Abstract
India is a diverse and complex country with a legal system often criticised for being slow, expensive, and inefficient. The backlog of cases in Indian courts is staggering, with millions pending at various levels. The high cost of litigation and the lengthy process often discourage people from seeking legal redress, particularly those from the marginalised and disadvantaged sections of society. This has increased the need for more accessible, quicker, and less expensive alternative dispute resolution methods. Alternative dispute resolution (ADR) processes are becoming increasingly popular in India as a substitute for traditional legal action. This study examines the Role of ADR procedures in India and rates their effectiveness in delivering affordable, quick, and accessible justice. The paper explores the advantages of the various ADR procedures available in India, including Lok Adalats, conciliation, arbitration, and mediation. The study also examines the laws governing ADR procedures in India. The paper ends with recommendations to improve the effectiveness of India’s ADR processes, including raising public awareness, implementing critical ADR initiatives, and using technology.
Keywords
Alternative dispute resolution (ADR), negotiation, conciliation, arbitration, mediation, Lok Adalats
Introduction
The phrase “alternative dispute resolution” refers to a broad category of practices that offer alternatives to the legal system for resolving disputes. This indicates that there is an alternative to litigation. When the traditional negotiation process fails, alternative dispute resolution (ADR) refers to several simplified methods intended to settle disputes more quickly. Human society has utilised ADR since the dawn of time, albeit it has only recently gained widespread support and legal recognition in various nations. ADR techniques provide several benefits over judicial action. Alternative dispute resolution methods are becoming more widespread in the legal and business sectors. Its diverse methods can help the parties to resolve their disputes at their terms cheaply and expeditiously.
The traditional method of resolving disputes, the litigation path, is a drawn-out procedure that causes unnecessarily long wait times for justice to be served and overburdens the judicial system. Alternative Dispute Resolution (ADR) techniques like arbitration, conciliation, mediation, etc., are beneficial in such a situation. Compared to traditional dispute resolution techniques, these ADR procedures are less adversarial and may be preferable. ADR is a process for resolving conflicts outside of Court. The primary reason ADR exists is to provide affordable, simple, quick, and accessible justice. ADR procedures are non-judicial bodies that deal with all matters that can be handled in the law via conformity among the parties. The most widely accepted faith inspires this idea, i.e. justice delayed is justice denied. Alternative dispute resolution is significant to the corporate community. It requires a quick and transparent way of litigation because it needs more time, patience, and money to expend on a long-consuming justice delivery system. As a result, the company’s policy should prioritise alternatives to litigation. It has been demonstrated that arbitration and mediation as alternatives to litigation make good business sense. Including arbitration and mediation clauses in contracts will help ensure that disputes are resolved promptly and cost-effectively. In this context, the current paper focuses on the legality of various mechanisms used for alternative dispute resolution in India and the different laws governing the ADR system in India.
Research Methodology
The research methodology adopted for the purpose of this paper is the doctrinal method of research. The data has been collected from various sources such as academic journals, books, reports, and websites. The main aim of the research is to identify and evaluate the Role of alternative dispute resolution (ADR) mechanisms in India.
Review of literature
Abraham Lincoln said:
“Discourage litigation. Persuade your neighbours to compromise wherever you can. Point out to them how the nominal winner is often a real loser – in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.”[1]
The Indian Constitution is structured on people’s welfare and well-being, and the state must provide justice to the aggrieved party through judicial or non-judicial dispute resolution forums that ensure timely and effective justice and the enforcement of fundamental rights for every individual in the state. The primary goal of ADR was to alleviate the rising pressure on the courts. In India, the quest for justice is an ideal that the citizens have been aspiring to for generations. Our Constitution reflects this aspiration in the Preamble itself, which speaks about justice in all its forms: social, economic and political. Justice is a constitutional mandate. The possibility of a justice delivery mechanism in the Indian context and the impediments to dispensing justice in India is a meaningful discussion. Delay in justice administration is the most significant operational obstacle, which has to be tackled on a war footing. In a country that aims to protect citizens’ socio-economic and cultural rights, it is extremely important to quickly dispose of the cases in India, as the Courts alone cannot handle the massive backlog of cases. This can be effectively achieved by applying the mechanisms of Alternative Dispute Resolution.
