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A CRITICAL STUDY OF THE ALTERNATIVE DISPUTE RESOLUTION MOVEMENT

Author: Aliya Ala Maqutoor Shaikh, II year of B.L.S.,LL.B. from Dr.D.Y Patil College of Law.


Abstract

In a flourishing nation like India, where there is advancement and expansion in almost everyfacet of varied areas, the backlog of pending lawsuits in Courts, however, stand to be unresolved. The lengthy monotonous procedure of approaching the court to attain an adequate verdict is nerve-racking. Not only one must keep up with the never-ending dates given by court but one must also bear costly and tedious procedures for issues of trivial nature.


Alternative Dispute Resolution is a mechanism through which disputes can be unravelled without bringing the traditional method into use. It resolves dispute through outside court settlements. It assists to matters which remain unresolved through the mundane technique i.e., proceedings that appear before an appropriate court of law. The traditional method takes prolonged period to determine upon conflicts whereas ADR takes matters into consideration which aren'tillicit in essence. ADR deals with varied forms of disputes- commercial, civil, family, industrial, etc. It assists the parties reconcile and communicate through their indifference.

Keywords: Alternative Resolution, outside-court settlement.


Introduction

A procedure through which conflicts between parties are seen to be resolved or brought to a congenial derivative without the interference of a trial of the Judicial Institution is called Alternative Dispute Resolution (ADR). It is an attempt to establish an alternative mechanism different than the traditional methods of resolving a dispute. It determines the outcomes of any dispute that arises between compliant allies, reluctant in approaching the Judicial Association (Court). The verdict can be reached in either a cordial or a contentious form, overseen either by the parties or a third party nonaligned in character. ADR proposes to settle all kinds of disagreements and concerns comprising commercial, industrial, civil, and family but does not execute cases that are illegal, unlawful, and illicit in disposition. It is particularly because crime is against State and hence, not enforceable. Normally, ADR utilizes an unbiased third party who assists the parties of a contract to communicate, discuss and settle the dispute.


Background

The ADR system is not a recent understanding by the people of this country. It has been predominant in India since time immemorial. The prematurely known treatise is the Bhradarnayaka Upanishad, in which varied kinds of arbitral bodies like; the Puga, Shreni's, Kulas were included.[i]


The Gupta Empire retained a different and distinct judicial system. At the lowest level of the judicial system was the village assembly or trade guild. During the Mughal Dynasty, most villagers resolved their cases in the villager courts itself and appealed to the caste code, the arbitration of an impartial umpire. With the inception of the British Raj these time-honoured institutions of dispute resolution started fading away and the traditional legal system put forward by the British started to rule.


Alternate dispute resolution in its contemporary form has picked up pace in the nation with the creation of the Bengal Regulation, as in India, a developing country, several people were and still stand to be deprived off their rights and live in poverty. When an individual's sovereignty gets infringed, he/she does not retain the wealth to battle lengthy brawls in the court. So, they do not acknowledge the legal system and methods. Thus, they assume that the court system is an obstacle.


♦ These justifications encouraged the Indian government to ratify Section 89 of the Code of Civil Procedure, 1908, and reinstate the initial Arbitration Act, 1940 with the Arbitration and Conciliation Act, 1996, by the referenda of the United Nations Commission on International Trade Law.[ii]


Mechanism of Alternative Dispute Resolution

  • ADR can be instrumental in ameliorating the responsibility of litigation in courts while providing a well-rounded as well as an adequate experience for the parties involved.

  • Approximately 71,000 lawsuits stand pending in Supreme Court. [iii]

  • Approximately 60 lakhs lawsuits stand pending in High Court.[iv

  • Androughly 4.1 crore lawsuits stand pending in District and Sub-ordinate Courts. [v]

  • The central rationale for the enormous backlog of lawsuits is the insufficient infrastructure which has furthermore proved to overburden the respective Courts.


Alternative Dispute Resolution plays an important role by settling a dispute resolution done through means which are not deviant, i.e., working jointly to attain the fairest solution for the parties involved. The service of ADR helps broaden and enlarge the facets of the Indian Judicial Institution through innovative and communal bargaining to accomplish the interests propelling the demands of the parties involved.


Considerably, there are three procedures for resolving a dispute.

1. Traditional Dispute Resolution.

2. Alternate Dispute Resolution.

3. Hybrid method of Dispute Resolution.[vi]


Traditional dispute resolution

This technique directs the proceedings that appear before an appropriate Court of law as per the procedure established. The traditional dispute resolution refers to proceedings done through trials, lawsuits, and jury. The traditional system is more rigid and stringent than that of a non-traditional method.


