talks about Settlement of disputes outside the court. The contents of the said section are as follows:Where it appears to the court that there exists elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for(a) arbitration;(b) conciliation;(c) judicial settlement including settlement through Lok Adalat; or(d) mediation
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Position of ADR in Australia. Historically, in Australia Alternative Dispute Resolution ("ADR") has largely been perceived as a non-judicial function. Indeed, ADR has been described as "a process of solving problems without the assistance of the Courts."1More recently however, cost pressures and the search for greater efficiencies and fairness has led to a greater focus on ADR processes in the context of the litigation process, a trend which has been driven by both the legislature and the Courts themselves. Mediation is the main form of ADR used in Australian Courts (Victorian). The Victorian Courts refer cases to conferences, which are normally pre hearing conferences, conciliation and sometimes arbitration. Mediation is a process in which the conflicting parties discuss, formulate and reach to a conclusion with the help of a mediating person known as the mediator. The mediator does not decide or advise, he has no advisory role in the proceedings. He, however, does advise on determining the process of mediation. Mediation can be followed voluntarily, by the order of the Honble Court and or existing contractual agreement. The Supreme, the Magistrates and the County Courts have the right to order any part of the proceeding or all of the proceeding to mediation, with or without the consent of the parties. There are three main types of ADR processes: Facilitative Advisory Determinative.
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TYPES OF ADR PROCESSES: MEDIATION: Mediation is a form of assisted, structured, problem solving, negotiation process. It is an excellent process for resolving most types of dispute and conflict. It is also highly effective at producing mutually acceptable outcomes when there are competing interests AND an underlying need to resolve the clash amicably, rather than by winning a contest of wills, or resources.The mediator guides individuals, groups, organisations and businesses ("parties") through the mediation process. The main objective is to resolve the dispute or problem constructively and to record the agreement(s) reached in a document that is regarded by all parties as being both morally and legally binding on them.Mediation is easily the most widely used dispute resolution process in Australia - mainly because it is both so flexible and so effective. For over fifteen years we have ourselves consistently achieved successful outcomes in over 90% of our mediations. In skilled hands, Mediation addresses and removes the causes of conflict, thereby repairing, or at least dignifying, the damaged relationships that are at the core of all disputes. Contrast this with adversarial processes such as litigation, which is designed specifically to deal only with the symptoms of conflict (ie: breaches of the law). The difference is critical when long-term family, friendship, commercial, business or customer relationships are involved. Most Australian courts and tribunals now regard mediation as an important and efficient dispute resolution process. Perhaps it's the ultimate irony that, after submitting to much of the stress and expense of preparing for trial, many courts now require parties to mediate before they allow them their day in court!Mediation ProcessesThe literature suggests a bewildering array of mediation process models, based on a variety of applied principles and philosophies. Our own research, training, teaching and, more than anything else, practical experience of conducting a great many successful mediations over many years, have led us to develop our own signature style of practical mediation. The two mediation processes we describe below are, therefore, the actual processes we deliver. The mediation processes can and have been adapted to suit almost every size and type of dispute, from non-financial family, family business and workplace conflicts to multi-million dollar commercial disputes.Two distinct styles of mediation building the flexibility to respond to the individual needs of each dispute into the processes themselves. These processes are: Facilitated Mediation Directed Mediation: Facilitated Mediation: This process follows the classic mediation model. The mediator manages a negotiation process designed to help the parties to develop their own agreement. The mediator does not express opinions, or make recommendations, although they do help to reality check options and proposals. Their main role is to maintain order and to provide direction and momentum in the mediation.Directed MediationThis is a more robust process than Facilitative Mediation. The mediator is expected to use his or her professional knowledge, judgment and experience more pro-actively - to express views and opinions and to make suggestions that will help guide, or nudge, the parties towards resolution.Which Process ?Mediators have substantial
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experience and credibility in the areas in which they mediate. They are also exceptionally good at gaining the trust and respect of parties and advisers involved in their mediations. Consequently, most parties choose the Directive Mediation model, with its substantially more pro-active approach. Of course, we are equally happy to use a Facilitative process, whenever requested to do so and there is always the option of changing the process in mid-stream, provided all parties agree to do so.Process StagesJust as we try to keep things simple with our two types of mediation process, so we believe that each process essentially comprises just four fundamental stages, each of which will be familiar to students of problem solving: Stages (1) and (2) - analyse the problem in the here and now. Stages (3) and (4) - develop and implement go-forward solutions. Mediation Process Stages: here and now analysis 1. Identify Issues - Situation and Needs Analysis understand (without judgment) what is going on, what are the perceived problems and what are the parties apparent needs and interests?Assess & Understand Separate the people (ie: personalities and egos) from the problem (ie: the issues). De-construct and analyse the identified problem(s) by: going hard on the problem and easy on the people. go-forward solutions 1. Generate Options Examine possibilities and alternatives through a joint problem solving process. Again, work on the problem, work with the people. Generate options for solutions that could work propositions the other party can easily say yes to.Develop Agreement craft the best and most attractive of the proposed solutions into a workable, written agreement. Produce the best possible outcome for everybody, under all the circumstances.
