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Majority of Indian Courts are flooded by adjournments, revisions, appeals, and cross
appeals; on an average a civil case takes anything from about 5 to 8 years for its final
disposal & causes are not wanting when cases have lingered in courts for 15 to 20 years.
The workload of Indian Judiciary increased by leaps and bounds and has now reached a
stage of unmanageable magnitude, which has in fact led to a large backlog of cases.2
In Surjit Singh’s Case3 , the Supreme Court expressed its anguish for such long delay, as
the particular case was lying pending in the civil court at Patiala with no sight of its
finalization.
It was in fact the common man’s disgust for traditional court litigation, which led to the
evolution of alternate methods of dispute resolution.
To quote, Mr. Justice V.R Krishna Iyer 4 “Interminable, time consuming, complex and
expensive court procedure impelled jurists to search for an alternate forum less formal,
more effective and speedy for resolution of dispute avoiding procedural clap trap led to
the Arbitration act.
1
http//Pib.nic.in/archive/ireling/Iyr2002/rjan 2002/r070/20022 html
2
Arbitration And Alternate Dispute Resolution, Dr. N.V. Paranjape ,Third Edition
3
Surjeet Singh & Others vs. Harbans Singh & Others, AIR 1996 SC135
4
Judge Supreme Court of India
1
Malimath Committee’s, Recommendations for Dealing with Increase of Arrears in
Litigation:
The Indian Judicial System has been stretched almost to a breaking point right from apex
court to lower subordinate courts, thus with a view to remedy this anomaly “ The
Malimath Committee ,also known as the arrears committee ,undertook a comprehensive
review of the working of the court system ,particularly all aspects of arrear and law’s
delay in addressing such concerns .It also made various useful recommendations for
reducing litigation and making justice readily accessible to people at minimum cost of
time and money .5
In its recommendations for reducing backlog of cases pending in various courts, The
Malimath committee underlined the need for adopting an alternate dispute resolution
mechanism, for encouraging Arbitration ,Mediation, Conciliation and Lok Adalats, as a
viable alternative to conventional court litigation, In its view such alternate dispute
resolution mechanism were capable of going a long way in restoring confidence of
people and establishing rule of law , which is in fact a key objective of our constitution.
Alternate Dispute Resolution, is a procedure for settling a dispute by means other than
litigation, such as arbitration, mediation or mini-trial 6
The purpose of ADR is to resolve the conflict in a more cost effective and expedited
manner, while fostering long term relationships. ADR is in fact a less adverse means, of
settling disputes that may not involve courts. ADR involves finding other ways (apart
from regular litigation) which act as a substitute for litigation and resolve civil disputes
,ADR procedure are widely recommended to reduce the number of cases and provide
cheaper and less adverse form of justice, which is a lesser formal and complicated
system. Off late even Judges have started recommending ADR to avoid court cases.7
5
Malimath committee (1989-1990) was headed by Hon’able justice PD Desai and Hon’able Justice AS
Anand.
6
Black’s Law Dictionary-17th Edition
7
www.slideshare.net
2
Historical Background of Development of ADR:
To Quote, Victor Hugo: An Invasion of Armies can be resisted, but not an idea whose
time has come. The time to settle disputes through ADR has quietly and irresistibly come.
Alternate Dispute Resolution has become an indispensable need for today‘s world,
Our Court’s are already overburdened by arrears which appear to be insoluble in near
future, Cases are increasing in courts in a super fast speed and the courts have proved to
be helpless in rendering speedy justice in majority of the pending cases, so much so that:
A resolution had been adopted by the Chief Minister and the Chief Justices of The High
Court on 4th of December 1993,declaring that the courts were not in a position to bear the
entire burden of the justice system and that a no. of disputes would be better settled, if
resolved by alternative modes like; Arbitration, Mediation and Negotiation ,
Alternate to dispute resolution need to have procedural flexibility in order to save time,
money and avoid miseries and delays associated with conventional trial, under the
scheme of ADR the litigants are in fact encouraged to resort to alternative dispute
resolution, so that the actual court systems would be left with a smaller number of
important disputes that demand judicial attention. Consequently ADR has received a
grand welcome in each and every field in which it has ventured.
The closing years of the 20th century witnessed a world wide change, towards the
growing trend of resolving problems of disputants; it was during this time that the
popularity of ADR methods as a good substitute for conventional judicial convention
gained popularity.
