JAMIA MILLIA ISLAMIA

(A Central University)

ASSIGNMENT
on
CONCEPT & SCOPE of ALTERNATE DISPUTE
RESOLUTION

Submitted to:
Prof. Dr. Nuzahat Parveen Khan Ma'am
Submitted by:
Manish Kumar Mishra
Roll No.19, Sec.A
IXth Sem, Final yr
2017-18
ACKNOWLEDGEMENT

Firstly, I would like to express my profound sense of gratitude

towards the Almighty GOD for providing me with the authentic
circumstances which were mandatory for the completion of my
research work.
I am also thankful to Prof. Dr. Nuzahat Parveen Khan Ma'am
for her invaluable support, encouragement, supervision and useful
suggestions throughout this research work. Her moral support and
continuous guidance enabled me to complete my work
successfully. Her intellectual thrust and blessings motivated me to
work rigorously on this study. In fact this study could not have
seen the light of the day if his contribution had not been available.
It would be no exaggeration to say that it is his unflinching faith
and unquestioning support that has provided the sustenance
necessary to see it through to its present shape.

Table of Contents

1. Concept of ADR
2. Background of ADR.
· Dispute Settlement during Mughal Rulers
 · Dispute settlement during Kushan Dynasty:

· Dispute Settlement during Gupta Age:

· Alternative Dispute Resolution during British Period:

3. Types of ADR Mechanism.

4. ADR Institutions around the world
5. ADR in India: Need & Importance.
6. Background to arbitration legislation:
7. Form of the Act:

· Issue at arbitration:

· Authorities of the Court.

· Scope of Arbitrator.

· Proceedings of arbitration proceedings:

· Evidence in arbitral proceedings:
· Form and content of awards:
· Challenge to the awards:
8. Concilliation.
· Evolution of Conciliation in India.
· Procedure OF Concilliation.
· Pros of Conciliation:
· Concliation and Mediation: Differences.
9. Mediation.
· Procedure of Mediation.
· Mediator and its role.
· Pros of Mediation
10. LokAdalat.
· Lok adalat and its significance.
· Lok adalat in india.
· The legal Services authority act, 1987.
· Pros of lok adalat.
· Critique of lok adalat.
· Suggestions of lok adalat.
11. Conclusions
Concept of ADR

Alternative Dispute Resolution or ADR refers to an assortment of dispute resolution

procedures that primarily serve as alternatives to litigation and are generally conducted
with the assistance of a neutral and independent third party.Mediation, Conciliation,
Arbitration, LokAdalats, Med-Arb, Early Neutral Evaluation and Mini Trial are some of
the examples of ADR procedures. ADR is essentially based on the philosophy that a
dispute is a problem to be solved together rather that a combat to be won and it visualizes
a participative and collaborative effort of the disputant parties, facilitated by the ADR
neutral, to arrive at an acceptable resolution of the dispute outside the litigative process.

The primary objective of every legal system is to render justiceand access to justice is
one of the cherished goals, which is the sine qua non for the existence of a democratic
and civilized state. It is, therefore, one of the prime functions of a welfare state to provide
adequate dispute-resolution mechanisms and indeed in a democratic society people must
have effective access to such dispute resolution mechanisms as the maxim ubi jus
ibiremedium cannot be permitted to be reduced to an empty promise.

Characterized by a huge and continuously increasing population and limited resources,

access to justice for all in India is still a distant dream even after six decades of
independence. The judicial system in India, laden with insurmountable arrears, marred by
a poor judge to population ratio and attended with procedural complexities, inherent
delays and soaring expenses, in the recent past, had entered into a phase where its
credibility and efficacy was getting eroded to a considerable extent. This propelled the
search for new alternatives and the result was the advent of the ADR in its contemporary
modern incarnation and undoubtedly over these years ADR has proved to be one of the
most promising remedies which have been advocated to counter the problems faced by
the justice delivery system.
The enactment of the Legal Services Authorities Act, 1987and the Arbitration and
Conciliation Act, 1996 unequivocally demonstrates the legislative consciousness and
concern towards the necessity and importance of ADR in India. However, the turning
point in the ADR movement was the legislative mandate articulated in the enactment of
section 89 CPCfollowed by an extraordinary, committed and concerted judicial
endeavour, which triggered an ADR revolution in India of a stature which was
unprecedented and preeminently unmatchable.

In the recent past the ADR revolution has gained tremendous momentum in India, not
only on account of ADR being an effective instrument for clearing the judicial dockets,
but also because it steers clear of rigidity and complexity and offers an additional
economical and expeditious remedy for resolution of disputes, a remedy which is fairly
appropriate in the given state of affairs. The Supreme Court and the High Courts have
also vociferously advocated the pervasive use of ADR and have themselves taken myriad
initiatives for popularizing and promoting ADR in India.

Delhi is a legally advanced city and the variety, complexity and enormity of litigation in
Delhi has no parallels as far as India is concerned. Burdened with colossal spurt in
litigation on the one hand and adorned with superior infrastructure, flourishing trade and
commerce, vibrant corporate sector and educated and aware masses on the other hand,
Delhi has tremendous potential for development of ADR and indeed Delhi has been one
of the pioneers in the adoption and implementation of ADR. Albeit, a whole gamut of
procedures are available under the umbrella of ADR, primarily four ADR processes
namely Mediation, LokAdalats, Arbitration and Conciliation have attained noteworthy
recognition in Delhi.ADR has been extremely effective in Delhi in the recent past and
although it is a developing subject, it has tremendous potential in times to come. What is
however required is a comprehensive legislative framework, effective and proper
implementation and institutionalization, constant evaluation and monitoring, a concerted
endeavour to rectify the flaws and correct the aberrations, proper education, training and
publicity and most importantly revolutionizing the mindset of the masses.

Background of ADR
ADR originated in the USA in a drive to find alternatives to the traditional legal system,
felt to be adversarial, costly, unpredictable, rigid, over-professionalised, damaging to
relationships, and limited to narrow rights-based remedies as opposed to creative problem
solving. The American origins of the concept are not surprising, given certain features of
litigation in that system, such as: trials of civil actions by a jury, lawyers' contingency
fees, lack of application in full of the rule "the loser pays the costs".
Beginning in the late nineteenth century, creative efforts to develop the use of arbitration
and mediation emerged in response to the disruptive conflicts between labor and
management. In 1898, Congress followed initiatives that began a few years earlier in
Massachusetts and New York and authorized mediation for collective bargaining
disputes. In the ensuing years, special mediation agencies, such as the Board of
Mediation and Conciliation for railway labor, (1913) (renamed the National Mediation
Board in 1943), and the Federal Mediation and Conciliation Service (1947) were formed
and funded to carry out the mediation of collective bargaining disputes. Additional state
labor mediation services followed. The 1913 New lands Act and later legislation reflected
the belief that stable industrial peace could be achieved through the settlement of
collective bargaining disputes; settlement in turn could be advanced through conciliation,
2
mediation, and voluntary arbitration.
At about the same time, and for different reasons, varied forms of mediation for non-
labor matters were introduced in the courts. When a group of lawyers and jurists spoke on
the topic to an American Bar Association meeting in 1923, they were able to assess court-
related conciliation programs in Cleveland, Minneapolis, North Dakota, New York City,
and Milwaukee.
Conciliation in a different form also appeared in domestic relations courts. An outgrowth
of concern about rising divorce rates in the postwar 1940's and the 1950's, the primary
goal of these programs was to reduce the number of divorces by requiring efforts at
reconciliation rather than to facilitate the achievement of divorces through less
adversarial proceedings. Following privately funded mediation efforts by the American
Arbitration Association and others in the late 1960s, the Community Relations Service
(CRS) of the United States Department of Justice initiated in 1972 a mediation program
for civil rights disputes.

Although a small number of individual lawyers had been interested in and were
practicing mediation ADR in Britain for some years, it was only in 1989 when the first
British based ADR company - IDR Europe Ltd. - bought the idea across the Atlantic and
opened its doors for business. This was the start of ADR Group. Since then many other
ADR organizations, including CEDR (Centre for Dispute Resolution), followed suite and
assisted in the development and promotion of ADR in the UK.

Dispute Settlement during Mughal Rulers:

The administrative system of the Mughal Empire was largely the work of
Akbar, for the early two Mughal kings (Babur and Humayun) did not really get the
chance to implement much of a system.29 Jalal ud-Din Muhammad Akbar laid the
foundation of the first lasting Muslim dynasty in Hindustan, the Mughal Empire; he
ascended the throne in 1556, after the death of his father, Humayun. At that time, Akbar
was only 13 years old. Akbar was the only Mughal king to ascend to the throne without
the customary war of succession.
Akbars action ultimately provided the Indian subcontinent with a more
efficient form of government than it had endured under earlier Muslim dynasties. Before
the rise of Mughals, Muslim rules had striven tooth and nail for more than three centuries
to impose their authority over the majority of Hindu population.30 Nothing like modern
legislation, or a written code of laws, existed in the Mughal period. The only notable
exceptions to this were the twelve ordinances of Jahagir and the Fatawa-i-A Xat^ a digest
of Muslim law prepared under supervision. The judges chiefly followed the Quranic
injunctions or precepts, the Fatawas or previous interpretations of the Holy Law by
eminent jurists, and the qanunus or ordinances of the Emperors. They did not ordinarily
disregard customary laws and sometimes followed principles of equity.31 Foreign writers
like Sir Thomas Roe point out that in the Mughal period there was no codified law as
such. Likewise, there was no highest court of justice which could finally lay down the
law for the country. The Mughals had three separate judicial agencies, all working at the
same time and independent of each other. Those were the courts of religious law, court of
secular law, and political courts. As regards the courts of religious law, those were
presided over by the Qazis who decided cases according to Islamic law. However, the
Qazi was never considered authoritative enough to lay down a legal principle, elucidate
an obscurity in the Quran or supplement the Quranic law by following the line of its
obvious intention in respect of cases not explicitly provided by it. The Qazis were
helped by the Muftis who expounded the law. The Mufti was urged to spend his days
and nights in reading books on jurisprudence and the reports of cases from which one can
learn precedents. The Miradls drew up and pronounced the judgment. Muslim Law in
India did not grow and change according to the circumstances and needs of the country.
As regards the courts of secular law, they were presided over by
Governors, Faujdars and Kotwals. In the time of Akbar, Brahmans were appointed to
decide the cases of Hindus.

Dispute settlement during Kushan Dynasty:

Kushan Empire is one of the most interesting Dynasties which ruled over
the land of Jammu & Kashmir.20 After the disintegration of the Mauryan Empire in the
second century B.C., South Asia became a collage of regional powers with overlapping
boundaries. Indias unguarded northwestern border again attracted a series of invaders
between 200 B.C. and A.D. 300. The invaders became Indianized in the process of
their conquest and settlement. Also, this period witnessed remarkable intellectual and
artistic achievements inspired by cultural diffusion and syncretism. The Indo-Greeks, or
the Bactrians, of the northwest contributed to the development of numismatics; they were
followed by another group, the Shakas (or Scythians), from the steppes of Central Asia,
who settled in western India. Still other nomadic people, the Yuezhi, who were forced out
of the Inner Asian steppes of Mongolia, drove the Shakas out of northwestern India and
established the Kushana Kingdom (first century B.C.-third century A.D.). The Kushana
Kingdom controlled parts of Afghanistan and Iran, and in India the realm stretched from
Purushapura (modern Peshawar, Pakistan) in the northwest, to Varanasi (Uttar Pradesh)
in the east, and to Sanchi (Madhya Pradesh) in the south. For a short period, the kingdom
reached still farther east, to Pataliputra.21
In Kanishkas time Kushan Kingdom has seen its highest rise (78-123
AD). Kanishka was the legendary ruler of ancient India and according to most historians
the greatest ruler of Kushan dynasty. He and his descendents called themselves Devputra
which means son of god, who ruled Aryavarta, the India. He established an
era, commonly known as Shaka era, starts from 78 AD. Shaka era is still in use in India.
Huvishka succeeded Kanishka I. He was founder of a city Hushka in Kashmir named
after him (described by Kalhan in Rajatarangini). Kushana Empire was at its zenith
during Kanishkas and Huvishkas reign. After Huvishkas reign, Vasudeva I took
control of this dynasty which by then had lost control over regions beyond Bactria or
perhaps the Bactria itself. The Kushan dynasty had been totally assimilated in Indian
culture. Vasudeva I was the last great king of the dynasty when Kushana empire was at
its height of splendor and prosperity.
Kushan Empire had started its decline soon after Vasudevas death.
Vasudeva was followed by his son Kanishka II, who lost all the territories west of river
Indus to Sassanians. Vasudeva II, Vashishka, and Shaka are the kings who followed after
the Kanisha II. After Vashishka the Kushan Empire had completely disintegrated into
few small kingdoms. By fourth century AD this dynasty went into total obscurity with
advent of mighty Gupta emperors.22

Dispute Settlement during Gupta Age:

Gupta age is known as golden age of India. It existed approximately from
320 to 550 AD.23 The administrative system during the Gupta dynasty reign was similar
to that of the Mauryan Empire. The King was the highest authority and possessed wide
powers to enable the smooth functioning of the empire. During the Gupta period, the
empire was classified into separate administrative divisions like Rajya, Rashtra, Desha
Mandala, etc. The provinces were divided into numerous districts or Vishayas.24 Gupta
kings were not autocrats. They shared their powers with ministers and other high officers.
A large number of powers were delegated to the local bodies such as village Panchayats
and town councils. According to Kalidas, there were three ministers- foreign minister,
finance minister and the law minister. Office of minister in charge of law and order was
called Vinayasthiti Sthapaka.25
The Gupta Empire had a separate judicial system. At the lowest level of
the judicial system was the village assembly or trade guild. These were the councils
appointed to settle the disputes between the parties that appear before them. There were
separate councils appointed to decide various matters that came before them. Thus, if
people could not reach to any amicable settlement, it was resolved by the councils. The
King presided over the highest court of appeal. In discharging his duty, the King was
assisted by judges, ministers, priests, etc.26 Inscriptions of Guptas refer to such judicial
officers as Mahadanda nayaka, Mahakshapatalika etc. Probably, Mahadandanayaka
combined the duties of a judge and a general. The Mahadandanayaka was probably the
Great keeper of Records. It appears that the Kumaramatya a Bhondapashika and the
Uparika had each his separate Adhikarna or court or office where the transactions
pertaining to land were decided. It is possible that judicial matters were also decided
there. According to Fa-Hien, punishments were very lenient and capital punishment was
very rare. However, the testimony of Fa-Hien is not accepted and it is pointed out by the
Kalidas, Visakhadatta that punishments were pretty harsh in the Gupta period-such as
injunctions or precepts, the Fatawas or previous interpretations of the Holy Law by
eminent jurists, and the qanunus or ordinances of the Emperors. They did not ordinarily
disregard customary laws and sometimes followed principles of equity.31 Foreign writers
like Sir Thomas Roe point out that in the Mughal period there was no codified law as
such. Likewise, there was no highest court of justice which could finally lay down the
law for the country. The Mughals had three separate judicial agencies, all working at the
same time and independent of each other. Those were the courts of religious law, court of
secular law, and political courts. As regards the courts of religious law, those were
presided over by the Qazis who decided cases according to Islamic law. However, the
Qazi was never considered authoritative enough to lay down a legal principle, elucidate
an obscurity in the Quran or supplement the Quranic law by following the line of its
obvious intention in respect of cases not explicitly provided by it. The Qazis were
helped by the Muftis who expounded the law. The Mufti was urged to spend his days
and nights in reading books on jurisprudence and the reports of cases from which one can
learn precedents. The Miradls drew up and pronounced the judgment. Muslim Law in
India did not grow and change according to the circumstances and needs of the country.
As regards the courts of secular law, they were presided over by
Governors, Faujdars and Kotwals. In the time of Akbar, Brahmans were appointed to
decide the cases of Hindus. The Panchayats also fell under this category. The courts of
secular law were not under the thumb of the Qazi. Political courts tried political cases like

