IS DISPUTE RESOLUTION BY ADR METHOD A RECENT

PHENOMENON?

Submitted in partial fulfilment of B.A L.L.B

(Alternative Dispute Resolution Project)

Submitted to- Submitted by-

Ms. Kulpreet Bhullar Ayushi Vohra
1403
5th Year; Section A
Acknowledgment

I would like to express my special thanks of gratitude to my teacher Ms. Kulpreet Bhullar as
well as our principal Ms. Tejinder Kaur who gave me the golden opportunity to do this
wonderful project on the topic ‘Is dispute resolution by ADR method a recent problem?’,
which also helped me in doing a lot of Research and I came to know about so many new
things I am really thankful to them.

Secondly I would also like to thank my parents and friends who helped me a lot in finalizing
this project within the limited time frame.
Index

S.No. Topic
1. Introduction
2. History
- During British Period
-Post Independence
3. Need
4. Merits
5. Demerits
6. Bibliography
Introduction
Dispute resolution is an indispensable process for making social life peaceful. Dispute
resolution process tries to resolve and check conflicts, which enables persons and group to
maintain co-operation. It can thus be alleged that it is the sin qua non of social life and
security of the social order, without which it may be difficult for the individuals to carry on
the life together.1

Alternative Dispute Resolution (ADR) is a term used to describe several different modes of
resolving legal disputes. It is experienced by the business world as well as common men that
it is impracticable for many individuals to file law suits and get timely justice. The Courts are
backlogged with dockets resulting in delay of year or more for the parties to have their cases
heard and decided. To solve this problem of delayed justice ADR Mechanism has been
developed in response thereof.

Alternative Dispute Redressal methods are being increasingly acknowledged in field of law
and commercial sectors both at National and International levels. Its diverse methods can
help the parties to resolve their disputes at their own terms cheaply and expeditiously.
Alternative Dispute Redressal techniques are in addition to the Courts in character. It
techniques can be used in almost all contentious matters, which are capable of being resolved,
under law, by agreement between the parties. Alternative dispute redressal techniques can be
employed in several categories of disputes, especially civil, commercial, industrial and family
disputes.2

The goal of Alternative dispute redressal is enshrined in the Indian Constitution’s preamble
itself, which enjoins the state: “to secure to all the citizens of India, justice-social, economic
and political-liberty, equality and fraternity”. 3

The Law Commission of India in its 14th Report categorically stated that, the delay results
not from the procedure laid down by the legislations but by reason of the non-observance of
many of its important provisions particularly those intended to expedite the disposal of
proceedings. The Supreme Court made it clear that this stage of affair must be addressed: ‘An
independent and efficient judicial system in one of the basic structures of our constitution…

1 Park and Burger, Introduction to the Science of Sociology p. 735

2 Hindu Marriage Act 1955, Industrial Dispute Act, 1947, The Code of Civil Procedure, The Family Court Act
1984
3 The Preamble of Indian Constitution
It is our Constitutional obligation to ensure that the backlog of cases is declared and efforts
are made to increase the disposal of cases.”4

Wide range of process are defined as alternative dispute redressal process often, dispute
resolution process that are alternative to the adjudication through Court proceedings are
referred to as alternative dispute resolution methods. These methods usually involve a third
party referred to as neutral, a skilled helper who either assists the parties in a dispute or
conflict to reach at a decision by agreement or facilitates in arriving at a solution to the
problem between the party to the dispute.

The term “Alternative Disputes Resolution” takes in its fold, various modes of settlement
including, Lok Adalats, Arbitration, Conciliation and Mediation. This technique of
Alternative Disputes Resolution has been used by many countries for effective disputes
resolution. The most common types of Alternative Disputes Resolution is Mediation. In, fact
mediation had been described by some as the most Appropriate Dispute Resolution method.
Mediation as a tool for dispute resolution is not a new concept. To put it in simple terms,
mediation is an amicable settlement of disputes with the involvement of a neutral third party
who acts as a facilitator and is called a ‘Mediator”.

ADR is usually less formal, less expensive and less time consuming than regular trial. ADR
can also give people more opportunity to determine when and how their dispute will be
resolved.

