PAPER-IV: ALTERNATE DISPUTE

RESOLUTION

FOR
BA. LLB 5 YDC
&
LLB 3 YDC

Notes

By:
MR S JAYACHANDRA (ADV)
Asst. Professor

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 ALTERNATIVE DISPUTE RESOLUTION

The Alternative Dispute Resolution (ADR) mechanism can provide a substitute for the
conventional methods of resolving disputes. ADR offers to resolve all types of matters
including civil, commercial, industrial, family etc., where people are not able to start any
type of negotiation and reach a settlement. Generally, ADR uses a neutral third party who
helps the parties to communicate, discuss the differences and resolve the dispute. It is a
method that enables individuals and groups to maintain cooperation and social order and
provides an opportunity to reduce hostility. Therefore, ADR are used to resolve disputes
outside the ordinary court system as these methods are an alternative to litigation.

➢ IMPORTANCE & NEED OF ADR IN INDIA

ADR plays a significant role in India through its diverse techniques to deal with the pendency
of cases in the courts of India. Alternative Dispute Resolution mechanism provides
scientifically developed techniques to the Indian judiciary which helps in reducing the burden
on the courts. ADR provides various modes of settlement including, arbitration, conciliation,
mediation, negotiation and Lok Adalat.

ADR is also founded on such fundamental rights, Articles 14 and 21 which deal with equality
before the law and the right to life and personal liberty respectively. ADR’s motive is to
provide Justice - social, economic & political and maintain integrity in the society enshrined
in the preamble. ADR also strives to achieve equal justice and free legal aid provided under
Article 39-A relating to the Directive Principle of State Policy (DPSP).

Primary legislation & Conventions dealing with Alternate Methods of dispute resolution
in India -

1. Section 89 of the Code of Civil Procedure, 1908 provides that opportunity to the people, if
it appears to the court there exist elements of settlement outside the court then the court
(The terms of the possible settlement and) refer t o the same for Arbitration,
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 Conciliation,Mediation or Lok Adalat.
2. The Arbitration and Conciliation Act, 1996 and,
3. Arbitration and Conciliation Amendment Act, 2015
4. Arbitration and Conciliation Amendment Act, 2019
5. The Legal Services Authority Act, 1987
6. Arbitration Council of India (ACI)
7. International Commercial Arbitration
8. UNCITRAL Model Law on International Commercial Arbitration, 1985
9. Geneva Convention, 1927
10. New York Convention, 1958
11. Recognition and Enforcement of Foreign Award
12. UNCITRAL Model Law on International Commercial Mediation and International
Settlement Agreements Resulting from Mediation, 2018

➢ ADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION

1. Less time consuming: People resolve their dispute in a short period as compared to courts
2. Cost-effective method: It saves a lot of money if one undergoes in litigation process.
3. Party autonomy and flexible procedure - Arbitration also gives the parties the choice of
applicable law especially if the arbitration is an international commercial arbitration.
Additionally, there is enormous flexibility to choose the type and kind of procedure that
the parties want to adopt for the arbitration. These rules will deal with many things
including what kind of hearing should be there for instance only written statements or oral
arguments, etc.
4. Confidentiality – An important feature of arbitration is that whatever happens in
arbitration remains private. It is only known to the parties and the arbitrators. All of them
are prohibited from sharing with third parties who are not involved in arbitration, any
document or information that is received during the arbitration. This is done to ensure that
parties feel free to share all information during arbitration so that a proper solution can be
arrived at.
5. Efficient way: There are always chances of restoring the relationship as parties discuss
their issues together on the same platform.
6. It prevents further conflict and maintains a good relationship between the parties. It
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 preserves the best interest of the parties.
7. Can be used at any time, even when the case is pending before the court.
8. Can be conducted with or without a lawyer.
9. Helps in the reduction of workload on the courts.

➢ VARIOUS MODES OF ALTERNATIVE DISPUTE RESOLUTION

ARBITRATION

Now the intricacies of the proceedings vary with the arbitration agreement. For example, there
could be a timeline which must be followed. This timeline would be stipulated in the agreement.

Section 8 of the Arbitration and Conciliation Act, 1996 provides if any party disrespects the
arbitral agreement and instead of moving to arbitration, moves that suit to civil court, the
other party can apply the court for referring the matter to the arbitration tribunal as per the
agreement but not later the submission of the first statement. The application must include a
certified copy of the arbitration agreement and if the courts are satisfied with it, the matter
will be referred to arbitration.

