 Alternative Dispute Resolution.

Alternative Dispute Resolution (ADR) refers to methods of resolving disputes outside of

traditional court proceedings, including mediation, arbitration, conciliation, and negotiation.
Alternative dispute resolution (“ADR”) refers to any method of resolving disputes without
litigation . ADR regroups all processes and techniques of conflict resolution that occur
outside of any governmental authority .

Needs Of Alternative Dispute Resolution Alternative Dispute Resolution (ADR) is needed

because it offers a more efficient, cost-effective, and less stressful alternative to traditional
litigation, allowing parties to resolve disputes quickly and peacefully, often with creative
solutions that better meet their needs.

Reasons of why Alternative Dispute Resolution is needed are as follows

1. Efficiency and Speed:

• Reduced Time: ADR processes like mediation and arbitration are generally
faster than court proceedings, resolving disputes in weeks or months rather
than years.
• Faster Resolution: ADR can lead to quicker resolutions, allowing parties to
move forward more quickly.
2. Cost-Effectiveness:
• Lower Costs: ADR can significantly reduce legal fees, court costs, and travel
expenses associated with litigation.
• Reduced Stress: ADR can be less stressful than court appearances, which can
be a burden for individuals and businesses.
3. Flexibility and Customization:
• Creative Solutions: ADR allows parties to explore a wider range of solutions
and tailor them to their specific needs, rather than being limited by legal
precedent.
• Party Control: ADR puts the parties in control of the process, allowing them to
participate actively in finding a resolution.
4. Improved Relationships:
• Preserving Relationships :ADR can help preserve relationships by fostering
cooperation and understanding, unlike the adversarial nature of litigation.
• Focus on Interests: ADR encourages parties to focus on their underlying
interests and needs rather than just their legal rights, leading to more
sustainable solutions.
5. Confidentiality:
• Privacy: ADR proceedings are typically confidential, unlike court proceedings,
which are public record.
• Reduced Exposure: This can be particularly important for sensitive disputes,
such as family or business disputes.
6. Reduced Court Backlog:
• Less Court Load: By resolving disputes outside of court, ADR helps reduce the
backlog of cases in the court system.
• Improved Justice Access: This can lead to faster access to justice for all.

Advantages of ADR: Lower Costs, faster resolution , flexibility, expertise, increased

control, confidentiality, reduce formality
Disadvantages: Limited judicial review, potential for unequal power , lack of precedent , no
guarantee of resolution, limited discovery, enforcement issue , public screening.

 Legal Aid

Legal aid is the provision of assistance to people who are unable to afford legal
representation and access to the court system. Legal aid is regarded as central in providing
access to justice by ensuring equality before the law, the right to counsel and the right to a
fair trial.

Legal aid is the provision of free or low-cost legal services to individuals who cannot afford to
hire a lawyer .It aims to ensure that everyone has access to justice, regardless of their
financial situation, upholding the principles of equality before the law, the right to counsel,
and the right to a fair trial.

Legal aid, a crucial aspect of ensuring access to justice, encompasses various dimensions,
including free legal services for the poor and marginalized, and is governed by the Legal
Services Authorities Act, 1987, with the National Legal Services Authority (NALSA) at its
helm.

1. Constitutional provisions of legal aid

Article 39A: Equal Justice and Free Legal Aid

 This article, added by the 42nd Amendment, is a Directive Principle of State Policy.
 It directs the State to ensure that opportunities for securing justice are not denied to
any citizen due to economic or other disabilities.
 The State is obligated to provide free legal aid, ensuring that the poor and vulnerable
can access justice.

2. Article 21: Protection of Life and Personal Liberty

 Article 21 states that no person shall be deprived of their life or personal liberty
except according to procedure established by law.
 The Supreme Court has interpreted this to include the right to legal aid, particularly
for those who cannot afford it.
 This means that if an accused person cannot afford a lawyer, the State must provide
one for their defence.

3. Legal Services Authorities Act, 1987

 This Act was enacted to give effect to the constitutional provisions on legal aid.
 It establishes Legal Services Authorities at the national, state, and district levels to
provide free and competent legal services.
 These authorities aim to ensure that the right to legal aid is realized in practice.

4. Key Judgments

 Hussainara Khatoon vs. State of Bihar: This case highlighted the State’s duty to
provide free legal aid to under trial prisoners who could not afford legal
representation.
 The Supreme Court has also emphasized that access to justice, including legal aid, is
a fundamental right under Articles 14 (equality before the law) and 21.
[Link] provisions of legal aid

 Article 39A of the Constitution: This article mandates the state to provide free
legal aid through appropriate legislation, schemes, or other means.
 Legal Services Authorities Act, 1987: This act provides the legal framework for
implementing legal aid programs, including establishing NALSA and SLSAs.
 Section 12 of the Legal Services Authorities Act: This section specifies the
categories of persons eligible for free legal services, including women, children,
members of Scheduled Castes and Scheduled Tribes, industrial workers, and victims
of various disasters.
 Section 304 of the Code of Criminal Procedure (CrPC) and Section 341 of
the Bombay Nuisance Prevention Act: These sections address the grant of legal
aid to an accused free of cost, particularly when they are not represented by an
advocate.
 Other relevant provisions: The Supreme Court has also interpreted Article 21 of
the Constitution, which guarantees the right to life and personal liberty, to include
the right to free legal aid, particularly at the stage of trial and when produced before
a magistrate.

[Link] Legal Services:

Purpose: To ensure that no citizen is denied access to justice due to economic or other
disabilities.

Scope: Covers civil and criminal matters, including representation by an advocate, payment
of process fees, expenses of witnesses, and other charges related to legal proceedings.

Coverage: Can include preparation of pleadings, memo of appeal, paper book, printing and
translation of documents, drafting of legal documents, and supply of certified copies of
judgments and orders.

Governing Body: The National Legal Services Authority (NALSA) is the central authority
responsible for providing free legal services.

Legal Basis : The Legal Services Authorities Act, 1987, provides the framework for the
provision of free legal aid.