Alternative Dispute Resolution during British Period:

The British East India Company opened their first trading centre at Surat,
Gujarat in 1612. This was as per the deed of right Mughal Emperor Jehangir granted to
them. Their first major interference with the internal politics of India was when they
supported Mir Kasim, a minister of Bengal, militarily to sabotage Siraj-ud-Daula, the
Nawab. On 23rd June, 1757, the Nawab was defeated by a joint military action of Robert
Clives troops and those of Mir Kasim in a battle at Plassey. And this was the turning
ADR, or mediation (as it is now synonymously known as), is used world-wide by
Governments, corporations and individuals to resolve disputes big or small, of virtually
any nature and in most countries of the world. point where the British formally entered
the political arena of India and began to play a
direct role in the administrative supremacy. They managed to bring under their
administrative control most of the princely states of India either by direct annexation
using force or by giving military support. They brought Punjab also under their control in
1849. Along with Punjab, the North West Frontier Province, which is now under
Pakistan, was also brought under them. And in those states where a legitimate heir
apparent to the crown was not available they were brought under the British rule. Sattara
(1848), Udaypur (1852), Jhansi (1853), Tanjore (1853), Nagpur (1854), Oudh (1856)
were some of the princely states the British annexed using this excuse — that there were
no legitimate heir apparent. When Tipu was defeated in 1792, they annexed Malabar
too.43
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.44 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.
In developing countries where most people opt for litigation to resolve disputes, there is
excessive over-burdening of courts and a large number of pending cases, which has
ultimately lead to dissatisfaction among people regarding the judicial system and its
ability to dispense justice. This opinion is generated largely on the basis of the popular
belief, Justice delayed is justice denied. However, the blame for the large number of
pending cases in these developing countries or docket explosion, as it is called, cannot be
attributed to the Courts alone. The reason for it being the non-implementation of
negotiation processes before litigation. It is against this backdrop that the mechanisms of
Alternative Dispute Resolution are being introduced in these countries. These
mechanisms, which have been working effectively in providing an amicable and speedy
solution for conflicts in developed economies, are being suitably amended and
incorporated in the developing countries in order to strengthen the judicial system. Many
countries such as India, Bangladesh and Sri Lanka have adopted the Alternative Dispute
Resolution Mechanism. However, it is for time to see how effective the implementation
of these mechanisms would be in these countries. ADR originated in the USA in a drive
to find alternatives to the traditional legal system, felt to be adversarial, costly,
unpredictable, rigid, over-professionalised, damaging to relationships, and limited to
narrow rights-based remedies as opposed to creative problem solving. The American
origins of the concept are not surprising, given certain features of litigation in that
system, such as: trials of civil actions by a jury, lawyers' contingency fees, lack of
application in full of the rule "the loser pays the costs".

Beginning in the late nineteenth century, creative efforts to develop the use of arbitration
and mediation emerged in response to the disruptive conflicts between labor and
management. In 1898, Congress followed initiatives that began a few years earlier in
Massachusetts and New York and authorized mediation for collective bargaining
disputes. In the ensuing years, special mediation agencies, such as the Board of
Mediation and Conciliation for railway labor, (1913) (renamed the National Mediation
Board in 1943), and the Federal Mediation and Conciliation Service (1947) were formed
and funded to carry out the mediation of collective bargaining disputes. Additional state
labor mediation services followed. The 1913 New lands Act and later legislation reflected
the belief that stable industrial peace could be achieved through the settlement of
collective bargaining disputes; settlement in turn could be advanced through conciliation,
2
mediation, and voluntary arbitration.
At about the same time, and for different reasons, varied forms of mediation for non-
labor matters were introduced in the courts. When a group of lawyers and jurists spoke on
the topic to an American Bar Association meeting in 1923, they were able to assess court-
related conciliation programs in Cleveland, Minneapolis, North Dakota, New York City,
and Milwaukee.
the British began to rule.45 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.46 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
ScheduleBodies 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.47 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.
Conciliation in a different form also appeared in domestic relations courts. An outgrowth
of concern about rising divorce rates in the postwar 1940's and the 1950's, the primary
goal of these programs was to reduce the number of divorces by requiring efforts at
reconciliation rather than to facilitate the achievement of divorces through less
adversarial proceedings. Following privately funded mediation efforts by the American
Arbitration Association and others in the late 1960s, the Community Relations Service
(CRS) of the United States Department of Justice initiated in 1972 a mediation program
for civil rights disputes.

Although a small number of individual lawyers had been interested in and were
practicing mediation ADR in Britain for some years, it was only in 1989 when the first
British based ADR company - IDR Europe Ltd. - bought the idea across the Atlantic and
opened its doors for business. This was the start of ADR Group. Since then many other
ADR organizations, including CEDR (Centre for Dispute Resolution), followed suite and
assisted in the development and promotion of ADR in the UK.

ADR, or mediation (as it is now synonymously known as), is used world-wide by

Governments, corporations and individuals to resolve disputes big or small, of virtually
any nature and in most countries of the world.

In developing countries where most people opt for litigation to resolve disputes, there is
excessive over-burdening of courts and a large number of pending cases, which has
ultimately lead to dissatisfaction among people regarding the judicial system and its
ability to dispense justice. This opinion is generated largely on the basis of the popular
belief, Justice delayed is justice denied. However, the blame for the large number of
pending cases in these developing countries or docket explosion, as it is called, cannot be
attributed to the Courts alone. The reason for it being the non-implementation of
negotiation processes before litigation. It is against this backdrop that the mechanisms of
Alternative Dispute Resolution are being introduced in these countries. These
mechanisms, which have been working effectively in providing an amicable and speedy
solution for conflicts in developed economies, are being suitably amended and
incorporated in the developing countries in order to strengthen the judicial system. Many
countries such as India, Bangladesh and Sri Lanka have adopted the Alternative Dispute
Resolution Mechanism. However, it is for time to see how effective the implementation
of these mechanisms would be in these countries.

DIFFERENT TYPES OF ALTERNATIVE DISPUTE RESOLUTIONS: - The most

common types of ADR for civil cases are Arbitration, Conciliation, Mediation, Judicial
Settlement and Lok Adalat. In India, the Parliament has amended the Civil Procedure
Code by inserting Section 89 as well as Order 10 Rule 1-A to 1-C. Section 89 of the Civil
Procedure Code provides for the settlement of disputes outside the Court. It is based on
the recommendations made by the Law Commission of India and Malimath Committee.
It was suggested by the Law Commission of India that the Court may require attendance
of any party to the suit or proceedings to appear in person with a view to arriving at an
amicable settlement of dispute between the parties and make an - 58 - attempts to settle
the dispute between the parties amicably. Malimath Committee recommended to make it
obligatory for the Court to refer the dispute, after issues are framed, for settlement either
by way of Arbitration, Conciliation, Mediation, Judicial Settlement through Lok Adalat.
It is only when the parties fail to get their disputes settled through any of the alternate
disputes resolution method that the suit could proceed further. In view of the above, new
Section 89 has been inserted in the Code in order to provide for alternative dispute
resolution. It is worthwhile to refer Section 89 of the Civil Procedure Code, which runs as
follows: - Sec. 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 observations 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 has been referred — (a) for arbitration or conciliation, the
provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the
proceedings for - 59 - 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 (39 of 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 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the
provisions of that Act; (d) for mediation, the Court shall effect a compromise between the
parties and shall follow such procedure as may be prescribed." On perusal of the
aforesaid provisions of Section 89, it transpires that it refers to five types of ADR
procedures, made up of one adjudicatory process i.e. arbitration and four negotiatory i.e.
non adjudicatory processes such as Conciliation, Mediation, Judicial Settlement and Lok
Adalat. The object behind Section 89 is laudable and sound. Resort to ADR process is
necessary to give speedy and effective - 60 - relief to the litigants and to reduce the
pendency in and burden upon the Courts. Of course, Section 89 has to be read with Rule
1-A of Order 10, which runs as follows: - Order 10 Rule 1-A. Direction of the Court to
opt for any one mode of alternative dispute resolution.--After recording the admissions
and denials, the Court shall direct the parties to the suit to opt either mode of the
settlement outside the Court as specified in sub- section (1) of section 89. On the option
of the parties, the Court shall fix the date of appearance before such forum or authority as
may be opted by the parties. Order 10 Rule 1-B. Appearance before the conciliatory
forum or authority.--Where a suit is referred under rule 1A, the parties shall appear before
such forum or authority for conciliation of the suit. Order 10 Rule 1-C. Appearance
before the Court consequent to the failure of efforts of conciliation.--Where a suit is
referred under rule 1A and the presiding officer of conciliation forum or authority is
satisfied that it would not be proper in the interest of justice to proceed with the matter
further, then, it shall refer the matter again to the Court and direct the parties to appear
before the Court on the date fixed by it. On joint reading of Section 89 read with Rule 1-
A of Order 10 of Civil Procedure Code, it transpires that the Court to direct the parties to
- 61 - opt for any of the five modes of the Alternative Dispute Resolution and on their
option refer the matter. Thus, the five different methods of ADR can be summarized as
follows: - 1. Arbitration 2. Conciliation 3. Mediation 4. Judicial Settlement & 5. Lok
Adalat

Types of ADR Mechanism.

Thus, the five different methods of ADR can be summarized as follows: - these are
studied in detail in the coming Chapters.

1. Arbitration
2. Conciliation
3. Mediation
4. Judicial Settlement & 5. LokAdalat

ADR Institutions around the world.

The various institutions and provisions governing the ADR mechanisms all over the
world are listed below:

a) Permanent Court of Arbitration (PCA): The Permanent Court of Arbitration (PCA),

also known as the Hague Tribunal is an international organization based in The Hague in
the Netherlands. It was established in 1899 as one of the acts of the first Hague Peace
Conference, which makes it the oldest institution for international dispute resolution. In
2002, 96 countries were party to the treaty. The court deals in cases submitted to it by the
consent of the parties involved and handles cases between countries and between
countries and private parties. The PCA is housed in the Peace Palace in The Hague,
which was built specially for the Court in 1913 with an endowment from the Carnegie
Foundation. The same building also houses the International Court of Justice, though the
two institutions operate seperately.

b) World Trade Organisation (WTO): The World Trade Organisation is an international

organisation which oversees a large number of agreements defining the rules of trade
between its member states. The WTO is the successor to the General Agreement on
Tariffs and Trade, and operates with the broad goal of reducing or abolishing
international trade barriers. The WTO has two basic functions: as a negotiating forum for
discussions of new and existing trade rules, and as a trade dispute settlement body. The
function of WTO as a trade dispute settlement body is important in this context. The
WTO has significant power to enforce its decisions, through the Dispute Settlement
Body, an international trade court with the power to authorize sanctions against states
which do not comply with its rulings. The WTO mainly resolves disputes through the
process of consensus and arbitration which are essentially mechanisms of ADR.

c) International Chamber of Commerce (ICC) : The International Chamber of Commerce

is an international organization that works to promote and support global trade and
globalisation. It serves as an advocate of world business in the global economy, in the
interests of economic growth, job creation, and prosperity. As a global business
organization, made up of member states, it helps the development of global outlooks on
business matters. ICC has direct access to national governments worldwide through its
national committees. ICC activities include Arbitration and Dispute reolution which are
the most prominent activities that it performs.

d) Court of Arbitration for Sport (CAS): The Court of Arbitration for Sport (CAS;
Tribunal Arbitral du Sport or TAS in French) is an arbitration body set up to settle
disputes related to sports. Its headquarters are in Lausanne; there are additional courts
located in New York City and Sydney, with ad-hoc courts created in Olympics host cities
as required. the CAS underwent reforms to make itself more independent of the
International Olympic Committee (IOC), organizationally and financially. The biggest
change resulting from this reform was the creation of an "International Council of
Arbitration for Sport" (ICAS) to look after the running and financing of the CAS, thereby
taking the place of the IOC. Generally speaking, a dispute may be submitted to the CAS
only if there is an arbitration agreement between the parties which specifies recourse to
the CAS. Currently, all Olympic International Federations but one, and many National
Olympic Committees have recognised the jurisdiction of the CAS and included in their
statutes an arbitration clause referring disputes to it. Its arbitrators are all high level jurists
and it is generally held in high regard in the international sports community.

e) United Nations Commission on International Trade Law (UNCITRAL): The United

Nations Commission on International Trade Law (UNCITRAL) is the core legal body
within the United Nations system in the field of international trade law. UNCITRAL was
tasked by the General Assembly to further the progressive harmonization and unification
of the law of international trade. The UNCITRAL is a body of member and observer
states under the auspices of the United Nations. It drafted the UNCITRAL Model law on
International Commercial Arbitration in 1985. Agreements, which cite the UNCITRAL
Arbitration Rules, may be bound to this form of dispute resolution. Legislation based on
the UNCITRAL Model Law on International Commercial Arbitration has been enacted in
Australia, Azerbaijan, Bahrain, Bangladesh, Belarus, Bermuda, Bulgaria, Canada, Chile,
in China: Hong Kong Special Administrative Region, Macau Special Administrative
Region; Croatia, Cyprus, Egypt, Germany, Greece, Guatemala, Hungary, India, Iran
(Islamic Republic of), Ireland, Japan, Jordan, Kenya, Lithuania, Madagascar, Malta,
Mexico, New Zealand, Nigeria, Oman, Paraguay, Peru, Philippines, Republic of Korea,
Russian Federation, Singapore, Spain, Sri Lanka, Thailand, Tunisia, Ukraine, within the
United Kingdom of Great Britain and Northern Ireland: Scotland; in Bermuda, overseas
territory of the United Kingdom of Great Britain and Northern Ireland; within the United
States of America: California, Connecticut, Illinois, Oregon and Texas; Zambia, and
Zimbabwe.