Alternate Dispute Resolution

This method is a non-traditional method which aims for a convenient and realistic solution for the parties involved. This method assures adjustable, informal, party-centric, and confidential proceedings carried out through any one of the following: - Arbitration, Mediation, Conciliation, Negotiation, or Judicial Settlement (inclusive of Lok Adalat).


Hybrid Method of Dispute Resolution

This method, as the phrase indicates, is a crossover between two alternative processes of dispute resolution. It signifies as a term which is formulated by contradictory elements. Hybrid ADR is an extension of the ADR which comprises two standalone dispute resolution mainly combined to establish to a single outcome.


The necessity to be able to develop alternative mechanisms was mainly to reduce the hindrance of the Courts. To provide swift access to justice along with the renewal and strengthening of customary systems of dispute resolution elicited the introduction of Section 89 in the Code of Civil Procedure,1908. Later was introduced the Arbitration and Conciliation Act,1996.[vii]


The Acts which deal with Alternative Dispute Resolution

  • Section 89 of the Civil Procedure Code, 1908- It provides that opportunity to the people, if it appears to court there exist elements of settlement outside the court then court develops the phrases of the feasible settlement and refer the same for: Arbitration, Conciliation, Mediation or Lok Adalat.[viii]

  • Arbitration and Conciliation Act, 1996- Proceedings of a debate are dealt with provisions of the Arbitration and Conciliation Act, 1996.[ix]

  • The Legal Services Authority Act, 1987- Reference of Lok Adalat under Section 20 (1) of the Legal Services Authorities Act 1987.[x]


Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 was enforced on 22 August 1996, but the ordinance was promulgated by the President on 16 January 1996.[xi] The additional two ordinances that are arbitration and conciliation ordinances were enacted on 26th March and 21 June 1996respectively.[xii]

  • Its central objective was to protect international and domestic commercial arbitration and conciliation thoroughly.

  • Minimize the function of courts and to reduce the load of pending cases for the judiciary.

  • To make sure that every award is implemented and executed in the same method as the decree of the court

  • It delivers that the conciliation agreement attained by the parties has the identical impact as the award bestowed by an arbitral tribunal

  • Assure that tribunal does not exercise its jurisdiction beyond the boundary.

  • Equips a reason by the tribunal for bestowing any arbitral award.

  • Brings in a procedure that is reasonable, efficient, and competent in meeting the necessities of society for arbitration and conciliation.

The Act is divided into four parts and three schedule:

  • Part I (Sections 2-43) – Applies to the place of arbitration in India. The award granted is treated as a domestic award.

  • Part II (Sections 44-60) – Enforcement of foreign awards.

  • Part III (Sections 61-81) – Conciliation.

  • Part IV (Sections 82-86) – Supplementary provisions.[xiii]

  • Schedule I – Convention on the recognition of foreign awards of arbitration.

  • Schedule II – Protocol to be followed on arbitration clauses.

  • Schedule III – Convention for the execution of foreign arbitral awards.


Let us now scrutinize the types of Alternative Dispute Resolution

1. Arbitration

The proceedings of arbitration are such that occur outside of the court and are less formal than a trial. Instead of taking a case to the judge, the parties take the dispute to an arbitrator where the procedure is comparably faster, cheaper, also confidential, and adaptable as per the method and application of Rules of Evidence. The parties have the liberation to plan out the same in the arbitration agreement. Unlike a trial, the rules of evidence are much more relaxed during an arbitration. Even evidence like hearsay can be admissible. After reviewing the presentation from both sides, the arbitrator will make a final often binding decision in the fairest and most unbiased way possible. Arbitral decisions are absolute and binding there is no right to appeal an arbitrator's decision. There's a restricted capacity of opposing them.


