DISPUTE RESOLUTION OR DISPUTE SETTLEMENT

Dispute resolution or dispute settlement is the process of resolving disputes

between parties. The term dispute resolution is sometimes used interchangeably
with conflict resolution, although conflicts are generally more deep-rooted and
lengthy than disputes. Dispute resolution techniques assist the resolution of
antagonisms (disagreements) between parties that can include citizens,
corporations, and governments.

Dispute resolution processes fall into two major types:

1. Adjudicative processes, such as litigation or arbitration, in which a judge,

jury or arbitrator determines the outcome.
2. Consensual processes, such as collaborative law, mediation, conciliation, or
negotiation, in which the parties attempt to reach agreement.

LEGAL DISPUTE RESOLUTION

(Conventional/Traditional method)

The legal system provides resolutions for many different types of disputes. Some
disputants will not reach agreement through a collaborative process. Some disputes
need the coercive power of the state to enforce a resolution. Perhaps more
importantly, many people want a professional advocate when they become
involved in a dispute, particularly if the dispute involves perceived legal rights,
legal wrongdoing, or threat of legal action against them.
The most common form of judicial dispute resolution is litigation. Litigation is
initiated when one party files suit against another. In India, litigation is facilitated
by the government within federal, state, and municipal courts. The proceedings are
very formal and are governed by rules, such as rules of evidence and procedure,
which are established by the legislature. Outcomes are decided by an impartial
judge and/or jury, based on the factual questions of the case and the application
law. The verdict of the court is binding, not advisory; however, both parties have
the right to appeal the judgment to a higher court. Judicial dispute resolution is
typically adversarial in nature, for example, involving antagonistic parties or
opposing interests seeking an outcome most favorable to their position.
EXTRAJUDICIAL DISPUTE RESOLUTION

Indian judiciary is one of the oldest judicial systems, a world-renowned fact but
nowadays it is also well-known fact that Indian judiciary is becoming inefficient to
deal with pending cases, Indian courts are clogged with long unsettled cases. The
scenario is that even after setting up more than a thousand fast track Courts that
already settled millions of cases the problem is far from being solved as pending
cases are still piling up.

To deal with such a situation Alternative Dispute Resolution (ADR) can be helpful
mechanism, it resolves conflict in a peaceful manner where the outcome is
accepted by both the parties.

Alternative Dispute Resolution (ADR)

The concept of Alternative Dispute Resolution (ADR) mechanism is capable of

providing a substitute to the conventional methods of resolving disputes. ADR
offers to resolve all type of matters including civil, commercial, industrial and
family etc., where people are not being able to start any type of negotiation and
reach the settlement. Generally, ADR uses neutral third party who helps the parties
to communicate, discuss the differences and resolve the dispute. It is a method
which enables individuals and group to maintain co-operation, social order and
provides opportunity to reduce hostility.

Importance of ADR in India

To deal with the situation of pendency of cases in courts of India, ADR plays a
significant role in India by its diverse techniques. Alternative Dispute Resolution
mechanism provides scientifically developed techniques to 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. Here, negotiation means self-counseling between the parties to resolve
their dispute but it doesn’t have any statutory recognition in India.
ADR is also founded on such fundamental rights, article 14 and 21 which deals
with equality before law and right to life and personal liberty respectively. ADR’s
motive is to provide social-economic and political justice and maintain integrity in
the society enshrined in the preamble. ADR also strive to achieve equal justice and
free legal aid provided under article 39-A relating to Directive Principle of State
Policy (DPSP).

Few important provisions related to ADR

 Section 89 of the Civil Procedure Code, 1908 provides that opportunity to

the people, if it appears to court there exist elements of settlement outside
the court then court formulate the terms of the possible settlement and refer
the same for: Arbitration, Conciliation, Mediation or Lok Adalat.
 The Acts which deals with Alternative Dispute Resolution are Arbitration
and Conciliation Act, 1996 and,
 The Legal Services Authority Act, 1987

Advantages of Alternative Dispute Resolution

 Less time consuming: people resolve their dispute in short period as

compared to courts
 Cost effective method: it saves lot of money if one undergoes in litigation
process.
 It is free from technicalities of courts, here informal ways are applied in
resolving dispute.
 People are free to express themselves without any fear of court of law. They
can reveal the true facts without disclosing it to any court.
 Efficient way: there are always chances of restoring relationship back as
parties discuss their issues together on the same platform.
 It prevents further conflict and maintains good relationship between the
parties.
 It preserves the best interest of the parties.
 VARIOUS MODES OF ALTERNATIVE DISPUTE RESOLUTION:
1. Arbitration.
2. Mediation.
3. Conciliation.
4. Lok Adalat.

ARBITRATION

The process of Arbitration cannot exist without valid arbitration agreement prior to
the emergence of dispute. In this technique of resolution parties refer their dispute
to one or more persons called arbitrators. Decision of arbitrator is bound on parties
and their decision is called ‘Award’. The object of Arbitration is to obtain fair
settlement of dispute outside of court without necessary delay and expense.