Constitutional Mandate :Article 39A of the Indian Constitution directs the state to provide
free legal aid.

[Link] for Legal Aid:

General: Individuals who cannot afford legal representation due to economic or other
disabilities are eligible.

Specific Categories:

• Scheduled Caste or Scheduled Tribe members

• Women or children
• Victims of trafficking
• Mentally ill or otherwise disabled persons
• Persons under special circumstances
 • Persons whose annual income does not exceed a certain limit (currently ₹1
lakh, with a higher limit of ₹1.25 lakh for cases before the Supreme Court
Legal Services Committee).

Application :Applications for legal aid can be made through various channels, including
online portals, physical applications at Legal Services Institutions, or by email.

[Link] and Structure:

NALSA:The National Legal Services Authority (NALSA) is the apex body responsible for
formulating policies and providing directions for legal aid services.

State Legal Services Authorities (SALSAs):Each state has a State Legal Services Authority to
implement NALSA’s policies and conduct Lok Adalats (people’s courts).

District Legal Services Authorities (DLSA):District-level authorities implement legal aid

programs and schemes within their respective districts.

Taluk Legal Services Committees :These committees coordinate legal services activities at
the taluk level and organize Lok Adalats.

Legal Aid Clinics: These clinics provide basic legal services, such as legal advice and
assistance in drafting legal documents, to people in rural areas.

[Link] Objectives:

Access to Justice :To ensure that no citizen is denied access to justice due to economic or
other disabilities.

Social Justice: To promote social justice and equality by providing legal services to the poor
and marginalized.

Empowerment: To empower individuals to participate in the judicial process and to ensure

that the legal system advances social justice.

Distributive Justice: To ensure that the benefits of the legal system are available to all,
regardless of their socio-economic status.

Key Aspects of Legal Aid Practice

• Constitutional Mandate: Article 39A of the Indian Constitution and the Legal
Services Authorities Act, 1987, mandate the state to provide free legal aid to
ensure access to justice for all citizens.
• Eligibility :Legal aid is primarily intended for the poor, marginalized, and
weaker sections of society, including women, children, and individuals
belonging to Scheduled Castes and Scheduled Tribes.
• Scope of Services: Legal aid encompasses a range of services, including
legal advice, representation in court proceedings, mediation, and negotiation,
as well as legal awareness programs.
• Implementation: The National Legal Services Authority (NALSA) and State
Legal Services Authorities (SALSAs) play a crucial role in implementing legal
aid schemes and ensuring access to justice for the vulnerable.
 •Application Process: Individuals can apply for free legal aid either offline or
online through the NALSA website or by contacting the nearest Legal Services
Authority.
• Public Prosecutor’s Duty: Public prosecutors have a mandatory duty to
ensure that an accused person is not left without legal representation and to
point out to the court the need for providing free legal aid if the accused is not
represented by an advocate.
• Role of Law Schools: Law schools can contribute to legal aid by providing
legal services to the poor and marginalized through legal aid clinics and other
initiatives.
• Importance of Legal Aid: Legal aid is crucial for ensuring equality before
the law, the right to counsel, and the right to a fair trial for all, regardless of
their financial status.
• Challenges and Future Directions: Despite the constitutional mandate,
there are challenges in ensuring effective implementation and reaching all
those in need of legal aid. Future directions include expanding the reach of
legal aid services, improving awareness, and strengthening the capacity of
legal aid providers.
 Legal Services Authority Act, 1987

The Legal Services Authorities Act, 1987, aims to provide free and competent legal services
to weaker sections of society, ensuring equal access to justice, and promotes amicable
dispute resolution through Lok Adalats.

Key Objectives and Functions:

1. Ensuring Access to Justice: The Act aims to ensure that no citizen is denied access to
justice due to economic or other disabilities.
2. Free and Competent Legal Services: The Act mandates the provision of free and
competent legal services to vulnerable groups.
3. Lok Adalat: The Act promotes the establishment of Lok Adalats (people’s courts) for
amicable settlement of disputes.
4. Legal Awareness: The Act emphasizes creating legal awareness among the public,
particularly among weaker sections of society.
5. National Legal Services Authority (NALSA): NALSA, constituted under the Act,
monitors and evaluates legal aid programs and sets policies for implementing the
Act.
6. State and District Level Authorities: State Legal Services Authorities (SLSA) and
District Legal Services Authorities (DLSA) are established to implement the Act at the
state and district levels, respectively.
7. High Court Legal Services Committees: High Court Legal Services Committees
(HCLSC) are established to provide legal services to weaker sections of the society
who wish to file or defend a case in the concerned High Court of a state.

Who is eligible for legal aid?

• Members of Scheduled Castes or Scheduled Tribes

• Victims of trafficking in human beings or beggar
• Women or children
• Mentally ill or otherwise disabled persons
 •Persons under circumstances of undeserved want
•Industrial workmen
•Persons in custody, including custody in a protective home
•Persons in a juvenile home
•Persons in a psychiatric hospital or psychiatric nursing home
•Persons with an annual income less than nine thousand rupees (as per older
criteria, may be updated)
 Legal Literacy Mission

The National Legal Literacy Mission, launched by NALSA in 2005, aims to empower
marginalized groups through legal awareness, focusing on rights, duties, and legal aid
access, with the motto “From Ignorance to Legal Empowerment”.

Objectives and Goals:

• Empowerment: To empower the poor, disadvantaged, and vulnerable,

especially women, children, and disabled persons, through legal literacy.
• Legal Awareness: To make people aware of their rights, duties, and the laws of
the land.
• Access to Justice: To ensure access to legal aid and justice services.
• 100% Legal Literacy: The mission aims to achieve 100% legal literacy.
• Targeted Approach: To focus on the most disadvantaged and vulnerable
groups first.
• State-Specific Plans: To prepare state-specific plans of action for
implementation.
• Research and Documentation: To undertake surveys, research, and
documentation to understand people’s problems and grievances.
• Sensitization: To sensitize judicial officers to people’s causes.