ADR in India: Need & Importance.

Alternative Dispute Resolution in India is an attempt made by the legislators and
judiciary alike to achieve the Constitutional goal of achieving Complete Justice in India.
ADR first started as a quest to find solutions to the perplexing problem of the ever
increasing burden on the courts. A thought-process that started off to rectify docket
explosion, later developed into a separate field solely catering to various kinds of
mechanisms which would resolve disputes without approaching the Formal Legal System
(FLS). The reasoning given to these ADR mechanisms is that the society, state and the
party to the dispute are equally under an obligation to resolve the dispute as soon as
possible before it disturbs the peace in the family, business community, society or
ultimately humanity as a whole.

In a civilised society, principles of natural justice along with the Rule of Law should
result in complete justice in case of a dispute. Rule of Law is defined as the state of order
in which events conform to the law. It is an authoritative, legal doctrine, principle, or
precept applied to the facts of an appropriate case. These definitions give us the
indication that the Rule of Law is a authoritative concept which might lead to a win-lose
situation in cases of dispute. Therefore, ADR uses the principles of natural justice in
consonance with the Rule of Law, in order to create a favourable atmosphere of a win-
win situation. This is much needed in countries like India where litigation causes a great
deal of animosity between the parties due to the agony caused by the long-standing
litigation. ADR, thus, gains its momentum in India today.

Alternative Dispute Resolution in India was founded on the Constitutional basis of

Articles 14 and 21 which deal with Equality before Law and Right to life and personal
liberty respectively. These Articles are enshrined under Part III of the Constitution of
India which lists the Fundamental Rights of the citizens of India. ADR also tries to
achieve the Directive Principle of State Policy relating to Equal justice and Free Legal
Aid as laid down under Article 39-A of the Constitution. The Acts which deal with
Alternative Dispute Resolution are Arbitration and Conciliation Act, 1996 (discussed in
detail later) and the Legal Services Authorities Act, 1987. Section 89 of the Civil
Procedure Code, 1908 makes it possible for Arbitration proceedings to take place in
accordance with the Acts stated above.
In India, the quest for justice has been an ideal, which the citizens have been aspiring for
generations down the line. 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. About half a century of the Constitution at work has tossed up
many issues relating to the working of the judiciary; the most important being court
clogging and judicial delays. Particularly disturbing has been the chronic and recurrent
theme of a near collapse of the judicial trial system, its delays and mounting costs. Here,
the glorious uncertainties of the law frustrated the aspirations for an equal, predictable
and affordable justice is also a question, which crops up often in the minds of the people.

We are a country of a billion people. The fundamental question is: How do we design and
structure a legal system, which can render justice to a billion people? The possibility of a
justice-delivery mechanism in the Indian context and the impediments for dispensing
justice in India is an important discussion. Delay in justice administration is the biggest
operational obstacle, which has to be tackled on a war footing. As Justice Warren Burger,
the former Chief Justice of the American Supreme Court observed in the American
context:

The harsh truth is that we may be on our way to a society overrun by hordes of lawyers,
hungry as locusts, and bridges of judges in numbers never before contemplated. The
notion — that ordinary people want black-robed judges, well-dressed lawyers, and fine
paneled courtrooms as the setting to resolve their disputes, is not correct. People with
legal problems like people with pain, want relief and they want it as quickly and
inexpensively as possible.

This observation with greater force applies in the Indian context.

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. These are the reasons behind the introduction of ADR in
India. The implementation of Alternative Dispute Resolution mechanisms as a means to
achieve speedy disposal of justice is a crucial issue.The sea-change from using litigation
as a tool to resolve disputes to using Alternative Dispute Resolution mechanisms such as
conciliation and mediation to provide speedy justice is a change that cannot be easily
achieved. The first step had been taken in India way back in 1940 when the first
Arbitration Act was passed. However, due to a lot of loop-holes and problems in the
legislation, the provisions could not fully implemented. However, many years later in
1996, The Arbitration and Conciliation Act was passed which was based on the
UNCITRAL model, as already discussed in the previous section of the paper. The
amendments to this Act were also made taking into account the various opinions of the
leading corporates and businessmen who utilise this Act the most. Sufficient provisions
have been created and amended in the area of LokAdalats in order to help the rural and
commoner segments to make most use of this unique Alternative Dispute Resolution
mechanism in India. Therefore, today the provisions in India sufficiently provide for
Alternative Dispute Resolution. However, its implementation has been restricted to just
large corporates or big business firms. LokAdalats, though a very old concept in Indian
Society, has not been implemented to its utmost level. People still opt for litigation in
many spheres due to a lot of drawbacks. Provisions made by the legislators need to be
utilised. This utilisation can take place only when a definite procedure to incerase the
implementation of ADR is followed. In order to have such an implementation
programme, it is necessary to analyse what the problems are and rectify them.

Any implementation is usually confronted with problems. ADR is no excaption to this

rule. Some of the problems faced during implementation are enumerated as under:

1) Attitudes: Although Indian law favours dispute resolution by arbitration, Indian

sentiment has always abhorred the finality attaching to arbitral awards. A substancial
volume of Indian case- law bears testimony to the long and ardous struggle to be freed
from binding arbitral decisions. Aided and abetted by the legal fraternity, the aim of every
party to an arbitration (domestic or foreign) is: try to win if you can, if you cannot do
your best to see that the other side cannot enforce the award for as long as possible. In
that sense, arbitration as a means of settling disputes is a failure- though it is being
increasingly regarded as a useful mechanism for resolving disputes. The trouble is that
neither the private sector nor the public sector in India are as yet sufficiently infused with
the spirit of arbitration. An arbitration award should only be permitted to be set aside for
reasons extraneous to its contents — such as, lack of jurisdiction of the arbitrator, fraud
or corruption of the arbitrator or of the other party, or a fundamental miscarriage of
justice in the conduct of arbitral proceedings. Jurisdiction to correct patent legal errors on
the face of the award was a peculiarly English innovation. To have imported this
questionable jurisdiction into litigous India (as we did under the Arbitration Act, 1940)
was a great mistake. Then, thin dividing line between the merits of an award and errors of
law apparent on its face are often blurred- few questions of fact continue to remain so
after being churned up in the mind of a skilled lawyer! These basic infirmities in the law
of arbitration, and the approach of users, left their mark on domestic arbitration under the
Arbitration Act, 1940.

First and foremost, there is a need to change our traditional approach to resolving
disputes, even a need to change our basic attitudes. Perhaps the legendary basketball
coach of Temple University, John Chaney, said it best when he said that "winning is an
attitude." He might well have been speaking about dispute resolution and ADR. We need
to redefine the very meaning of what it is to "win." Consistent with what our clients want
and deserve, the ultimate "win" requires our understanding of the clients' interests and
goals and our ability to solve their problems. The spirit of ADR mechanisms is to create a
WIN-WIN situation, but the attitude to people is changing it into a WIN-LOSE situation,
which is not very different from a litigation. In so many large international arbitrations
the defendant will do everything to postpone the moment of the award; at and before the
hearing, the parties will deploy all concievable, and some inconcievable, procedural
devices to gain an advantage; the element, of mutual respect is lacking; and the loser
rather than paying up with fortitude, will try either to have the award upset, or to atleast
have its enforcement long postponed. It is in this background that the new Indian law (of
arbitration and conciliation) was concieved and enacted. But it is not enough to have a
new law- it is necessary for judges and lawyers to realise that the era of court-structured
and court- controlled arbitration is effectively at an end. Our attitudes require
readjustment; we need to re- adjust to the spirit of ADR, and adhere to its underlying
philosophy, which is that of utmost good faith of the parties.
2) Lawyer and Client Interests: Lawyers and clients often have divergent attitudes and
interests concerning settlement. This may be a matter of personality (one may be a
fighter, the other a problem solver) or of money. In some circumstances, a settlement is
not in the clients interest. For example, the client may want a binding precedent or may
want to impress other potential litigants with its firmness and the consequent costs of
asserting claims against it. Alternatively, the client may be in a situation in which there
are no relational concerns; the only issue is whether it must pay out money; there is no
pre-judgement interest; and the cost of contesting the claim is less than the interest on the
money. In these, and a small number of situations, settlement will not be in the clients

23
interest.

Still, a satisfactory settlement typically is in the clients interest. It is the inability to obtain
such a settlement, in fact, that impels the client to seek the advice of counsel in the first
place. The lawyer must consider not only what the client wants but also why the parties
have been unable to settle their dispute and then must find a dispute resolution procedure
that in likely to over come the impediments to settlement. Note, however, that, even
though it may initially appear that the parties seek a settlement, sometimes, an
examination of the impediments to settlements reveals that atleast one party wants
something that settlement cannot provide (eg. Public vindication or a ruling that
establishes an enforceable precedent.)

An attorney who is paid on an hourly basis stands to profit handsomely from a trial, and
maybe less interested in settlement than the client. On the other hand, an attorney paid on
a contingent fee basis is interested in a prompt recovery without the expense of preparing
for or conducting a trial, and maybe more interested in settlement than is the client. It is
in part because of this potential conflict of interest that most processes that seek to
promote settlement provide for the clients direct involvement. For lawyers, this means
new approaches that initially seem almost counterintuitive. For example, the recovery of
large sums of money is usually regarded as the ultimate "win" for plaintiffs in
commercial cases. Yet, Wall Street values longterm streams of revenue even more highly
than large sums of cash. Perhaps the restructuring of a long-term relationship would offer
a better result. Once in mediation, lawyers usually try to exert a high degree of control
over the process, not unlike in a deposition or at trial. However, direct involvement of the
client in the mediation process is often the best way to succeed. Lawyers also frequently
engage in a "we-they" approach to negotiations that rarely results in a zero-sum gain.
Lawyers need to have a better understanding of the importance of integrative bargaining,
where lawyers can sit on the same side of the table and try to "expand the pie." Lawyers
also need to reflect upon the meaning of Ethical Consideration, which imposes a duty to
represent a client zealously. Effective mediation advocates need to abandon any desire for
revenge in favor of a more goal-oriented approach if they are to secure the "win" that best
serves their client's interests. In many instances, it is not the lawyer but the angry client
who wants revenge. For these clients, every new case becomes a matter of principle until
the client receives the lawyer's third or fourth bill-then the client wants to spell the word
"principle" differently. Here, even more so, the lawyer has a responsibility to make an
early and realistic assessment of the dispute and to serve as an anchor for the client.

24
These differences in interest need to be sorted out.

3) Legal Education: Law schools train their students more for conflict than for the arts of
reconciliation and accomodation and therefore serve the profession poorly. Already,
lawyers devote more time to negotiating conflicts than they spend in the library or
courtroom and studies have shown that their efforts to negotiate were more productive for
the clients. Over the next generation, societys greatest opprtunities will in tapping human
inclinations towards collaboration and compromise rather than stirring our proclivities for
competition and rivalry. If lawyers are not leaders in marshalling co-operation and
designing mechanisms which allow it to flourish, they will not be at the centre of the
most creative social experiments of our time. A serious effort to provide cheaper methods
of resolving disputes will require skilled mediators and judges, who are trained to play a
much more active part in guiding proceedings towards a fair solution. In short, a just and
effective legal system will not merely call for a revised curriculum; it will entail the
education of entire new categories of people. For law schools, there is a need to recognize
that the demands of the marketplace have forever changed the dynamics of dispute
resolution. Obviously, an understanding of the adversarial system, stare decisis, and the
process of litigation remain critical. At the same time, students need to enhance their
skills as negotiators and to appreciate, for example, the value of listening or the
advantage of making the "first credible offer." Law students also need to understand the
suitability and advocacy issues in ADR at more sophisticated levels and to understand the
important keys to problem solving. It is time that our law schools began to take the lead
in helping to devise such training.

4) Though recourse to ADR as soon as the dispute arises may confer maximum
advantages on the parties; it can be used to reduce the number of contentious issues
between the parties; and it can be terminated at any stage by any one of the disputing
parties. However, there is no guarantee that a final decision may be reached.

5) ADR procedures are said to be helpful in reaching a decision in an amicable manner.

However, the decisions arrived at after a non-litigative procedure are not binding as they
are voluntary. This makes the entire exercise futile as parties do not stick to their decision
resulting in a waste of time and money.

6) ADR procedure permits parties to choose neutrals who are specialists in the subject
matter of the disputes. This does not mean that there will be a diminished role for
lawyers. They will continue to play a central role in ADR processes; however, they will
have to adapt their role ADR requirements. Neutrals and trained ADR experts are very
few to cater to the vast population.

7) Since the ADR proceedings do not require a very high degree of evidence, most of the
facts regarding the dispute which would have been proved otherwise continue to be a
bane in the discussion which may lead to dissatisfaction.

8) In ADR, the parties can choose their own rules or procedures for dispute settlement.
Arriving at them is the major hurdle.

9) ADR programmes are flexible and not afflicted with rigourous rules of procedure.
There is, therefore, a possibility of the parties going back on the agreed rules and
programmes. This creates a delay and slows the process of dispute resolution.
10) Flexibility and unconfirmed procedures make it extremely difficult to quote and use
precedents as directives.

11) ADR procedures were introduced to lessen the burden of the courts. However, since
there is an option to appeal against the finality of the arbitral award to the courts, there is
no difference in the burden.

12) There are also some situations under which an amicable settlement through ADR is
not favoured. They are:

· One party may be owed money and simply be looking for the final and
enforceable decision which can be obtained by reporting directly to litigation. Any
ADR procedure only compromises his situation.

