ALTERNATIVE DISPUTE RESOLUTION IN INDIA (ADR)

In a rapidly developing society human needs are bound to multiply resulting into conflict
of interests. People become more conscious about their individual rights and litigation becomes
an inevitable part of their life due to rising incidence of disputes among them. The problem is
further compounded when there is lack of discipline in the litigation process an judicial
mechanism finds it difficult to cope up with the enormous caseload. Particularly, in a modern
technologically and economically well advanced society, litigation is a primary means of
resolving disputes. When it fails to meet the need of the people there is oblivious need to search
for new alternative methods of dispute resolution. It is in this context that the alternative modes
of dispute resolution have gained primacy in the present millennium.

Justice delivery institutions in most of the developing countries in the world are currently
confronted with serious crises, mainly on account of delay in the resolution of the disputes
particularly the delay in disposal of the commercial and other civil matters. We must admit that
this situation has eroded public trust and public confidence in the justice delivery institutions. It
obstructs economic growth, development and social justice to the citizens in a country. The crises
therefore, call for an urgent solution. The cause for such backlog of cases is institutional and the
delay in disposal of the cases, is due to procedural laws. Administrative institutions have failed to
monitor the status, substance and pace of litigation in the courts. The beginning of the modern
ADR movement is from United States of America. As Chief Justice Warren Burger of the U.S.
Supreme Court once observed on noticing the increase of cases from 2000 to about 5000 in the
US Supreme Court between 1963 to 1982 made the following remarks:

We are moving towards a time when it will be impossible for the courts to cope up with the
dockets. If something is not done, the result will be a production of line of justice that none of
us would want to see.

Centre for Public Resources (CPR) in New York was a leader in the movement towards
Alternative Dispute Resolution (ADR). It was assumed that the High Cost of litigation and long
span of time, were misuse of public resources. Therefore, number of ADR techniques, which
includes mini trials, having main focus on arbitration, mediation and disputes resolution by
negotiation. Alternative dispute resolution mechanism principally consists of mediation,
negotiation and arbitration as techniques for resolution of disputes by the consenting parties.

THE PRESENT SCENARIO:-

The legal system in India is viewed by many as part of colonial legacy. Undoubtedly,
judiciary is the important institution which has withstood many challenges during the last-more
than fifty years to retain its integrity. But with the mounting pressure of cases-civil, criminal,
revenue, industrial and others the workload of judiciary increased leaps and bound and it has
now reached a stage of unmanageable magnitude and the cases remain undecided for years
together for one reason or the other.
 The preamble to the constitution of India promises to secure socio-economic and political
justice and equality of status and of opportunity to all the citizens. Art. 39-A contains a directive
principle which holds that the state will ensure that the legal system operates in a manner so as to
promote justice to all an to ensure that no citizen is denied the opportunities of securing justice
by reason of economic or any other disability. But the ground reality is that the law hardly
reaches the vulnerable sections of the society here majority of the people are illiterate, rustic and
rural and are ignorant about existence of their legal rights and remedies. And those who are
aware of their right, find it difficult to get them translated into reality because of the legal and
procedural ordeals on has to undergo in the process of litigation.

MALIMATH COMMITTEE:-

The report of the Malimath Committee (1989-90). The committee was headed by Honble
Mr. Justice V.S. Malimath, the two other members being Honble Mr. Justice P.D. Desai and
Honble Dr. Justice A.S.Anand.

In India the situation is all the more worse. The Indian judicial system has been stretched almost
to a breaking point right from the Apex court to the lowest subordinate courts. The Malimath
Committee which is also known as the Arrears committee, undertook a comprehensive review of
the working of the court system, particularly all aspects of arrears and Laws delay and made
various useful recommendations for reducing litigation and making justice readily accessible to
the people at the minimum cost of time and money.

The Malimath Committee underlined the need for alternative dispute resolution mechanism such
as mediation, conciliation, arbitration, Lok Adalats etc. as a viable alternative to the conventional
court litigation.

ALTERNATIVE MEASURES FOR JUDICIAL FEFORM:-

In the complexities of modern life-style disputants want a decision and that too as quickly as
possible. As a problem of over-burdened courts, a number of tribunals were established in India.
Even after formation these adjudicatory tribunals and setting up of Family courts, H.R.
commissions, Women commissions for the protection of rights of men and women, the problem
of delay in courts still persists unabated thereby defeating the cause of justice.

Particularly, civil litigation in India is notoriously known for pendency of cases flooded by
adjournments, revisions, appeals, cross- appeals etc. on an average a civil litigation takes 5-8
years for its final disposal and cases are not wanting when civil cases have lingered in the courts
for even 15 to 20 years for one reason or another.