Key Features and Activities:

• Various Awareness Activities: NALSA and other Legal Services Institutions

conduct seminars, lectures, distribute pamphlets, participate in media
programs, and use mobile vans to spread awareness.
• Legal Aid Clinics: Legal Aid Clinics are run in law colleges to further the
objectives of Legal Services.
• Internship Programs: Internship programs are organized for law students to
promote the role of legal services activities.
• Legal Literacy Cells: Legal Literacy Cells are established in colleges to equip
students with legal knowledge and empower them to become responsible
citizens.
• Focus Areas: The mission focuses on legal rights, education on fundamental
duties, and education on the availability and benefits of legal aid.
• Pan India Legal Literacy and Legal Awareness Programme: This program aims
to expand legal literacy and awareness across the country, utilizing
technology, building partnerships, and focusing on capacity building and grass
root initiatives.
Techniques of ADR

Alternative dispute resolution (ADR), also known as external dispute resolution (EDR), is
basically a method to resolve a dispute outside the court, i.e., without any interruption from
the court. At this point in time, when There are many cases pending before the court and
there are not sufficient judges and time to resolve them all in court, ADR gained widespread
acceptance to resolve disputes. There are many methods of ADR, like mediation. Arbitration,
conciliation and many more .Negotiation is also a prominent method of ADR. When two or
more parties have different interests and want to come to a mutually acceptable conclusion,
they opt for negotiation as an ADR .

1) Negotiation
Negotiation is derived from the Latin word negotiari’ which means ‘to carry on business, do
business. Negotiation is very prominent among Indians; we get to see it from the street
while negotiating the price of anything with the big multinational companies while
negotiating deals with them. Negotiation is defined as self-counselling between the parties
to resolve the dispute. In negotiation, parties, with their own will, by discussing politely and
patiently, try to come up with a solution that is acceptable to both parties regarding the
issue. Negotiation is a process of discussion and communication between two or more
parties with the aim of reaching an agreement or resolving a dispute. It involves identifying
common interests, exploring potential solutions, and finding compromises that satisfy all
parties involved.

One of the key reasons why negotiation is important is its ability to preserve relationships.
Unlike litigation, which often results in winners and losers, negotiation allows people to work
together towards a resolution that meets everyone’s needs. This collaborative approach
fosters understanding, builds trust, and maintains positive connections for future
interactions.

Types of strategy for a successful negotiation

1. Preparatory Strategies:
 Research and Planning: Thoroughly research the other party’s goals, interests, and
priorities before entering negotiations.
 Know Your Priorities: Identify your own key objectives and what you’re willing to
concede.
 Consider Alternatives: Have a clear understanding of your BATNA (Best Alternative
To a Negotiated Agreement) and potential fall-back options.
 Set Anchors: Use strategic pricing or initial offers to influence the other party’s
perception.
 Assess the Other Party: Understand their potential strengths, weaknesses, and
negotiation style.
2. Communication and Relationship Building:
 Active Listening: Pay close attention to what the other party is saying, both
verbally and nonverbally, to understand their needs and concerns.
 Open Communication: Be clear, concise, and transparent in your communication,
while also being open to feedback.
 Build Rapport: Establish a positive and trusting relationship with the other party to
foster cooperation.
  Persuasion: Use logical arguments and emotional appeals to influence the other
party’s perspective.
 Emotional Intelligence: Manage your own emotions and be aware of the other
party’s emotional state.
3. Negotiation Approaches:
 Distributive Negotiation: Focuses on dividing a fixed resource, often leading to a
win-lose outcome.
 Integrative Negotiation: Aims for a win-win outcome by finding solutions that
satisfy both parties’ interests.
 Principled Negotiation: Emphasizes fairness, objective criteria, and mutual gain,
rather than focusing on positions.
 Compromising: Finding a middle ground where both parties make concessions to
reach an agreement.
 Collaborative Negotiation: Working together to create new value and achieve
mutual goals.
 Team Negotiation: Utilizing a team of negotiators with different strengths to
achieve a common goal.
4. Other Important Strategies:
 Problem Solving: Actively work to identify and resolve any issues that arise during
the negotiation.
 Adaptability: Be flexible and willing to adjust your approach based on the situation
and the other party’s reactions.
 Knowing When to Walk Away: Recognize when a deal is not in your best interest
and be prepared to end the negotiation.
 Use Concessions Strategically: Offer concessions that are valuable to the other
party while minimizing your own losses.
 Focus on Interests, Not Positions: Understand the underlying needs and
motivations of each party, rather than just their stated positions.
 Build Strong Relationships: Foster positive relationships with the other party,
which can be beneficial for future negotiations.

Characteristics Of Negotiation

 Voluntary: This is one of the important characteristics of negotiation, i.e.. it should

be completely voluntary. And no party can be forced to negotiate with the other
party. Whichever party wants to negotiate will send a letter to the other party, asking
to negotiate. If the other party agrees to negotiate without any force or Threat, only
then can both parties take further steps to negotiate.
 Bilateral/multilateral: Negotiation can be conducted between two or more parties,
as many as may be required.
 Non adjudicative: Negotiation is a process that includes only parties to the issue to
get a solution amicably and no third neutral party takes part in the negotiation
process.
 Informal: unlike other alternative dispute resolutions. Negotiation is an informal
method. There are no rules defined for negotiation; parties to the issue make their
own rules with mutual discussion and acceptance.
 Flexible: Negotiation totally depends on the choice of parties, i.e., where it will take
place, when it will take place, what will be the topic of negotiation, which approach
they will take, etc.
Advantages of negotiation

• Negotiation is a flexible process, i.e.. it depends on the discretion of the parties as to

whether they want to opt for negotiation to resolve the issue or not; if yes, where it should
be conducted; in how many meetings the negotiation should be done; and there are no
specified rules for negotiation; parties can conduct it in their own way.

• Unlike other issue resolving processes (e.g., litigation, arbitration, etc.), it is more likely to
come to a conclusion that can be favourable for both parties.

• It is a voluntary process and can only be opted for with the consent of each party. It is the
discretion of the parties whether they want to negotiate or not and The decision of any party
shouldn’t be forced or manipulated by the other party.