Most countries including India have accepted Arbitration, Mediation and Conciliation as
the best ADR techniques for resolution of civil disputes, particularly those relating to
money suits, injunctions and specific performance of contracts.
A D R as a mode of dispute resolution has been quite popular with the business
community, Due to globalization of economy and competitive market policy; there has
been a tremendous increase in trade, commerce and industry, which has resulted in a
surge in disputes pertaining to commercial transactions and businesses. Business
community and industrial entrepreneurs cannot afford to indulge in protracted litigation
and thus prefer to get their disputes settled through ADR.
To Quote, Mr. Justice A.M.Ahmadi8 ,While we encourage ADR Mechanisms ,we must
create a culture for settlement of disputes through these mechanisms , unless members of
bar encourage their clients to settle their disputes through negotiation ,such mechanism
cannot succeed.
8
Former chief Justice of India
3
Thus to summarize the above discussion ADR shall be instrumental in tackling the
menace and monstrosity of what is known as Docket Explosion-,”An unmanageable
upsurge in the number of pending cases , before regular courts.9
Arbitration alone is not ADR; ADR may be through the following modes of ADR:
• Mini Trial: A Non-binding procedure in which the disputing parties are presented
with summaries of their cases, so as to enable them to access the strengths,
weaknesses and prospects of their case and then an opportunity to settle it is
explores.
• Lok Adalats: Besides the above , Lok Adalats are also doing well as a mode of
alternate dispute resolution system
4
particularly if a government body is involved. An ombudsman can only
recommend as to how a dispute may be resolved, however his/her
recommendations cannot be enforced.
• Tribunals: Tribunals are similar to a court without the ritual or formality they,
there are a no. of specialized tribunals which bear the name of their specialization,
eg: Employment Tribunal, Immigration Tribunal.
Scope of ADR:
Under ADR, a dispute may be settled out of court and that too without litigation, however
ADR system applies to only those disputes, as have arisen out of a legal relationship
which may or may not be contractual.
• Speed: ADR is far quicker than the traditional litigation methods of going to
courts, certain types of ADR supply very quick solutions, and ensure that the legal
system can operate more quickly with lesser damage.
• Economy of Cost: ADR proceedings tend to be less formal and expensive than
traditional litigation, more particularly because, in most cases ADR processes are
successful in avoiding the expenses incurred for engaging court barristers or
solicitors.
• Expertise: In ADR experts are frequently used, in matters where judges are
unlikely to have expert knowledge.10
10
www.slideshare.net
5
• ADR System Is Devoid Of Corruption: ADR system is bereft of corruption,
which is on and off found and of whose existence there is always a likely
apprehension in any of the traditional justice systems.
• Free From Prejudice: Since both parties to ADR come to terms on mutually
agreeable terms, & that too out of their own free will, without having any fear of
consequences of winning or losing, the system on a whole is quite free from
prejudice.
• Choice of Decision Maker: The Choice of selecting the mediator and the
arbitrator lies with the parties and they are free to appoint any mutually agreeable,
expert to adjudicate over any issue in dispute.
• ADR Is Capable of Achieving Results That Meet the Needs of All the Parties
Involved, at least in some measure.11
11
www.newperimeter.com
6
Disadvantages of Alternate Dispute Resolution Mechanism:
Even though ADR has many benefits, yet it is pertinent to disclose its disadvantages, not
with the aim of criticizing the system, but rather with a positive mission of further
betterment of this hugely popular dispute resolution system:
The Key Pit Falls Of ADR, Needing The Attention Of Legislatures Are:
• ADR Decisions Lack The Force of Precedent: In ADR precedent has no value,
and consequently under ADR, precedents are not given much importance.
• Extra Cost Where ADR Is Unsuccessful: If ADR does not work then court
action is required, this is often followed by an extra costs that all such process
entail.
7
Common Modes of Alternate Dispute Resolution and Their Importance:
(Explanation)
Importance given to ADR in Indian Context can be gauged from the fact that Civil
Procedure Code, 1908 has laid down that the cases must be encouraged to go for ADR12
After due deliberation and several trials Arbitration and Mediation emerged as the most
common modes of ADR, though Conciliation and Negotiation also comprise of ADR,
they are however seldom used.
Arbitration is a method of dispute resolution involving one or more neutral third parties
who are usually agreed to by the disputing parties and whose decision is binding14
12
Section-89 CPC,1908,Amended and implemented in 2002,enables the court to refer to arbitration or
conciliation any matter, where there is a possibility of settlement
13
www.legalserviceindia.com
14
Black’s Law Dictionary -17th Edition
8
Scope of Arbitration:
Scope of Arbitration is quite wide, thus a karta of a HUF, a Company and parties to an
arbitration agreement can all submit their disputes to arbitration.