Article 39A of the Indian Constitution: The State shall ensure that the operation of the judicial system promotes justice so that no citizen’s possibilities to secure justice are denied due to economic or other disadvantages[2]. In interpreting this provision, the Supreme Court held in the case of L Babu Ram v. Raghunathji Maharaj and Ors that “social justice” includes “legal justice,” which means that the system of administration of justice must provide an affordable, prompt, and effective instrument for the realisation of justice for all sections of the people, regardless of their social or economic position or finances.[3]
Any dispute is just like Cancer. If it is resolved sooner, it is better for all the parties concerned about it. If it is not resolved at the beginning, it grows quickly, and it becomes challenging to resolve with time.
Consequently, the procedure of resolving it must be agreeable to both parties. However, where there is a dispute, there must also be a mechanism to resolve these disputes. Disputes can be resolved through litigation, i.e. in a court of law or through Alternative Dispute Resolution (ADR) Mechanism. India is a litigating country where it becomes expensive, time-consuming and full of complexities. On the other hand, ADR is a system whereby disputants resolve their disputes with minimum outside help.
History of alternative dispute resolution in India:–
India is no stranger to the ADR system. Even hundreds of years before the British arrived, India used mediation to resolve disputes. India had a panchayat system in antiquity. The village elders used this approach to settle disputes within the community. It is still common in Indian society today. Even the class of businessmen employed mediation as a means to resolve disputes before the British era. At the time, members of the business association asked neutral, reputable businessmen to settle issues amicably. [4]
During the colonial period, British courts introduced arbitration to resolve trade disputes. The Indian Arbitration Act of 1947 established a framework for settling disputes through arbitration. However, the Act’s scope was limited and did not cover all disputes. In 1996 the Arbitration and Conciliation Act was enacted, bringing significant modifications to the law governing arbitration and introducing the idea of conciliation.
Mediation was also implemented as a voluntary and non-binding method in India in the 1990s. The Legal Services Authorities Act[5] established Lok Adalats, or people’s courts, to encourage ADR procedures and provide litigants with prompt justice.
The Commercial Courts, Business Division, and Commercial Appellate Division of High Courts Act, passed by the Indian Parliament in 2002, calls for the creation of specialised commercial courts and tribunals for the ADR of commercial disputes. The Supreme Court of India has also been instrumental in promoting ADR and has directed the establishment of mediation centres nationwide in various courts. The necessity to deliver prompt and affordable justice to litigants encouraged the creation of ADR systems in India. The growing use of ADR mechanisms results from the traditional court system’s increasing caseload and backlog in justice delivery. The International Centre for Alternative Dispute Resolution[6] was established to advance ADR processes in India under the provisions of the Arbitration and Conciliation Act of 1996. ADR in India has developed significantly due to the ICADR’s training and certification programmes for arbitrators, mediators, and conciliators.
In recent years, the Indian government has taken many initiatives to promote and encourage alternative conflict resolution processes. The government has formed the National Legal Services Authority (NALSA) to provide legal aid and promote alternative dispute resolution (ADR) techniques. Arbitration, conciliation, mediation, and Lok Adalats have all become fundamental parts of the Indian legal system. The increasing popularity of ADR mechanisms has led to the establishment of specialised courts and tribunals for resolving disputes through ADR mechanisms.
Thus, in India, ADR is not a new concept; rather, ADR-relating resolution has occasionally been amended to cater to speedy dispute resolution. Indian judiciary has also encouraged it on various occasions[7]. E.g., In Salem Advocate Bar Association v. Union of India[8], the Honourable Supreme Court of India directed the constitution of an expert committee to formulate how the provision relating to ADR incorporated in Section 89[9] of Civil Procedure Code – 1908 has to be brought into operation.
Legislations relating to ADR in India
- i) Section 89 of Civil Procedure Code.
- ii) Order 23 Rule 3 of the Civil Procedure Code.
- iii) Order 32-A of the Civil Procedure Code.