• Negotiation involves only parties to the issue and There is no interference from any third
party for dispute resolution, which is a great advantage for the parties who don’t want to
involve any outsiders in the issue.

Negotiation is the process that only binds the parties to an issue, unlike other processes
(e.g.. litigation). For example, in litigation, if a decision is passed by the court, then it will be
taken into consideration or, as a in further similar cases, but in negotiation, there’s nothing
like that; if somebody gets into a similar dispute with someone else, then it is not necessary
to Take their decision into consideration i.e. They can come to a different conclusion.

• since in negotiations, disputes are resolved amicably. Which enhances the relationship
between the parties for future interactions.

• As negotiation is a voluntary process, there will be no court fees or other expenses, which
makes it a less expensive dispute resolution process compared to others.

• Evidently, negotiation is a faster process to resolve any dispute, as there is no interruption

by the court or any other third party to keep giving dates for the hearings to resolve the
issue.

• Negotiation is always a good option for any sensitive issue because this is a very private
resolution process That only includes the parties to the dispute

Disadvantages Of Negotiation

• If the negotiation is conducted between the unequal parties, then there are huge chances
that the stronger party will get more benefits as compared to the weaker party, which is
morally wrong.

• Where there are benefits to the absence of the third party, there are also drawbacks. Due
to the absence of Third party, There are chances in negotiation that the parties will not come
to any agreement and all the Time and money incurred by the parties will be a waste.

• If one of the parties doesn’t know about their rights. Then due to the absence of this
neutral party, there are huge chances that the other party can take advantage of that party.

• If any party changes its mind, backs off after initiating negotiation, and withdraws itself
from the proceedings of negotiation, then the amount of time and money invested in the
negotiation will become a waste.
Process/Steps Of Negotiation

• Preparation: Before becoming a part of the negotiation process, parties need to prepare
themselves for what can be the Best Alternative to a Negotiated Agreement (BATNA) and
what can be the Worst Alternative to a Negotiated Agreement (WATNA). They also need to
decide whether the other party is willing to resolve The dispute or not.

• Discussion: Before conducting negotiation, setting ground rules for the negotiation is
crucial that what will be the venue of the negotiation, timings, what will be the approach
they want to go with etc.

• Clarification of goals: Parties to the negotiation should have to clarify their goals and
viewpoints and resolve any misunderstandings.

• Bargaining and problem solving: This is the most important part of the negotiation
process. Parties to The negotiation share their points of view, adjust according to the
situation and come to a conclusion that is acceptable to all parties.

• Agreement: after coming to a conclusion, an agreement is made according to the decided

solution of the dispute and then signed by the parties to the negotiations.

• Implementation: After signing the agreement, parties need to implement and operate
according to the agreement.

• Prepare alternatives: It’s important to consider alternative options if an agreement

cannot be reached Through traditional negotiations. Brainstorm potential alternatives before
entering into negotiations so that you have backup plans ready if needed.

Types Of Negotiation

• Distributive negotiation: In this type of negotiation, parties negotiate over one topic,
which creates a win-lose situation for the parties due to which one party will get the
advantage.

• Integrative negotiation: In this, parties negotiate over many topics, which creates
chances to get a win-win situation for the parties and mutual gain.

• Team negotiation: In this type of negotiation, the parties negotiate in teams.

• Multiparty negotiation: In whichever negotiation there are more than two parties, that
negotiation becomes a multiparty negotiation.

2) Mediation
Mediation, a form of Alternative Dispute Resolution (ADR), involves a neutral third party, the
mediator, assisting disputing parties to reach a mutually acceptable resolution without
resorting to formal litigation or court proceedings. Mediation is a process where a neutral
third party, the mediator, facilitates communication and negotiation between parties in a
dispute. The mediator helps the parties explore potential solutions and reach a voluntary
agreement that addresses their interests. It is a voluntary process, meaning the parties must
agree to participate in mediation.
Benefits/Nature Of Mediation

1. Informality – No court rules or legal precedents are involved in mediation. The

mediator does not impose a decision upon the parties. As opposed to adversarial
forums, the mediator helps to maintain a business like approach to resolving a
dispute. There are no fixed solutions in mediation. Parties can look to developing
creative solutions to resolve matters and the solution rests with the parties
themselves.
2. Privacy and confidentiality – The mediation conference takes place in a private
setting such as a conference room at any of the Arbitration Associations. Mediation is
not a matter of public record. Its confidentiality is maintained.
3. Time and cost savings – Mediation generally lasts a day. Complex matters may
require more time due to highly technical issue and/ or multiple parties. Without the
formalities found in litigation, mediation usually results in substantial costs savings.
4. Control – Parties have control over their participation in mediation. A party can
decide to terminate their participation at any point in mediation. Mediators help
parties maintain control over the negotiation that takes place.

Stages /Process Of Mediation

1. The Introduction :In this stage, the mediator introduces him or herself to the
involved parties and explains how things will work. During this process, the
mediator attempts to establish a friendly tone and trust between all parties. The
mediator is in charge of the process, and everyone’s roles are defined.
2. Opening Statements: These statements are typically done by the mediator and
work to set a formal tone for the meeting. The mediator will expound on the
details of how the process works, so everyone feels some familiarity with
mediation. In times past, these statements were standard, but now, they are
often waived due to all of the parties already being familiar with the process.
3. Joint Discussion : In a joint session, the disputing parties or their attorneys talk
to each other directly with the mediator in the room. This is in contrast to private
caucuses, where the mediator relays commentary to each party, and each party
stays in its own room. There are several forms that joint sessions can take. They
can include everyone, just have the defendants present with the mediator, only
include attorneys, or only include clients. At these sessions, the parties attempt to
persuade each other to their views of the issue. Solutions may be discussed, and
this can involve arguing points of law and other factual components. Various
professionals or individuals have different ideas of how best to tackle these
sessions, with some believing that it’s best to convince the mediator and others
preferring to focus on the opposing parties.
4. Caucuses : When there is an impasse in mediation, caucuses can be used to try
to break it. While this term is now strongly associated with politics, it is used
differently in mediation. In mediation caucuses, one side of a mediation dispute
will meet in a private room, typically with the mediator. Possible resolutions to the
dispute are then discussed, sometimes with the party’s chosen advisor. Not every
mediation session requires a caucus. They are called on a case-by-case basis if
one of the parties or the mediator thinks that having one (or more) will help.
5. Negotiation: Negotiation is the process of helping two or more parties find a
solution to an issue that is acceptable to all sides. It goes on throughout the
 mediation process, and when successful, all parties will agree that they have
reached a fair conclusion. The mediator’s job is to facilitate this process and bring
it to a successful resolution. In some cases, mediation teachers will add one or
two more steps to the process: “Planning” at the beginning and “closure” to the
end. These do not change the fundamental way that mediation works. Mediation
is an important skill to have, even if you don’t plan on being a professional
mediator. The ability to facilitate solutions to interpersonal or business-related
conflicts allows parties to remain satisfied and on friendlier terms than would be
possible if litigation were involved. Take a mediation class at PCC to learn this
essential skill.
6. Agreement: If an agreement is reached, it is documented and signed by all
parties.