“Intermediate time consuming, complex and expensive court procedures impelled jurists
to search for an alternative forum less formal, more effective and speedy for resolution of
disputes, by avoiding procedural clap trap, led to the arbitration act.
Types of Arbitration:
9
Types of Disputes Which Can Be Referred To Arbitration, For Redressal through
Arbitration as a Mode of ADR:
Almost any type of civil dispute can be settled by ADR, Disputes related to Business,
Contract, Construction, Commercial recoveries, Family disputes, Property and Insurance
are some of the disputes open to resolution by Arbitration as a mode of ADR.
• Criminal offences.
Supporters of Arbitration hold that it has a multitude of advantages over the regular court
litigation, The Advantages of Arbitration as a mode of ADR can be summarized as
follows:
10
• Privacy: Arbitration hearings are confidential private meetings in which
attendance of media and members of public is not permitted and even final
decision of such proceedings is not published, this procedure is particularly
beneficial to those who don’t wish to wash their dirty linen in public, and has
consequently become a routine with corporate enterprises.
• Convenience: Arbitration hearings are arranged at times and places which suit
the parties, arbitrators and witnesses.
• Finality: There is as such no right of appeal in arbitration, even though the court
has the power to remit or set aside the arbitration, more or less the award of an
arbitrator is final.
Drawbacks of Arbitration:
11
Mediation as Mode of Alternate Dispute Resolution:
Mediation is basically negotiations carried out with the assistance of a neutral third party;
however recommendations of a mediator are not binding.
• Law Mandates mediation and the courts encourage and enforce it.
• Mediation as a mode of ADR is voluntary and parties to mediation can at any time
opt out of mediation, if it does not help.
• Mediation makes the disputing parties aware of the strengths and weaknesses of
their case and helps them find a realistic solution.
• Parties to mediation can, in fact opt for more by signing a settlement that works to
the benefit of both the aggrieved as well as his opponent.
15
Black’s Law Dictionary- 17th Edition
16
Samadhan
12
• At the end of the mediation, the relationship of the parties can be restored to a
position as had existed before the culmination of such a dispute.
A Mediator plays an active role in settling the dispute between parties to mediation: Some
of the Key roles played by a mediator for settling the conflict between the disputing
parties are as follows:
Any Democracy worth the name must provide adequate means of dispute resolution.
Settlement of disputes by mutual compromise is a much better method, than seeking
adjudication in the adversary legal system. The System of conciliation was for the first
time tried in Japan, France and Norway. In India the idea of conciliation was evolved on
an experimental basis by the High Court of Himachal Pradesh.
17
Black’s Law Dictionary-17th Edition
13
Conciliation as a Beneficial Means of ADR
Conciliation as a means of alternate dispute resolution has stood the test of time and has
emerged as a beneficial mode for sharing the burden of litigation by encouraging quick
amicable settlement of disputes. Conciliation has minimized the pendency of old cases
and has been instrumental in ensuring that litigation is brought to an end by resorting to a
mutually acceptable and amicable settlement of issues pending litigation.
With a view to relieve regular courts of the excessive overflow of litigation, certain
categories of cases with reasonable possibility of amicable settlement are transferred to
conciliation courts ,which in fact do their best to assist parties to dispute to arrive at a
mutually agreeable reconciliation.
A settlement agreement reached by parties to conciliation has a status and effect similar
to an arbitral award.
The liberty given to civil courts under sec-89 of CPC, to refer a dispute for conciliation
even where the parties do not consent, provided the court in all earnestness deems it fit
for conciliation, has been one of the most important reasons for the phenomenal success
of conciliation as a key alternate dispute resolution procedure.
Drawbacks of Conciliation
• Once litigation starts there will rarely be negotiations as litigants have already
invested some money and would not be willing to give up their chance of
winning.
• In addition to this lawyers of both sides, who charge their fee on the basis of
every appearance, would have no incentive for considering any possible
compromise.
14
How Does a Mediator Differ From A Conciliator:
Conciliator is understood as one who simply passes on what each party state to the other,
without any proposals emanating from him for settlement, while on the other hand in case
of mediation a third party intermediary puts forward different alternative proposals for
arriving at a settlement.
