Alternative Dispute Resolution

Acknowledgement
Writing a project is not an easy task it requires hard labour, deep study and
thorough knowledge of the topic given. Thus who helped in making this project
successful I would like to express my deep feeling of gratitude towards them for
being a hand of support for me always.
First of all I would like to thank my subject teacher Prof. G.G.Singh who has
given me opportunity to make this project and enlightened me with the intricacy
of the subject. Secondly I would show my gratitude towards my friends who
guided me all through making this project successful. Lastly I would thank my
family for being a support in each and every thing required for completing this
project.

Asmita Singh
IX semester
Section A

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INDEX
Title...............................................................................Page No.

1. Acknowledgement..........................................1
2. Introduction.....................................................3
3. The Concept and its Efficacy..........................5
4. Need of ADR in India.....................................6
5. Means of ADR in India...................................7
a. Arbitration...............................................8
b. Conciliation.............................................9
c. Mediation................................................9
d. Negotiation.............................................10
e. Lok Adalat..............................................10
6. Conclusion.....................................................13
7. Bibliography...................................................18

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Alternative Dispute Resolution

Introduction
Alternative dispute resolution (ADR) (also known as external dispute
resolution in some countries, such as Australia) includes dispute
resolution processes and techniques that act as a means for disagreeing parties
to come to an agreement short of litigation. It is a collective term for the ways
that parties can settle disputes, with (or without) the help of a third party.
Despite historic resistance to ADR by many popular parties and their advocates,
ADR has gained widespread acceptance among both the general public and
the legal profession in recent years. In fact, some courts now require some
parties to resort to ADR of some type, usually mediation, before permitting the
parties' cases to be tried (indeed the European Mediation Directive
(2008) expressly contemplates so-called "compulsory" mediation; this means
that attendance is compulsory, not that settlement must be reached through
mediation). The rising popularity of ADR can be explained by the increasing
caseload of traditional courts, the perception that ADR imposes fewer costs
than litigation, a preference for confidentiality, and the desire of some parties to
have greater control over the selection of the individual or individuals who will
decide their dispute. Some of the senior judiciary in certain jurisdictions (of
which England and Wales is one) are strongly in favour of this (ADR) use of
mediation to settle disputes.
With the steep growth in the number of laws and the number of cases, the Court
system is under great pressure. In order to reduce the heavy demand on Court
time, efforts need to be made to resolve the disputes by resorting to Alternative
Dispute Resolution Methods before they enter the portals of the court. The
Arbitration, Mediation and Conciliation are tools of Alternative Dispute
Redressal System.
Arbitration
Arbitration is a process in which a neutral third party or parties render a
decision based on the merits of the case. In the Indian context the scope of the
rules for the arbitration process are set out broadly by the provisions of the
Arbitration and Conciliation Act 1998 and in the areas uncovered by the Statute
the parties are free to design an arbitration process appropriate and relevant to
their disputes.
Mediation
The Process of mediation aims to facilitate the development of a consensual
solution by the disputing parties. The Mediation process is overseen by a non-

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partisan third party - the Mediator. The authority of the mediator vests on the
consent of the parties that he should facilitate their negotiations.
Conciliation
This is a process by which resolution of disputes is achieved by compromise or
voluntary agreement. In contrast to arbitration, the conciliator does not render a
binding award. The parties are free to accept or reject the recommendations of
the conciliator. The conciliator is in the Indian context, often a Government
official whose report contains recommendations. So far as Department of Legal
Affairs is concerned, this Department provides annual recurring Grants-in-aid to
National Legal Services Authority (NALSA) which is a statutory body. During
the financial year 2008-09, this Department released Grant-in-aid amounting to
Rs. 18,82,69,495/- . Out of the Rs. 18,82,69,495/- grant in-aid amounting to Rs.
3 crore were released to NALSA for continuing the activities of the Mediation
and Conciliation Project Committee in respect of Mediation.
As regards the promotion of alternative methods of dispute resolution, the
International Centre for Alternative Dispute Resolution (ICADR) was set up by
the Department of Legal Affairs as an autonomous body registered under the
Societies Registration Act, 1860. The Hon'ble Minister for Law & Justice is the
Chairman of ICADR. The main object of the ICADR is to promote popularise
and propagate Alternative Dispute Resolution to facilitate early resolution of
disputes so as to reduce the burden of arrears in the Courts.