Role of the Mediator

 The mediator does not make decisions or impose solutions; they facilitate the parties’
communication and negotiation.
 The mediator helps the parties identify their interests and needs, explore options,
and reach a mutually agreeable resolution.
 The mediator ensures that the process is fair and impartial, and that all parties have
an opportunity to be heard.
3) Conciliation
Conciliation is a form of ADR where a neutral third party, known as a conciliator, assists
disputing parties in reaching a mutually acceptable settlement. It’s a process of orderly or
rational discussion under the guidance of the conciliator. The conciliator does not make
decisions or impose solutions; instead, they facilitate communication and negotiation to help
parties reach their own agreement.

Role of the Conciliator

 The conciliator’s primary role is to assist the parties in reaching a mutually

acceptable resolution to their dispute.
 This involves facilitating communication, encouraging dialogue, and exploring
possible solutions.

Stages/Process Of Conciliation

 Commencement: Conciliation proceedings can begin when parties mutually agree

to use conciliation as a method for resolving their dispute.
 Appointment of Conciliator: Parties can appoint a single conciliator or each party
can appoint one conciliator, with the parties together agreeing on a third conciliator
to act as the presiding conciliator.
 Written Statements: The conciliator may request each party to submit a brief
written statement describing the nature of the dispute and the points at issue.
 Conduct of Proceedings: The conciliator facilitates discussions, explores options,
and encourages parties to reach a mutually acceptable agreement.
 Outcome :If the parties reach a settlement, they can execute a settlement
agreement endorsed by the conciliator, which becomes binding.

Benefits of Conciliation
  Confidentiality: Conciliation proceedings are generally confidential, unlike
traditional court proceedings.
 Informality: It is a less formal process than court litigation. The conciliation process
is typically informal and avoids legal jargon, making it more accessible to parties
without legal expertise.
 Quicker Resolution: Conciliation can often lead to faster resolution of disputes than
court proceedings.
 Cost-Effective: ADR processes like conciliation can be more cost-effective than
litigation.
 Parties retain control: The ultimate decision to agree on a settlement remains with
the parties involved.
 Settlement Proposal: Unlike mediation, conciliators may offer non-binding
settlement proposals to help parties reach a resolution.
 Interest-Based: The conciliator helps parties understand their interests and needs,
rather than focusing solely on legal positions, to facilitate a mutually beneficial
outcome.
 Facilitated Agreement: The conciliator guides the process, encouraging
communication and cooperation between parties to find a solution that addresses
their concerns.
 Voluntary: Parties must agree to participate in conciliation; it cannot be forced upon
them.
 Non-Binding: The conciliator’s role is to facilitate, not to decide. The parties retain
full control over the outcome, and any agreement reached is voluntary.
 Neutral Third Party: A neutral conciliator, often with expertise in the subject
matter, helps parties identify issues, explore options, and reach a resolution.

Scope of Application:

 Wide Range of Disputes: Conciliation can be used to resolve a wide variety of

disputes, including contractual, commercial, family, and employment disputes.
 Relationship Preservation: Conciliation can be particularly beneficial in situations
where parties need to maintain ongoing relationships, such as in family or business
disputes.
 Overcoming Legal Constraints: ADR, including conciliation, can address disputes
that may be difficult or time-consuming to resolve through traditional litigation.
 Lok Adalat : Lok Adalat, a form of ADR in India, uses conciliation, mediation, and
negotiation to resolve disputes in a quick and cost-effective manner.

Arbitration
Arbitration is an alternate dispute resolution process, where the parties put forward their
dispute to a third party i.e. an arbitrator or a panel of arbitrators who consider the evidence
and arguments and then give a decision to the parties. The verdicts in arbitration
proceedings are called arbitral awards. They are in general loyally enforceable. Arbitration is
much faster, flexible and private in comparison to judicial proceedings. It is normally
favoured for settlement of commercial or contractual disputes.

Arbitration in India is governed by The Arbitration and Conciliation Act.1996. The number of
arbitrators and their appointments are defined in Sections 10 and 11 of the Act. The parties
are allowed to ascertain the number of arbitrators. However, such a number must be an odd
number and if there is no consensus among the partier about the number of arbitrators then
a single arbitrator can be selected. A citizen of any nation can be selected as an arbitrator,
unless there is an agreement to the contrary. Thus, a foreigner can be appointed as an
arbitrator. The parties are allowed to lay down the process for appointing the arbitrators. If
the parties do not concur on the process of appointing the arbitrator and the number agreed
is three, then each party will name one arbitrator and The third shall be nominated by the
two arbitrators designated by the parties. The third arbitrator designated by the two
nominated arbitrators will be the presiding arbitrator. The Supreme Court and High Court can
also appoint arbitrators with the help of graded arbitral institutions in case the parties are
unsuccessful in selecting an arbitrator Through the other methods mentioned in Section 11.