· A party may owe money and seek to use amicable settlement as a delay and
discovery mechanism — the other party may, therefore, be concerned about the
delay, incurring extra costs and being disadvantaged in the subsequent litigation

· Adjudicative methods may be most appropriate for resolving some situations,

such as frivolous claims, claims which compromise a particular principle, cases
which involve bodily injury or alleged criminality.
All these problems are not permanent in nature. They all have solutions. An
attempt to make suggestions for the solutions of the above listed problems has
been made below. This list of suggested solutions is merely illustrative and not
exhaustive. An in-depth research for this is vital.
It is felt that an attitudinal change towards ADR would result in active
implementation of ADR and the burden on the courts will reduce. Yet, whether it
is in the urban segment or in the rural segment, there is still a lack of knowledge
about ADR. A need for instilling awareness is imperative to bring in a change in
the attitudes. The urban sector which has a higher literacy rate could be reached
by inserting slides in movie theatres, having advertisements in television channels
and newspapers, conducting periodical seminars and having a dedicated helpline.
 It is the rural segment whose attitude is difficult to change. From the initial
gramasabha system, it took many years for them to adopt litigation. To revert back
to the old system, which is in fact an ADR concept would require tremendous
amount of communication by trained professionals bespelling the strengths of the
system. An insight into the advantages of conciliation andnegotiation would bring
in the desired change — change of attitude. To keep active here is awareness, by
interactive communication. A dedicated helpline would exhilerate the process of
attitudinal change by giving clarity to communication.

· People are generally ignorant about legal terminology and the opportunities
available in dispute resoolution. The other gnarling issue is corruption. To combat
these two forces, imparting knowledge is a must. Driving ignorance away would
infact, help in curtailing corruption too. The NGOs should put in their efforts in
providing a knowledge base to the needy. A committed person in each
NGO,working in rural areas, should help in reaching the goal quickly.

· The major lacuna in ADR is that it is not binding. One could still appeal against
the award or delay the implementation of the award. Justice delayed is justice
denied. The very essence of ADR is lost if it is not implemented in the true spirit.
The award should be made binding on the parties and no appeal to the court
should be allowed unless it is arrived at fradulently or if it against public policy.

· Rules of procedure are being formulated on a case by case basis and the rules
made by the parties themselves, with maybe, some intervention of legal
professionals. However, a general guideline and a stipulated format would assist
in bringing clarity to the formulation of an ADR award. This would also help in
cutting down ignorance and assist in better negotiation.

· Legal education and law schools should focus on the arts of conciliation and
negotiation and not merely on litigation. Lawyer client interests should also be
moulded towards a primary focus on ADR failing which the recourse should be
towards litigation.
Background to arbitration legislation:

The Indian law of arbitration is contained in the Arbitration and Conciliation Act 1996
Act The Act is based on the 1985 UNCITRAL Model Law on International Commercial
Arbitrationand the UNCITRAL Arbitration Rules 1976. The Statement of Objects and
Reasons of the Actrecognises that Indias economic reforms will become effective only if
the nations disputeresolution provisions are in tune with international regime. The
Statement of Objects andReasons set forth the main objectives of the Act as follows:

i) to comprehensively cover international and commercial arbitration and conciliation

asalso domestic arbitration and conciliation;

ii) to make provision for an arbitral procedure which is fair, efficient and capable
ofmeeting the needs of the specific arbitration;

iii) to provide that the arbitral tribunal gives reasons for its arbitral award;

iv) to ensure that the arbitral tribunal remains within the limits of its jurisdiction;

v) to minimise the supervisory role of courts in the arbitral process;

vi) to permit an arbitral tribunal to use mediation, conciliation or other procedures

duringthe arbitral proceedings to encourage settlement of disputes;

vii) to provide that every final arbitral award is enforced in the same manner as if it werea
decree of the court;

viii) to provide that a settlement agreement reached by the parties as a result of

conciliation proceedings will have the same status and effect as an arbitral award
onagreed terms on the substance of the dispute rendered by an arbitral tribunal; and

ix) to provide that, for purposes of enforcement of foreign awards, every arbitral award
made in a country to which one of the two International Conventions relating toforeign
arbitral awards to which India is a party applies, will be treated as a foreignaward.
Form of the Act:

The Act is a composite piece of legislation. It provides for domestic arbitration;

international commercial arbitration; enforcement of foreign award and conciliation (the
latter being based onthe UNCITRAL Conciliation Rules of 1980).The more significant
provisions of the Act are to be found in Part I and Part II thereof. Part Icontains the
provisions for domestic and international commercial arbitration in India. Allarbitration
conducted in India would be governed by Part I, irrespective of the nationalities of
theparties. Part II provides for enforcement of foreign awards.Part I is more
comprehensive and contains extensive provisions based on the Model Law. Itprovides
inter alia for arbitrability of disputes; non-intervention by courts; composition of
thearbitral tribunal; jurisdiction of arbitral tribunal; conduct of the arbitration
proceedings; recourseagainst arbitral awards and enforcement. Part II on the other hand,
is largely restricted toenforcement of foreign awards governed by the New York
Convention or the GenevaConvention. Part II is thus, (by its very nature) not a complete
code.

Issue at arbitration:

Any commercial matter including an action in tort if it arises out of or relates to a

contract can be referred to arbitration. However, public policy would not permit
matrimonial matters, criminalproceedings, insolvency matters anti-competition matters or
commercial court matters to bereferred to arbitration. Employment contracts also cannot
be referred to arbitration but director company disputes are arbitrable (as there is no
master servant relationship here)

Authorities of the Court.

One of the fundamental features of the Act is that the role of the court has been
minimised. Accordingly, it is provided that any matter before a judicial authority
containing an arbitrationagreement shall be referred to arbitration (Section 8 provided the
non - applicant objects no laterthan submitting its statement of defense on merits).
Further, no judicial authority shall interfere,except as provided for under the Act (Section
5).

In relation to arbitration proceedings, parties can approach the Court only for two
purposes: (a) for any interim measure of protection or injunction or for any appointment
of receiver etc.; or

(b) for the appointment of an arbitrator in the event a party fails to appoint an arbitrator or
if two appointed arbitrators fail to agree upon the third arbitrator. In such an event, in the
case ofdomestic arbitration, the Chief Justice of a High Court may appoint an arbitrator,
and in the caseof international commercial arbitration, the Chief Justice of the Supreme
Court ofIndia may carry out the appointment A court of law can also be approached if
there is any controversy asto whether an arbitrator has been unable to perform his
functions or has failed to act withoutundue delay or there is a dispute on the same. In
such an event, the court may decide to terminatethe mandate of the arbitrator and appoint
a substitute arbitrator.

Scope of Arbitrator.

The Act provides that the arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration agreement. The
arbitrationagreement shall be deemed to be independent of the contract containing the
arbitration clause,and invalidity of the contract shall not render the arbitration agreement
void. Hence, thearbitrators shall have jurisdiction even if the contract in which the
arbitration agreement iscontained is vitiated by fraud and/or any other legal infirmity.
Further, any objection as tojurisdiction of the arbitrators should be raised by as party at
the first instance, i.e., either prior toor along with the filing of the statement of defence. If
the plea of jurisdiction is rejected, thearbitrators can proceed with the arbitration and
make the arbitral award. Any party aggrieved bysuch an award may apply for having it
set aside under Section 34 of the Act. Hence, the schemeis that, in the first instance, the
objections are to be taken up by the arbitral tribunal and in theevent of an adverse order,
it is open to the aggrieved party to challenge the award.

Challenge to Award.

An arbitrator may be challenged only in two situations. First, if circumstances exists that
give rise to justifiable grounds as to his independence or impartiality; second, if he does
not possesthe qualifications agreed to by the parties. A challenge is required to be made
within 15 days ofthe petitioner becoming aware of the constitution of the arbitral tribunal
or of the circumstancesfurnishing grounds for challenge. Further, subject to the parties
agreement, it is the arbitraltribunal (and not the court - unlike under the old Act of 1940)
which shall decide on thechallenge. If the challenge is not successful the tribunal shall
continue with the arbitralproceedings and render the award, which can be challenged by
an aggrieved party at that stage.This is another significant departure from the Model Law,
which envisages recourse to a court oflaw in the event the arbitral tribunal rejects the
challenge. The Indian courts have held that the apprehension of bias must be judged from
a healthy,reasonable and average point of view and not on mere apprehension of any
whimsical person.

Proceedings of arbitration proceedings:

The arbitrators are masters of their own procedure and subject toparties agreement, may
conduct the proceedings in the manner they consider appropriate. This power includes-
the power todetermine the admissibility, relevance, materiality and weight of any
evidence. The onlyrestrain on them is that they shall treat the parties with equality and
each party shall be given afull opportunity to present his case,12 which includes
sufficient advance notice of any hearing or meeting. Neither the Code of Civil Procedure
nor the Indian Evidence Act applies to arbitrations. Unless the parties agree otherwise,
the tribunal shall decide whether to hold oralhearings for the presentation of evidence or
for arguments or whether the proceedings shall beconducted on the basis of documents or
other material alone. However the arbitral tribunal shallhold oral hearings if a party so
requests (unless the parties have agreed that no oral hearing shall be held). Arbitrators
have power to proceed exparte where the respondent, without sufficient cause, failsto
communicate his statement of defence or appear for an oral hearing or produce
evidence.However, in such situation the tribunal shall not treat the failure as an admission
of theallegations by the respondent and shall decide the matter on the evidence, if any,
before it. If theclaimant fails to communicate his statement of the claim, the arbitral
tribunal shall be entitled to terminate the proceedings.

Evidence in arbitral proceedings:

The Indian Oaths Act 1969 extends to persons who may be authorized by consent of
parties to receive evidence. This Act thus, encompasses arbitral proceedings as well.17
Section 8 of the saidAct states that every person giving evidence before any person
authorized to administer oathshall be bound to state the truth on such subject. Thus,
witnesses appearing before an arbitraltribunal can be duly sworn by the tribunal and be
required to state the truth on oath and uponfailure to do so, commit offences punishable
under the Indian Penal Code. However, thearbitrators cannot force unwilling witnesses to
appear before them and for this courts assistanceis provided for vide Section 27 of the
Act. Under this provision the arbitral tribunal or a partywith the approval of the tribunal
may apply to the court seeking its assistance in taking evidence(this is also provided for
in the Model Law). However, Section 27 of the Indian Act goes beyondthe Model Law as
it states that any person failing to attend in accordance with any order of thecourt or
making any other default or refusing to give evidence or guilty of any contempt of
thearbitral tribunal, shall be subject to like penalties and punishment as he may incur for
likeoffences in suits tried before the court. Further, the court may either appoint a
commissioner fortaking evidence or order that the evidence be provided directly to the
arbitral tribunal. Theseprovisions extend to any documents to be produced or property to
be inspected. Section 26provides for appointment of experts by the arbitral tribunal for
any specific issue. In suchsituation a party may be required to give the expert any
relevant information or produce anyrelevant document, goods or property for inspection
as may be required. It will be open to a party (or to the arbitral tribunal) to require the
expert after delivery of his report, to participate in anoral hearing where the parties would
have an opportunity to put questions to him.
Form and content of awards:

The arbitrators are required to set out the reasons on which their award is based, unless
the parties agree that no reasons are to be given or if it arises out of agreed terms of
settlement. Thetribunal may make an interim award on matters on which it can also make
a final award. Indianlaw provides for a very healthy 18% interest rate on sums due under
an award. Thus, unless thearbitral tribunal directs otherwise, the award will carry interest
at 18% per annum from the dateof the award till the date of payment. The tribunal is free
to award costs, including the cost ofany institution supervising the arbitration or any other
expense incurred in connection with thearbitration proceedings.

Challenge to the awards:

The grounds for setting aside an award rendered in India (in a domestic or
internationalarbitration) are provided for under Section 34 of the Act. These are
materially the same as inArticle 34 of the Model Law for challenging an enforcement
application. An award can be setaside if:
a) a party was under some incapacity; or
b) the arbitration agreement was not valid under the governing law; or
c) a party was not given proper notice of the appointment of the arbitrator or on the
arbitral proceedings; or
d) the award deals with a dispute not contemplated by or not falling within the terms
of submissions to arbitration or it contains decisions beyond the scope of the
submissions; or
e) the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties; or
f) the subject matter of the dispute is not capable of settlement by arbitration; or
g) the arbitral award is in conflict with the public policy of India.
CONCILIATION.

The Halsburys Laws of England defines Conciliation as a process of persuading the

parties to reach an agreement. Conciliation may comprehensively be defined as a non-
adjudicatory and non adversarial ADR mechanism involving a settlement procedure
wherein an impartial third party (conciliator) enables and steers the disputant parties to
arrive at a satisfactory and acceptable settlement of a dispute. It is considered as an
effective and meaningful alternative to litigation for resolution of disputes through the
guidance and assistance of a neutral and impartial third party. Conciliation is a voluntary
process and the conciliator has no authority to impose on the parties a solution to the
dispute. Like any other ADR process the sanctity of conciliation is the mutual
determination of the parties to amicably resolve their disputes through an ADR
mechanism. The consensual nature of the dispute resolution process allows parties to join
in a friendly search for an amicable solution, without procedural restraints or protracted
battles over formal technicalities and the parties are encouraged to visualise options
which provide solutions keeping in view their interests and priorities.Generally, all civil
disputes are suitable for conciliation and it affords an excellent ADR mechanism for
amicable resolution outside the litigate process.

Evolution of Conciliation in India.

Conciliation is not a new concept as far as India is concerned. KautilyasArthashastra also

refers to the process of conciliation. Various legislations in India have also recognized
conciliation as a statutorily acceptable mode of dispute resolution and conciliation was in
fact being frequently resorted to as a mode of dispute resolution under these specific
legislations. However, apart from these statutory provisions dealing with specified
categories of cases, conciliation in general as a mode of ADR lacked proper legislative
framework and statutory backing. In 1984 faced with the problem of surmounting arrears
the Himachal Pradesh High Court evolved a unique project for disposal of cases pending
in courts by conciliation. This was also been recommended by the Law Commission of
India in its 77th and 131st reports and the conference of the Chief Justices and Chief
Ministers in December 1993. The Malimath Committee had also inter alia recommended
the establishment of conciliation courts in India.In the mean time the UNCITRAL had
adopted the UNCITRAL Conciliation Rules, 1980 and the General Assembly of the
United Nations had recommended the use of these rules, therefore, the Parliament of
India found it expedient to make a law respecting conciliation, and the Arbitration and
Conciliation Act, 1996 was enacted. Conciliation was afforded an elaborate codified
statutory recognition in India with the enactment of the Arbitration and Conciliation Act,
1996 and Part III of the Act comprehensively deals with conciliation process in general.
The chapter on conciliation under the Arbitration and Conciliation Act, 1996 is, however,
essentially based on the UNCITRAL Conciliation Rules, 1980. Thereafter post litigation
conciliation was recognized as a mode of dispute resolution when section 89 was
incorporated in the Code of Civil Procedure, 1908 which affords an option for reference
of sub judice matters to conciliation with the consent of parties for extra judicial
resolution.