Example of a Mediation ProcessAs soon as a dispute is referred to us we conduct an intake session to help us, and the parties, to work out and decide which process, style and mediator are best suited to the matter at hand. A typical mediation develops as follows: Preliminary contact. This is usually a telephone or face-to-face contact and may be with one, some, or all of the parties, or their advisers. We see whether the basic chemistry between us is right; offer and explain process options; identify information requirements and sources; identify required outcomes; estimate process time frames and provide estimates of likely costs.Preliminary contact with reluctant party(s). Sometimes, a party to a dispute is resistant to, or even oblivious of, the need to get the problem resolved. If necessary we make contact, provide explanations and get a preliminary commitment to, at the least, start a dialogue.Preliminary Planning Meeting (1 hour). Used to establish trust in the mediator and commitment to the process. The parties define and confirm the problem that needs to be resolved, agree their respective information requirements, set the style for the mediation process, agree costs and how to deal with them and commit to a process timetable.
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Usually, we involve all the parties in the process from the outset. However, where levels of emotion, aggression or insecurity are very high (eg: family, partnership or workplace conflicts), we may instead initially conduct a series of individual meetings. We much prefer face-to-face communication, but if thats not possible we conduct meetings by phone or video conference. We believe it is essential for us to get a real feel for the people and issues and similarly, for the parties and their advisers to understand us and the way we work. The mediation meeting(s). This is usually a half or a full day meeting. Alternatively, it may comprise a series of shorter sessions with individual, some or all of the parties (especially in family, family business and workplace conflicts). The mediator ensures that: All relevant issues are identified, presented and explored. The needs and interests of all parties are validated and acknowledged. Note that this is not the same as their being accepted. Options and alternatives are generated that could become possible solutions / resolutions. The risks and rewards of adopting the various options and alternatives are considered and evaluated. Solutions, being the perceived best choice option(s) from above, put into some form of workable structure, are agreed by the parties. Finally, when the parties are satisfied that they have arrived at and agreed the best possible mutual solution for their problem or dispute, the mediator helps them to develop a written agreement for signing. The agreement is, or will become, legally binding. The advantages of mediation are that the parties do not have to meet and lawyers can be present or not. Further advantages are as follows:(i) the introduction of the third party mediator enables parties to appraise their cases in confidence;(ii) the process is focused on the interests of the parties rather than on their legal rights alone additional factors come into play such as external commercial pressures, personal emotions and other surrounding circumstances;(iii) the process is conciliatory by nature there is not an imposition of a solution it is a mutual and consensual outcome;(iv) scope for non-monetary remedies including the provisions for services, payments in kind and apologies. This may be contrasted with the fixed remedies available in litigation those being damages, specific performance and injunction etc;(v) quick, cheap and confidential. The process is conducted under the "without prejudice" head of privilege. Further, discussions in mediation cannot be discussed in litigation or arbitration proceedings;(vi) a more reflective approach to solving disputes the process provides parties with an opportunity to focus on the issues in dispute, consider the true economic costs and risks and will provide an opportunity to re-establish lines of communication which are often broken when the dispute escalates.However, mediation may be negative in that:(vii) It is not appropriate where a court remedy is necessary e.g. injunctions, specific performance;(viii) The mediator has no power to impose a binding decision on the parties; and 3.(ix) Mediation rarely produces a satisfactory resolution unless both parties to a dispute are committed to a resolution.Conciliation:Many complaints that the Australian Human Rights Commission receives are resolved through conciliation. Conciliation is an informal, flexible approach to resolving complaints matters can be settled by an exchange of letters, a telephone negotiation between the Commission and the people
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involved, a telephone conciliation conference or a face to face conciliation conference. We will discuss with you the best way to try and resolve the complaint and what sort of outcome you are seeking. We will also talk with the respondent about the options they have and the benefits of resolving the complaint through conciliation. The conciliation conference is not a public hearing, a court of law or a tribunal. That means parties do not have to prove or disprove the complaint. Instead conciliation allows people to state their point of view, discuss the issues in dispute and settle the matter on their own terms. There is generally no need for legal representation. However, parties may request that a lawyer, advocate or support person attend the conference with them. The Commission is an impartial third party during the conciliation process. Our role is to assist the parties to consider different options to resolve the complaint and provide information about possible terms of settlement. We can also help write up the conciliation agreement. Outcomes will vary depending on the nature of the complaint. However, agreements can include an apology, reinstatement to a job, compensation for lost wages, changes to a policy or putting in place anti-discrimination policies. If the complaint cant be resolved through conciliation, you can apply to have