It becomes quite difficult to maintain a clear line of demarcation between mediation and
conciliation.
Generally a mediator is likely to make directly or indirectly, some basis for settlement.
Thus consequently what was purely mediation may slowly slide in to conciliation while
on the other hand a conciliator may slowly assume the passive role of a mediator.
Negotiation is the most common mode by which parties resolve their disputes without
ever coming to the notice of third parties. Everyday several disputes are being resolved
through negotiations.
In true sense of the term negotiation entails bargaining, which is some what similar to an
agreement between disputing parties.
During the course of negotiation each party endeavors to obtain the best possible solution
in its favor, and with a view to accomplish this, each of them puts forward the minimum
it is prepared to accept in settlement of mutual claims or the limits of the maximum
which it is prepared to concede.
In Instances where either party adheres to its demand or concession which it is prepared
to make and the other party does not accept such demand or concession, then in such a
situation there is a breakdown of negotiation.
However on the other hand where the parties agree on mutually acceptable terms, then in
such situation the dispute shall be deemed to have been resolved.
15
Lok- Adalat as a Means for Alternate Dispute Resolution:
The Lok-Adalat is an old form of adjudicating system that prevailed in ancient India and
its validity has not been taken away even in modern days ,The word Lok-Adalat means
people’s Court, this system is based upon the Gandhian Principles .It is one of the
components of ADR Systems ,as the Indian courts are over burdened with backlog of
cases and regular courts decide cases involving lengthy ,expensive, and tedious procedure
courts take years together to settle even petty cases ,Lok-Adalat therefore provides
alternative resolution or device for expeditious and inexpensive justice. The Lok-Adalat
system was introduced in India at the beginning of the 1980’s, starting from the state of
Gujarat, the Lok Adalat System evolved as a means of alternate Dispute resolution.
Though meant to settle disputes at grass root level, in traditional manner, yet it became
popular as an ADR mechanism for improving access to justice and for alleviating
institutional burden of regular law courts.
It has been generally agreed that the adverse model of judicial adjudication has proved to
be inadequate to meet the needs of Indian rural masses, which by and large are poor,
indigent, illiterate and unfamiliar with formalities of legal procedure.
Thus there arose a dire need for a more conciliatory, less formal, more client friendly and
consensual mode of alternate dispute resolution mechanism for making access to justice
as more humane, simple and effective.19
18
PT Thomas vs Thomas Job, AIR 2005 SC 3575
19
Lok-Adalats came into vogue, with the passing of the Legal Services Authority Act of 1987.
16
Functioning of Lok-Adalat as an Alternative Dispute Resolution Body:
• Lok-Adalats ensure procedural flexibility and speedy trial of dispute, and there is
no strict application of procedural laws like Civil Procedure Code and Evidence
Act., while assessment of claims by Lok-Adalat.21
• Parties to dispute can directly, through their counsel interact with the Judges,
which is in fact not quite possible in regular court of law.22
• Another beneficial feature of Lok-Adalat lies in the fact that, in instances where
no settlement or compromise has been arrived through conciliatory methods of
Lok –adalat, then the matter shall be returned to that very court which had
referred such matter to a lok-adalat, and on such an occasion that court shall
proceed to deal with such a case from the very stage, which had been reached
before such reference was made.
• In order to grant finality to the awards passed by The Lok Adalats. The Legal
Services Authority Act of 1987 has laid down that no appeal shall be preferred
against such award.23
20
PT Thomas vs. Thomas Job ,AIR 2005 SC 3575
21
PT Thomas vs. Thomas Job ,AIR 2005 SC 3575
22
PT Thomas vs. Thomas Job ,AIR 2005 SC 3575
23
Section-21(2)Legal Service Authority Act 1987
17
• Award of Lok Adalat is binding upon the parties and has the status of a decree of a
civil court. It is non –appealable which in fact prevents any delay in final
settlement of disputes.24
• Lok Adalats are a boon to the litigating public ,as they can get their disputes
settled fast and free of cost and that too amicably25
Lok-Adalats have been quite instrumental in dealing with compoundable cases involving:
Motor Vehicle Accident Claims, Labor, Banking, Insurance and a host of such other
matters.
Off late various specialized types of Lok-Adalats are being organized to dispense with
particular types of cases involving Motor Accident Claim Settlement Lok-Adalat,
Pension, Women and Electricity Lok-Adalats.
