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Module 9 - Alternative Dispute Resolution

The document discusses various alternative dispute resolution (ADR) methods including arbitration, mediation, conciliation, and negotiation. It provides details on: 1) Arbitration which involves referring a dispute to an arbitrator for a legally binding decision. The Arbitration and Conciliation Act of 1996 governs domestic and international commercial arbitration in India. 2) Mediation which involves an impartial third party facilitating discussions between disputing parties to help them reach a voluntary settlement. 3) Conciliation where a conciliator proposes solutions and gives advice to help parties reach an agreement. 4) Negotiation where parties directly discuss and try to settle disputes without a third party.

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Pranav Chandak
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243 views15 pages

Module 9 - Alternative Dispute Resolution

The document discusses various alternative dispute resolution (ADR) methods including arbitration, mediation, conciliation, and negotiation. It provides details on: 1) Arbitration which involves referring a dispute to an arbitrator for a legally binding decision. The Arbitration and Conciliation Act of 1996 governs domestic and international commercial arbitration in India. 2) Mediation which involves an impartial third party facilitating discussions between disputing parties to help them reach a voluntary settlement. 3) Conciliation where a conciliator proposes solutions and gives advice to help parties reach an agreement. 4) Negotiation where parties directly discuss and try to settle disputes without a third party.

Uploaded by

Pranav Chandak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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  • Introduction to Alternative Dispute Resolution: Presents an overview of alternative dispute resolution concepts and its relevance to business.
  • Methods of ADR: Highlights the different methods of alternative dispute resolution including arbitration, mediation, conciliation, and negotiation.
  • Arbitration: Explains the arbitration process as a legally binding method for resolving disputes, including its procedures and the Arbitration and Conciliation Act, 1996.
  • Mediation: Describes the mediation process where a neutral third party facilitates a resolution between conflicting parties.
  • Conciliation: Focuses on the use of conciliation to prevent disputes from escalating by building relationships.
  • Negotiation: Covers the negotiation process where parties interact directly to reach a settlement without third-party intervention.
  • Comparison of ADR Methods: Compares key aspects of litigation, arbitration, mediation, and negotiation including cost, control, and outcome.
  • Advantages of ADR over Litigation: Discusses the benefits of ADR methods such as speed, cost-effectiveness, and preserving relationships compared to traditional litigation.

Alternative Dispute Resolution

Prof. Mehek Kapoor

Legal Aspects of Business


Methods of ADR
Arbitration

Conciliation Mediation

Negotiation
Arbitration
• Arbitration is a method to resolve disputes outside the courts.

• Parties refer the dispute to one or more persons appointed as an


arbitrator(s) who decides the case and imposes a decision (‘arbitral
award’) that is legally binding on both parties and enforceable in the
courts.

• Usually, the arbitration clauses are mentioned in commercial


agreements where the parties agree to resort to an arbitration
process in case of disputes that may arise in future regarding the
contract terms and conditions.
Arbitration and Conciliation Act,1996

International
Commercial Arbitration
Part I

Domestic Arbitration

Enforcement of Foreign
Part II
Awards

Part III Conciliation


Arbitration and Conciliation Act, 1996
S 7. Arbitration agreement- Should be in writing as clause or separate
agreement

S 10. Number of Arbitrators- Sole arbitrator or Odd number determined


by parties

S 11. Appointment of Arbitrators- Procedure for appointment decided by


parties. Arbitrators appointed by parties else in arbitration with 3 both
appointed arbitrators appoint Presiding arbitrator

S 12. Grounds for Challenge of Arbitrator’s Appointment-


circumstances exist that give rise to justifiable doubts as to his independence
or impartiality, or he does not possess the qualifications agreed to by the
parties.

S 20. Place of Arbitration- parties free to decide place of arbitration, legal


system who’s rules apply to the arbitration proceedings
Arbitration and Conciliation Act, 1996
Conducting an Arbitration- Arbitration also gives the parties the choice of
applicable law and flexibility to choose the 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.