the matter heard in the Federal Court of Australia or the Federal Circuit Court of Australia Arbitration Each of the States and Territories have introduced uniform Commercial Arbitration Acts. In NSW this is the Commercial Arbitration Act 2010.Arbitration is when the matter in question is determined by a professional arbitrator who is usually given the power to impose a binding decision on both parties. Arbitration can, in that sense, be seen as a direct replacement for litigation and is usually complex and potentially expensive.The advantages of arbitration is that it avoids using the courts and is confidential. It is therefore advantageous for companies wishing to continue a business relationship after the dispute or looking to minimise negative publicity. In comparison to litigation, it is speedier and more informal, and the exclusionary rules of a hearing do not apply (in other words, everything can come into evidence so long as it is relevant and non-cumulative). Furthermore, there is limited discovery, since it is controlled by what the parties have agreed upon.The disadvantages mainly concern costs with arbitrations potentially taking a similar amount of time to litigation.An arbitrators award may only be appealed on the limited grounds of manifest error of law on the face of the award, where the question is one of the general public importance and the decision of the arbitrator is at least open to serious doubt or misconduct.
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Early Neutral Evaluation ("ENE")ENE is a non-binding ADR process where a neutral party gives non-binding evaluations on the merits and flaws of a dispute.Apart from the general advantages over litigation that ADRs offer, specifically ENE is advantageous in that the opinions of a mutually respected neutral individual may assist in the negotiations and the opinion from a QC/retired judge etc can assist the parties to break deadlock. Disadvantages include the fact that the process is non-binding and parties can ignore an opinion that they do not agree with. Expert Determination: Expert Determination is a process whereby an independent third party, with recognised expertise in the subject matter in dispute between the parties, assists the parties to resolve their dispute.(i) Advantages: can be effective where the parties anticipate a specific type of technical dispute arising in which the expertise of the decision maker will be critical, such as technical engineering disputes; quicker/cheaper than litigation/arbitration; confidential; gives parties a greater knowledge of how the factual evidence is likely to be decided if the case goes to trial(ii) Disadvantages: expert has no power to force his findings on the parties. The parties may provide that the determination of the expert is final and binding upon them, but recourse to the Courts is still necessary to enforce any determination. ADR in the Courts: In 1996 Lord Woolf, Master of the Rules, published a report on access to civil justice in the United Kingdom. Included within this report were recommendations as to the adoption of prelitigation protocols to encourage a more co-operative approach to dispute resolution, to promote fair settlements and to avoid litigation wherever possible.The pre-litigation protocols, which were later developed, provided guidelines which parties to prospective litigation were expected to follow before commencing proceedings before the Courts. The purposes of such protocols were:(a) to focus the attention of litigants on the desirability of resolving disputes without litigation;(b) to enable them to obtain the information they reasonably need in order to enter into an appropriate settlement; or(c) to make an appropriate offer (of a kind which can have cost consequences if litigation ensues); and(d) if a pre-action settlement is not achievable, to lay the ground for the expeditious conduct of the proceedings. Lord Woolf noted that the vast majority of cases in the UK settled without trial, by negotiation and considered that pre-litigation protocols would further encourage early settlement. 5.In 2009 Lord Jackson conducted a review of the costs of civil litigation in the UK.5 Lord Jackson found that pre-action protocols were of benefit in particular categories of litigation (e.g. construction, large scale commercial litigation), but the adoption of a protocol applicable to all general litigation had led to substantial delay and additional cost. He recommended that the general protocol be repealed, because "one-size does not fit all".6Regrettably, the Australian Government has not heeded Lord Jacksons recommendations.From 2008 a number of reports were produced in Australia which recommended parties to litigation take "genuine" or
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"reasonable" steps to resolve disputes before commencing litigation, which steps might include, but need not necessarily include, ADR processes.7The Civil Dispute Resolution Act (2011) Cth ("Act") came into effect on 1 August 2011. The objects of the Act are:(a) to change the adversarial culture often associated with disputes;(b) to have people turn their minds to resolution before becoming entrenched in a litigious position; and(c) where a dispute cannot be resolved and the matter proceeds to court, the issues are identified reducing the time required for a court to consider the matter.8The Act applies to the Federal Court of Australia and the Federal Magistrates Court and requires an applicant to file a genuine steps statement at the time of filing the application. The genuine steps statement must specify the steps taken to resolve the issues in dispute or, if no such steps have been taken, to provide appropriate reasons. An example of the latter is the urgency of the proceedings.9A respondent is also required to file a genuine steps statement before the first directions hearing. This statement is required to state whether or not the respondent agrees with the applicants genuine steps statement and to specify any disagreement.10The Act is not prescriptive as to the genuine steps a litigant is required to take. Section 4 provides that a person takes genuine steps to resolve a dispute:".if the steps taken by the person in relation to the