Any party to a contract where arbitration clause is there, can invoke arbitration
clause either himself or through their authorized agent which refer the dispute
directly to the arbitration as per the Arbitration clause. Here, arbitration clause
means a clause that mention the course of actions, language, number of arbitrators,
seat or legal place of the arbitration to be taken place in the event of dispute arising
out between the parties.

What is the procedure to be followed once the arbitration clause is invoked?

1. Initially, applicant initiates arbitration by filing a statement of claim

that specifies the relevant facts and remedies. The application must
include the certified copy of arbitration agreement.
2. Statement of claim is a written document filed in the court or tribunal
for judicial determination and a copy also send to the defendant in
which claimant described the facts in support of his case and the relief
he seeks from the defendant.
3. The respondent reply to the arbitration by filing an answer against the
arbitration claim of claimant that specifies the relevant facts and
available defenses to the statement of claim.
4. Arbitrators’ selection is the process in which the parties receive lists
of potential arbitrators and select the panel to hear their case.
 5. Then there is the exchange of documents and information in
preparation for the hearing called ‘Discovery’.
6. The parties meet in persons to conduct the hearing in which the parties
present the arguments and evidences in support of their respective
cases.
7. After the witnesses examined and evidences are presented, then there
in conclusion arbitrator gives an ‘Award’ which is binding on the
parties.
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 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, other party can apply the court for referring the matter to
arbitration tribunal as per the agreement but not later the submission of the first
statement. The application must include a certified copy of arbitration agreement
and if courts satisfy with it, the matter will be referred to arbitration.

MEDIATION

Mediation is an Alternative Dispute resolution where a third neutral party aims to

assist two or more disputants in reaching agreement. It is an easy and
uncomplicated party centered negotiation process where third party acts as a
mediator to resolve dispute amicably by using appropriate communication and
negotiation techniques. This process is totally controlled by the parties. Mediator’s
work is just to facilitate the parties to reach settlement of their dispute. Mediator
doesn’t impose his views and make no decision about what a fair settlement should
be.
THE PROCESS OF MEDIATION WORKS IN VARIOUS STAGES.
THESE ARE:
Opening statement
Joint session
Separate session and,
Closing
At the commencement of mediation process, the mediator shall ensure the parties
and their counsels should be present.

1. Initially in the opening statement he furnishes all the information

about his appointment and declares he does not have any connection
with either of parties and has no interest in the dispute.
2. In the joint session, he gathers all the information, understand the fact
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, mediator tries to encourage and promote
communication and manage interruption and outbursts by the parties.
3. Next is separate session, where he tries to understand the dispute at a
deeper level, gathers specific information by taking both the parties in
confidence separately.
4. Mediator asks frequent questions on facts and discusses strengths and
weaknesses to the parties of their respective cases.
5. After hearing both the sides, mediator starts formulating issues for
resolution and creating options for settlement.
6. In the case of failure to reach any agreement through negotiation in
mediation, mediator uses different Reality check technique like:

 Best Alternative to Negotiated Agreement (BATNA):

It is the best possible outcome both the party come up with or has in
mind. Its suitable situation as each party thinks about their most
favorable scenario looks like.
 Most Likely Alternative to Negotiated Agreement (MLATNA):
For a successful negotiation the result always lies in the middle,
mediator after considering both the parties comes up with most likely
outcome. Here result is not always in the middle but little left or right
of the center depending on negotiation situation.
 Worst Alternative to Negotiated Agreement (WATNA):
It the worst possible outcome a party has in their mind for what could
happen during negotiation.
It may be helpful to the parties and mediator to examine the alternative outside the
mediation (specifically litigation) and discusses the consequences of failing to
reach agreement like: effect on the relationship of the parties or effect on the
business of the parties. It is always important to consider and discuss the worst and
most probable outcomes, it’s not always people get the best outcome.

Mediator discusses the perspective of the parties about the possible outcome at
litigation. It is also helpful for the mediator to work with parties and their
advocates to come to a proper understanding of the best, worst and most probable
outcome to the dispute through litigation as that would help the parties to
acknowledge the reality and prepare realistic, logical and workable proposals.

CONCILIATION

Conciliation is a form of arbitration but it is less formal in nature. It is the process

of facilitating an amicable (friendly) resolution between the parties, whereby the
parties to the dispute use conciliator who meets with the parties separately to settle
their dispute. Conciliator meets separately to lower the tension between parties,
improving communication, interpreting issue to bring about a negotiated
settlement. There is no need of prior agreement and cannot be forced on party who
is not intending for conciliation. It is different from arbitration in that way.

Actually, it is not possible for the parties to enter into 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.
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 engage in conciliation process even while the arbitral proceedings are
on (section 30).

LOK ADALAT

Lok Adalat is called ‘People’s Court’ presided over by a sitting or retired judicial
officer, social activists or members of Legal profession as the chairman. National
Legal Service Authority (NALSA) along with other Legal Services Institutions
conducts Lok Adalats on regular intervals for exercising such jurisdiction. Any
case pending in regular court or any dispute which has not been brought before to
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
of referred to the Lok Adalat and is settled subsequently, the court fee originally
paid in the court when the petition 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 the parties agree on 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 come to
a conclusion for 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
offenses.