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Forms and Significance of Alternative Dispute Resolution (ADR)

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   28-Dec-2023 | Aarifa Nadeem



India's courts are "extremely burdened" and "desperately congested", according to CJI, DY Chandrachud, and given the shocking amount of cases pending, mediation is a crucial dispute resolution method.

Alternative Dispute Resolution (ADR) refers to methods used to resolve disputes or conflicts outside of traditional court litigation. These mechanisms offer parties involved in a disagreement a way to settle their issues more informally, often faster, and with less expense than going to court.

ADR can be effective because it allows parties to maintain greater control over the resolution process and can often preserve relationships that might be strained through a more adversarial court process. Additionally, it can be faster and more cost-effective than going to trial.

Brief History of ADR in India

People have been in disputes and battles from the beginning of time. The one difference is that in the past, conflicts were resolved by going to the king's darbaar or by fighting battles to determine who was right or wrong. Litigation developed after the judicial system and jurisprudence changed over time.

Under this approach, parties settle disputes by arguing for their rights. An unbiased, neutral judge will hear arguments from both parties and then provide a well-reasoned ruling. Alternative dispute resolution occurred when people realized that not all disputes needed to be heard in regular courts. In India's legal system, alternative conflict settlement has existed since ancient times. Puga, Shreni, and Kula are mentioned in the Bhradarnyaka Upanishad, which is where it first appears.

Panchayats were also used in the past to settle many conflicts in towns and villages. The Bengal Regulation Act 1781 and Bengal Resolution Act 1771 were the initial pieces of law that allowed ADR in India. These actions included particular and nevertheless, the Civil Procedure Code of 1908 superseded both of these statutes and is still in effect today. No article on ADR would be complete without including Section 89 (1), which required the courts to implement particular measures for ADR processes.

Various Fields Where ADR Can Be Used

  • ADR methods like arbitration and mediation are frequently used in resolving contract disputes, partnership disagreements, and other business-related conflicts.
  • ADR is often used to resolve disputes between employers and employees, including issues related to wrongful termination, discrimination, or breach of employment contracts.
  • In cases of divorce, child custody, and property division, mediation and collaborative law are often used to help families reach agreements outside of court.
  • Disputes between landlords and tenants, property boundary disputes, or disagreements in real estate transactions can often be resolved through ADR.
  • Mediation and arbitration can be utilized to resolve conflicts between patients and healthcare providers, insurance disputes, or disagreements over medical treatment.
  • ADR is used to resolve disputes over patents, trademarks, copyrights, and other intellectual property rights.
  • ADR can be employed in resolving conflicts related to environmental issues, such as land use, pollution, or natural resource disputes.

These diverse fields highlight the flexibility and applicability of ADR methods in various situations, offering a more tailored and often quicker resolution compared to traditional court litigation.

Different Forms of ADR

Everyone wants the administration of justice to be swift and reasonably priced. These days, settling a dispute quickly not only helps the parties save precious time and money but also helps to create an atmosphere that is more conducive to contract enforcement.

The customary method of resolving disputes, which involves going to court, is a drawn-out process that causes needless delays in the administration of justice and overburdens the judiciary. ADR procedures like Arbitration, Conciliation, Mediation, and so on are helpful in such a situation.

These alternative dispute resolution (ADR) processes can be a more effective replacement for traditional dispute resolution techniques since they are less confrontational.

Arbitration

  • One of the most well-known and rapidly expanding types of ADR is arbitration. Compared to mediation, arbitration is a more formal process (less formal than a court trial) that has many characteristics with conventional court procedures, such as streamlined standards of evidence and restricted discovery.
    • Since the parties' approval is necessary for arbitration to proceed, the arbitration agreement is symbolic as it serves as the entry point to the unique arbitration system.
    • It is essentially the parties' voluntary admission of a commitment to arbitrate their disputes before a private tribunal.
  • Arbitration is a quasi-judicial process that is different from court procedures in that the parties to the dispute agree to name an arbitrator to decide their disagreement.
    • Statutory regulations govern the authority and duties of arbitral tribunals.
  • In India, arbitration procedures are governed by the Arbitration and Conciliation Act, 1996. The latest modification to the Act is the Arbitration and Conciliation (Amendment Act), 2021.

Mediation

  • Another unofficial substitute for the lawsuit is mediation. Negotiation experts known as mediators strive to reconcile conflicting parties and try to reach a compromise that either side will accept or reject. The mediation is not legally enforceable.
  • Unlike arbitration, mediation helps individuals, as well as companies, resolve conflicts peacefully since the solution reached through the process is voluntary and consensual. Some laws, including the Arbitration and Conciliation Act of 1996, the Code of Civil Procedure of 1908, the Companies Act of 2013, and the Commercial Courts Act of 2015, reference mediation and conciliation as a method of resolving disputes.
    • Nonetheless, it was felt that a thorough law regulating the several facets of mediation was necessary.
  • In light of this, on December 20, 2021, the Mediation Bill, 2021 was presented in the Rajya Sabha to advance institutional mediation as one of the preferred forms of alternative dispute resolution.
    • On December 20, 2021, the 2021 Bill was referred to the Parliamentary Standing Committee on the Mediation Bill which presented its report in 2022 and its findings and recommendations were taken into account by the Cabinet, which then accepted changes to the 2021 Bill.
    • The Mediation Bill, 2023 was subsequently passed by the Lok Sabha and the Rajya Sabha.