Procedure OF Concilliation.

COMMENCEMENT OF CONCILIATION AND APPOINTMENT OF CONCILIATOR:

The conciliation process commences when the disputing parties agree to conciliate and a
neutral conciliator is appointed. The party initiating conciliation sends a written invitation
to conciliate to the other party briefly identifying the subject matter of the dispute.
Conciliation proceedings commence when the other party accepts in writing the
invitation to conciliate. Thus conciliation agreement should be an ad hoc agreement
entered by the parties after the dispute has actually arisen and not before. Even if the
parties incorporate conciliation clauses in their agreements, still conciliation would
commence only if the other party accepts the invitation of one party to conciliate in case
of a de facto dispute. Thus unlike in the case of an arbitration agreement, Part III of the
Arbitration and Conciliation Act, 1996 does not envisage any agreement for conciliation
of future disputes. It only provides for an agreement to refer the disputes to conciliation
after the disputes have arisen. In conciliation proceedings ordinarily there is one
conciliator unless the parties agree that there shall be two or three conciliators. Even in
case of plurality of conciliators they are supposed to act jointly. An uneven number of
conciliators is not necessary in conciliation since the task of the conciliators is to make
recommendations for a settlement and not to render binding decisions. In conciliation
proceedings with one conciliator, the parties may agree on the name of a sole conciliator
and in conciliation proceedings with two conciliators, each party may appoint one
conciliator. The parties may also request any institution or person to recommend suitable
names of conciliators or directly appoint them and such person or institution while
discharging this responsibility should have regard to aspects as are likely to secure the
appointment of an independent and impartial conciliator.

PROCEDURE IN CONCILIATION AND ROLE OF CONCILIATOR:

The conciliator may request each of the parties to submit a brief written statement
describing the general nature of the dispute and the points at issue, with a copy to the
opposite party. At any stage of the conciliation proceedings the conciliator may request a
party to submit to him such additional information as he deems appropriate. The
conciliator is supposed to assist the parties in an independent and impartial manner in
their attempt to reach an amicable settlement of their dispute. A conciliator assists parties
by helping them to initiate and develop positive dialogue, clarify misunderstandings,
create faith upon one another and generate a congenial atmosphere required for
harmonious and cooperative problem-solving. In order to justify his position the
conciliator must be an impartial person. The parties should be able to repose trust and
confidence in him so as to enable them to share their secrets and their thinking process
with the conciliator with the belief that the same will not be divulged to other party
without specific instructions in that regard. The conciliator may conduct conciliation
proceedings in such a manner as he considers appropriate, taking into account the
circumstances of the case and the wishes of the parties. The conciliator has wide
procedural discretion in shaping the dynamic process towards a settlement. The process
of conciliation, inter alia, involves creating a constructive bonding between the parties to
a dispute to steer them towards resolution. and justice giving due consideration to the
rights and obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous business practices
between the parties. The conciliator may invite the parties to meet him or may
communicate with them orally or in writing. He may meet or communicate with the
parties together or with each of them separately. The conciliator may hold several joint or
private meetings with the parties so as to enable the parties to clarify their cases and so as
to persuade the parties to arrive at a mutually acceptable solution. Unless the parties have
agreed upon the venue of conciliation proceedings the conciliator is supposed to decide
the venue of conciliation proceedings in consultation with the parties. Thus the
conciliator is vested with extensive power to choose and mould the procedure to be
followed by him untrammeled by the procedural laws, albeit in consultation with the
parties. In order to facilitate the conduct of the conciliation proceedings, the parties, or
the conciliator with the consent of the parties, may arrange for administrative assistance
by a suitable institution or person. This shows that depending upon the requirement from
case to case basis the conciliator may or may not adopt a structured process in
conciliation. The role of the conciliator is to assist the parties to arrive at an amicable
settlement. The conciliator may, at any stage of the conciliation proceedings, himself
make proposals for a settlement of the dispute.managing the process of conciliation as
opposed to a mere facilitator. The conciliator assesses the respective cases of the parties
and apart from acting as a facilitator suggests and advices the parties on various plausible
solutions to the parties so as to enable the parties to choose the best possible and apt
solution. He attempts to get the parties to accept the merits and demerits of their cases
thereby leading them to a mutually acceptable solution. The conciliator, in this manner
plays a more proactive and interventionist role in persuading the parties to arrive at a
final settlement. In actual practice conciliator needs to be a person who is not only well-
informed and diplomatic but can also influence the parties by his persona and persuasive
skills.
Settlement Agreement:
When it appears to the conciliator that there exist elements of a settlement, which may be
acceptable to the parties, he is supposed to formulate the terms of a possible settlement
and submit them to the parties for their observations. After receiving the observations of
the parties, the conciliator may reformulate the terms of a possible settlement in the light
of such observations. parties have full understanding of the settlement terms. The
agreement must embody the terms and conditions of the settlement with clarity and
precision. It is open to the parties to settle some of their disputes by conciliation and
leave the unresolved disputes between them for resolution by other modes of
adjudication. The settlement agreement must also bear the signatures of the parties. Once
the parties sign the settlement agreement, it shall be final and binding on the parties and
persons claiming under them respectively. The settlement agreement drawn up in
conciliation proceedings has the same status and effect as if it is an arbitral award on
agreed terms on the substance of the dispute rendered by an arbitral tribunal under section
of the Arbitration and Conciliation Act, 1996. However it is only that agreement which
has been arrived at in conformity with the manner stipulated and form envisaged and got
duly authenticated in accordance with section 73 of the Arbitration and Conciliation Act,
1996, which can be assigned the status of a true settlement agreement and can be
enforced as an arbitral award.Therefore a settlement agreement arrived in private
conciliation proceedings can be enforced by executing the same in a civil court as if it
were a decree of the court.
TERMINATION OF CONCILIATION PROCEEDINGS:
A successful conciliation proceeding concludes with the drawing and signing of a
conciliation settlement agreement. The signing of the settlement agreement by the parties,
on the date of the settlement agreement terminates conciliation proceedings. That apart,
any party may terminate conciliation proceedings at any time even without giving any
reason since it is purely voluntary process. The parties can terminate conciliation
proceedings at any stage by a written declaration of either party. A written declaration of
the conciliator, after consultation with the parties, to the effect that further efforts at
conciliation are no longer justified, also terminates conciliation proceedings on the date
of such declaration.

Pros of Conciliation:

COST EFFECTIVE AND EXPEDITIOUS PROCESS

Conciliation is an economical and expeditious mechanism for resolution of disputes in
comparison to litigation and arbitration, which makes it an excellent ADR Mechanism.
The cost management tools and expertise of the conciliator generally prevent
multiplication of actual costs to the parties and seek to make it cost efficient. The
conciliator follows a simplified procedure suited to the aspirations of the parties and
keeping in mind the need for speedy settlement of the dispute. Moreover the time
management tools applied by the conciliator prevent dragging on of conciliation
proceedings for longer periods and ensure its conclusion within a reasonable time frame.
The end result in conciliation is a negotiated settlement which is treated to be an arbitral
award on agreed terms, thereby obviating the possibility of successive appeals and finally
resolving the dispute in an expeditious and cost effective manner.

AUTONOMY AND CONVENIENCE OF PARTIES

Conciliation is flexible and convenient. The parties are free to agree on the procedure to
be followed by the conciliator, the time and venue of the proceedings and thus eventually
control the process. The conciliator may conduct the conciliation proceedings in such a
manner as he considers appropriate, taking into account the circumstances of the case,
convenience of the parties and the wishes the parties may express. A very commendable
feature of conciliation is that the parties can withdraw from conciliation at any stage.
Unless a party consents to the initiation and continuance of conciliation and accepts the
resultant settlement agreement he cannot be said to be bound by the process, and he may
walk out from conciliation proceedings at any time. This is unlike arbitration and
litigation where decisions can be made even if a party walks out. In litigation or
arbitration what solution or resolution would be contained in the judgment or award is not
within the control or prior knowledge of the parties and moreover the ultimate decision is
based on a straightforward decision on merits keeping in view the rights and positions of
the parties. In conciliation however the parties control the outcome and can incorporate
terms and conditions in the settlement agreement as per mutual agreement. They can
devise creative solutions for their disputes at one go which may not have been within the
contemplation of an arbitrator or a judge.

PARTY SATISFACTION AND HARMONY

Unlike litigation and arbitration where one party wins and the other loses, in conciliation
both parties are winners as the decision is acceptable to both. Both parties are in favour of
the decision, as until both parties agree to a proposal, the settlement or agreement does
not take place. Therefore it is a win-win situation for both the parties as both the parties
are satisfied with the agreement. Such win-win situation enables them to retain good
relationship for times to come unlike litigation and arbitration where the parties on
account of the win-loss equation are not able to continue or rebuild their relationship.
Even where the conciliation proceedings do not fructify into a settlement, they prove to
be useful by enabling the parties to understand each others versions, positions and
aspirations in a better perspective.

CONFIDENTIALITY
In contradistinction to judicial proceedings conciliation is a private closed door affair and
therefore offers privacy and confidentiality. In fact confidentiality in conciliation
proceedings is a statutory guarantee 54 The conciliator and the parties are supposed to
keep confidential, all matters relating to the conciliation proceedings. The parties are also
precluded from relying upon or introducing as evidence in subsequent arbitral or judicial
proceedings views expressed or suggestions made by the other party in respect of a
possible settlement of the dispute, admissions made by the other party in the course of
conciliation proceedings, proposals made by the conciliator and the fact that the other
party had indicated his willingness to accept a proposal for settlement made by the
conciliator.Even during the course of conciliation proceedings where a party gives any
information to the conciliator subject to a specific condition that it be kept confidential,
the conciliator is not supposed to disclose that information to the other party. This ensures
that even in the eventuality of failure of conciliation proceedings neither party is able to
derive undue benefit out of any proposal, view, statement, admission, etc. made by the
opposite party during conciliation proceedings. The process of conciliation provides an
opportunity for settlement of disputes without publicity. The conciliator is also precluded
from acting as an arbitrator or as a representative or counsel of a party in any arbitral or
judicial proceeding in respect of a dispute that is the subject of the conciliation
proceedings nor can he be presented by the parties as a witness in any arbitral or judicial
proceedings. The settlement agreement drawn up in conciliation proceedings has the
same status and effect as if it is an arbitral award

ENFORCEABILITY OF CONCILIATION SETTLEMENT AGREEMENT:

on agreed terms on the substance of the dispute rendered by an arbitral tribunal under
section 30 of the Arbitration and Conciliation Act, 1996. Thus the settlement agreement
in conciliation is executable as a decree of the civil court. It is open to any party to apply
for execution of the settlement agreement by filing an execution petition before the civil
court. The expeditious enforcement of a conciliation settlement agreement in a summary
manner i.e. by way of execution proceedings in a civil court is the principal advantage
attached with conciliation.

CONCILIATION and MEDIATION: Differences.

Mediation is nothing but negotiation facilitated by a third party who assists the parties in
moving to resolution.63 Conciliation is also a process of arriving at a settlement with the
assistance of a third party/conciliator. The difference between conciliation and mediation
has been an important issue in ADR jurisprudence. One obvious reason is that there are
striking similarities between mediation and conciliation. The source of morality in both
mediation and conciliation is the liberty and spirit of the parties to evaluate their
respective cases, understand their interests and arrive at a negotiated settlement with the
assistance of a neutral third party. Albeit, the two terms are used distinctly yet the
fundamental philosophy and the basic process in both mediation and conciliation are
similar. Both, conciliation and mediation can be described as negotiation facilitated by a
third party. They both focus on amicable resolution of disputes and aim at maintenance of
relationships between the parties. In fact, at times the two terms are used synonymously
or interchangeably.

MEDIATION

Mediation in its plain and simple form is nothing but facilitated negotiation. However,
comprehensively mediation may be defined as a voluntary process of dispute resolution
where a neutral third party (the mediator) with the use of effective and specialized
communication and negotiation techniques aids the parties in arriving at an amicable
settlement. The word mediation is derived from the latin word mediare which means to
be in the middle.Mediation is therefore a process aimed at finding a middle path amidst
the dispute between the parties so that a mutually acceptable solution can be worked out.
It is a non adversarial approach towards dispute resolution and is a well recognized ADR
process all over the globeMediation is in fact a successful management technique for
resolving complex disputes. The object of the process is to reduce acrimony and
posturing, enable the parties to realize and understand their priorities and interests and
steer them towards a self determined and mutually acceptable resolution. The mediator
induces and facilitates the parties to enter into a positive dialogue, attempts to break the
impasse and enables them to visualize their own solutions in a pragmatic manner. The
idea is to assist people to communicate in a rational and problem solving manner, clarify
issues and to help negotiations by bringing realism and objectivity to a dispute. Mediation
is therefore in a sense empowering the parties to think for themselves and choosing what
is right for them so that they own the responsibility of arriving at their own decisions. In
short it is a professionally and scientifically managed negotiation process.

Procedure of Mediation.

The agreement to mediate is the genesis of mediation. Unfortunately there is no

legislation governing mediation in general in India and therefore there is no statutory
indication as to how mediation is to be initiated and conducted by the parties in general.
The agreement to mediate is therefore generally an ad hoc agreement which emerges after
a dispute has arisen and where under the parties jointly agree to refer the existing dispute
to mediation by a third party. It is however a normal phenomenon for parties to
incorporate mediation clauses in their contracts thereby agreeing to refer future disputes
to mediation also, although even in that eventuality, there is still a requirement for the
parties to be ad idem for actually referring the matter to mediation after the dispute has in
fact arisen. Mediation therefore commences only when both the parties agree to resolve
their disputes by taking recourse to mediation and a neutral and independent mediator is
jointly appointed for facilitating the process. The actual mediation process follows
thereafter under the guidance of the mediator to be suitably moulded in light of the needs,
aspirations, desires, preferences and goals of the parties. Mediation is described as a
structured process of consensual dispute resolution. Traditionally the mediation process
involves different stages viz. introduction, joint session, caucus, agreement, etc. As far as
the Indian scenario is concerned there is no statutory mandate to follow a particular
procedure, however it is the experience for years together which has been crystallized
into conventions, which require the mediator to preferably follow a structured process.
The stages of a conventional mediation process are, therefore neither rigid nor inflexible
and can be modulated to achieve the desired outcome. Yet the ground reality is that
invariably the de facto process adopted by a specially trained mediator, in substance turns
out to be the conventional Procedural flexibility is an inbuilt advantage in mediation
which is untrammeled by any structural specifications and the mediator may devise a
tailor made procedure to suit the requirements of the parties and the attending
circumstances, with the necessity of finding a consensual resolution being the primary
guiding factor. structured mediation process comprising of pre defined stages or
permutations and combinations thereof. The idea of specifying a pre fabricated structured
process is avoidance of hit and trial methods and unnecessary experimentation so as to
introduce consistency and efficacy in the process and reap benefits of the best practices,
experiences and research of professionals and intellectuals. The fact of the matter is that
the structure of mediation process creates an efficient convention for mediators and
parties to follow in multiple iterations; however, adjustments may be desirable, indeed
even necessary in many cases and such adjustments are quite permissible.