MEDIATION
Mediation is an alternative method of dispute resolution where a third neutral party aims to
assist two or more disputants in reaching an agreement. It is an easy and uncomplicated party-
centered negotiation process where a third party acts as a mediator to resolve disputes
amicably by using appropriate communication and negotiation techniques. This process is
controlled by the parties. The mediator’s work is just to facilitate the parties to settle their
dispute. The mediator doesn’t impose his views and does not decide what a fair settlement
should be.

Stages of Mediation -

1. Opening statement - Initially in the opening statement he furnishes all the information
about his appointment and declares he does not have any connection with either of the
parties and has no interest in the dispute.
2. Joint Session - In the joint session, he gathers all the information, and understands the
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 facts and issues about the dispute by inviting both the parties to present their case and put
forward their perspective without any interruption. In this session, the mediator tries to
encourage and promote communication and manage interruptions and outbursts by the
parties.
3. Separate Session - Here he tries to understand the dispute at a deeper level, and gathers
specific information by taking both parties in confidence separately. Mediator asks
Frequent questions on facts and discusses strengths and weaknesses with the parties of
their respective cases.
4. Closing - After hearing both sides, the mediator starts formulating issues for resolution
and creating options for settlement. In the case of failure to reach an agreement through
negotiation in mediation, the mediator uses different Reality check techniques like:

CONCILIATION

Conciliation is a form of arbitration but it is less formal. It is the process of facilitating an

amicable resolution between the parties, whereby the parties to the dispute use a conciliator
who meets with the parties separately to settle their dispute. The conciliator meets separately
to lower the tension between parties, improve communication, and interpret issues to bring
about a negotiated settlement. There is no need for prior agreement and cannot be forced on
the party who does not intend for conciliation. It is different from arbitration in that way.

The parties can't enter into a conciliation agreement before the dispute has arisen. It is clear
in Section 62 of The Arbitration and Conciliation Act, 1996 which provides,

1. The party initiating conciliation shall send to the other party a written invitation to
conciliate under this part, briefly identifying the subject of the dispute.
2. Conciliation proceedings shall commence when the other party accepts in writing the
invitation to conciliate.
3. If the other rejects the invitation, there will be no conciliation proceedings.

The above provision clearly states conciliation agreement should be an extemporary

agreement entered into after the dispute has but not before. Parties are also permitted to

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 engage in the conciliation process even while the arbitral proceedings are on (Section 30 of
the ACT).

LOK ADALAT

Lok Adalat is called the ‘People’s Court’ presided over by a sitting or retired judicial officer,
social activists or members of the Legal profession as the Chairman. National Legal Service
Authority (NALSA) along with other Legal Services Institutions conducts Lok Adalats on
disputes which has not been brought before any court of law can be referred to Lok Adalat.
There is no court fee and rigid procedure followed, which makes the process fast. If any
matter pending in court, is referred to the Lok Adalat and is settled subsequently, the court fee
originally paid in the court when the petition was filed is also refunded back to the parties.

Parties are in direct interaction with the judge, which is not possible in regular courts. It
depends on the parties if both parties agree that a case long pending in regular court can be
transferred to Lok Adalat. The persons deciding the cases have the role of statutory
conciliators only, they can only persuade the parties to conclude settling the dispute outside
the regular court in the Lok Adalat. Legal Services Authorities (State or District) as the case
may be on receipt of an application from one of the parties at a pre-litigation stage may refer
such matter to the Lok Adalat for which notice would then be issued to the other party. Lok
Adalats do not have any jurisdiction to deal with cases of non-compoundable offences.

Other Info:

• What is Unilateral Intervention?

A unilateral option provision is a dispute resolution agreement that gives just one party the sole right to choose a certain
dispute resolution process, such as arbitration or litigation.

• What is bilateral in ADR?

In its most basic form, a bilateral contract is an agreement between at least two people or groups. Most business and
personal contracts fall into this category.

• What is Third-party intervention

Third-party intervention is a conflict resolution method where a neutral third party is brought in to help resolve a dispute
between two or more parties. The goal is to help the parties communicate better, understand each other's perspectives, and
find a mutually acceptable resolution.