Negotiation

  • The most effective way to resolve disputes is through negotiation. This is the simplest form of ADR, involving direct discussions between the parties to resolve the dispute without any third-party involvement.
  • Although arbitration and mediation are the two most well-known ADR processes, settling a disagreement through negotiation is nearly usually the initial step in the process. Through negotiation, the parties can get together to resolve their differences.
  • The primary benefit of this type of dispute resolution is that it gives the parties autonomy throughout the proceedings and the resolution. Compared to other forms of ADRs, negotiation is far less formal and offers greater flexibility.

Conciliation

  • Conciliation is another ADR that involves a neutral third party, the conciliator, assisting disputing parties in resolving. The conciliator does not make decisions or impose solutions but rather facilitates communication between the parties.
  • They help the parties understand each other’s perspectives, clarify issues, and explore potential solutions. Like most ADR methods, conciliation is typically voluntary.
    • Parties choose to participate and can withdraw at any time if they feel the process is not beneficial.
  • Discussions and information shared during conciliation are usually confidential. This encourages open communication and allows parties to freely explore potential solutions without fear of their statements being used against them in a court of law.
  • The main goal of conciliation is to reach a mutually agreeable solution. The conciliator helps parties generate options and assists them in finding common ground to resolve the dispute.

Lok Adalats

  • Another one of the ADR procedures in India is Lok Adalat, a forum for the peaceful resolution of cases and disputes that are ongoing in court or at the pre-litigation stage. With the passage of the Legal Services Authorities Act in 1987, Lok Adalats was granted statutory standing. Although there isn't a way for the parties to appeal a Lok Adalat award, they are still able to exercise their right to litigate by going to the appropriate court and filing a case through the necessary procedures if they are unhappy with the decision.

When a matter is filed in a Lok Adalat, there is no court fee required. The individuals who make decisions in the Lok Adalats are known as Members of the Lok Adalats. They are merely statutory conciliators with no judicial authority, so their only power is to persuade the parties to resolve their differences outside of the Lok Adalat courtroom. They are not allowed to put pressure on any party to resolve their differences directly or indirectly. The members have to support the parties in their endeavour to resolve their disagreement peacefully in an unbiased and independent manner.

Suggestive Measures to Strengthen ADR in India

  • Encourage the courts to actively promote ADR by referring suitable cases for mediation or other ADR methods before trial. This will reduce the burden on courts and encourage more parties to explore ADR.
  • Providing comprehensive training programs for ADR practitioners, including mediators, arbitrators, and conciliators. Enhance their skills to manage complex disputes across various sectors.
  • Promote awareness about ADR methods among the general public, legal professionals, businesses, and government entities. Educational campaigns, workshops, and training programs can highlight the benefits and processes of ADR.
  • Establishing more ADR centres equipped with trained mediators, arbitrators, and facilitators to handle diverse disputes effectively and facilities across the country.
  • Strengthening legal frameworks supporting ADR, providing legislative backing and enforceability to agreements reached through ADR processes. This encourages parties to trust and utilise ADR mechanisms.
  • Utilise technology to facilitate online dispute resolution (ODR), making ADR more accessible and convenient. Develop secure platforms for virtual hearings and mediation sessions. Establish mechanisms to gather feedback from users of ADR services to continuously improve the quality and efficiency of ADR processes.

Conclusion

In conclusion, I would like to say that Alternative Dispute Resolution (ADR) mechanisms offer invaluable tools for resolving conflicts outside the traditional courtroom setting. With their emphasis on flexibility, speed, cost-effectiveness, and the preservation of relationships, ADR methods provide diverse avenues for parties to find mutually agreeable solutions. Ultimately, the continued evolution and improvement of ADR mechanisms are instrumental in fostering a culture of constructive dispute resolution, promoting harmony, and facilitating fair outcomes for all parties involved.

Sources

  1. https://www.law.cornell.edu/wex/alternative_dispute_resolution#:~:text=Alternative%20Dispute%20Resolution%20(%22ADR%22,conciliation%2C%20mediation%2C%20and%20arbitration.
  2. https://www.legalserviceindia.com/legal/article-13036-historical-evolution-of-adr-in-india-and-emerging-trends-in-adr-in-today-s-corporate-world.html#:~:text=Alternative%20dispute%20resolution%20has%20been,by%20the%20method%20of%20panchayats.
  3. https://legalaffairs.gov.in/sites/default/files/arbitration-and-mediation_0.pdf
  4. https://indianexpress.com/article/india/courts-extremely-burdened-mediation-important-tool-to-tackle-case-pendency-justice-chandrachud-8101721/
  5. https://www.mondaq.com/india/trials--appeals--compensation/1362668/the-new-mediation-bill-2023---updates-and-highlights#:~:text=Registration%3A%20While%20the%202021%20Bill,notified%20by%20the%20Central%20Government%2C
  6. https://arbitrationblog.kluwerarbitration.com/2021/05/23/indias-arbitration-and-conciliation-amendment-act-2021-a-wolf-in-sheeps-clothing/#:~:text=Firstly%2C%20the%202021%20Amendment%20alters,changes%20to%20the%201996%20Act.
  7. https://nalsa.gov.in/lok-adalat