Mediator and its role.

Mediation is facilitated negotiation conducted with the assistance of a third party neutral
possessing specialized skills, requisite training and sufficient experience necessary to
assist the disputant parties in reaching a negotiated settlement. The foremost aspect of a
mediators role is his neutrality. The mediator occupies a fiduciary position and more so
because not one but all the parties repose confidence in him. A mediator must, therefore
without delay disclose any circumstances likely to give rise to a reasonable doubt as to
his independence or impartiality. His neutrality, independence and impartiality are
therefore the keys to a successful mediation.The mediator is a friend, philosopher and
guide for the parties. A mediator however neither imposes a solution nor actively suggests
concrete proposals for resolution, but only creates a conducive atmosphere in which the
parties can themselves find a solution for their problems. A mediator is a facilitator who
facilitates communication between the parties and helps them generate possible solutions
to a dispute. He always honours the right of self determination of the parties and his
duties includes determining the parties bottom lines and through relatively persuasive
interventions move them in stages off their positions to a point of compromise. His task is
limited to assisting the parties to conduct negotiations between themselves.However
despite the lack of teeth in the mediation process, the involvement of a mediator alters the
dynamics of negotiation.The mediator attempts to facilitate voluntary resolution of the
disputes by the parties, communicates the views of each party to the other, assists them in
identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of
compromise and generating options in an attempt to solve the dispute, emphasizing that it
is the responsibility of the parties to take decision which effect them and he does not
impose any terms of settlement on the parties. The mediator, depending on what seems to
be impeding an agreement, may attempt to encourage exchange of information, provide
new information, help the parties to understand each others views, let know that their
concerns are understood; promote a productive level of emotional expression; deal with
differences in perceptions and interest between negotiations and constituents (including
lawyer and client); help negotiators realistically, assess alternatives to settlement, learn
about those interests which the parties are reluctant to disclose to each other and invent
solutions that meet the fundamental interest of all parties.
Pros of Mediation

COST EFFECTIVE AND EXPEDITIOUS RESOLUTION

Mediation offers an ADR mechanism for cost effective and expeditious resolution of
disputes.The object of mediation is amicable dispute resolution and hence the costs
involved are minimal in comparison to arbitration or litigation. The parties are also able
to save on lawyers fee and court fee. The mediation process is quite simple and there are
neither any procedural fetters nor any legal claptrap in the mediation process. The
procedural flexibility, avoidance of legal formalities and proficient assistance by the
mediator in steering the parties to an amicable resolution, result in speedier dispute
resolution. Moreover once a settlement is reached the dispute stands finally resolved
thereby obviating the possibility of successive appeals thereby minimizing the costs and
delay.

CREATIVE SOLUTIONS
Mediation enables the parties to devise creative, tailor made solutions for their disputes
taking into account the needs, aspirations and interests of the parties which may not be
possible in case of litigation or arbitration. The parties themselves retain full control of
the mediation process and are free to determine their own solutions. They are at liberty to
settle all disputes to suit their requirements. The hallmark of mediation is therefore its
capacity to help the parties expand traditional settlement discussions and broaden
resolution options, often by going beyond the legal issues in controversy. Mediation is
essentially non adversarial in nature and fundamentally parties are not opponents in
mediation, but are collaborators striving towards a mutually acceptable resolution which
results in a win-win situation It is the most appropriate ADR mechanism in case of
complex and multifaceted disputes as such disputes often require novel broad based
solutions rather than a straightforward legal adjudication.

PRESERVATION OF RELATIONSHIPS
Mediation affords an opportunity to communicate, participate and collaborate with the
opposite party and understand each others interests in a cool, composed and amiable
atmosphere. It focuses on long-term interests and bonding, fosters amity and friendship
50 and promotes peace, harmony and everlasting relationships amongst the parties.
Mediation is therefore very promising in continuing relationship cases. Since both parties
emerge as winners, relations are preserved between the parties for times to come.

CONFIDENTIALITY
Mediation is a closed door private affair and the prime advantage associated with
mediation is confidentiality. Unlike court proceedings third parties do not have access to
mediation proceedings. The mediator Mediation is confidential whether or not it results in
the settlement and resolution of the dispute. and the parties are also supposed to keep
confidential, all matters relating to the mediation proceedings. Even during the
proceedings when one party gives information to the mediator subject to a specific
condition that it is to be kept confidential, the mediator is precluded from disclosing that
information to the other party. In case mediation is unsuccessful, what transpired in the
mediation proceedings is not to be disclosed. This is despite the fact that confidentiality
in mediation has no statutory backing because the process of mediation is inherently
considered to be confidential. In case of court annexed mediation conducted by the
mediation centres at Delhi also, confidentiality has been accorded due importance. The
courts have also emphasized upon the aspect of confidentiality in mediation proceedings.
DIFFERENCE BETWEEN THE MEDIATION AND OTHER DISPUTE RESOLUTION
PROCESS: - The alternative dispute resolution procedures can be broadly classified into
two groups, first those that are adjudicative and adversarial, and second those, which are
consensual and non-adversarial. The latter group includes mediation.52 Sir Robert A.
Baruch Bush and Joseph P. Folger, in, The promise of mediation say that, in any conflict,
52 Manka, ADR: What Is It And Why Do You Need To Know? 47 J Mo Bar 623, 625. -
79 - the principal objective ought to be to find a way of being neither victims nor
victimizers, but partners in an ongoing human interaction that is always going to involve
instability and conflict.53 There are several types of different dispute redressal methods
that have evolved owing to the different needs and circumstances of the society. The
study of the differences between them will help the disputant in choosing the best and the
apt method of resolving their disputes according to their needs. The dominant form of
dispute redressal method that is broadly adopted for the resolution of a dispute is, by
filing of case before the Court of law. With the bird eye view, it can be said that, in the
process of adjudication through Court of law, someone has to lose among the disputing
party. The litigation route has now become slow, expensive, and uncertain in its outcome.
The Courts and Tribunals do not 'resolve' a dispute, but they only decide a dispute or
adjudicate on them. Whereas, in the case of mediation, the parties can try to agree with
one another, were a mediator acts as a facilitator. Mediation has the advantage as it can
lead to finality because, it allows for informed and un-coerced decisions to be taken by
everyone involved. Disputes are resolved in the process of mediation through consensual
interaction between the disputants.54 The mediator in promoting or in other words,
facilitating resolution of the dispute by the parties themselves does not purport to decide
the issue between them. Mediation is more flexible, quick and less expensive than the
process of adjudication through Court of Law. Thus, 53 See Robert A. Baruch Bush and
Joseph P. Folger, The promise of mediation (1994) at 229- 59. 54 Tania Sourdin,
Alternative Dispute Resolution,(2002) p 2,3. - 80 - the study reveals that, litigation
produces provides for fair and just results, but it is procedurally disadvantages as
compared to mediation. Mediation affords a far greater degree of flexibility, relative
informality, confidentiality and control over its resolution. Comparative study of the
process of mediation and arbitration shows that, mediation is a form of expedited
negotiation. The parties control the outcome. Mediator has no power to decide.
Settlement in the dispute is done only with party approval. Exchange of information is
voluntary and is often limited. Parties exchange information that will assist in reaching a
resolution. Mediator helps the parties define and understand the issues and each side's
interests. Parties vent feelings, tell story, and engage in creative problem solving.
Mediation process is informal and the parties are the active participants. Joint and private
meetings between individual parties and their counsel are held in this process. Outcome
based on needs of parties. Result is mutually satisfactory and finally a relationship may
be maintained or created. Mediation when compared with arbitration is of low cost. It is
private and confidential. Facilitated negotiation is an art. Mediator is not the decision
maker. Mediator is a catalyst. He avoids or breaks an impasse, diffuse controversy,
encourages generating viable options. He has more control over the process. The process
of mediation gives the parties many settlement options. Relationship of parties is not
strained in the process of mediation. There is a high degree of commitment to settlement.
Parties participation is there in the decision making process. Thus, there is no winner and
no loser in this process, only the problems are resolved. In - 81 - this process the disputed
parties maintains the confidentiality of proceedings.55 The Arbitration and Conciliation
Act, 1996 has provided for the legislative framework of the processes of arbitration and
conciliation in India. The process of arbitration is adjudicative in nature as the arbitrators
control the outcome. Arbitrator is given power to decide. Arbitration award is final and is
a binding decision. Often extensive discovery is required in this process. Arbitrator listens
to facts and evidence and renders an award. The parties present the case, and testify under
oath. The process of arbitration is formal. The attorneys can control the party
participation. Evidentiary hearing is given in this process. No private communication
with the arbitrator is possible. Decision is in the form of award based on the facts,
evidence, and law. The process of arbitration is more expensive than mediation, but less
expensive than traditional litigation. It is a private process between the arbitrator and the
disputed parties but in some cases, decisions are publicly available. Thus, it is an informal
procedure, which involves decision-maker impasse when it is submitted to an Arbitrator.
The parties have less control in the proceedings and the final award, as the decision
making process is with the arbitrator.56 The Conciliator under the Arbitration and
Conciliation Act, 1996, apart from assisting the parties to reach a settlement, is also
permitted to make proposals for a settlement and formulate the terms of a possible 55 L,
Boulle, Mediation: Principles, process, practice (Butterworths, Sydney,1996) p10-14. 56
P. C. Rao, Secretary General ICADR , Alternative Dispute Resolution (1997) at 19-25. -
82 - settlement or reformulate the terms. Conciliation, is a procedure like mediation but
the third party called the conciliator, takes a more interventionist role in bringing the two
parties together and in suggesting possible solutions to help the disputed parties to reach a
settlement. The difference between the process of mediation and conciliation lies in the
fact that, the conciliator can make proposals for settlement, formulate or reformulate the
terms of a possible settlement, while a mediator would not do so but would merely
facilitate a settlement between the parties. Under Section 30 and Section 64(1) and
Section 73(1) of the Arbitration and Conciliation Act, 1996, the conciliator has a greater
or a pro-active role in making proposals for a settlement or formulating and reformulating
the terms of a settlement. A mediator is a mere facilitator. The meaning of these words in
India is the same in the UNCITRAL57 and Conciliation Rules and in UK and Japan.
Conciliation and Mediation process is distinguishable from Arbitration as the parties
willingness to submit to mediation or conciliation does not bind them to accept the
recommendation of the conciliation or mediator but an arbitrators award, by contrast, is
binding on the parties.58 (3.3.1) THE DIFFERENCE BETWEEN CONCILIATION
AND MEDIATION59: Under our law and the UNCITRAL model, the role of the
mediator is not pro-active and is somewhat less than the role of a conciliator. We 57
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW 58 Robert
Merkin, Arbitration Law edn 2004,p 168, para 6.6. 59 Justice M. Jagannadha Rao, Judge
Supreme Court of India. See http://lawcommissionofindia.nic.in/ adr_conf/concepts
%20med%20Rao%201.pdf - 83 - have seen that under Part III of the Arbitration and
Conciliation Act, the Conciliators powers are larger than those of a mediator as he can
suggest proposals for settlement. Hence the above meaning of the role of mediator in
India is quite clear and can be accepted, in relation to sec. 89 of the Code of Civil
Procedure also. The difference lies in the fact that the conciliator can make proposals for
settlement, formulate or reformulate the terms of a possible settlement while a mediator
would not do so but would merely facilitate a settlement between the parties. Brown
quotes60, which offers a range of dispute resolution processes, facilitative, evaluative and
adjudicative. It is there stated that conciliation is a process in which the Conciliator plays
a proactive role to bring about a settlement and mediator is a more passive process. This
is the position in India, UK and under the UNCITRAL model. However, in the USA, the
person having the pro-active role is called a mediator rather than a conciliator. Brown
says61 that the term Conciliation which was more widely used in the 1970s has, in the
1970s, in many other fields given way to the term mediation. These terms are elsewhere
often used interchangeably. Where both terms survived, some organizations use
conciliation to refer to a more proactive and evaluative form of process. However, reverse
usage is sometimes employed; and even in UK, Advisory, Conciliation and Arbitration
Service (ACAS) (UK) applies a different meaning. In fact, the meanings are reversed. In
relation to employment, 60 (at p 127) the 1997 Handbook of the City Disputes Panel, UK
61 Page 272, ibid. - 84 - the term conciliation is used to refer to a mediatory process that
is wholly facilitative and non-evaluative. The definition of conciliation formulated by the
ILO (1983) is as follows: the practice by which the services of a neutral third party are
used in a dispute as a means of helping the disputing parties to reduce the extent of their
differences and to arrive at an amicable settlement or agreed solution. It is a process of
orderly or rational discussion under the guidance of the conciliator. However, according
to the ACAS, mediation in this context involves a process in which the neutral mediator
takes a more pro-active role than a conciliator for the resolution of the dispute, which the
parties are free to accept or reject. (The ACAS role in Arbitration, Conciliation and
Mediation, 1989). It will be seen that here, the definitions, even in UK, run contrary to
the meanings of these words in UK, India and the UNCITRAL model. The National
Alternative Dispute Resolution Advisory Council, (NADRAC), Barton Act 2600,
Australia62 in its recent publication (ADR terminology, a discussion Paper, at p 15) states
that the terms conciliation and mediation are used in diverse ways. ( The New Mediation:
Flower of the East in Harvard Bouquet: Asia Pacific Law Review Vol. 9, No.1, p 63-82
by Jagtenbury R and de Roo A, 2001). It points out that the words conciliation and
counselling have disappeared in USA. In USA, the word conciliation has disappeared and
62 see www.nadrac.gov.au - 85 - mediation is used for the neutral who takes a pro-active
role. For example: Whereas the terms conciliation and conselling have long since
disappeared from the literature in reference to dispute resolution services in the United
States and elsewhere, these terms have remained enshrined in Australian family laws,
with mediation grafted on as a separate dispute resolution service in 1991. Conversely,
policy papers in countries such as Japan still use the term conciliation rather than
mediation for this pro-active process63 report of Justice System Reform Council, 2001,
Recommendations for a Justice System to support Japan in the 21 st Century). NADRAC
refers, on the other hand, to the view of the OECD (The Organisation for Economic Co-
operation and Development) Working Party on Information, Security and Privacy and the
Committee on Consumer Policy where conciliation is treated as being at the less formal
end of the spectrum while mediation is at the more formal end. Mediation is described
there as more or less active guidance by the neutrals. This definition is just contrary to the
UNCITRAL Conciliation Rules which in Art 7(4) states Article 7(4). The conciliator may,
at any stage of the conciliation proceedings, make proposals for a settlement of the
dispute…. In an article from US entitled Can you explain the difference between
conciliation and mediation64, a number of conciliators Mr. 63 see
www.kantei.go.jp/foreign/judiciary/2001/0612. 64
http://www.colorodo.edu/conflict/civil-rights/topics/1950.html - 86 - Wally Warfield, Mr.
Manuel Salivas and others treat conciliation as less formal and mediation as pro-active
where there is an agenda and there are ground rules. In US from the informal conciliation
process, if it fails, the neutral person moves on to a greater role as a conciliator. The
above article shows that in US the word mediator reflects a role which is attributed to a
pro-active conciliator in the UNCITRAL Model. In fact, in West Virginia, Conciliation is
an early stage of the process where parties are just brought together and thereafter, if
conciliation has not resulted in a solution, the Mediation programme is applied which
permits a more active role.65 The position in USA, in terms of definitions, is therefore
just the otherway than what it is in the UNCITRAL Conciliation Rules or our Arbitration
and Conciliation Act, 1996 where, the conciliator has a greater role on the same lines as
the mediator in US.