History

India has a long history of settlement of disputes outside the formal justice delivery system.
The concept of parties settling their disputes by reference to a person or persons of their
choice or private tribunals was well known to ancient India. Long before the king came to
adjudicate on disputes between persons such disputes were quite peacefully decided by the
intervention of the kulas, srenis, pugas and such other autonomous bodies. These traditional
institutions worked as main means of dispute resolution, not an alternative. During the British
rule the system of dispute resolution was changed and a new formal, adversary system of
dispute resolution originated. Arbitration was recognised as out of court method of dispute
resolution and several provisions were enacted relating to that. The ADR system as is
understood in the present scenario is the result of the shortcomings of that formal judicial

4 Brij Mohan Lal vs. Union of India & Other (2002-4-scale-433), May 6, 2002
system. Now the alternative disputes resolution techniques are being used to avoid the costs,
delays and cumbersome procedure of the formal courts.

Alternative Dispute Resolution during British Period:

Judicial administration was changed during British period. The current judicial system of
India is very close to the judicial administration as prevailed during British period. The
traditional institutions worked as recognised system of administration of justice and not
merely alternatives to the formal justice system established by the British. The two systems
continued to operate parallel to each other.5 The system of alternate dispute redressal was
found not only as a convenient procedure but was also seen as a politically safe and
significant in the days of British Raj. However, with the advent of the British Raj these
traditional institutions of dispute resolution somehow started withering and the formal legal
system introduced by the British began to rule.

Alternate Dispute Resolution in the present form picked up pace in the country, with the
coming of the East India Company. Modern arbitration law in India was created by the
Bengal Regulations. The Bengal Regulations of 1772, 1780 and 1781 were designed to
encourage arbitration.6 Bengal Resolution Act, 1772 and Bengal Regulation Act, 1781
provided parties to submit the dispute to the arbitrator, appointed after mutual agreement and
whose verdict shall be binding on both the parties. Hence, there were several Regulations and
legislation that were brought in resulting considerable changes from 1772. After several
Regulations containing provisions relating to arbitration Act VIII of 1857 codified the
procedure of Civil Courts except those established by the Royal Charter, which contained
Sections 312 to 325 dealing with arbitration in suits. Sections 326 and 327 provided for
arbitration without the intervention of the court. After some other provisions from time to
time Indian Arbitration Act,1899 was passed, based on the English Arbitration Act of 1889. It
was the first substantive law on the subject of arbitration but its application was limited to the
Presidency – towns of Calcutta, Bombay and Madras. Act, however suffered from many
defects and was subjected to severe judicial criticisms. In 1908 the Code of Civil Procedure
was re-enacted. The Code made no substantial changes in the law of arbitration. The
Arbitration Act of 1940 was enacted replacing the Indian Arbitration Act of 1899 and section
89 and clauses (a) to (f) of section 104(1) and the Second Schedule of the Code of Civil
5 Sarvesh Chandra, ADR: Is Conciliation the Best Choice, in P.C. Rao and William Sheffield (eds.), Alternative
Dispute Resolution: What it is and How it Works, Universal Law Publishing Co., New Delhi, (1997) p. 85.
6 Nripendra Nath Sircar, Law of Arbitration in British India (1942), p. 6 cited in 76’th Report of Law
Commission of India, 1978, p. 6, para 1.14
procedure 1908. It amended and consolidated the law relating to arbitration in British India
and remained a comprehensive law on Arbitration even in the Republican India until 1996.

Alternative Dispute Resolution Post Independence:

Bodies such as the panchayat, a group of elders and influential persons in a village deciding
the dispute between villagers are not uncommon even today. The panchayat has, in the recent
past, also been involved in caste disputes. In 1982 settlement of disputes out of courts started
through Lok Adalats. The first Lok Adalat was held on March 14, 1982 at Junagarh in Gujarat
and now it has been extended through out the country. Initially, Lok Adalats functioned as a
voluntary and conciliatory agency without any statutory backing for its decisions. By the
enactment of the Legal Services Authorities Act, 1987, which came into force from
November 9, 1995, the institution of Lok Adalats received statutory status. To keep pace with
the globalization of commerce the old Arbitration Act of 1940 is replaced by the new
Arbitration and Conciliation Act, 1996. Settlement of matters concerning the family has been
provided under Order XXXIIA of the Code of Civil Procedure, 1908 by amendment in 1976.
Provisions for making efforts for reconciliation under Sections 23 (2) and 23 (3) of the Hindu
Marriage Act, 1955 as also under Section 34 (3) of the Special Marriage Act, 1954 are made.
Family Courts Act was enacted in 1984. Under Family Courts Act, 1984 it is the duty of
family court to make efforts for settlement between the parties. Introduction of section 89 and
Order X Rule 1A, 1B and 1C by way of the 1999 Amendment in the Code of Civil Procedure,
1908 is a radical advancement made by the Indian Legislature in embracing the system of
“Court Referred Alternative Disputes Resolution”.

