The Code of Civil Procedure (Amendment) Act, 1999 inserted Section 89 providing for settlement of disputes outside the Court and additionally inserted Rules 1 A, 1 B, 1 C to Rule 1 of Order X to the Code. Section 89 confers the jurisdiction on the court to refer a dispute to an ADR method, whereas Rules 1 A to 1 C of Order X lay down the way in which the jurisdiction is to be exercised by the court. The court explains the alternatives concerning ADR method to the parties, permits them to take a method by consensus, and if there's no consensus, proceeds to choose the method.
Dispute settlement outside the Court (Section 89)
Section 89 of the Code of Civil Procedure, 1908 provides for the settlement of disputes outside the Court and makes a provision that once it seems to the court that there exist components of a settlement which can be acceptable to the parties, the court shall formulate the terms of settlement and provide them to the parties for observations and when receiving the observations of the parties, the court could develop the terms of a doable settlement and refer for—
(c) Judicial settlement together with settlement through Lok Adalat; or
Further, Section 89 provides that when a dispute is referred for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the purview of the provisions of Arbitration and Conciliation Act, 1996. In case of Lok Adalat, the provisions of sub-section (I) of Section 20 of the Legal Services Authorities Act, 1987 shall apply.
In regard to the above provisions, a compulsory duty has been assigned to the civil courts to endeavour for settlement of disputes through an ADR procedure.
The objective of Section 89 is to confirm that the court makes an endeavour to facilitate out-of-court settlements through ADR processes before the trial commences.
Thus, Alternative Dispute Resolution (ADR) which at one time was thought of as a voluntary act on the part of the parties has currently obtained statutory recognition with the enactment of Arbitration and Conciliation Act, 1996, Legal Services Authorities Act, 1987, and also the incorporation of ADR mechanisms envisaged in Section 89 and Order X Rules 1 A, 1 B and 1 C within the Code of Civil Procedure, 1908 is an extra radical step taken by law-makers for promoting ADR in India. Thus, the Indian law-makers have currently created adequate provisions in law to facilitate introduction of ADR mechanisms in India.
There is flexibility within the use of ADR procedures. The flexibility is available within the procedure and also within the process to get to a decision .The solutions may be problem-specific. The rigidity of precedent as utilized in adversarial technique of dispute-resolution would not interfere in the way of finding solutions to the disputes with creative means.
Thus, the growth of ADR strategies can give access to several litigants. It’ll facilitate in reducing the excess work load that's placed on the judiciary. Once the cases unfinished before the judiciary become manageable, the courts would be able to improve the standard of their decisions. This would have a great impact in improving not only the access to justice but even the standard of justice.