ALTERNATIVE

DISPUTE
RESOLUTION
ALTERNATIVE DISPUTE
RESOLUTION

• The process of resolving conflicts without going to

courts, such as through arbitration, conciliation,
mediation, or negotiation, is known as alternative
dispute resolution (ADR). Through negotiation
between the parties, ADR aims to resolve the conflict.
MODES OF ALTERNATIVE DISPUTE
RESOLUTION

• Arbitration
• Arbitration is a process in which the parties dispute is presented
to an arbitral tribunal, which renders a binding ruling (an “award”)
on it.
• It can only begin if the parties have a valid arbitration agreement
in place before the dispute arises.
• After analysing the parties’ disagreement, the arbitrator resolves
it.
• The Arbitration and Conciliation Act, of 1996, governs it in India.
Mediation
• In mediation, a third party who is impartial to both sides of the
conflict works with the parties to arrive at a agreeable resolution.
• It is a voluntary informal, out-of-court settlement, and the
outcome is not always legally binding.

Conciliation
• Conciliation is a way of settling disputes where the parties work
with a conciliator to reach an agreement.
• The conciliator’s job is to get the parties to agree to put their
differences aside and come to a mutually agreeable settlement
on the terms.
Negotiation:
A non-binding procedure in which discussions between the
parties are initiated without the intervention of any third
party with the object of arriving at a negotiated settlement to
the dispute.
It is the most common 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 judicial settlement, including settlement
through Lok Adalat
• For judicial settlement, the Court must refer the matter to an
appropriate institution or person, and that institution or person
shall be regarded as a Lok Adalat.
• This settlement must be subject to the entirety of the Legal
Services Authority Act of 1987.
BENEFITS OF ALTERNATIVE
DISPUTE RESOLUTION

• Flexibility: ADR processes frequently foster collaboration and

help the parties comprehend one another’s points of view. ADR
also enables the parties to devise more innovative solutions that
a court might not be able to enforce under the law.
• Economical: When compared to litigation, ADR is more cost-
effective. ADR procedures also offer parties the chance to lessen
hostility and settle disputes amicably, which makes it easier for
them to continue working together in the future.
• Saving time: The ADR process settles disagreements more
quickly than litigation does. The best time to discuss and resolve
the matter can be chosen by the parties.
• Confidentiality: The conflicts that are the topic of arbitration and
mediation are handled in confidence and kept private. To
safeguard their trade secrets and copyrights, corporate entities
and industrial businesses need to do this especially.
• Enforcement: The parties are still in charge of the issue, and
any solution they reach is their own decision rather than a
directive from a third party. As a result, these awards are typically
simpler to enforce than court judgments.
• Expertise: The arbitrator frequently has a background in the
area of dispute. Therefore, he or she can propose a more
reasonable and logical solution to the problems.
• Better participation: ADR promotes public involvement in the
conflict settlement process. As a result, it fosters respect and
awareness of the law, promoting self-reliant development.
NEED OF ADR SYSTEM IN INDIAN
• As of May 2022, there were approximately 4.7 crore cases still
pending in courts at all levels of the legal system. 87.4% of them
are still pending in lower courts. This pendency can be
decreased by strengthening ADR.
• Justice is being delayed as a result of the lack of judges,
resource-dwindling litigation, case adjudication, and difficulties in
reaching an agreement in about a third of the cases that are still
pending.
• It reduces the number of undertrials. According to Prison
Statistics-2020, published by the National Crime Records
Bureau (NCRB), 76% of all detainees in the nation’s 1,300 jails
were undertrials. Alternatives to the current situation include Lok
adalats and legal options like plea bargaining.
• According to the World Bank’s ease of doing business report,
protracted litigation and lax contract enforcement are two key
obstacles to conducting business in India. Therefore, robust
dispute resolution procedures are crucial if India is to reach its
goal of a USD 5 trillion economy.
• A high price for justice. According to a DAKSH study from 2016,
the average cost for a litigant (other than legal expenses) is Rs
1,039 per case per day, and the average cost for lost income or
business is Rs 1,746 per case per day.
CURRENT ADR DISPOSITION IN INDIA

Section 89 of the Civil Procedure Code, 1908

• According to Section 89 of the Civil Procedure Code of 1908, if
the court determines that a settlement contains elements that the
parties might find acceptable, it may formulate the terms of the
potential settlement and refer it for arbitration, conciliation,
mediation, or judicial settlement, including settlement through
Lok Adalat. (Read the Provision )
Lok Adalat
• They were established by the Legal Services Authority Act of
1987. They are called “People’s Courts,” and the chairman is
typically a sitting or retired judge. The other two members are
typically attorneys and social workers. Both court costs and
stringent procedural rules are absent. But every Lok Adalat
procedure is thought to be court action.
• The Lok Adalats’ award (decision), which is final and binding on
all parties, is regarded as an order of a civil court. There is no
appeal option if the parties are not happy with the award.
THE 1996 ARBITRATION AND
CONCILIATION ACT

• The UNCITRAL ( United Nations Commission on

International Trade Law ) Model Law is a major inspiration
for the Arbitration Act. The Arbitration Act is divided into two
parts: Part I deals with arbitrations held in India, while Part
II deals with arbitrations held abroad. In 2019, changes
were made. The amendment’s key components are as
follows:
• Establishment of the Arbitration Council of India (ACI), a free-
standing organisation, for the promotion of arbitration, mediation,
conciliation, and other alternative conflict resolution procedures.
• The Supreme Court and High Courts may now name arbitral
institutes that parties may approach for the appointment of
arbitrators under the new Act.
• Relaxation of deadlines: The Act aims to do away with the 12-
month deadline for international business arbitrations.
• Confidentiality of proceedings: According to the Act, all
information about an arbitration proceeding must be kept private,
with some exceptions made for the arbitral award’s specifics.
• ADR and Mediation in Specialized Statues
• There are provisions for mediation in several statutes, including
the Industrial Disputes Act of 1947, the Companies Act of 2013
and the Real Estate (Regulation and Development) Act of 2016.

• New Delhi International Arbitration Centre Act of 2019

• The NDIAC will be established under the Act to handle
arbitration, mediation, and conciliation cases. The NDIAC is
recognised as a nationally significant institution by the statute.
ADDITIONAL ARBITRAL TRIBUNALS

• The Mumbai Centre for International Arbitration, the Indian

Council of Arbitration (ICA), and the Nani Palkhivala Arbitration
Center are domestic arbitration organisations.
• International organisations like the International Arbitration
Center and the International Chamber of Commerce.
•