- iv) Section 80 of the Civil Procedure Code.
- v) Arbitration and Conciliation Act – 1996
- vi) Legal Services Authorities Act – 1987.
- vii) Industrial Dispute Act
- viii) Section 320 of the Criminal Procedure Code
- ix) Section 9 of Family Court Act
- x) Inter state water Dispute Act
Forms of alternate dispute resolutions in India
Various Forms of ADR
(1) Arbitration
(2) Conciliation
(3) Mediation
(4) Judicial Settlement, and
(5) Lok Adalat
Arbitration
Arbitration is a type of ADR, a method of resolving disputes outside of the courts in which the parties refer the dispute to one or more persons – Arbitrators – who decide the form of an award that is legally binding on the parties to the disputes and enforceable in the courts.
Arbitration is important to India’s Alternative Dispute Resolution (ADR) framework. It is a prominent alternative conflict resolution process commonly employed in commercial and business disputes.
Arbitration is governed by the Arbitration and Conciliation Act, of 1996, allowing domestic and international arbitration. The legislation specifies the arbitrator’s duty, the court’s powers, and the procedure for conducting the arbitration. The statute also recognises the importance of party autonomy in arbitration by allowing the parties to select their arbitrator(s) and establish the arbitration procedure.
In 2015, the Government developed the Arbitration and Conciliation (Amendment) Act 2015. The 1996 act needed to be amended to make arbitration in India a more widely used and affordable form of dispute resolution. The main goal was to convert the populace from the restrictive court-based conflict resolution system to the speedy justice provided by the Arbitration Tribunal. The Act came into force on October 23, 2015. The goal was also to bring the nation’s dispute resolution mechanism to comply with international norms.
The fact that arbitration is a private and secret process is one of its key merits. The parties can keep the details of their dispute confidential, which can be crucial in commercial disputes where the parties do not want the public to learn about their business dealings.
Additionally, arbitration gives the parties more influence over the dispute settlement procedure. In arbitration, the parties can pick their arbitrator or arbitrators, and they have more control over the arbitration process than in litigation, where the court renders the final verdict. This may result in a process that is quicker and less expensive.
Arbitration awards are final and binding, which means that the parties cannot appeal the arbitrator’s decision of the arbitrator(s). This provides finality to the dispute and reduces the risk of further litigation.
International issues often use arbitration as a solution. India is a signatory to the 1958 New York Convention[10], which governs the recognition and enforcement of foreign arbitral awards. Because of this, arbitration is a very appealing technique for resolving international conflicts.
Conciliation
Among the different types of ADR, conciliation has emerged as a widely used mechanism in India. In contrast to arbitration and court litigation, conciliation is voluntary and non-binding. Either party may terminate the conciliation process at any moment and without giving a reason. Another significant distinction is that the parties control the procedure and resolution of the dispute. In arbitration and litigation in courts, the parties have no say in the Court’s judgement or the Arbitrator’s Award. The Conciliator solemnly urges the parties to reconcile amicably.
The legal framework for conciliation in India is provided by the Arbitration and Conciliation Act 1996. The Act defines conciliation as a process in which a conciliator assists the parties in a dispute to settle. The Act allows the parties or a third party authorised by them to appoint a conciliator. It also outlines the conciliation method and the legal implications of a conciliation settlement agreement[11]. One of the key benefits of conciliation is that it is a voluntary process in which the parties can choose whether or not to participate. This gives the parties more control over the outcome of the conflict and helps them reach a more satisfactory solution. Conciliation is also confidential, so the parties can address the difficulties openly without fear of having the material used against them in court. This encourages a more collaborative and cooperative approach to dispute settlement, which can result in more positive long-term relationships between the parties.
Conciliation has proven to be an effective ADR mechanism in India. As per the data published by the Ministry of Law and Justice of the GOI, the percentage of successful conciliation cases has consistently increased over the years. The conciliation success rate in India was 60% in 2019, a significant improvement over previous years. This suggests that conciliation is gaining acceptance and appeal as a technique for resolving disputes among the parties involved.