Need

Alternative dispute resolution offers efficiency and can enhance the quality of dispute
resolution by permitting a wider array of outcomes and more client participation. Alternative
dispute resolution is growing nationwide, providing individuals and businesses with cheaper,
faster ways to resolve disputes. Our courts follow the adversarial method of adjudication,
which uses a neutral decision-maker (judge) who adjudicates disputes after they have been
aired by the adversaries in contested proceedings.

Some judicial systems require the parties to negotiate, conciliate, mediate or arbitrate, prior
to court action. In voluntary processes, submission of a dispute to an alternative dispute
resolution process depends entirely on the will of the parties. Therefore, this explains the
need for alternative dispute resolution in India. In a country, which aims to protect the socio-
economic and cultural rights of citizens, it is extremely important to quickly dispose the cases
in India, as the Courts alone cannot handle the huge backlog of cases. This can be effectively
achieved by applying the mechanisms of alternative dispute resolution.

The purpose of alternative dispute resolution is to encourage the peaceable/satisfactory

resolution of disputes and litigation through voluntary settlement procedures. A dispute
between two or more parties is usually based upon a difference in perception of
rights/obligations and expectations between individuals or corporations. The ultimate goal is
to resolve disputes and arrive at a consensus – a mutually acceptable agreement that takes
into consideration the interests of all concerned parties. Alternative dispute resolution is also
suitable, in fact require, where factors of confidentiality and privacy come into play. Family
disputes are one and business disputes are another. Privacy apart, alternative dispute
resolution is best suited for disputes where the parties are having some permanent
relationship or ties, viz., family members, trade partners, employer-employee, etc. In such
disputes, though the Court would render a decision as per law, it would leave the parties with
a strained relationship. These disputes, more than ‘resolution’, need a ‘solution’, which can
only come through alternative dispute resolution and not from a court. Alternative Dispute
Resolution mechanism is intended to cover negotiation, mediation, conciliation and
arbitration.

The ICADR (International Centre for Alternative Dispute Resolution) is a unique Centre in
this country which makes a provision for promoting teaching and research in the field of
alternative dispute resolution and also for offering Alternative Dispute Resolution services to
parties not only in India but also to parties all over the world. Alternative Dispute Resolution
is intended to cover almost all disputes, including commercial, civil, labour and family
disputes in which parties are entitled to conclude a settlement and to be settled by alternative
dispute resolution procedure.

The International Centre is intended to spread alternative dispute resolution concept

effectively throughout the country. The main objectives of the Centre are:

(1) to propagate, promote and popularise the settlement of domestic and international
disputes by different modes of alternative dispute resolution;
(2) to provide facilities and alternative and other support services for holding conciliation,
mediation, mini-trials and arbitration proceedings;

(3) to promote reform in the system of settlement of disputes and its healthy development
suitable to the social, economic and other needs of the community;

(4) to appoint conciliators, mediators, arbitrators, etc., when so requested by the parties;

(5) to undertake teaching in alternative dispute resolution and related matters and to award
diplomas, certificates and other academic or professional distinction;

(6) to develop infrastructure for education, research and training in the field of alternative
dispute resolution;

(7) to impart training in alternative dispute resolution and related matters and to arrange for
fellowship, scholarship, stipends and prizes.

Another reason why Alternative resolution system needs attention is that it is in the interest
of the parties that instead of trying to achieve more and sufficient accuracy and facing delays
in process, the matter is decided expeditiously, even if it means sacrificing accuracy or
leaving some degree of error. Further in any adjudication, there is an inevitable component of
error in or what should be the perfect result. The endeavour for perfect accuracy is not always
worth it. In any case, it is a balance between five factors, namely:

(1) Depth of procedures;

(2)Expenses;

(3)Time taken/speed (or avoiding delays);

(4)Accuracy that has to be arrived at/ achieved; and

(5) Individual placements of each party. The time it takes to decide a dispute has its own
importance which must not be overlooked and this operates in several ways. The continuing
uncertainty, consumption of mental energy, and other expenses towards the continuing
litigations take a greater toll than generally thought of. In this context, time means normal or
reasonable time and not anything beyond that. Otherwise, it ceases to be justice and becomes
‘coercion into submission’ by reason of delay.
The Arbitration and Conciliation act passed in 1996 ensures high validity for these
settlements. Section 34 and 35 of the act says that the Arbitration award shall be binding and
final to the parties and person claiming under them. A recourse to a court against an arbitral
award may be made only on a few circumstances like when a matter is decided beyond the
scope of arbitration or, the procedures was not in accordance with the agreement between the
parties; and only if the disputed party approach the court within 90 days from the date of
arbitral award. Except that, section 36 says, “the award shall be enforced under the Code of
Civil Procedure 1908 (5 of 1908) in the same manner as if it were a decree of a court”.

