Alternate Dispute Resolution in India
Alternate Dispute Resolution (ADR), mainly denotes a wide range of dispute resolution processes that act as a means of disagreeing parties to come to an agreement without using the means of litigation. It is a collective term which refers to the ways in which the parties can settle disputes, with the help of a third party. It is also known as external dispute resolution (EDR). ADR has gained widespread acceptance among both the general public and the legal profession in the recent years and is also being adopted as the means to help settle disputes alongside court system itself. It is a form of dispute resolution which has two other forms, namely: Traditional Dispute Resolution and the Hybrid Methods of Dispute Resolution. The Traditional Dispute Resolution refers to the most commonly used means of litigation, while the Hybrid Methods of Dispute Resolution refers to a cross-over between the other two forms of dispute resolution.
Alternate Dispute Resolution in India has been in existence since the previous Arbitration Act of 1940 and hence it isn’t a fresh unknown concept. The urgent need to evolve mechanisms to reduce the burden of courts and provide speedy access to justice led to the introduction of Section 89 in the Code of Civil Procedure, 1908 and consequently the Arbitration & Conciliation Act, 1996. The Act has been enacted to aid the mandates of the UNCITRAL Model. Section 89(1) of CPC provides for settlement of disputes outside the court. In simpler words, it provides that where the court apprehends that there are certain terms which may be acceptable by both the parties, then it may refer the same for arbitration, conciliation and mediation for possible settlement.
The various modes of ADR are:
There has to be a valid Arbitration Agreement between the parties prior to the emergence of a dispute for the process of arbitration to exist. In this method of dispute resolution, the parties refer the dispute to a third party, who is appointed as an arbitrator. It must be noted that the arbitrator is appointed by either party to the dispute and if the other party does not approve of the said arbitrator, the party can approach the Chief Justice for the appointment of the arbitrator. The decision of the arbitrator is binding on both the parties and his decision is given in the form of an award. It is important to point out that an arbitration tribunal has jurisdiction over its own jurisdiction. Therefore, if either of the parties is unhappy with the arbitral award then Section 34 of the Arbitration & Conciliation Act provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award.
Mediation is a form of Alternate Dispute Resolution wherein a third party which is neutral attempts to aid the disputing parties in reaching a mutually acceptable agreement by using the means of negotiation and communication. It is the most simple and uncomplicated mode of dispute resolution where the third party acts a mediator to resolve the dispute between the parties. The process of mediation is completely controlled by the parties since the mediator only acts as a medium to facilitate the process of reaching a mutually acceptable agreement. His suggestions or decisions are not binding on either of the parties.
Conciliation is similar to arbitration but it is less formal in nature. In this process the parties to the dispute use a conciliator, who meets each party separately to reach an amicable resolution of the dispute. The intention behind meeting each party separately is to reduce the tension between them, improve communication and to also interpret the dispute in a way to bring about a settlement. Conciliation is different from arbitration since it does not require a prior agreement between the parties and also the suggestions of the conciliator are not binding on the parties.
While the judicial system is the most sought after and is considered to be the most fair, the large backlog in cases which are yet to be heard and frequent adjournments result in considerable delays. Hence, Alternate Dispute Resolution System is becoming the first choice for resolving disputes and is on the way of becoming the new norm.