Arbitration Agreement

An arbitration agreement is explained under Section 2(a) of the Arbitration Act, 1940, as a
written agreement to submit prevent or future disputes of the parties to arbitration, whether
the name of the arbitrator is mentioned in it or not. An arbitration agreement is also called
‘reference. According to Section 2 of the Arbitration Act 1996 of the United Kingdom, an
arbitration agreement denotes an agreement to put forward to arbitration present or future
disputes, whether they are contractual or not. There are some essentials That need to be
followed for a legitimate arbitration agreement, such as the agreement must be in a written
form incorporating the essential terms of arbitration. The arbitration agreement forms the
basis of arbitration, since it is a method of dispute resolution formed upon the consent of
both parties. The agreement to present their disputes to arbitration must be mutual and
signed by both parties. As per Section 2(b) of the Arbitration and Conciliation Act, 1996, an
arbitration agreement stands for an agreement as stated in Section 7.

Section 7(1) of the Arbitration and Conciliation Act, 1996, elucidates that an arbitration
agreement is an agreement through which the parties agree to refer to arbitration all or
certain disputes that have arisen err may arise in the future among them regarding a legally
defined relation, whether contractual or not.

According to Section 7(2), an arbitration agreement can exist as an arbitration clause in a

contract or a distinct agreement. Sub-Section (3) says that the agreement must be in written
form. Sub Section (4) further clarifies that an arbitration agreement will be considered to be
in written form if it is a document executed by the parties; an exchange of letters, teller or
other forms of Telecommunications or an exchange of statements of claim and defence in
which the existence of the agreement is claimed by one party but not refused by the other.
Now a days, contracts commonly have an arbitration clause or a dispute resolution clause.
Sometimes, a full-fledged arbitration agreement is also executed between the parties.

In K. Vankula v. State of AP (2009), it has been brewed that no private parties, by their
agreement or even the Government, can compel a civil court to arbitrate a dispute. Even
Section 29 of the CPC does not oblige courts to conduct arbitration. It is not permissible to
confer such power on a Court under the agreement between the parties.

There should be mutuality with regard to the initiation of arbitration proceedings. The
arbitration agreement or clause must give a bilateral right of reference to both parties. Vs..
either party, in the event of a dispute, can refer the matter for arbitration.

Types of arbitration
 1. National Arbitration

National arbitration means an arbitration conducted in the country according to national

laws. The term “Domestic or National’ arbitration is not defined in the Arbitration and
Conciliation Act, 1996. But if we carefully read through Section 2 sub-sections (2) and (1) of
the Act, we will find that Domestic Arbitration converts an arbitration in which the arbitral
proceedings are convened in India, and according to Indian law, the cause of action has
arisen in India, or in the event that the parties are subject to Indian Jurisdiction. Most
countries have their own laws for dealing with arbitration within their jurisdiction.

2. International Arbitration

In cases of arbitration where one of the parties is a foreign citizen or the subject matter of
the dispute is placed outside the country, or the process of arbitration has taken place
outside the country, it is called International arbitration, International arbitration has been
developed to permit parties from various legal and national backgrounds to solve Their
disputes in a binding manner.

International arbitration can be of three main types interstate arbitration, investor rate
arbitration and international commercial arbitration. In international trade and commerce,
contracts are necessary in order to avoid disputer. But in trade and commerce, disputes are
inevitable. International traders are generally reluctant to settle disputes in a court of law
since the judicial process in any country is complicated. In such cases, arbitration is
generally considered better than litigation.

3. Formal and Informal Arbitration

When The statutes of the arbitration law are strictly adhered to during the arbitration
process, and there is a formal arbitration agreement between the parties, it is formal
arbitration. If the arbitration is not exactly in conformation with the arbitration law or There
is no formal arbitration agreement, it is called informal arbitration.

4. Ad hoc Arbitration

Ad hoc arbitration means an arbitration agreed to and organised by the parties Themselves
lacking the aid of an institution. Ad hoc arbitration can be sought when a disagreement
arises between the parties to a business transaction that could not be settled through
mediation or conciliation. The proceedings are convened by the arbitrator(s) in conformation
to the agreement between the parties. Ad hoe arbitration is less formal than institutional
arbitration, Any third party does not administer it, and the parties have to make provisions
for the choice of arbitrators. The determination of rules, and applicable laws and procedures.
Ad hoc arbitration is generally considered more cheaper, flexible and quicker in comparison
to institutional arbitration.

5. Institutional Arbitration

Institutional arbitrations are administered according to the rules laid down by a designated
arbitral organization. When the parties agree beforehand that in the event of prospective
differences resulting among them in the process of conducting trade and commerce, they
will present the matter to be settled by a designated arbitrate organisation, it is called
institutional arbitration.
The most important advantage that institutional arbitration provides is that it saves the
parties and their lawyers the trouble of going through the cumbersome task of determining
the arbitration procedure.

6. Private and Statutory Arbitration

Private arbitration means arbitration that occurs as a result of a private agreement between
two parties. Private arbitration is also described as consensual arbitration as it is conducted
by mutual consent and not by force of law.

Statutory Arbitrations are arbitrations administered in conformation with the norms of

specific statutes that provide for arbitration in respect of dispute arising out of matters
covered by those statutes. Many statutes in India provide for arbitration in respect of
disputes arising from matters covered by those statutes.

7. General and Specialised Arbitration

When the parties consent to refer to arbitration all or any disputes that have arisen or may
arrive in future, the agreement is general and not in relation to any specific dispute. It is
called general arbitration. A general agreement may relate to a series of agreements under
the same contract, and disputes may arise from time to time. Each dispute may be
individually referred to the same or different arbitrators or through the same arbitral
institution.

Specialised arbitration is arbitration administered under the supervision of an arbitral

institution, which might have certain specified norms to meet the specific requirements for
conducting arbitration regarding disputes of a distinct nature, such as disputes as to
commodities. Construction or specific areas of technology.