LokAdalat.
Lok-Adalat means, People's Court. "Lok" stands for "people" and the term "Adalat"
means court. Lok-Adalat is a system of alternative dispute resolution developed in India.
India has long history of resolving disputes through the mediation of village elders. The
system of Lok-Adalat is based on the principles of the PanchParmeshwar of Gram
Panchayats.The idea of Lok-Adalat was mainly advocated by Justice P.N. Bhagwati, a
former Chief Justice of India. Lok-Adalat is a non-adversarial system, whereby mock
courts (called Lok-Adalat) are held by the State Authority, District Authority, Supreme
Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal
Services Committee. They are held periodically for exercising such jurisdiction as they
determine. The clogged courthouses have become an unpleasant compulsive forum
instead of temples of speedy justice. Instead of waiting in queues for years and passing on
litigation byinheritance, people are inclined either to avoid litigation or to start resorting
to extra judicial remedies.

Lok Adalats in india.

The Legal services Authorities Act, 1987 provides that every State/ District Legal
Services Authority or the Supreme Court/ High Court Legal Services Committee may
organise Lok Adalats at such intervals and such places and for exercising such
jurisdiction and for such areas as it thinks fit.17 The Lok Adalats may comprise of
serving or retired judicial officers and such other persons as may be prescribed by the
Legal Services Authority/ Committee.18 Any case pending before a court may be referred
to a Lok Adalat if all the parties agree or if one of the parties makes an application to the
court and the court is prima facie satisfied that there are chances of settlement or if the
court is satisfied that the matter is an appropriate one to be taken cognizance of by the
Lok Adalat after giving a reasonable opportunity of being heard to the parties. 19 Thus
the court can also suo motu refer the dispute to the Lok Adalat even where the parties are
reluctant, if the court is satisfied that the matter is an appropriate one to be taken
cognizance of by the Lok Adalat.20 The prime consideration which the court has to keep
in mind is the existence of the possibility of a settlement. The parties however must get a
reasonable opportunity of being heard before the matter is referred to the Lok Adalat, suo
motu by the court. 21 The Legal Services Authority or Committee organizing the Lok
Adalat may also refer a case to the Lok Adalat on receipt of an application from any one
of the parties after giving a reasonable opportunity of being heard to the parties. 22 17 S.
19(1), Legal Services Authorities Act, 1987. 18 S. 19(2), Legal Services Authorities Act,
1987. 19 S. 20(1), Legal Services Authorities Act, 1987. 20 Sau. Pushpa Suresh Bhutada
v. Subhash Bansilal Maheshwari, AIR 2002 Bombay 126; The conditions specified under
ss. 19 and 20, Legal Services Authorities Act, 1987 must be, however, satisfied. See
Shashi Prateek v. Charan Singh Verma, AIR 2009 Allahabad 109. 21 Commissioner,
Karnataka State Public Instruction (Education), Bangalore v. Nirupadi Virbhadrappa
Shiva Simpi, AIR 2001 Karnataka 504. 22 S. 20(2), Legal Services Authorities Act, 1987.
87 The Lok Adalat proceeds to dispose of the case on the basis of compromise or
settlement between the parties. The source of power of Lok Adalat, which is only a forum
for ADR, is conciliation and the Lok Adalat is not supposed to delve into the realm of
adjudication. 23 In fact the promotion of conciliation culture is one of the most important
objectives of the Lok Adalat movement. The jurisdiction of Lok Adalat is therefore
limited to making an effort to bring about a compromise or settlement between the parties
to the dispute with their consent so that the matter is finally settled once for all.24
Conversely where there is no compromise or settlement the case cannot be disposed of by
the Lok Adalat25 and in such an eventuality the case is to be returned back to the court
for disposal as per law.26 Where the matter is settled before the Lok Adalat an award is
passed by the Lok Adalat on the basis of the settlement. However, the award of the Lok
Adalat cannot travel beyond the compromise or settlement arrived at between the
parties.27 The award of the Lok Adalat is not a judicial decision and the Lok Adalat
cannot incorporate any finding, direction or stipulation in the award de hors the
settlement and the award is nothing but a formal assimilation and integration of the terms
of the settlement or compromise arrived between the parties, by the Lok Adalat in the
form of an enforceable order and the nature of this process of passing of the award
though ostensibly judicial is in fact essentially administrative. Further every award of the
Lok Adalat is final and binding on all the parties to the dispute28 23 State Bank of Indore
v. Balaji Traders, 2003(3) R.C.R.(Civil) 339. 24 N.V. Paranjape, Public Interest
Litigation, Legal Aid & Services, Lok Adalats and Para Legal Services 282 (Central Law
Agency, Allahabad, 1st Edn. 2006). 25 Compromise is an agreement reached by
adjustment of conflicting or opposing claims by reciprocal modification of demands. A
compromise is always bilateral and means mutual adjustment. On the other hand
Settlement is termination of legal proceedings by mutual consent. See State of Punjab v.
Phulan Rani, AIR 2004 SC 4105; See also Union of India v. Ananto, AIR 2007 SC 1561.
26 B.P. Moideen Sevamandir v. A.M. Kutty Hassan, 2009 (2) S.C.C. 198. 27 State of
Punjab v. Ganpat Raj, AIR 2006 SC 3089. and no appeal lies 28 S. 21, Legal Services
Authorities Act, 1987; In Rajan Kakar v. Vijaya Bank, AIR 2008 Delhi 17 it was held that
award of the Lok Adalat was final and binding between the parties and after the award
fresh proceedings under the Securitisation and Reconstruction of Financial 88 to any
court against the award.29 This is a very valuable and vital provision which is meant to
give finality to the decision of the Lok Adalat.30 Even review by the court which referred
the case to the Lok Adalat is not permissible.31 If any party wants to challenge such an
award based on settlement, it can be done only by filing a petition under Article 226
and/or Article 22732 of the Constitution of India and that too on very limited grounds.33
The award of a Lok Adalat is deemed to be a decree of a civil court and is per se
executable.34 Viewed in that perspective, since every award of the Lok Adalat is deemed
to be a decree of a civil court, the matter need not be referred back to the concerned court
for passing of a consent decree.35 Lok Adalat has the requisite powers to specify its own
procedure, however, it is bound to follow the principles of natural justice, equity, fair play
and other legal principles. 36 Assets and Enforcement of Security Interest Act, 2002 were
not permissible; See also M. I. Ibrahim Kutty v. Indian Overseas Bank, AIR 2005 Madras
335. 29 P. T. Thomas v. Thomas Job, AIR 2005 SC 3575; The provisions of the Act
override the provisions of section 96 CPC providing for appeal generally from a decree.
See also Punjab National Bank v. Lakshmichand Rai, AIR 2000 Madhya Pradesh 301. 30
Abdul Hassan and National Legal Services Authority v. Delhi Vidyut Board, AIR 1999
Delhi 88. For example the award can be set aside on grounds of fraud. See United India
Insurance Co. Ltd. v. Master Imran Khan, AIR 2008 Delhi 26. 31 New India Assurance
Company Ltd. v. Ponnamma Thomas, AIR 2008 Kerala 4 (DB). 32 High Court has the
power of superintendence over Lok Adalats in terms of Article 227 of the Constitution of
India; See Parmod v. Jagbir Singh, 2003 (2) R.C.R.(Civil) 184. 33 State of Punjab v.
Jalour Singh, AIR 2008 SC 1209; See also Commissioner of Karnataka State Public
Instruction (Education) v. Nirupadi Virbhadrappa Shiva Simpi, AIR 2001 Karnataka 504
and Merlin alias Sherly Augustin v. Yesudas, AIR 2007 Kerala 199. The award of the Lok
Adalat can be questioned on grounds of fraud, misrepresentation, coercion, arbitrariness,
unreasonableness, denial of hearing etc. Although it ensures minimum standards of
fairness, the emphasis is more on natural justice than the rigours and 34 In K.N.
Govindan Kutty Menon v. C.D. Shaji, (2012) 2 SCC 51 it was held that the award of a
Lok Adalat in a criminal case under section 138 of the Negotiable Instruments Act, 1881
could be executed as a decree of the civil court by the civil court. See also Valarmathi Oil
Industries v. Saradhi Ginning Factory, AIR 2009 Madras 180 and Subhash Narasappa
Mangrule v. Sidramappa Jagdevappa Unnad, 2009 (3) Mh. L.J. 857; See also K.N.
Chandrasekharan Pillai, Ensuring Equality: Role of Legal Services Authorities available
at: http://www.nja.nic.in (last visited on 01.06.2012). 35 N.V. Paranjape, Public Interest
Litigation, Legal Aid & Services, Lok Adalats and Para Legal Services 282 (Central Law
Agency, Allahabad, 1st Edn. 2006). 36 Tulika Sen, Natural Justice and Lok Adalats,
(2007) PL February 7; See also Moni Mathai v. The Federal Bank Limited, AIR 2003
Kerala 164. 89 formalities of legal procedure.37 A Lok Adalat has the same powers as are
vested in a civil court under the Code of Civil Procedure, 1908 for summoning and
enforcing the attendance of witnesses and examining them on oath, the discovery and
production of any document, requisitioning of any public record, reception of evidence
on affidavits, etc. and all proceedings before a Lok Adalat are deemed to be judicial
proceedings. 38 4. ADVANTAGES OF LOK ADALATS But despite this, the procedure
followed by Lok Adalat is relatively simple, flexible and straightforward.

LOK ADALAT: SIGNIFICANCE

The problem of delays and expensive litigation has engaged the attention and
consideration of several legal luminaries, those connected with the management of the
judicial system of the country. As per statistics available in India, it is unable to clear the
backlog of cases.
The backlog has been increasing at an average rate of 34 percent annually. This huge
backlog of unsolved cases, experts claim, is directly proportional to a lack of judges.
Statistics released by the Supreme court although shows a drop in vacancies of judges in
the courts of the country, the number is still very high.The vacancies in the Supreme
court have been reduced by new appointments this year and last year. The High Courts
statistics however, show some concerns. There have been nearly 30 percent vacancies in
High Courts as well as lower courts In Maharashtra state, total pending cases as of 31
December, 2009 in Lower Courts is 4,158,458, i.e. 15 percent of total pendency and
338,183 in High courts i.e. 8 percent of total pendency. The United Nations Development
Programme reveals that approximately 20 million legal cases are pending in India. India
is a country of 1.1 billion people. Presently it has approximately 12.5 judges for every
million people compared with roughly 107 per million in the United States and Great
Britain have around 150 judges for million of its population.[Google search] In its 120th
Report in1988, the Law Commission of India had recommended that the state should
immediately increase the ratio from 10.5 judges per million of Indian population to at
least 50 judges per million within within the period of next five years.[ 120th Report of
the Law Commission of India on Manpower Planning in the Judiciary: A Blueprint,
Ministry of Law, Justice and Company Affairs, Government of India (1987) 39.] the
recommendation is yet to be implemented. Our justice delivery system is bursting at the
seams and may collapse unless immediate remedial measures are adopted not only by the
judiciary but also by the legislature and executive. It has been said by ford Devlin: If our
business methods were as antiquated as our legal system, we would have become a
bankrupt nation long back. Thereby various Committees were appointed. Law
Commission of India also in its various reports, have considered this problem in all its
facets and have suggested some remedial measures. Accordingly, a few procedural
amendments were carried out, a piece of substantial law emerged and other
improvements in the working of the system have also been introduced. Many tribunals,
forums have been created to reduce workload in Courts. Besides, many mechanisms for
harmonious settlement of disputes such as negotiation, conciliation, mediation,
arbitration. LokAdalat have been set up to provide fast, active and cheap remedies that
can be made available to the people along with Traditional Legal System and to confirm
guarantee of equal access to justice. LokAdalats are usually presided over by retired
judges, social activists, or other members of the legal profession. The LokAdalat can deal
with all Civil Cases, Matrimonial Disputes, Land Disputes, Partition/Property Disputes,
Labour Disputes etc., andcompoundable criminal Cases. The first LokAdalat was held in
1985 in Delhi where more than 150 cases were solved within a day.