dispute constitute a sincere and genuine attempt to resolve the dispute, having regard to the persons circumstances and the nature and circumstances of the dispute." .The Act does provide examples of genuine steps which might be taken which include attempting to negotiate, providing relevant documents and information and considering and participating in an ADR process.Lawyers are obliged to inform their clients of the above obligations and assist them to comply. A failure to do so may result in a costs award against the lawyer.While the failure to file a genuine steps statement does not invalidate proceedings and, for the moment at least, the Federal Court Registry has been accepting applications without a genuine steps statement, the failure to comply with these requirements may result in an award of costs against the defaulting party. Finally, the Act provides that the Courts may make rules providing for the form of genuine steps statements and the matters which are to be specified in them16.The Federal Court Rules provide that an applicant must file a genuine steps statement in accordance with the requirements of the Civil Dispute Resolution Act at the time of filing the original application.However, apart from providing for a form the Rules do not, as yet, provide any guidance as to the genuine steps which must be undertaken by a party.Various concerns have been expressed about the genuine steps requirements and, in particular, the "one-size fits all approach", which Lord Jackson recommended against. Such concerns include an increase in the costs of litigation, particularly in matters of a minor commercial nature where resolution is unlikely. It has also been suggested that the genuine steps requirements will give rise to mini-trials concerned with whether or not the requirements have been complied with and what the consequences of any non-compliance should be.It is fair to say that the Federal Court was not an enthusiastic proponent of the genuine steps requirements and, thus far, has taken a light touch to these obligations. Whether this continues or the Court decides to be more prescriptive in terms of the genuine steps parties are required to take, remains to be seen.
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CHAPTER 6
CONCLUSIONS
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Conclusions
The justice dispensation system in India has come under great stress for several reasons, mainly due to huge pendency of cases in the courts. Alternative Disputes Resolution is a mode of resolution of disputes through arbitration, conciliation or mediation which provides an alternative route for resolution of disputes instead of resolution of such disputes through courts. The principle of ADR are successfully adopted in the Indian Legal System as an alternative to the justice delivery system. 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 Adalath quickly has acquired good popularity among the public and this has really given raise to a new force to alternate dispute resolution and this will no doubt reduce the pendency in law Courts. The scope of alternate dispute resolution system (ADR) has been highlighted by the Honble Chief Justice of India in his speech in the joint conference of the Chief Ministers of the State and Chief Justice of High Courts, held at Vigyan Bhavan, New Delhi on September 18, 2004 and insisted the Courts to try settlement of cases more effectively by using alternate dispute resolution system so as to bring down the large pendency of cases in law Courts.
I conclude the article by saying that alternate dispute resolution will really achieve the goal of rendering social justice to the parties to the dispute, which is really the goal of the successful judicial system.
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CHAPTER 7
SUGGESTIONS
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Suggestions
With a very laudable objective of speedy disposal of cases, Alternative Dispute Resolution Mechanism (ADR) is mooted. Among the modes of Alternative Dispute Resolution Mechanism, Arbitration is most discussed issue always as many agreements or contracts contain an Arbitration Clause now-a-days. The difference between Arbitration Mechanism and the adjudication through Civil Court etc. issues can be summed up as follows: There is no need of paying court fee when a dispute is adjudicated by an Arbitrator.Arbitrator is less burdened compared to Civil Court and the parties have the liberty of choosing their own judge.Arbitrator need not follow the procedure prescribed under Civil Procedure Code, 1908 though he will follow the principles of natural justice. The procedure, the fees, the place of Arbitration etc. can be mutually agreed by the Parties and in the absence of any consensus, the Court or the Arbitrator will take a decision on the issues.Despite so much relaxation in the established civil procedure, the adjudication before the Arbitrator or the issue of getting an Arbitrator appointed is delayed very often. The general issues or challenges to the adjudication through Arbitrator are as follows: Even when there is no real lis between the parties, one party to an agreement containing Arbitration clause, may initiate Arbitration proceedings with untenable claim. The issue is settled to some extent now in view of the recent development that the Court entertaining an application under section 11 of Arbitration and Conciliation Act, 1996 discharges judicial function and can look into the issues as to whether there is any existing agreement prima facie, whether there is any lis between the parties and whether the subject matter is capable of being arbitrated. Arbitration mechanism is always Alternative, but, still we depend on the Civil Courts and the procedure lay down under the Code of Civil Procedure, 1908 for getting the civil disputes adjudicated. We need many reforms in our judicial system in India to ensure speedy disposal of cases and it will certainly take years to bring the proper reforms. Simultaneous to bringing the proper reforms or initiating measures to bring the reforms in our Indian Judiciary aiming at speedy and effective disposal of cases, we also need to concentrate as to how make the Arbitration Mechanism truly effective.