8. Contractual Arbitration

The parties generally include an arbitration clause as a crucial part of the contract to present
their existing or prospective dispute for arbitration. By virtue of this clause. The parties
agree to submit any or all disputer arising out of their legal relationship to arbitration. An
arbitration clause of an agreement or contract is a clause contained in and forming part of
the main contract for the reference of disputes arising between the parties to arbitration.

An arbitration agreement can also exist in the form of a separate agreement. An arbitration
clause forming part of a larger agreement or a separate arbitration agreement is also valid.

Advantages of arbitration

 Arbitration is more flexible than the judicial process.

 The parties to the dispute select their arbitrator, who may be a specialist on the
subject in dispute, whereas a judge may not be. This makes arbitration beneficial in
complicated and specialised matter.
 Arbitration is generally faster compared to litigation, particularly because the
pronouncement is binding and not open to appeal. The right of appeal, even if
present, is very limited in scope.
 Arbitration is confidential in nature. This restricts the divulgence of trade secrets and
potentially damaging information,
 It is a cooperative process and not adversarial in nature.
  Arbitration offers an agreeable outcome. The parties are assisted in coming up with a
solution together.
 The parties are allowed to nominate the arbitrators and the procedure for arbitration.
Thus, arbitration offers a certain degree of control to the parties.
 Arbitration mandates equal treatment of parties. Arbitrators are expected to be
impartial and unbiased.

Disadvantages of arbitration

 Arbitration may be considered adversarial. It barely does anything to foster a win-win

situation or boost relationships. Instead, it often intensifies a dispute, just as a court
based adjudication does.
 Arbitration curtails the decision-making ability of the parties. Mediation is a better
option in this regard.
 Arbitration is informal and may be potentially unjust. Some observers believe that
only the courts, with their carefully regulated procedures, can provide justice.
 In arbitration, a decision is made final, there is very limited or no scope for appeal.
 There are generally no specific rules of evidence in arbitration. Arbitrators can use
any information that is brought before them.
 Arbitration lacks transparency, which could be potentially disadvantageous to one
party.

Aspects Arbitration Conciliation

Definition A method of dispute A method of dispute
resolution where a neutral resolution where a neutral
third party makes a legally third party facilitates
binding decision after negotiations between the
considering the arguments parties to help them reach a
of both parties. mutually acceptable
solution.
Role of the Third Party The arbitrator acts as a The conciliator acts as a
decision-maker and renders mediator and facilitates
a final and binding decision. talks between the parties
but does not make a final
decision.
Legal Binding The decision reached by the The agreement reached
arbitrator is legally binding through conciliation is not
and enforceable by law. legally binding unless the
parties voluntarily decide to
formalize it into a contract.
Process Control The parties have limited The parties have more
control over the arbitration control over the conciliation
process as the arbitrator process as they actively
determines the rules and participate in negotiations
procedures. and decide the outcome.
Adversarial Nature Arbitration is typically an Conciliation is more
adversarial process where collaborative, focusing on
the parties present their finding common ground and
case to the arbitrator. resolving disputes amicably.
Speed Arbitration can be relatively Conciliation can be quicker
quicker than litigation but as it fosters direct
may take several months or communication between the
years. parties to resolve efficiently.
 Applicability Applicable in commercial Applicable in family
disputes, construction disputes, community
contracts, labour disputes, conflicts, and interpersonal
and international matters. conflicts.
Role of Legal Representation Parties in arbitration can Parties in conciliation may or
have legal representation to may not have legal
present their case. representation.

Arbitration and Conciliation Act, 1996

The government enacted the Arbitration and Conciliation Act, 1996 in an effort to modernize
the 1940 Act. In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative
Committee (AALCC), the International Council for Commercial Arbitration (ICCA) and the
International Chamber of Commerce (ICC) met for a consultative meeting, where the
participants were of the unanimous view that it would be in the interest of International
Commercial Arbitration if UNCITRAL would initiate steps leading to the establishment of
uniform standards of arbitral procedure.

The preparation of a Model Law on arbitration was considered the most appropriate way to
achieve the desired uniformity. The full text of this Model Law was adopted on 21 st June 1985
by UNCITRAL. This is a remarkable legacy given by the United Nations to International
Commercial Arbitration, which has influenced Indian Law. In India, the Model Law has been
adopted almost in its entirety in the 1996 Act.[13]

This Act repealed all the three previous statutes. Its primary purpose was to encourage
arbitration as a cost-effective and quick mechanism for the settlement of commercial
disputes. It covers both domestic arbitration and international commercial arbitration.[14] It
marked an epoch in the struggle to find an alternative to the traditional adversarial system
of litigation in India.

The changes brought about by the 1996 Act were so drastic that the entire case law built up
over the previous fifty-six years on arbitration was rendered superfluous. Unfortunately,
there was no widespread debate and understanding of the changes before such an
important legislative change was enacted. The Government of India enacted the 1996 Act by
an ordinance, and then extended its life by another ordinance, before Parliament eventually
passed it without reference to Parliamentary Committee.

Arbitration, as practiced in India, instead of shortening the lifespan of the dispute resolution,
became one more “inning” in the game. Not only that, the arbitrator and the parties’
lawyers treated arbitration as “extra time” or overtime work to be done after attending to
court matters. The result was that the normal session of an arbitration hearing was always
for a short duration. Absence of a full-fledged Arbitration Bar effectively prevented
arbitrations being heard continuously on day-to-day basis over the normal working hours,
viz. 4-5 hours every day. This resulted in elongation of the period for disposal.

Veerappa Moily also said in the ADR congress held in the year 2010 that the 1996 Act,
although modeled along international standards, has so far proved to be insufficient in
meeting the needs of the business community, for the speedy and impartial resolution of
disputes in India.[15]
The Law Commission of India prepared a report on the experience of the 1996 Act and
suggested a number of amendments. Based on the recommendations of the Commission,
the Government of India introduced the Arbitration and Conciliation (Amendment) Bill, 2003,
in the Parliament. The standing committee of law ministry felt that provisions of the Bill gave
room for excessive intervention by the courts in arbitration proceedings.[16]

Similarities Between Arbitration and Conciliation

1. Alternative Dispute Resolution (ADR) Methods

Similarity: Both arbitration and conciliation are types of Alternative Dispute Resolution
(ADR), which means they are methods used to resolve disputes outside the court system.