In Surjeet Singh & other V/s Harbans Singh & others , AIR 1996 SC135, the Supreme Court
expressed its anguish for long delay as the case was lying pending in civil Court at Patiala since
1948 with no sight of its finalization. In yet another case of Dr. Buddhikota Subbarao V/s
K.Parasharan, AIR 1996 SC 2678 ,the apex court observed no litigation has a right to
unlimited drought on the time and public money in order to get his mater settled in the manner as
he wishes.

The noted jurist Mr.N.A. Palkhivala attributing this cause to legal profession inter-alia,
observed:

The fault is mainly of legal professionals. We ask for adjournments on the most flimsy
grounds. If the Judge does not readily grant adjournment, he is deemed highly unpopular, I
think it is the duty of the legal profession to make sure that it co-operates with the judiciary in
ensuring that justice is administered speedily and expeditiously , it is a duty of which we are
totally oblivious.

In the Indian context, if money suits and claims pertaining to property rights are referred to
arbitration or conciliation, it would reduce the files of the various courts by 50% .

While inaugurating International Arbitration Conference in New Delhi from March 2-4 of 2000
Honble the then President of India, Mr.K.R.Narayanan said that in the era of globalization
International Arbitration should take into account socio-economic profiles of the countries while
dealing with a dispute to arrive at a just solution.

Alternative Dispute Resolution (ADR) is a term for describing process of resolving disputes in
place of litigation and includes arbitration, mediation, conciliation, expert determination and
early neutral evaluation by a third person. In many important respects, arbitration is
similar/common with court based litigation than the other forms of ADR. Prior to the enactment
of The Arbitration and Conciliation Act, 1996, none of these forms of ADR except arbitration
have any statutory basis in India. Mediation and Conciliation require an independent third party
as mediator or conciliator to assist the parties to settle their disputes. The expert determination
requires independent experts in the subject of disagreement of the parties to decide the case.
Such expert is chosen jointly by the parties and his decision is binding.

The objective of ADR as the phrase itself suggest is to resolve disputes of all sorts outside the
traditional legal mechanism i.e. courts/judicial system. There is a broad spectrum ranging from
the purely consensual mode of resolution of disputes to an executive procedure like arbitration,
conciliation or negotiation. Though a combination of some of the technique like negotiation,
conciliation, mediation and arbitration may also be used to resolve certain disputes. ADR thus
offers an alternative route for resolution of disputes. The emphasis in the ADR, which is informal
and flexible, is on helping the parties to help themselves.

The Arbitration and conciliation Act 1996 also contains provision relating to conciliation in
contractual matters arising out the legal relationship, The arbitral proceedings being informal,
less expansive and relatively speedier, have proved to be an efficient alternative means for the
redressal of disputes and differences between the parties. Like arbitration , conciliation and
mediation as an alternative means of settlement of disputes also needs to popularized
commenting on this point, the former CJI Mr. Justice A.M.Ahmadi observed, -

while we encourage ADR mechanisms, we must create a culture for settlement of disputes
through these mechanisms, Unless the members of the Bar encourage their clients to settle
their disputes through negotiations, such mechanisms cannot succeed.

TRIBUNALS IN INDIA:-

With the acceptance of Welfare ideology, there was mushroom growth of public services and
public servants. The courts particularly the High Courts were inundated with cases concerning
service matters. The Swarn Singh Committee therefore, inter-alia recommended the
establishment of Administrative Tribunals as a part of Constitutional adjudicative system.
Resultantly the Constitution (42nd Amendment) Act 1976 inserted Part XIV-A to the
Constitution of India consisting of Articles 323A and 323B. Article 323A provides for the
establishment of Administrative Tribunals for adjudication or trial of disputes and complaints
with respect to recruitment, conditions of service of persons appointed to public services and
other allied matters. Article 323B makes provision for the creation of Tribunals for adjudication
or trial of disputes, complaints or offences connected with tax, foreign exchange, industrial and
labour disputes, land reforms, ceiling on urban property, election to Parliament and State
Legislatures, etc. Parliament has power to enact any law under Article 323A while both
Parliament and State Legislatures can make laws on matters of Article 323B, subject to their
legislative competence. Therefore, in some cases, expert bodies like Central Administrative
Tribunals constituted under Section 4 of the Administrative Tribunals Act 1985, have been
empowered to adjudicate matters relating to service conditions etc. Similarly the Consumer
Disputes Redressal Mechanism provided for better protection of the consumers, thereby
providing for the establishment of the District Consumer Disputes Redressal Forum at district
level, State Consumer Disputes Redressal Commission, at the State Level and National
Consumer Disputes Redressal Commission at the National Level to adjudicate the Consumer
Disputes/cases under the Consumer Protection Act, 1986. The Income-tax Appellate Tribunal are
empowered to hear appeals under Section 253 of the Income Tax Act, 1961, Central Excise and
Gold Appellate Tribunal (now known as Central Excise and Service Tax Appellate Tribunal) is
empowered to hear appeals under Section 35(b) of the Central Excise and Salt Act, 1944. The
Debt Recovery Tribunals set up under the provisions of The Recovery of Debts due to Banks and
Financial Institutions Act 1993, have been empowered to adjudicate cases relating to debts /loans
of Commercial Banks and Financial Institutions. The tribunal system was evolved in our country
to provide an alternative to the regular courts. The tribunals are presided over by the experts of
the respective fields and the adjudication mechanism is cost effective, thus less costly in
comparison to the regular courts and they are effectively resolving the disputes by taking much
less time in comparison to the regular courts.
LOK ADALAT SYSTEM IN INDIA:-