To commence the Arbitration procedure the parties are foremost mandated to retain a valid arbitration agreement along with a written agreement as per Section 7 of the Arbitration and Conciliation Act, 1996.[xiv] The arbitration agreement shall incorporate in the contract giving rise to a conflict of a connection from a distinct instrument signed by the parties. It is probable to deduce the presence of an arbitration agreement from notes, telexes, or from telegrams that record the agreement and were traded among the parties to a contract. Taking the Indian contract Act 1872, into consideration, the agreement shall necessarily precede arbitration and should be authentic.[xv] Furthermore, the respected parties to an arbitration agreement shall retain the ability to enter a contract in terms of Sections 11 and 12 of the Indian Contract Act.[xvi]


1. Conciliation

Conciliation is a form of arbitration with lesser formalities. It is a non-binding process comprising a third party of unbiased opinion, conciliator, who aids the parties to a dispute in reaching a mutually satisfactory agreement. A conciliator's verdict can or cannot be followed. A conciliator is a proactive participant. The parties are unrestricted, they can either accept or reject the suggestions of a conciliator. Regardless, if both parties acknowledge the settlement documented by the conciliator, it shall then be considered as final and a binding contract on both. The parties can also present the intermediary with their opinions and ideas on how to conclude the conflict.


To commence with this procedure, there is no necessity for an existing agreement. A conciliator can be assigned by either side upon request. Of all the intermediaries recommended, two or even three can be used. If there are more than two intermediaries, they must function jointly. It is impossible to adjudicate if one of the parties denies the other's offer to do so. All parties concerned in the disagreement have the option of presenting statements to the intermediary summarizing the context of the conflict and the precise matters at hand.


2. Mediation

In mediation, an unbiased person named a mediator assists the parties to try to attain a mutually satisfactory solution to the dispute. A mediator in not a proactive participant as that of a conciliator. The parties in dispute themselves set the requirements of the settlement to be attained. The mediator does not specify the dispute but assists the parties to express and communicate so they can try to resolve the conflict among themselves. In mediation, the mediator leaves the management of the result with the parties.


Various institutions, communities, States, people, and other representatives retaining a stake in the outcome may participate (as parties) in the dispute. The mediators employ pertinent tactics or dexterities to initiate or improve arguments between the disputants, to help parties reach a consensus (with substantial significance) on the topic of concern. A mediator is simply deemed impartial if all parties concerned agree. A mediating disagreement is an alternative for parties concerned in many diverse types of conflicts, comprising enterprise, legal, diplomatic, workplace, society, and family issues. For instance, if parties which are unions, or an industry are unable to arrive at an agreement then a third-party mediator could further assist them to reach at a mutually accepted conclusion. Moreover, a company usually employs an outside mediator to help the two sides arrive at the terms of any pending agreements or compacts.


3. Negotiation

Negotiation is deemed to be a form that is considerably familiar when concerned with conflict resolution outside of court. A process that is non-binding which requires discussions between the parties are commenced without the interference of any third party (negotiator) with an aim of attaining a negotiated settlement to the dispute. It is a largely familiar procedure of an alternative explanation. Negotiation arises in corporations, non-profit organizations, licit proceedings, government branches, and among countries. Grounds which are confidential in nature concerning matters like marriage, divorce, property, parenting as well as international trade and law require some extent of negotiation. Proficient mediators are correspondingly comprehended as negotiators.


4. Lok Adalat

An intriguing element present in the Indian legal system is the voluntary agency named Lok Adalat. To hold practices under jurisdiction as they see reasonable, District Authority, Taluka Legal Services Committee, The State authority, High Court Legal Services Committee, and Supreme Court Legal Services Committee, will regulate mock courts named Lok Adalat periodically. Lok Adalat accentuates collaborative problem-solving. The Legal Services Authorities act was enacted in 1987 to promote out-of-court settlement. Disputes in the pre-litigation phase can also be resolved cordially in a Lok Adalat.[xvii]

Lok Adalat correspondingly known as the People’s Court constitutes a colloquial environment that enables negotiations in the presence of a judicial officer where lawsuits are administered without excessive emphasis on legal technicalities. The judges of a Lok Adalat are people with experiences in law, social activism, and judicial retirement and usually preside over such chateaus. The final verdict given out by the Lok Adalat is deemed to be final as well as definitive and is furthermore considered to be an ordinance of a civil court. It shall, furthermore, be binding on the parties related to the dispute. A verdict finalised by the Lok Adalat is not appealable in a court of law. If both parties approve a case that is already proceeding in a traditional court system, then it might be shifted to a Lok Adalat. For instance, if a party petitions the court and the court, after permitting the opposing party to be heard is persuaded that settlement is probable, the lawsuit may be directed to a Lok Adalat.


Benefits of Alternative Dispute Resolution

  • An alternate dispute resolution mechanism delivers scientifically formulated methods to the Indian judiciary to assist lessen the responsibility of the court.