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Alternative Dispute Resolution

The Concept & itsEfficacy

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

The concept of Conflict Management through Alternative Dispute Resolution

(ADR) has introduced a new mechanism of dispute resolution that is non
adversarial. A dispute is basically lis inter partes and the justice dispensation
system in India has found an alternative to Adversarial litigation in the form of
ADR Mechanism.
New methods of dispute resolution such as ADR facilitate parties to deal with
the underlying issues in dispute in a more cost-effective manner and with
increased efficacy. In addition, these processes have the advantage of providing
parties with the opportunity to reduce hostility, regain a sense of control, gain
acceptance of the outcome, resolve conflict in a peaceful manner, and achieve a
greater sense of justice in each individual case. The resolution of disputes takes
place usually in private and is more viable, economic, and efficient. ADR is
generally classified into at least four types: negotiation, mediation, collaborative
law, and arbitration. (Sometimes a fifth type, conciliation, is included as well,
but for present purposes it can be regarded as a form of mediation.

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Need of ADR in India

The system of dispensing justice in India has come under great stress for several
reasons mainly because of the huge pendency of cases in courts. In India, the
number of cases filed in the courts has shown a tremendous increase in recent
years resulting in pendency and delays underlining the need for alternative
dispute resolution methods. It is in this context that a Resolution was adopted by
the Chief Ministers and the Chief Justices of States in a conference held in New
Delhi on 4th December 1993 under the chairmanship of the then Prime Minister
and presided over by the Chief Justice of India.
It said: "The Chief Ministers and Chief Justices were of the opinion that Courts
were not in a position to bear the entire burden of justice system and that a
number of disputes lent themselves to resolution by alternative modes such as
arbitration, mediation and negotiation. They emphasized the desirability of
disputants taking advantage of alternative dispute resolution which provided
procedural flexibility, saved valuable time and money and avoided the stress of
a conventional trial".
In a developing country like India with major economic reforms under way
within the framework of the rule of law, strategies for swifter resolution of
disputes for lessening the burden on the courts and to provide means for
expeditious resolution of disputes, there is no better option but to strive to
develop alternative modes of dispute resolution (ADR) by establishing facilities
for providing settlement of disputes through arbitration, conciliation, mediation
and negotiation.

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Means of ADR in India

The technique of ADR is an effort to design a workable and fair alternative to
our traditional judicial system. It is a fast track system of dispensing justice.
There are various ADR techniques viz. arbitration, mediation, conciliation,
mediation-arbitration, mini-trial, private judging, final offer arbitration, courtannexed ADR and summary jury trial.
These techniques have been developed on scientific lines in USA, UK, France,
Canada, China, Japan, South Africa, Australia and Singapore. ADR has emerged
as a significant movement in these countries and has not only helped reduce
cost and time taken for resolution of disputes, but also in providing a congenial
atmosphere and a less formal and less complicated forum for various types of
disputes.
The Arbitration Act, 1940 was not meeting the requirements of either the
international or domestic standards of resolving disputes. Enormous delays and
court intervention frustrated the very purpose of arbitration as a means for
expeditious resolution of disputes. The Supreme Court in several cases
repeatedly pointed out the need to change the law. The Public Accounts
Committee too deprecated the Arbitration Act of 1940. In the conferences of
Chief Justices, Chief Ministers and Law Ministers of all the States, it was
decided that since the entire burden of justice system cannot be borne by the
courts alone, an Alternative Dispute Resolution system should be adopted.
Trade and industry also demanded drastic changes in the 1940 Act. The
Government of India thought it necessary to provide a new forum and procedure
for resolving international and domestic disputes quickly.
Thus "The Arbitration and Conciliation Act, 1996"came into being. The law
relating to Arbitration and Conciliation is almost the same as in the advanced
countries. Conciliation has been given statutory recognition as a means for
settlement of the disputes in terms of this Act. In addition to this, the new Act
also guarantees independence and impartiality of the arbitrators irrespective of
their nationality. The new Act of 1996 brought in several changes to expedite
the process of arbitration. This legislation has developed confidence among
foreign parties interested to invest in India or to go for joint ventures, foreign
investment, transfer of technology and foreign collaborations.
The advantage of ADR is that it is more flexible and avoids seeking recourse to
the courts. In conciliation/mediation, parties are free to withdraw at any stage of
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time. It has been seen that resolution of disputes is quicker and cheaper through
ADR. The parties involved in ADR do not develop strained relations; rather
they maintain the continued relationship between themselves
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 defence 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 panels of
arbitrators so appointed constitute 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 accept 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.