About a Mediation settlement: Section 74 says, “the settlement agreement shall have the
same status and effect as it is an arbitral award on agreed terms of the substance of the
dispute rendered by an arbitral tribunal”. Even though the Arbitration & Conciliation Act,
1996 was enacted to give impetus to conciliation and giving statutory recognition to
conciliated settlements, giving the same status of a court decree for its execution, no real
effort was taken by the courts or by the lawyers to utilize the provisions and encourage the
litigants to choose the method. Even though some mediation training and familiarization
programs were conducted it did not create the real effect. The amendment of the Code of
Civil Procedure referring pending court matters to alternate dispute resolution was not
welcomed by a group of lawyers and the amendment was challenged. The modalities to be
formulated for effective implementation of Sec. 89 also came under scrutiny. For this purpose
a Committee headed by former judge of the Supreme Court and Chairman of the Law
Commission of India, Justice M. Jagannadha Rao was constituted to ensure that the
amendments become effective and result in quick dispensation of justice. The Committee
filed its report and it was accepted and, the Hon’ble Supreme Court of India has pronounced
a landmark decision “Salem Advocate Bar Association, Tamil Nadu v. Union of India” 7 where
it held that reference to mediation, conciliation and arbitration are mandatory for court
matters. This judgment of the Supreme Court of India will be the real turning point for the
development of mediation in India. But the growth of mediation should be carefully moulded
so that the system gains the faith and recognition of the litigants. Even though arbitration was
to a certain extend accepted by the business world and corporate, the scope of mediation and
its benefits has not yet been explored and utilised. The main reason may be the doubt about
the validity of such a settlement as compared to a court decree.

Merits
7 JT 2010 (7) SC 616, (2010) 8 Supreme Court Cases 24
1. It saves a lot of time by allowing the parties to resolve their differences/ disputes/ issues/ in
a short period of time as compared to the excessive stint taken by the Hon’ble Courts in
resolving the same issues.

2. The most elementary benefit of the ADR system is saving costs, giving control to the
disputants and thus avoiding the vicious litigation process. Such process results in substantial
savings of court fees, lawyer’s incentives, and other costs because they do not include time
consuming and expensive discovery that is quite prevalent in different courts.

3. It puts the parties in control by giving them opportunities to discuss their case by giving
them a forum to put forth their own views and thereby giving them a chance to put
themselves on a clean slate.

4. Access to justice is much easier and faster in case of ADR, because it allows people, who
cannot afford fees or cannot afford to lose time, to acquire a remedy without getting into the
sweat breaking system of the court.

5. It focuses on the issues that are important to the people instead of just stressing upon the
legal rights an obligation.

6. It leads to more flexible remedies than in court, ie the people make agreements that the
court cannot order or enforce upon.

7. There is no public announcement of any ADR processes for that matter. The case is held in
a confidential manner by keeping the private matters as private. Full secrecy is maintained.

Demerits

1. A recent survey suggests that nearly 90% of the cases, which are dealt through the ADR
system, are solved but the remainder, ie, the remaining ten percent, of the cases go
unresolved, the parties to the unresolved cases have no choice but to file a law suit thereby
wasting same, sometimes more, amount of time and money in the proceedings of the legal
system.

2. The possibility of bias, through negligible, or conflict of interst or at least the appearance
of impropriety, may arise if a neutral in ADR gets a good deal of repeat business from the
same institution.
3. In many cases, it is necessary to disclose the time/date and place of the said arbitration
proceedings to the third parties and or patent officers and thereby compromising the
confidentiality of the system.

4. The remedies established, or given out to the parties in disputes, in case of ADR cannot be
binding on future cases, i.e the remedy of one case cannot be taken as the guiding stone for
another or it, the remedy, cannot be taken as a legal precedent.

5. It is lack of knowledge and awareness with respect to the various methods for dispute
resolution that more often than not discourage parties from considering this option seriously.
Bibliography

1. http://shodhganga.inflibnet.ac.in/bitstream/10603/44117/9/09_chapter%203.pdf

2. http://shodhganga.inflibnet.ac.in/bitstream/10603/10373/8/08_chapter%202.pdf

3. http://shodhganga.inflibnet.ac.in/bitstream/10603/44117/8/08_chapter%202.pdf

4.http://www.lawyersclubindia.com/articles/Merits-and-Demerits-of-the-Alternative-Dispute-
Resolution-System-5225.asp