  • ADR plays a substantial part in India through its diverse methods. It aids deal with the crisis of the pendency of lawsuits in a country.

  • It provides varied ways of settlement. ADR is furthermore established on Fundamental Rights under Articles 14 and 21 which deal with equality before the law and the right to life and personal libertyrespectively.[xviii]

  • Its motive is to deliver social economic and political Justice and preserve integrity in the society consecrated in the preamble.

  • It correspondingly aspires to accomplish equal justice and free legal aid delivered under Article 39 A associated with the Directive Principle of State Policy.[xix]

  • ADR has turned out to be victorious in extricating the backlog of lawsuits at varied levels of the judiciary.

  • Lok Adalat has independently disposed of more than 50,00,00 lawsuits a year on average in the last three years but there appears to be an absence of awareness about the availability of such a mechanism.[xx]

  • Also, parties accumulate the emotion that there is no loss or gain in victory among the parties, and also realize that the complaint has been redressed and the cordial affinity between the parties has been recovered.[xxi]


Need of Alternative Dispute Resolution

  • The lower judiciary momentarily has around 5300 seats vacant- over 20% of its capability.[xxii]

  • Various states have distinct procedures and thus distinctive difficulties when it comes to lower court appointments.

  • According to an explanation in the Rajya Sabha on August 4, 2022, the lower courts have around 4.1 crores of pending lawsuits, while the High Court has around 60,00,00 pending cases.[xxiii]

  • Additionally, the Supreme Court pendency is around 71,000 cases.[xxiv]

  • When it arrives to vacancies the Supreme Court has three seats vacant (out of 34) High Courts have 380 seats vacant (out of 1,108) and district and Subordinate Courts have 5,342 vacant seats (out of 24,631).[xxv]

  • With the mechanism of ADR, cases that are not illicit, and stand pending in court, will help reduce the responsibility and burden of the courts.


Advantages of Alternative Dispute Resolution

  • ADR is a rapid dispute resolution that is dissimilar to legal proceedings, most lawsuits can be listened to and determined in a single day.

  • Fast and efficient: Where both parties can put their resentment on the same porter and probabilities of mending barriers are increased

  • This is an efficient method as there are continual opportunities for resuscitating affinities as parties talk over their problems jointly through the same medium.

  • It even prevents additional disputes and conserves a good relationship among the parties. It maintains the fairest interest of the parties.

  • Also, less costly than proceeding through the court procedure which can command a lot of money.

  • Moreover, people are unrestricted to convey themselves without any trepidation in a court of law. They can reveal the true facets without disclosing them to any court.


Why is ADR Unsuccessful in India?

In India, Lok Adalat has been relatively victorious in settling various of pending lawsuits. Its adoption of negotiation, mediation, and conciliation techniques to resolve conflicts is extraordinary. In expansion to the administrations inaugurated under the Legal Services Authorities, Act 1987, the legal aid societies in distinct law schools and law institutes in India adopt the chore of executing Lok Adalat, particularly in rural India which lacks the reasonable dispute settlement system. The suggestions are put together to bolster the Lok Adalat strategy to boost public confidence in the system. Unfortunately, despite the reality that the Indian legal system motivates dispute settlement carried out through the ADR instrument, the masses maintain to not adopt it whole-heartedly. The failure of ADR's unpopularity is mainly because the Government and Bars failed in catching up with the people of the society. Also, because the fairness required in laws is seen to be lacking, as the rules and legislature is not keen to explain the laws clearer.[xxvi]


In almost all countries which are developed, the Bar is seen to be divided into litigating lawyers as well as into non-litigating lawyers. The actualities and figurines exhibit that the reason behind ADR proving to be a success in the USA is mainly because of a powerful endeavour seen to be carried out by the Bar.[xxvii] In developed countries, the ratio of non-litigating lawyers is particularly elevated than that of litigating lawyers.[xxviii] But we fail toencounter many non-litigating attorneys in India. The credit for this shall be given to the absence of a proper understanding of ADR mechanisms by the lawyers who were generally bereft of any activity in administrating the ADR methodologies. The scarcity of an institutional framework in India has also been located as a significant impediment to the popularisation of India.


Conclusion

The method of ADR has been demonstrated to be of subsidy. There are myriad reasons for the triumph of ADR incorporating swift expertise, easy accessibility, low cost, lack of hostility, and capacity to adjudicate conflicts cordially.