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Once 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.
Conciliation
Conciliation 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.
Mediation
Mediation, a form of alternative dispute resolution (ADR) or "appropriate
dispute resolution", aims to assist two (or more) disputants in reaching an
agreement. The parties themselves determine the conditions of any settlements
reached rather than accepting something imposed by a third party. The
disputes may involve (as parties) states, organizations, communities, individuals
or other representatives with a vested interest in the outcome.
Mediators use appropriate techniques and/or skills to open and/or improve
dialogue between disputants, aiming to help the parties reach an agreement
(with concrete effects) on the disputed matter. Normally, all parties must view
the mediator as impartial.

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Disputants may use mediation in a variety of disputes, such as commercial,

legal, diplomatic, workplace, community and family matters.
A third-party representative may contract and mediate between (say) unions and
corporations. When a workers union goes on strike, a dispute takes place, and
the corporation hires a third party to intervene in attempt to settle a contract or
agreement between the union and the corporation.
Negotiation
Negotiation is a dialogue intended to resolve disputes, to produce an agreement
upon courses of action, to bargain for individual or collective advantage, or to
craft outcomes to satisfy various interests. It is the primary method of
alternative dispute resolution.
Negotiation occurs in business, non-profit organizations, government branches,
legal proceedings, among nations and in personal situations such as marriage,
divorce, parenting, and everyday life. The study of the subject is called
negotiation theory. Those who work in negotiation professionally are called
negotiators. Professional negotiators are often specialized, such as union
negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators,
or may work under other titles, such as diplomats, legislators or brokers
Lok Adalat:
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.
It roughly means "People's court". India has had a long history of resolving
disputes through the mediation of village elders. The system of Lok Adalats is
an improvement on that and is based on Gandhian principles. This is a nonadversarial system, where by mock courts (called Lok Adalats) are held by the
State Authority, District Auth[2]ority, 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
are usually presided by retired judge, social activists, or members of legal
profession. It does not have jurisdiction on matters related to noncompoundable offences. There is no court fee and no rigid procedural
requirement (i.e. no need to follow process given by Civil Procedure Code or
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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 because it is a judgement 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.
Lok Adalat (peoples courts), established by the government, settles dispute
through conciliation and compromise. The First Lok Adalat was held in Chennai
in 1986. Lok Adalat accepts the cases which could be settled by conciliation and
compromise and pending in the regular courts within their jurisdiction.
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.
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Conclusion
Today when about more than two and half crores (As per the Ministry of Law
and Justice press release 48,838 cases are pending in Supreme Court, 38,82,074
cases pending in high Court and 2,52,40,185 are pending in subordinate courts
as on 31.1.2008) of case pending in our courts, that means at least five crore
people are directly involved in litigation that about 4 percent of our population,
and we have only 12,500 judges at lower court level and about 647 judges at
various High Court and 26 judges in Supreme Court of India. Our Justice
Administration system is adversarial in nature in which there are two parties
and they are on face to face with each other in the Court, and we have seen that
its not the legal issues which are involved in most of the cases put before us
rather its ego which come in between and it ultimately ends in blood amongst
the litigants, and hatretism.
It is also observed that our courts have very limited time for example 10:00 AM
to 5:00 PM we are in Court but during that time we have to manage out time for
various things like signing of files, and day to day orders, meetings,