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The measures to make the Arbitration Mechanism truly effective, as I think, are as follows: Rather practicing to appoint retired judges as Arbitrators, it is better to have panel of Arbitrators who are talented and with very good legal knowledge. There is nothing wrong if a practicing legal advocate is appointed as an Arbitrator when he is willing to act as such. When it comes to the fee or the remuneration to be paid to the Arbitrator, it is better to fix lumsum remuneration for deciding an issue and having mechanism that the entire fee is paid to the Arbitrator at once. It is better to avoid the practice of paying sitting fees to the Arbitrators if one needs to make the adjudication through arbitration really speedy. Applications under section 34 of Arbitration and Conciliation Act, 1996 to be carefully gone into and the implications of entertaining an application under section 34 on the main Arbitration claim before the Arbitrator to be carefully considered. The present legal position with regard to appointment of Arbitrators to be continued and the process of appointment of arbitrators to be judicial always. Arbitration Mechanism can be made truly effective and I dont think that the mechanism is truly effective as of now for the few among many reasons referred to above.
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CHAPTER 8
APPENDIX
8.1 Bibliography 8.2 Images
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8.1 Bibliography
Access to Justice Taskforce (2009). A Strategic Framework for Access to Justice in the Federal Civil System. Canberra: Attorney-Generals Department,Commonwealth of Australia. http://www.ag.gov.au/a2j Canadian Bar Association (1996). Systems of Civil Justice Task Force Report. Ottawa, ON: Task Force on Systems of Civil Justice. https://www.cba.org/cba/pubs/pdf/systemscivil_tfreport.pdf Farrow, T., D. Lowe, B. Albrecht, H. Manweiller, and M. Simmons (2012). Addressing the Needs of Self Represented Litigants in the Canadian JusticeSystem. A White Paper prepared for the Association of Canadian Court Administrators, March 27. Fisher, P. (2000). All You Need to Know About Mediation but Didnt Know to AskA Parachute for Parties in Litigation, Mediate.com, November.http://www.mediate.com/articles/fi sher2.cfm Martin, W. (2012). Managing Change in the Justice System. 18th AIJA Oration, Brisbane, September 14. National Alternative Dispute Resolution Advisory Council (2009). The Resolve to Resolve Embracing ADR to Improve Access to Justice in the Federal Jurisdiction. Canberra: National Alternative Dispute Resolution Advisory Council. http://www.nadrac.gov.au/publications/PublicationsByDate/Documents/TheResolvetoResolve.pd f Ruhlin, C., and H. N. Scheiber (1996). Umpiring the Multi-Option Justice System, 80 Judicature 58. http://scholarship.law.berkeley.edu/facpubs/1573Sourdin Alternative Dispute Resolution, 4th ed. Australia: Thomson Reuters. (2012b) A Broader View of Justice. In M. Legg (ed.), The Future of Dispute Resolution. Sydney: LexisNexis. http://www.civiljustice.info/ (2012c). Exploring Civil Pre-Action Requirements: Resolving Disputes Outside Courts. Australian Centre for Justice Innovation, Monash University, Melbourne, November. Stipanowich, T. (2004). ADR and the Vanishing Trial: The Growth and Impact of Alternative Dispute Resolution, 1 Journal of Empirical Studies 843. Tan, S. (2012). Resolving Disputes Without CourtsCommentary from Law Council of Australia. Submission to ACJI Background Paper, June 22.
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The contribution of mediation to workplace justice, in: The Industrial Law Journal Henry S. Farber, An Analysis of Final-Offer Arbitration, in: The Journal of Conflict Resolution, Vol. 24, No. 4
8.2 Images:
: sample copy of the arbitration cooperation agreement.
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International Commercial Dispute Resolution System Framework: A Comparative Study.

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