The experiment of Lok Adalats as a means of Alternate Dispute resolution has proved
fairly successful, in view of the fact that they provide cheaper, quicker and consumer
friendly remedies.
As these settlements are based upon, free consent of parties and are not opposed to public
policy, there arise no challenges to their enforceability.
While Arbitration and Judicial settlement involve a decision by a third party, which is
based upon finding of fact and applicability of relevant legal rules and principles to the
facts so determined.
Though in negotiation a party may adopt a recalcitrant attitude and may prevent a
settlement, however in case arbitration and judicial settlement that is not possible,&
generally Award of an arbitrator is a necessary outcome which is imperative and binding
upon the parties, particularly so because award or decision is based upon the jurisdiction
or power vested in Arbitrator or court.
24
PT Thomas vs. Thomas Job ,AIR 2005 SC 3575
25
PT Thomas vs. Thomas Job ,AIR 2005 SC 3575
18
Unlike negotiation, in arbitration gain or success of one party is loss of the losing party.
Case Laws Indicating Instances Where Judiciary Has Ruled In Favor of Alternate
Dispute Resolution:
It was held that, when ever there is an arbitration clause in acontract, aggrieved parties
must have recourse to the provisions of the arbitration act and that being a complete code
in itself, parties cannot approach High Court, with a petition under Art-226.
The Stage for ADR was set up in the early 1930’s, the Privy Council decision in
Sitana vs. Viranna, highlights the beginning of the germination of the idea of ADR;
In Sitanna Vs Viranna, the Privy Council affirmed the decision of panchayat, and Sir
John Wallis observed that the reference to a village panchayat is the time honored method
of deciding disputes. It avoids protracted litigation and is based on the ground realities
verified in person by the adjudicators and the award is fair and honest settlement of
doubtful claims based on legal and moral grounds.27
It was held, that the experiment of Lok-Adalat as an alternate mode of dispute settlement
has come to be accepted in India as a viable, economic, efficient and informal one.
In one of the orders passed in this judgment it was recorded that the cabinet secretary has
issued instructions to all departments of Government of India as well as PSU’s that all
disputes “regardless of type, should be resolved amicably by mutual consultation or
through good offices of empowered agencies of the government or through arbitration
and recourse to litigation should be eliminated.
26
AIR 1989,Kant 1989(1)Arb35Lr 270
27
AIR 1934 SC 105
28
AIR 2005 SC 3575
29
1995 Supp(4)SCC 541
30
AIR 2005 Ker 64
19
In Salem Advocate Bar Association Tamil Nadu vs. UOI 31
It was held that, keeping in mind the laws delays and the limited number of judges
,which are available ,it has now become imperative that resort should be had to ADR,
with a view to bring an end to litigation at an early date .In this very case it was
highlighted ,that ADR mechanism contemplated by Section 85 of CPC32 is arbitration
,conciliation ,judicial settlement including settlement through lok adalat and mediation.
Here in it was held that ADR is inevitable in one form or the another form in view of
global unquestionable phenomenon because court of law some times becomes suit for life
,litigation in the present set up and mechanism has become expensive and time
consuming and dispensation of justice has become slow. It is reported that out of 192
Countries, which are members of UN, 133 Countries have successfully implemented
ADR in one form or the other, with encouraging and rewarding success.
Conclusion:
Not even invading armies can stop an idea whose time has come, the time for Alternate
Dispute Resolution, as a means to assist regular court litigation has arrived. The Concept
of resolution of disputes through modes other than ,those involving time consuming
technical procedures ,though initially started on an experimental basis ,has in fact gained
immense popularity.
31
AIR 2003(1) SCW 4627
32
Civil Procedure Code
33
2002(144) ELT 18 (Guj)
20
Thus it would not be wrong to summarize that “In true sense of the term alternate dispute
resolution has emerged as a life saving pill for our ailing judicial system, ADR by dealing
with simple cases has in fact spared to the regular courts, some extra time to deal with
more technical and complex judicial matters, and by doing so it has in fact been quite
successful in achieving its desired purpose of relieving the regular courts of their growing
backlog of cases.
At this juncture it would not be wrong to conclude by saying that” the system of alternate
dispute resolution has emerged as a more humane face of regular litigation, the mere
mention of which in fact quite capable of sending a chill down the spine of many a
person.
The era of Alternate Dispute Resolution has dawned on our societies, and encouragement
of newer forms of Alternate Dispute resolution like MEDOLA, Mini Trial & other such
initiatives would be in the best interests of our society.
21
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