Conciliation has been successful in India as an ADR method for a number of reasons. The backing of the legal community and the judiciary is one of the key elements. The courts in India have taken several initiatives to encourage parties to use ADR processes, such as conciliation, and have been proactive in doing so. By assisting conciliators with training and support and spreading knowledge of the procedure among the public, the legal profession has also substantially contributed to the conciliation mechanism.
Mediation
Mediation has recently been recognised as the fastest-growing mode of alternative dispute resolution. It allows parties to relook at mutual interests and develop innovative solutions through an interactive and facilitative process. Mediation is voluntary and non-binding upon the parties, and issues are resolved through negotiation using proper communication techniques. The mediator suggests options but only compels the parties to attend the mediation or consider the possibilities if they are interested. Mediation has not been confined to any specific statutory enactment in India.
The concept of mediation was mainly addressed in the Code of Civil Procedure, 1908 (“Code”), while amending it in the late 1990s by including Section 89(2)(d), which empowered courts to order dispute resolution through mediation, among other techniques. The constitutionality of the amendments was questioned in the landmark decision of Salem Advocates Bar Association v. Union of India[12], leading the foundation of the Law Commission to investigate the merits of the amendments and offer methods for the simple dispensation of justice. This led to framing the draft Civil Procedure -Alternative Dispute Resolution and Mediation Rules 2003 (“ADR Rules”).
Mediation is encouraged and supported by the Indian legal system and is seen as a cost-effective and efficient way to resolve disputes, and the Supreme Court of India decided in Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd[13] that any disputes involving contracts, trade, commerce, consumer issues, and even tort liability should typically be settled by mediation. The Supreme Court even ordered mediation in the high-profile and exceedingly sensitive Ayodhya dispute[14]. Furthermore, mediation was used in business and patent conflicts. The judiciary’s efforts were finally rewarded with an amendment to the Commercial Courts Act 2015, which made mediation mandatory before filing a lawsuit. The Ministry of Law and Justice gave mediation the necessary boost when Section 12A was introduced in the Commercial Courts Act of 2015. Section 12A made pre-institution mediation mandatory.
The Indian legal system has established several institutions to facilitate mediation. For example, the Supreme Court of India formed the Mediation and Conciliation Project Committee (MCPC) in 2005 to promote mediation and conciliation as a method of dispute resolution. Furthermore, many Indian state governments have built their own mediation institutes to provide citizens with mediation services.
Overall, mediation has grown in popularity as an ADR mechanism in India, and its role in conflict resolution is projected to expand in the coming years.
Lok Adalats:
Lok Adalats, or “people’s courts,” are a type of alternative dispute resolution (ADR) process unique to India. They are informal courts aiming to resolve conflicts quickly and cheaply. Lok Adalats are frequently presided over by retired judges, social activists, or other people with conflict resolution experience.
Lok Adalats play an important role in India. They are a successful strategy for relieving the burden on the formal court system and granting access to justice to those who might otherwise be unable to pursue legal remedies. Lok Adalats help settle small cases, domestic issues, and other civil disputes.
Lok Adalats are not only an effective means to resolve disputes but they are also legally sanctioned. In addition to providing an efficient way to resolve disputes, Lok Adalats are also backed by the law. The Legal Services Authorities Act of 1987 provides for the establishment of Lok Adalats as a means of resolving disputes, and their decisions are binding on the parties involved.
Lok Adalats are based on the conciliation principle, which implies that the parties are urged to seek a mutually acceptable conclusion through negotiation and dialogue. The Lok Adalat has the authority to issue a binding award or settlement to the parties involved. This means that Lok Adalat’s decision has the same legal significance as that of a court of law.
Lok Adalats can be formed at several levels, including national, state, district, and village. At the national and state levels, the National Legal Services Authority (NALSA) and State Legal Services Authorities (SLSA) are in charge of organising, managing, and supervising Lok Adalats.
One of the main advantages of Lok Adalats is that they are free of the procedural and technical formalities that characterise the traditional judicial system. This means that the process is simple and straightforward, and the parties are not needed to retain legal counsel.