ADR is a suitable alternative mechanism to resolve disputes in place of litigation. The

Committee for implementing Legal Aid Schemes (CILAS) constituted by the Ministry of Law
and Justice, Govt. of India in 1980 recommended the establishment of Lok Adalat. Consequently,
Lok Adalat movement is accepted to be one of the components. It has assumed great importance
and attained a statutory re-cognisation under the Legal Services Authorities Act, 1987, which
was enforced w.e.f. November 9, 1995. They are not akin to regularly constituted courts but they
supplement the existing justice administration system. They provide adequate and effective
means of disputes resolution at a reasonable costs. Special status has been assigned to the Lok
Adalat under the Legal Services Authorities Act which provides statutory base to such Lok
Adalat, which are regularly organized primarily by the State Legal Aid and Advice Boards with
the help of District Legal Aid and Advice Committees. Some of the Lok Adalats are being
sponsored by the various voluntary legal aid agencies. The whole emphasis in the Lok Adalat
proceedings is on conciliation rather than adjudication.

A Lok Adalat has jurisdiction to determine and arrive at a compromise or settlement between the
parties to a dispute in respect of any matter falling within the jurisdiction of any civil, criminal,
or revenue courts or of any tribunal constituted under any law for the time being in force for the
area for which the Lok Adalat is being organized. In a case where a pending action or proceeding
is referred to Lok Adalat by a Joint Application of the parties, the Lok Adalat is to proceed to
dispose of that proceeding or matter and arrive at compromise or settle the disputes between the
parties. In doing so, the Lok Adalat must be guided by legal principles and principles of justice,
equity and fair play. In a case where no compromise or settlement can be arrived at, it is open to
the parties to the proceeding, to request for transfer of their proceedings before the courts at a
later stage from which it was transferred. Every award of the Lok Adalat is a civil decree and
every award made by the Lok Adalat is deemed to be final and binding on all parties to the
proceedings or disputes. No appeal lies to any court against such an award. The Lok Adalat is
empowered to exercise substantive powers vested in a civil court under the Code of Civil
Procedure while trying suit of proceeding.

CIVIL PROCEDURE CODE:-

The use of ADR, is promoted by the enactment of section 89 of the Code of Civil Procedure
which is inserted by Section 7 of the Code of Civil Procedure (Amendment) Act 1999. The
courts also encourage the parties to use an ADR procedure in appropriate cases. The
Governments including Central Government are committed to settle their legal disputes out of
the court by ADR methods whenever the other party agrees for it. Normally ADR is an
alternative way of settlement of the disputes or issues. ADR is simple, cheaper, quicker and less
stressful to all parties, in comparison to adversarial litigation.

CONCILIATION/ MEDIATION:-
The term conciliation and mediation have not been used with any precision. To begin with the
term conciliation1 was used more widely, while of late the term mediation has become more
popular. By and large these terms are used inter changeably. Section 61 of the Act1 provides for
application of Part-Ill of the Act to conciliation of disputes arising out of legal relationship,
whether contractual or not and to all proceedings relating thereto. The provisions of Part-Ill shall
not apply where by virtue of any existing law which is in force, certain disputes may be in the
exclusionary category of conciliation. Section 62 of the Act2 provides for commencement of
conciliation proceedings. Section 63 provides for the number of conciliators and Section 64
provides for the appointment of conciliators. The parties may submit brief written statement
describing the general nature of the dispute and the points at issue with a copy of such statement
to the opposite party under Section 65 of the Act. The Code of Civil Procedure, 1908 or the
Indian Evidence Act, 1872 are not binding upon the conciliators as per the provisions of Section
66 of the Act. The conciliator assists the parties in an independent and impartial manner in their
attempt to arrive at an amicable settlement of their dispute. The conciliator is guided by the
principles of objectivity, fairness and justice by taking into account the rights and obligations of
the parties. The conciliators are free to conduct the proceedings, by taking into account, the
circumstances of the case and willingness of the parties, including any request by a party that the
conciliator should hear oral statement requiring speedy disposal/ settlement of the dispute. The
conciliator is free to make any proposal for settlement of dispute at any stage under Section 67 of
the Act. Section 75 of the Act provides that the proceedings before conciliator shall be
confidential. The parties shall keep all matters relating to the conciliation proceedings as
confidential. The agreement is also confidential except where its disclosure is necessary for the
purposes of implementation and enforcement of the settlement. Section 73 empower the
conciliator to formulate the terms of a possible settlement and submit the same to the parties for
their observance. On observance, if the parties agreed, a written settlement agreement may be
signed. The settlement agreement shall be final and binding on the parties and their
representatives. The conciliator shall authenticate the settlement agreement and furnish a copy of
such agreement to each of the parties under Section 73 of the act.