Any dispute elicited among the parties can be decrypted positively by pursuing the practical methods delineated in the alternative dispute resolution. To decipher a dispute, both parties are advised to consult a connoisseur, commonly an attorney. Moreover, it is deemed essential that both parties' consent to be lawfully bounded by the judgement made through any one of the ADR procedures. This is mainly because the focus of ADR is to resolve disputes through compromise and community rather than litigation, hence, an outcome of an ADR procedure results in optimistic relation with the clients.


The primary objective of an ADR is to resolve disputes outside of court because every ruling a judge convenes will solely result in inflaming the uncertainties among the parties concerned. ADR procedures are proactive and offer suggestions to solve the conflict and hence, there is no suspicion that ADR is the austere way not simply to ameliorate a dispute but also to settle it by retaining the affinity among the parties to a dispute.


[i] Ankit Raturi "Position of Alternative Dispute Resolution (ADR) in India - LAWYERS GYAN." 15 Jul. 2018, https://lawyersgyan.com/blog/position-of-alternative-dispute-resolutionadr-in-india/.; [Last visited on 14th January,2023, 2:14 p.m.] [ii] S. Chaitanya Shashank & Kaushalya T. Madhavan, "ADR in India: Legislations and Practices - Academike." 07 Jan. 2015, https://www.lawctopus.com/academike/arbitration-adr-in-india/. [January 14th, 2023, 2:30 p.m.] [iii] "Over 71,000 Cases Pending in Supreme Court, 59 Lakhs In High Courts ...." 05 Aug. 2022, https://www.livelaw.in/top-stories/over-71000-cases-pending-in-supreme-court-59-lakhs-in-high-courts-law-minister-tells-rajya-sabha-205784. [January 14th, 2023, 2:36 p.m.] [iv] Umang Poddar "India’s lower courts are sitting on 4 crore cases. Filling judicial ...." 06 Aug. 2022, https://scroll.in/article/1028852/indias-lower-courts-are-sitting-on-4-crore-cases-filling-judicial-vacancies-must-be-a-priority. [January 14th,2023, 2:38 p.m.] [v] Ibid [vi] "Alternative Dispute Resolution In India: A Brief Overview." https://www.mondaq.co.uk/AdviceCentre/Content/4458/Alternative-Dispute-Resolution-In-India-A-Brief-Overview. [January 14th, 2023, 3:11 p.m.] [vii] Ibid [viii] "All you need to know about Alternative Dispute Resolution (ADR)." 09 May. 2017, https://blog.ipleaders.in/adr-alternative-dispute-resolution/. [January 14th, 2023, 4:43 p.m.] [ix] Supra Note 6 [x] "Hybrid OF ADR Class NOTE - Hybrid ADR A hybrid dispute resolution ...." https://www.studocu.com/row/document/babcock-university/human-rights/hybrid-of-adr-class-note/25423335. [January 14th,2023, 4:48 p.m.] [xi] "Arbitration and Conciliation Act, 1996 - iPleaders." 09 Jun. 2022, https://blog.ipleaders.in/arbitration-and-conciliation-act-1996/. [January 14th, 2023, 4:50 p.m.] [xii] Ibid [xiii] Supra Note 11 [xiv] "Alternative Dispute Resolution: Mechanism in India." 23 Oct. 2022, https://primelegal.in/2022/10/23/alternative-dispute-resolution-mechanism-in-india/. [January 14th,2023, 5:01 p.m.] [xv] Supra Note 6 [xvi] Supra Note 6 [xvii] Supra Note 14 [xviii] upra Note 14 [xix] Supra Note 14 [xx] Supra Note 14 [xxi] "6 Advantages of Alternative Dispute Resolution - BT Mediation." 26 Jan. 2021, https://www.btmediation.com/advantages-of-alternative-dispute-resolution/. [January 14th,2023, 7:40 p.m.] [xxii] Supra Note 4 [xxiii] Supra Note 4 [xxiv] Supra Note 4 [xxv] Supra Note 4 [xxvi] Sunaina Jain, "Challenges of Arbitration in India | VIA Mediation Centre." https://viamediationcentre.org/readnews/NDYx/Challenges-of-Arbitration-in-India. [January 14 th,2023, 5:24 p.m.] [xxvii] Astha Dhawan," A Birds Eye View of Current Scenario of ADR in India | VIA Mediation Centre." https://viamediationcentre.org/readnews/MTM2/A-Birds-Eye-View-of-Current-Scenario-of-ADR-in-India. [January 14 th,2023, 5:20 p.m.] [xxviii] Ibid

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