compliances of directions of higher courts, and other miscellaneous work,
which a judge has to see.
What is justice, in laymans term its something which a aggrieved person
deserves and it has been encroached upon by another, and now our conventional
system of justice needs overhauling and need to develop a new approach, the
alternative dispute resolution is an steps towards that end, and in India we have
yet not developed a full fledged system, the time has come that as a judge we
need to take initiative at the court of first instance, which plays the most
important role in the justice delivery system, as the seed of justice is sowed over
there, because the case takes off from there and we lack a strong system at that
which can be easily rectified, the Shetty Commission envisages 50 judges per
million we have only 10.5 judges per million, the judges really are over
burdened with work, and due to this the work is hotched potched and become
out of control, which can be easily managed by systematic approach and firstly
by enhancing the number of judges, not that we should right now recruit all the
judges at one go, but in a phased manner, the Honble Supreme Court has
pronounced in its judgment that the living conditions of the judges at lower
level should be improvised and they deserve better living standard and all states
and Centre should take initiative because we implement laws which are passed
by both Parliament and State legislature, and its joint liability of both the state
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and Centre to make budgetary allocation to fulfil the need of the courts. I am
sure the Presiding officer of the court will be able to work with more efficiency
if his basic needs are taken care properly.
Judges work is divine work and the justice is done by god and we are doing
delegated work of God so, as a judge we should never forget that our judgments
have direct impact on the society, and public have lots of expectations from us,
and we should try to come up to their expectations.
Today we have seen that everyone take resort to strikes, road blocks, and other
modes of disobedience, this situation has not arisen over night, rather its a
consistent development, people are slowly losing their faith in judicial system
also, as they end up getting justice at a very later stage, which is too late, as
justice delayed is justice denied. Today the public at large gave lost faith in
government and police deptt; their FIRs are not getting registered, which is a
settled law, law is social engineering, and the role of judges is the important in
this whole episode, and law is governed by two rules, firstly equality before law,
and no one is above law.
The Legal Services Authorities Act, 1987 has also been amended from time to
time to endorse use of ADR methods. Section89 of the Code of Civil Procedure
as amended in 2002 has introduced conciliation, mediation and pre-trial
settlement methodologies for effective resolution of disputes. Mediation,
Conciliation, Negotiation, Mini-Trial, Consumer Forums, Lok Adalats and
Banking Ombudsman have already been accepted and recognized as effective
Alternative dispute resolution methodologies.
Alternative dispute resolution has greatly expanded over the last several years to
include many areas in addition to the traditional commercial dispute in the form
of arbitration; mediation has become an important first step in the dispute
resolution process. Arbitrators and mediators have an important role in
resolving disputes. Mediators act as neutrals to reconcile the parties differences
before proceeding to arbitration or litigation. Arbitrators act as neutral third
parties to hear the evidence and decide the case. Arbitration can be binding or
non-binding.
What is ADR? In simple terms it is Alternate Dispute Resolution the
conventional Courts use formal system of redressal applying various rules of
law, as we have erstwhile mentioned that our system is adversial. The concept
of Conflict Management through Alternative Dispute Resolution (ADR) has
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introduced a new mechanism of dispute resolution that is non adversarial. A

dispute is basically lis inter parties and the justice dispensation system in India
has found an alternative to Adversarial litigation in the form of ADR
Mechanism in which two parties contest their case and one party wins and the
other party looses, but in case of alternate dispute resolution (Section 89 Code
of Civil Procedure), which can be categorized in four broad heads which are1.

Arbitration;

2.

Mediation;

3.

Conciliation;

4.

Judicial settlement including settlement through Lok Adalat.