Example: Instead of going to court, two parties in a family dispute might choose arbitration
or conciliation to solve their issues more quickly and privately.

2. Voluntary Process

Similarity: Arbitration and conciliation are both voluntary processes. Usually, parties agree to
use such methods through a contract or mutual consent.

Example: Two companies might agree in their contract that if a dispute arises, they will use
arbitration to resolve it instead of going to court.

3. Neutral Third Party Involvement

Similarity: Both processes involve a neutral third party to help resolve the dispute. In
arbitration, the third party is an arbitrator, while in conciliation, it is a conciliator.

Example: In a labour dispute, a neutral conciliator might help the employer and employee
find a solution, while an arbitrator may make a binding decision if conciliation fails.

4. Confidentiality

Similarity: Both arbitration and conciliation are highly confidential, in which the talks are
carried out, and the results are not widely known.

Example: If a company and a supplier go through conciliation to resolve a payment issue,

the details of the talks and any settlement will remain private.

5. Informal Process

Similarity: Both methods are less formal compared to court proceedings, which makes the
process fast and flexible.

Example: In a conciliation session, the conciliator may facilitate a discussion between the
parties to find common ground without strict formal rules, like in a courtroom.

6. Focus on Mutual Agreement

Similarity: Both arbitration and conciliation aim to resolve disputes in a way acceptable to all
parties involved, though they do so in different ways.

Example: In conciliation, the conciliator helps the parties reach a compromise, while in
arbitration, the arbitrator gives a final decision that both parties must accept.
 7. Legally Recognized

Similarity: Both arbitration and conciliation are legally recognized in many countries and
often come with enforceable outcomes.

Example: If a company agrees to settle through arbitration, the decision made by the
arbitrator is legally binding, just like a court judgment.

The Geneva Convention

The Geneva Convention of 1927 (formally known as the Convention on the Execution of
Foreign Arbitral Awards) was created to provide a more standardized approach to the
recognition and enforcement of foreign arbitral awards. The Convention was drafted to
address the growing need for an international framework that would reduce barriers to
enforcing arbitral awards across borders.

The main goal of the Geneva Convention was to simplify and facilitate the enforcement of
arbitral awards made in one country in other member states. By adhering to this convention,
signatory countries agreed to recognize and enforce arbitral awards made in other member
countries, subject to certain conditions.

Key Principles of the Geneva Convention:

Reciprocity: Countries that are signatories to the Geneva Convention agreed to enforce each
other’s arbitral awards under the principle of reciprocity. This means that a country would
only recognize and enforce awards from another country that reciprocates by doing the
same.

Public Policy Exception: The Convention allows countries to refuse enforcement of an award
if it is deemed to be contrary to the public policy of the country where enforcement is
sought.

Simplicity and Efficiency: The Geneva Convention was designed to simplify the process for
enforcing foreign arbitral awards, reducing the complexities associated with international
enforcement.

Legal Framework of Section 53

Section 53 provides clarity on how Geneva Convention awards should be interpreted for
enforcement in India. The section ensures compliance with India’s commitments under the
Geneva Protocol (1923) and the Geneva Convention (1927), which predate the New York
Convention.

Understanding the Scope of Section 53

Section 53 of the Arbitration and Conciliation Act, 1996 specifically deals with the Geneva
Convention awards and their interpretation in India. This section allows for the recognition
and enforcement of awards made under the Geneva Convention, following similar
procedures as those outlined for the New York Convention in Section 44.

According to Section 53, an arbitral award that has been made in a country that is a
signatory to the Geneva Convention is subject to enforcement in India, provided it meets
certain conditions, such as compliance with public policy requirements and the principle of
reciprocity.
Conditions for Enforcement of Geneva Convention Awards

In order to enforce a foreign award under Part II of Chapter II of the Arbitration and
Conciliation Act, 1996, Section 57(1) lays down five conditions. These are:

1. Arbitration agreement should be valid

Section 57(1)(a) of the 1996 Act provides that the foreign award would be liable to be
enforced only if such award is made in accordance with a valid arbitration agreement. The
test of the validity of the arbitration agreement would be in accordance with the law
applicable to the agreement. In the event that the arbitration agreement is invalid, then the
award too would not be enforceable.

2. Subject matter should be arbitrable

Section 57(1)(b) of the 1996 Act provides that the subject matter of the award must be
arbitrable as per Indian law. If the same is not arbitral in accordance with Indian law, then
the foreign award would not be enforceable.

3. Constitution of the tribunal and due process

Section 57(1)(c) of the 1996 Act provides that the award must be made by such an arbitral
tribunal as was provided in the submission to arbitration by the parties. Further, the
constitution of the tribunal should be in a manner as agreed by the parties. In doing so, it
should also conform to such laws as are applicable to the arbitration procedure.

4. Award must be final

Section 57(1)(d) of the 1996 Act states that the award sought to be enforced must have
attained the status of finality in the country in which It was made. By finality, the provision
means that the award should not be open to any form of opposition or appeal. For example,
a foreign award would be considered to have attained finality if the time period for
challenging the award by virtue of a proceeding had expired long before. Such an award
would be considered to have attained finality and would be enforceable.

5. Enforcement should not be against public policy

According to Section 57(1)(e) of the 1996 Act, if the enforcement of the foreign award is
against the public policy of India, then the award would be denied enforcement in India.
Further, Explanation 1 to Section 57(1)(e) clarifies what would be construed to mean public
policy for the purpose of this provision, Public policy, for the purposes of Explanation 1,
constitutes the following:

In the making of the award, either any element of fraud or corruption was present, or the
award violated Section 75 or Section 81 of the 1996 Act: or

 The award contravenes the fundamental policy of Indian law.

 The award conflicts with the basic notions of morality and justice.
 For the purpose of determining whether an award contravenes the fundamental
policy of Indian law, Explanation 2 to Section 57(1)(e) provides that there must not be
a review on the merits.