Alternative Dispute Resolution: Meaning, Nature and Origin

This post is written by Anushree Tadge, 3rd-year law student of ILS Law College, Pune, she tries to explain briefly what the concept of Alternative Dispute Resolution is? Its meaning, nature and genesis.

Introduction

Indian judiciary is one of the few very old judiciaries throughout the globe and is a carefully designated one under the Constitution of India. Even after being efficient enough, the Indian courts are known worldwide for their slow judicial procedure. More than 43 lakh cases are pending in the high courts all over the country and it was reported to the Rajya Sabha in 2019 that over 8 lakh of these cases are over a decade old. This is a big problem and the major reason for it is the increasing population and with it the ‘unsatisfactory’ proportion of judges to citizens.

Long unsettled cases disturb the mental as well as the financial health of both the parties. This problem persists long after establishing more than a thousand fast track Courts but the filing of a case requires a day, but disposal of cases take months. So, Courts alone efficiently handling pending cases while disposing of new ones is possible only in a Utopian country.

What is ADR?

Hence, dealing with such problems requires external help other than Judicial setups and in such Alternative Dispute Resolution (ADR) can be a helpful one, it is an umbrella term for various methods that resolve conflict in a peaceful manner acceptable to both the parties. ADR as a concept can be substituted to the conventional methods in order to resolve disputes. ADR as a process can efficiently resolve all type of matters – civil, commercial, family, companies etc. ADR uses the assistance of a neutral third party who helps both the parties to communicate as well as discuss the differences in order to reach a settlement that will take into consideration the arguments of both the parties. This includes Arbitration, Mediation, Negotiation as well as Conciliation (the most popular ADR methods).

Arbitration

Arbitration is a substitute to court trials, it cannot exist without a valid arbitration agreement clause, inserted before the dispute emerges. In this kind of ADR system, the proceedings shall be with arbitrators (substitute to judges in Court), they can be one or two in number. The decision of an arbitrator is binding on the parties (just like Court proceedings) and the decision is called ‘Award’. The sole object of Arbitration proceedings instead of conventional one is to obtain a just and fair settlement of disputes outside court without necessary delay and expense that is expected out of Court trials.

Either of the parties (in a contract with arbitration clause) can invoke the clause either himself or by way of an authorized agent. Here, the arbitration clause is a clause that mentions the course of actions in case a party wants to go for arbitration, language involved, number of arbitrators to be seated, and place where the arbitration is to be conducted.

Mediation

Mediation is another form of Alternative Dispute resolution where a third neutral party aims to resolve disputes between the parties and assist them in reaching an agreement. It is an easy and uncomplicated process, extremely party centred. A third party is appointed as a mediator to resolve the dispute amicably by using appropriate communication and negotiation techniques. Mediator’s sole objective to help parties reach a common point, he doesn’t impose his views and make no such decision imposing on the parties, what a fair settlement should be. Four stages of mediation are- Opening statement, Joint session, Separate session and finally Closing.

Conciliation

Conciliation can be called as another form of arbitration but it is comparatively less formal in nature. It is different because ‘clause’ for conciliation to be invoked by either of the parties is not a mandate of this ADR, but since a conciliator does a similar job to an arbitrator, the proceedings work on similar lines. Also, it is actually not possible for the parties to have a conciliation agreement before the dispute. It is stated in Section 62 of The Arbitration and Conciliation Act, 1996 that,

If a party wishes to initiate conciliation, it shall send to the other party a written invitation to offer the same, along with a brief introduction of the subject of the dispute.
The proceedings shall commence only when the other party accepts the same
If the other party wishes to reject the invitation, there will be no question of conciliation proceedings.

Nature of ADR: Explained-

‘Alternative dispute resolution’ as a word literally means to solve the dispute by alternative mechanisms. As mentioned above, these are techniques of dispute settlement outside of the government judicial process and solve disputes by mutual understanding. ADR is extra supports the judicial system by easing the burden on the same. It is less expensive and time-efficient. According to Justice Mustafa Kamal, “it is a non-formal settlement of legal and judicial dispute as a means of disposing of cases quickly and inexpensively”

ADR process are-
• Settled with the assistance of a neutral third person
• the third person is familiar with the nature of the dispute
• involved with proceedings that are informal,
• consumed with lesser procedural technicalities
• cost and time-efficient
• efficient because the confidentiality of the subject matter (related to the dispute) is maintained to a great extent

Genesis of ADR: Explained-

Alternate Dispute Resolution System is not a new experience for the people in our country. It has been prevalent for a long time. System of Dispute Resolution, anciently, made a significant contribution in matters related to family, social groups, and trade and property. Disputes were also resolved at village level where elders comprised the ‘Panchayat’ and performed the informal ‘mediation’. More such institutions like Kulas, Srenis and Parishads adjudicated disputes before ‘kings’. Further with the entry of East India Company, Modern Arbitration Law was introduced by way of Bengal Regulation of 1772, 1780 and 1781 In the common law countries, ADR has its roots in the English legal development. Charters and documents reveal that some respected male members in the community often resolved disputes as extended legal authorities of kings, creating one of the first forms of arbitration. In the modern times, dispute resolution refers to both Alternate Dispute Resolution subsequent to which is the Online Dispute Resolution. ADR system includes the mechanism, short of litigation, rather with the help of a third party. This may refer to Arbitration, Mediation, and Negotiation and Conciliation, sometimes. With technology seeping into this whole arena of ADR, Online dispute resolution is the new face of Dispute Resolution.

ADR in India

The ADR mechanism has proven to be one of the most effective mechanisms to resolve disputes of commercial matters. In India, laws relating to resolution of disputes are three in number. The Judiciary itself also encourages out-of-court settlements to meet with the pending cases in the courts. Few important provisions related to ADR in India-

Section 89 of the Civil Procedure Code, 1908 – It provides the opportunity to people, to settle matters outside the court by way of Arbitration, Conciliation, Mediation or Lok Adalat.
The Acts dealing with Alternative Dispute Resolution are Arbitration and Conciliation Act, 1996 and,
The Legal Services Authority Act, 1987
To effectively implement the ADR mechanisms throughout India, organisations like the Indian Council of Arbitration (ICA), The International Centre for Alternative Dispute Resolution (ICADR) were established in the year 1965 and 1993 respectively. The ICADR is an autonomous organisation, working to promote and develop ADR facilities and techniques throughout India. While the main objective of the Indian Council of Arbitration- ICA is to promote amicable and quick settlements of matters by arbitration. Arbitration and Conciliation Act, 1996, law, is based on the United Nations Commission on International Trade Law (UNCITRAL) model of the International Commercial Arbitration Council.

References

Md. Aktaruzzaman, Concept and Law on ADR and Legal Aid, 2nd ed., (Dhaka, Shabdakoli Printers, 2008), p.9.