S 31. Form & Contents of an Arbitral Award- Final and binding upon
both parties unless appeal. Award is in writing, signed by the members of the
arbitral tribunal, copy delivered to each party, states costs and fees to be paid
by which party to whom and if interest imposed

S 34. Setting Aside of the Award- party was under incapacity, proper
notice of arbitration was not given, procedure agreed upon was not followed,
subject-matter of the dispute is not capable of settlement by arbitration, in
conflict with public policy of India
Arbitration Process
Mediation
• Mediation is where an impartial third party facilitates a
conversational process between the disputing parties to come to a
satisfactory resolution.

• Mediation is a voluntary and non-binding process.

• Impartial third party known as a mediator tries to:


▪ objectively facilitate the resolution process
▪ talks to the parties first jointly then separately
▪ mediator does not propose solutions, parties involved
find a solution

• The role of the mediator is to facilitate the conversation through


negotiation- and communication techniques.
Mediation Process
Introduction and Opening Statement of Mediator

Gather information, understand the facts and issues in Joint Session

Gather deeper specific information by talking to parties in Separate Session

After hearing both the sides, mediator starts identification of problem

Bargaining and generation of options for settlement by parties

Reaching an Agreement
Conciliation
• Conciliation is focused on building a positive relationship between
the disputing parties, more often used preventatively, to stop a
conflict from developing into something substantial.

• Non-binding procedure and no prior agreement or clause required.

• Parties submit to the advice of a conciliator, who:


▪ through active facilitation
▪ talks to each of them separately
▪ proposes solutions

• The facilitator can make suggestions towards certain proposals, and


give advice for certain solutions.
Negotiation
• Discussions between the parties are initiated without the
intervention of any third party, with the object of arriving at a
negotiated settlement of the dispute.

• A non-binding procedure

• Steps include preparation, exchange of information, bargaining and


closing.
Factors Litigation Arbitration Mediation/ Negotiation
Conciliation
Time Slowest Faster than Faster than Fastest
Litigation Arbitration
Cost High Usually lower Low Lowest
than Litigation
Control Parties are Parties are Parties are Parties are
Passive Passive Active the only
Observers Observers Participants – Participants -
assisted in find their
finding own
solution, solution,
have control control the
over outcome outcome
Outcome Win – Lose Win – Lose Win -Win Win-Win

Confidentiality Lowest High Higher than Highest


Arbitration
Procedure and Highest Higher Low Lowest
Formality
Advantages of ADR over Litigation
• Select your own Arbitrator or Mediator. Selecting someone with expertise in the
substantive field involved in the dispute can help focus on the substantive issues involved
rather than on technical procedural rules. In normal litigation, the parties cannot select the
judge, and the judge and/or jury may often need expert witnesses to explain extremely
complex issues, wasting precious time.

• Expenses are reduced. Attorneys and expert witnesses are very expensive. Alternative
dispute resolution offers the benefit of getting the issue resolved quicker than would occur at
trial – and that means less fees incurred by all parties.

• ADR is speedy. Trials are lengthy, it could take years to have a case heard by a judge or jury.
Appeals can then last months or years after that. ADR can be scheduled by the parties and the
arbitrators as soon as they are all able to meet together.

• The results can be kept confidential. The parties can agree that information disclosed
during negotiations or arbitration hearings cannot be used later even if litigation ensues. The
final outcome can also be made private if the parties so stipulate and agree. On the other hand,
most trials and related proceedings are open to the public and the press.

• Party participation. ADR permits more participation by the litigants. ADR allows the
parties the opportunity to tell their side of the story and have more control over the outcome
than normal trials overseen by a judge.

• Fosters cooperation. ADR allows the parties to work together with the neutral arbitrator or
mediator to resolve the dispute and come to a mutually acceptable remedy.

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