Alternative Dispute Resolution is an alternative method of dispute settlement in which an independent, objective and impartial third party help the parties of the dispute to reach an agreement about the dispute by bringing them together and helping them to communicate with each other.
ADR has come up as an option for providing cost and time-efficient justice as compared to the judicial proceedings. ADR is an optional dispute resolution and it aims at simpler and faster resolution of the disputes without impairing the judicial sovereignty of the state.
The main methods of ADR used in India are:
Arbitration is governed by The Arbitration and Conciliation Act, 1996. It is a form of dispute resolution where one or more parties are appointed to settle the dispute acting as third parties. The third-party should be neutral and this party is referred to as an ’arbitrator’ while the decision of the arbitrator, is known as 'Arbitral award’.
The arbitration proceedings are informal and this process allows the dispute to be resolved amicably and efficiently. It takes less time and involves lesser costs for the parties. Therefore, parties frequently choose to arbitrate when disputes arise, especially in the business world. Big corporations prefer to settle disputes quickly, rather than fighting long cases in the courts.
Before the arbitration process begins, an arbitration agreement is required to be formed. This agreement lays down the terms and conditions on which the arbitration process is carried out. It is determined through this agreement as to how the process will be made cheaper, efficient and how the rules of evidence would be applied. Arbitral decisions are binding on the parties, who have limited scope of objecting to the decisions unless specified otherwise.
Mediation is a process where an impartial third party aims to assist two or more people to help in settling the dispute. It is a simple and uncomplicated negotiation process where the third party acts as a mediator to resolve the dispute amicably by using appropriate communication and negotiation techniques. Mediator’s work is to facilitate the parties to settle their dispute. The mediator doesn’t impose his views and does not decide what a fair settlement should be.
Conciliation is a form of arbitration which is less formal. It is the process of facilitating an amicable 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 the communication to bring about a negotiated settlement There is no need of prior agreement and cannot be binding on the party who is not intending for conciliation.
Lok Adalat is one of the most popular alternative dispute resolution mechanism in India. It is a forum where cases pending in a court of law are settled. It has been given statutory status under the Legal Services Authorities Act, 1987. Lok Adalat is presided over by a sitting or retired judicial officer, social activists or honorary members of the legal profession as the chairman. National Legal Service Authority (NALSA) alongside 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 any court of law is often referred to Lok Adalat. There is no rigid procedure followed, which makes the process fast. If any matter pending in the court of referred to the Lok Adalat and is settled subsequently, the court fee paid in the court when the petition filed is also refunded back to the parties.
There are many other dispute resolution methods, such as Mediation-Arbitration, Summary Jury Trial etc. But Arbitration, Mediation and Lok Adalats are the most popular methods of ADR in India. Throughout the world, ADR is becoming the favoured choice for parties. ADR procedures are collaborative and allow the parties to understand each other's positions. ADR allows the parties to return with creative solutions that a court might not be allowed to impose.