It is win win situation and no party wins no party looses, today the need of
time is that we resort to non conventional systems as well, we should not forget
that its not something new to us, we had for ages, like panchayats etc, it was self
sufficient, every village has panchayat and it was a powerful authority for
redressing the disputes. The best part of ADR is that since both parties come
face to face and they work out the modalities and reach to an amicable solution,
there is no likelihood of winning or losing the case, i.e. its a win win situation
and thereafter no appeal, and thus it reduces the burden of appellant courts as
well, the arbitration and conciliation Act, 1996 provides for Arbitration and the
award given by the arbitrator is deemed to be a decree. It was step towards the
ADR. The labor legislation has already incorporated conciliation and mediation
system in their enactments, to have an amicable solution in case of tussle
between the labor and the management. The conventional courts are already
overburdened with loads of cases, and at least a sizable number of cases can be
disposed off by way of ADR. The CPC envisages for use of ADR in section 89
in amended section as mandatory for court to refer the dispute after the issues
are framed for settlement of disputes outside the Court (Clause 7 of the CPC
Amendment (Bill), 1999). The Law Commission of India in its 129th Report
recommended for the Alternate modes of Dispute Redressal to be obligatory on
the courts after framing of issues. It is only after the parties fail to get their
disputes settled through any one of the alternate dispute resolution methods that
the suit shall proceed further in the court where it was filed.

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The purpose of this special provision seems to help the litigant to settle his
dispute outside the Court instead of going through elaborate process in the court
trial. This is a special procedure for settling the dispute outside the courts by a
simpler and quicker method. The litigants on the institution of the suit or
proceedings may request the Court to refer the disputes and if the court feels
that there exist any element of settlement which may be acceptable to the
parties; it may refer them to any of the forums abovementioned at any stage of
the proceedings. In fact new rules in Order X were inserted in consequence to
the insertion of the sub section (1) of section 89. These new rules namely 1A,
1B and 1C have been inserted by the Amending Act. The settlement can be
made by adopting any of the modes specified in the section 89 of the CPC
inserted by the Amendment Act. As per the Rule 1A the parties to the suit are
given an option for settlement of the dispute outside court. When the parties
have exercised their option it shall fix the date of appearance before such person
as may be opted by the parties. As per the Rule 1-B the parties are required to
appear before such forum opted by them. Rule 1C provides for the Presiding
Officer of the Forum to refer the matter again to the Court in case he feels that
in the interest of justice he should not proceed with the matter.
On the basis of above analysis it is apparent that the ADR is the best and most
effective solution to reduce the Himalayan pendency in various courts of our
country. It is not to forget that the ADR is more effective as it is an amicable
solution and both parties are in win win position and brings about harmonious
relationship between both the parties unlike in the conventional courts, thus it is
permanent solution to any dispute, as it dont lead to appeal or revision, and
hence reducing the burden of appellate courts as well and also it saves valuable
time and energy of the courts which can be utilized erstwhile in other matters
pending before court and it renders justice on time (Justice delayed is justice
denied, but ADR saves time and timely judgment is possible). As a judge it is
our duty as envisaged by the new CPC to encourage the ADR, in civil maters in
the interest of justice. Despite many advantages of using Alternative dispute
resolution mechanisms, our society has been reluctant to give it its due
recognition. The predominant reason being that a litigation ridden society is
generally unable to explore consensual dialogue or arrive at an amicable
solution. The ADR practitioner therefore acts like a healer of conflicts rather
than a combatant. It is similar to the Panchayat system we have in our villages.
The resolution of disputes is so effective and widely accepted that Courts (In
sitanna v. Viranna; AIR 1934 SC 105, the Privy Council affirmed the decision of
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the Panchayat and Sir John Wallis observed that the reference to a village
panchayat is the time-honoured method of deciding disputes) have more often
recognized them. It avoids protracted litigation and is based on the ground
realities verified in person by the adjudicators and the award is fair and honest
settlement of doubtful claims based on legal and moral grounds.

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Bibliography
1. Wikipedia - http://en.wikipedia.org/wiki/Alternative_dispute_resolution
2. Legal Service India - http://www.legalservicesindia.com/article/article/adrmechanism-in-india-224-1.html

3. Scribd - http://www.scribd.com/doc/229332105/Alternate-Dispute-Resolutionin-India

4. GKToday - http://www.gktoday.in/alternative-dispute-resolution

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