ARBITRATION LAW IN INDIA:

In our country, in the past statutory provisions on arbitration were contained in three different
enactments i.e. the Arbitration Act 1940, the Arbitration (Protocol and Convention) Act 1937 and
the Foreign Awards (Recognition and Enforcement) Act, 1961. The Arbitration Act, 1940 laid
down the framework within which domestic arbitration was conducted in India, while the other
two Acts dealt with foreign awards. The Arbitration and Conciliation Act, 1996 has repealed the
Arbitration Act, 1940 (10 of 1940) and the Arbitration (Protocol & Convention) Act, 1937 (6 of
1937) and the Foreign Awards (Recognition and Enforcement) Act, 1961 under section 85 of the
1996 Act.
United Nations Commission on International Trade Law (UNCITRAL) prepared a Model Law
on international commercial arbitration in 1985. The General Assembly of the United Nations
has recommended that all member countries should give due consideration to the Model Law, for
the desirability of uniformity of the Law of Arbitral Procedures and the specific needs of
International Commercial Arbitration Practice. The United Nations Commission on International
Trade Law (UNCITRAL) adopted the UNCITRAL Conciliation.

1.The Arbitration and Conciliation Act, 1996.

2 . ibid

Rules in 1980. The Arbitration and Conciliation Bill 1996 was passed by both the Houses of
Parliament and received the assent of the President of India on August 16, 1996 and was
enforced w.e.f. January 25, 1996 and the enactment came on the statute book as the Arbitration
and Conciliation Act, 1996 (26 of 1996).

The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal
without unnecessary delay and expense. The parties should be free to agree as to how their
disputes are to be resolved, subject only to such safe guards as are necessary in the public
interest. In the matter governed by the provisions of the 1996 Act, the court should not intervene
except as provided by those provisions. The main object of Arbitration is to exclude judicial
intervention with the process of Arbitration. The Court is however required to direct the parties
to resort to Arbitration as per the agreement and to provide alternative dispute resolution to those
who cannot bear the cost and the time of ordinary civil court procedure as per the provisions of
Section 89 CPC. There are separate enactments specially to settle disputes arising between
employer and employee under the Industrial Disputes Act. Statutory tribunals are also some time
lacking in their effort as they do not have the simplicity, transparency and practical approach to
resolve the disputes, as in the Arbitration and Conciliation Act, 1996. The English Arbitration
Act, 1996, provides that the provisions of law must not be construed as excluding the operations
of rule of law consistent with those provisions, in particular any rule of law as to (a) matters
which are not capable of settlement by arbitration, (b) the effect of an oral arbitration agreement
or (c) the refusal of recognition or enforcement of an arbitral award on ground of public policy.
The English Arbitration Act, 1996 must not be construed as reviving any jurisdiction of the court
to set aside or remit an award on the ground of errors of fact or law on the face of award.

Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitration,
disputes are resolved with binding effect by a person or persons acting in a judicial manner in
private, rather than by the regular court of law, that would have jurisdiction to adjudicate, but for
the agreement of the parties to exclude it. The Arbitration and Conciliation Act, 1996 is a long
leap in the direction of Alternative Dispute Resolution system. It is based on UNCTRAL model.

Commenting on arbitration as an ADR technique, Mr. V.R.Krishna Iyar of the Supreme Court
observed:-
 Interminable time consuming, complex and expensive curt procedure implied jurists
to search for an alternative forum less formal, more effective and speedy for resolution of
disputes avoiding procedural claptrap and this led them to the Arbitration Act

CONCLUSION:-

The justice dispensation system in India has come under great stress for several reasons, mainly
due to huge pendency of cases in the courts. Alternative Disputes Resolution is a mode of
resolution of disputes through arbitration, conciliation or mediation which provides an alternative
route for resolution of disputes instead of resolution of such disputes through courts. The
principles of ADR are successfully adopted in the Indian Legal System as an alternative to the
justice delivery system.