Suggestions
In this paper, the legal foundation for ADR in India has been examined, and the paper has analysed a number of case studies to highlight how effective ADR is at resolving conflicts. The study also offers the suggestions listed below for enhancing the ADR system in India and broadening public adoption of it.
Awareness campaigns: Awareness-raising initiatives are required to inform the public about ADR processes, including Lok Adalats, arbitration, and mediation. The government and other organisations can run such campaigns to highlight the advantages of ADR and urge more individuals to use it.
Integration with the formal court system: ADR methods and the traditional court system should be better integrated. This can be accomplished by establishing specialised ADR centres within the court system or making ADR awards enforceable.
Standardisation of procedures: Standard operating procedures should be used for ADR systems to maintain consistency and predictability. This can be accomplished by developing model rules and guidelines for ADR.
Use of technology: The use of technology, such as online dispute resolution systems, can contribute to making ADR more accessible and efficient. The government and other organisations can invest in building such platforms to make ADR more user-friendly.
Incentives: With incentives like lower costs or quicker settlement periods, parties should be encouraged to use ADR methods. As a result, more individuals may use ADR, which will ease the load on the formal court system.
Overall, the above-mentioned recommendations can strengthen India’s ADR process and make it more successful and efficient in resolving conflicts.
Conclusion
To sum up, alternative dispute resolution is a mechanism that, unlike the traditional court system, allows parties to address their conflicts out of court. People get fearful and lose faith in the method of the justice delivery system in nations like India, where there are billions of cases pending in court, which ultimately causes frustration among people regarding the court system and its ability to dispense justice. It is important to rebuild this faith and adopt procedures that are as effective and binding on the parties involved while lacking the complexity of lengthy legal litigation. It is important to note that ADR is not meant to replace the current legal system but rather to lessen the additional burden that is placed on the court in India.
Citations
- Constitution of India, 1950
- Arbitration and Conciliation Act, 1996
- Avtar Singh, Law of Arbitration and Conciliation.
- Mahboob Ali, Brochure on Alternative Dispute Resolution Mechanism in Modern Indian Society.
5. Koonorayar, Vishnu;Pillai, K.N. Chandrashekran; V.S., Jaya, Alternative Dispute Resolution in India- ADR: status/effectiveness study
Ab Wahid Lone
Central University Of Kashmir
[1] https://www.goodreads.com/quotes/64491-discourage-litigation-persuade-your-neighbors-to-compromise-whenever-you-can
[2] INDIA CONST. art. 39, , § A.
[3] L Babu Ram v. Raghunathji Maharaj and Ors, AIR 1976 SC 1734.
[4] Anil Xavier, Mediation: Its origin and growth in India, available at www.arbitrationindia.org/pdf/mediation_india.pdf.
[5] Legal Services Authorities Act of 1987
[6] International Center for Alternative Dispute Resolution (ICADR). http://www.en.wikimediation.org/index.php?title=International_Center_for_Alternative_Dispute_Resolution_(ICADR)
[7] http://www.sethassociates.com/alternative_dispute_resolution.php accesed on 09-04-2023
[8] Writ Petition No.496 of 2002 decided on 25.10.2002
[9] section 89.Settlement of disputes outside the Court.
(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for-
(a) arbitration;
(b) conciliation
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
(2) Where a dispute had been referred-
(a) 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 provisions of that Act.
(b) to Lok Adalat, the court shall refer the same to the Lok Adalat in accordance with the provisions of sub- section (1) of section 20 of the Legal Services Authority Act, 1987 and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
(d) for mediation, the court s hall effect a compromise between the parties and shall follow such procedure as may be prescribed.
[10] International Center for Alternative Dispute Resolution (ICADR). http://www.en.wikimediation.org/index.php?title=International_Center_for_Alternative_Dispute_Resolution_(ICADR)
[11] https://www.legalserviceindia.com/legal/article-9139-arbitration-and
[12] Salem Advocates Bar Association v. Union of India, (2003) 1 SCC 49
[13] M/s. Afcons Infra. Ltd. & Anr vs M/S Cherian Varkey Constructions (P) Limited & Ors., (2010) 8 SCC 24
[14] https://en.wikipedia.org/wiki/Ayodhya_dispute