LOK-ADALAT IN INDIA

With 42nd amendment act of constitution of 1976, Article 39-A, has been inserted which
requires the State to secure that the operation of the legal system promotes justice, on a
basis of equal opportunity, and shall, in particular, provide free legal aid, by suitable
legislation or schemes or in any other way, to ensure that opportunities for securing
justice are not denied to any citizen by reason of economic or other disabilities. The
entire mechanism of LokAdalat designed and evolved is with the object of promoting
justice. Justice has three connotations namely social, economic and political. Access to
Justice means an ability to participate in the judicial process. It is that human right which
covers not only bare court entry but has many dimensions including time consuming
factor2 . LokAdalat is defined as a forum where voluntary effort aimed at bringing about
settlement of disputes between the parties is made through conciliatory and pervasive
efforts. Though initially, LokAdalat camps were started at Junagarh District in Gujrat by
1982, the first LokAdalat was held in Chennai in 1986. Soon this programme was
adopted by several other states, such as Bihar, Haryana, Karnataka, Maharashtra etc. and
now gained popularity throughout the country. The Legal Services Authorities Act, 1987
implemented in its true spirit has created popularity for and utility of LokAdalat for
speedy resolution of disputes. It is believed that the "LokAdalat" is an old form of
arbitrating system which had been prevailing in early India and its validity has not been
taken away even in the modern days too. This system is based on Gandhian Principles. It
is one of the components of ADR system. As the Indian Courts are overburdened with the
backlog of cases and the regular Courts are to decide the cases involve a lengthy,
expensive and tedious procedure. The Court takes years together to settle even petty
cases. LokAdalat therefore provides alternative resolution or devise for expeditious and
inexpensive justice3 . Both pre-litigation and post-litigation efforts are invited by
LokAdalat to enable the entire society to create peace and harmony. The Legal Services
Authorities Act, 1987 makes provision for free legal aid which can be availed both before
the Courts and LokAdalat so constituted. The Court has to give guidance to parties (when
parties are opting for any mode of ADR) by drawing their attention to the relevant factors
which parties will have to take into account, before they exercise their opinion as to the
particular mode of settlement.

THE LEGAL SERVICES AUTHORITIES ACT, 1987

LokAdalat is a forum where the disputes/cases pending in the court of law or at

prelitigation stage are settled/compromised amicably. The LokAdalat has been given
statutory status5 under the Legal Services Authorities Act, 1987. Under the said Act, the
award made by the LokAdalat is deemed to be the decree of a civil court and is final and
binding on all parties and no appeal lies before any court against its award.Nature of
cases to be referred to LokAdalat 1. Any case pending before any court 2. Any dispute
which has not been brought before any court and is likely to be filed before the court
Provided that any matter relating to an offence not compoundable under the law shall not
be settled in LokAdalat. How to get the case referred to the LokAdalat for settlement A)
Case pending before the court: 1. If the parties agree to settle the dispute in LokAdalat or
2. One of the parties makes an application to the court or 3. The court is satisfied that that
the matter is an appropriate one for settlement in LokAdalat B) Any dispute at pre-
litigative stage The State Legal Services Authority or District Legal Services Authority as
the case may be on receipt of an application from any one of the parties to any pre-
litigation stage matter refer such matter to the LokAdalat for amicable settlement The
Permanent Lok-Adalat6 is advance version of Lok-Adalat with additional features of
having residuary powers. As, Permanent Lok-Adalat is statutory body and its decision is
binding and it can decide the matter even if, the parties fails to arrive at settlement and
compromise. Therefore, the permanent Lok-Adalat has residuary jurisdiction, in addition
to the jurisdiction enjoy by the Lok- Adalat, to decide dispute by virtue of S.22C (8) even
if dispute between parties failed after conciliation. The Amendment has been introduced
in Section 22 of the said Act in 2002, which provides for setting up of Permanent
LokAdalat to provide compulsory pre-litigative mechanism for conciliation and
settlement of cases relating to public utility services, like postal, telegraph or telephone
service etc. Award of the Permanent Lok-Adalat is open to challenge and subject to
judicial review on the following grounds, i. Offence of non-compoundable in nature ii.
Permanent Lok-Adalat cannot take cognizance of the case, if it is pending before any
court. Such pending cases could be only referred to LokAdalat as per S. 20 and not to
Permanent LokAdalat - Order passed by Permanent LokAdalat would be without
jurisdiction and liable to be set aside.

Pros OF LOK ADALAT

1. In LokAdalat Court fee is not required to be paid and if Court fee is already paid the
amount will be refunded if the dispute is settled at LokAdalat according to the rules.
2. There is procedural flexibility and speedy trial of the disputes. There is no strict
application of procedural laws like Civil Procedure Code and Evidence Act while
assessing the claim by LokAdalat.
3. Parties to the dispute have chance of participation and also can directly interact with
the Presiding Officer through their Counsel which is not possible in regular Courts of law.
4. The award by the LokAdalat is final and binding on the parties and it has the status of a
decree of a Civil Court and it is non-appealable which does not cause the delay in the
settlement of disputes finally.
5. LokAdalat system is a boon to the common man as they can get their disputes settled
fast and free of cost amicably.
6. Though the Lok-Adalat have no adjudicatory or judicial functions, their functions
relate purely to conciliation and try to arrive at compromise and settle the dispute.

CRITIQUE OF LOK ADALAT

Presently, LokAdalat is considered to be one of the best Alternative Disputes Resolution

Systems. Just like every other system, LokAdalat is also having several virtues and it
suffers from few ill as well. As it is rightly said that, Justice delayed is a Justice denied
but Justice hurried is a Justice buried. Keeping this fact in mind, the higher judiciary in
many of its judgments directed that, the speedy proceeding conducted by way of
LokAdalat should not impair the right of any party. The lawyers are sometimes reluctant
to refer the matter for settlement in LokAdalat. Sometimes parties may pressurize their
lawyer to stick up to the strict process of court. The High Court7 observed, In the name of
the speedy resolution of disputes, the fair interests of the parties cannot be sacrificed,
more importantly when the petitioners involved are minors, insane and disabled. While
expressing its lamented remark about the present Lok-Adalat system, the Kerala High
Court pointed out the drawback as — However, the major drawback in the existing
scheme of organization of the LokAdalat under Chapter VI of the Legal Services
Authorities Act is that the system of LokAdalat is mainly based on compromise or
settlement between the parties. If the parties do not arrive at any compromise or
settlement, the case is either returned to the court of law or the parties are advised to seek
remedy in a court of law. This causes unnecessary delay in the dispensation of justice. If
LokAdalat has given power to decide the cases on merits in case parties fail to arrive at
any compromise or settlement, this problem can be tackled to a great extent. However
this defect has been removed in permanent Lok-Adalat. It has also been observed that
since the forum of Lok-Adalat are headed by the person from judiciary, they assume the
role of Lok-Adalat as judicial forum and deviate from the basic objectives for which it
has been formed. The Supreme Court has also lamented on this issue.

SUGGESTIONS OF LOK ADALAT.

1. Legal literacy and legal aid programmes need to expand to take care of poor and
ignorant by organizing awareness camps at grass-root level besides, the mass media like
newspapers, television, radios can also be desirable for this purpose.
2. To increase its utility, the concerned Legal services Authority or Committee should
disseminate information to the public about the holding of various LokAdalat by it and
success achieved thereby in providing speedy, equitable and inexpensive justice.
3. There is need for improvement in quality of legal aid provided by lawyers and
advocates. The remunerations offered from legal services authorities to lawyers should be
revised and thus encouraged to render effective legal assistance to needy persons. 3. It is
observed that, there is need for enactment of more statutory provisions allowing justice
through LokAdalat. 4. The LokAdalat Movement can be successful only if the people
participate on voluntary basis in the functioning of LokAdalat. This can be achieved by
restraining themselves from invoking the jurisdiction of traditional Courts in trifle
disputes.
PERMANENT LOK ADALATS - WHETHER AN ADR MECHANISM 105 The next
question is then how the concept of Permanent Lok Adalat co-exists with this judgment
of the Supreme Court. The aspect to be considered is that in State of Punjab v. Jalour
Singh the Supreme Court was dealing with a case involving a Lok Adalat within the
contemplation of section 19, 20, 21 and 22 of the Legal Services Authorities Act, 1987.
The Permanent Lok Adalats in contradistinction to Lok Adalats have been expressly
conferred an adjudicatory role by the statute. the Supreme Court held that the Lok
Adalats only have a conciliatory role and they are not competent to undertake
adjudicatory determination and the award of the Lok Adalat does not mean and imply any
independent verdict or opinion arrived at by the decision-making process. 106 102 In
Ram Niwas v. D.D.A., AIR 2007 Delhi 115 it was held that Permanent Lok Adalat is a
statutory body in terms of the Legal Services Authorities Act, 1987 and its decision must
be accepted. 103 Paras Holidays Pvt. Ltd. v. State of Haryana, 2008(4) R.C.R.(Civil) 367
104 S. 22 E, Legal Services Authorities Act, 1987. 105 AIR 2008 SC 1209. 106 S. 22
C(8), Legal Services Authorities Act, 1987. Where in a matter before a Permanent Lok
Adalat the matter cannot be settled by conciliation the Permanent Lok 109 Adalat is
statutorily enjoined to decide the dispute on merits.107 The judgment in State of Punjab
v. Jalour Singh would therefore not apply to Permanent Lok Adalats since in that case the
court was not considering the provision enshrined under section 22C(8) of the Legal
Services Authorities Act, 1987.108 Moreover the amendments to the Legal Services
Authorities Act, 1987 pertaining to Permanent Lok Adalats were challenged, but they
were upheld by the Supreme Court of India.109 In Life Insurance Corporation of India v.
Suresh Kumar110, the Supreme Court observed that Permanent Lok Adalat has no
jurisdiction or authority vested in it to decide any lis, as such, between the parties even
where the attempt to arrive at an agreed settlement between the parties has failed.
However, again the court in that case was dealing with and referring to a Lok Adalat'
organized under section 19 of the Act. Continuous Lok Adalats organized under section
19 of the Legal Services Authorities Act, 1987 are sometimes loosely described as
Permanent Lok Adalats' and should not be confused with Permanent Lok Adalats
constituted under section 22B(1) of the Act. This position has been clarified by the
Supreme Court itself 111 that a Permanent Lok Adalat has the jurisdiction to decide on
the merits of the dispute where an amicable resolution of the dispute fails.112 Thus a
person who enters the domain of a Permanent Lok Adalat cannot withdraw from the same
and he must ultimately suffer a decision on merits if a negotiated settlement does not
fructify and that to with the added 107 The only exception has been made in a case where
the dispute pertains to an offence, even if it is a compoundable offence and in such cases
the Permanent Lok Adalat cannot decide the matter on merits. 108 Pu Lalkanglova Sailo
v. Pi Ngurthantluangi Sailo, AIR 2009 Gauhati 39. 109 S.N. Pandey v. Union of India,
Writ Petition (Civil) No. 543/2002 decided by the Supreme Court vide order dated
28.10.2002. 110 2011 (4) SCALE 137. 111 InterGlobe Aviation Ltd. v. N. Satchidanand,
(2011) 7 SCC 463. 112 See also United India Insurance Co. Ltd. v. Ajay Sinha, 2008 (7)
S.C.C. 454 where the Supreme Court held that the Parliament has given the authority to
the Permanent Lok Adalat to decide matters on merits and therefore it has an adjudicating
role to play. 110 rigour of absence of any appeal. 113 This might put a party at some
disadvantage in as much as the forum which in its form appears to be conciliatory
ultimately turns out to be adjudicatory. Lawyers have been very critical of this provision.
114 Be that as it may there are ADR mechanisms which have adjudicatory character also.
Arbitration is a purely adjudicatory process and still it is regarded as an ADR mechanism.
But this only implies that that the concept of Permanent Lok Adalat does not appear to be
completely in sync with purely non adjudicatory ADR. 115 We also have hybrid
processes such as Med-Arb wherein the parties allow the same person to first mediate,
and if that is unsuccessful, then arbitrate a dispute.116 Similarly dispute resolution
through Permanent Lok Adalats is also an ADR mechanism, hybrid in nature, having both
adjudicatory as well as non adjudicatory trappings and alternative in the sense that it
offers a substitute to conventional litigation and it steers clear of the rigidity and
complexity of the conventional litigative process. It is also considered as an ADR
mechanism having both adjudicatory as well as non adjudicatory trappings. 117 A
Permanent Lok Adalat is a special tribunal which is not a `court' 118 113 In Ambika
Kumary v. State of Kerala, AIR 2012 Kerala 16 it was held that once a complaint is filed
before the Permanent Lok Adalat and the same is within its jurisdiction, then the
Permanent Lok Adalat has no escape from deciding the matter finally, which can be
through a settlement award, and if there is no possibility of a settlement by deciding the
case on merits. 114 Marc Galanter & Jayanth K. Krishnan, Bread for the Poor: Access to
Justice and Rights of the Needy in India, 55 Hastings L.J. 789 (March, 2004). 115 P.C.
Rao, Alternatives to Litigation in India, in P.C. Rao and William Sheffield (Eds.),
Alternative Dispute Resolution 24 (Universal Law Publishing Company Pvt. Ltd., Delhi,
1997); K. Jayachandra Reddy, Alternative Dispute Resolution, in P.C. Rao and William
Sheffield (Eds.), Alternative Dispute Resolution 79 (Universal Law Publishing Company
Pvt. Ltd., Delhi, 1997). 116 Alexander Bevan, Alternative Dispute Resolution 9 (Sweet
and Maxwell, London, 1992). 117 A Permanent Lok Adalat is not bound by the Code of
Civil Procedure, 1908 and the Indian Evidence Act, 1872. 118 InterGlobe Aviation Ltd. v.
N. Satchidanand, (2011) 7 SCC 463. and its decision is not subject to successive 111
appeals. 119 The procedure is somewhat similar to Med-Arb. The Supreme Court120 has
held that the procedure adopted by Permanent Lok Adalats is what is popularly known as
`Con-Arb' (conciliation cum arbitration) in the United States of America, where the
parties can approach a neutral third party or authority for conciliation and if conciliation
fails, authorize such neutral third party or authority to decide the dispute itself, such
decision being final and binding.121 The Chairman of a Permanent Lok Adalat is a
person who has held a judicial office of an additional District Judge or higher. Thus there
can be no issues about quality of the decision making process or the decision rendered on
merits. Lawyers regularly appear before the Permanent Lok Adalats in Delhi leaving no
room for any issues with respect to adequate legal representation. The Permanent Lok
Adalat invites written statements of the parties. It may take such documents and evidence
as it may deem fit and it is to be guided by the principles of natural justice, objectivity
fail play, equity and other principles of justice. The mere fact that it is not bound by the
provisions of Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872 does not
imply that the Permanent Lok Adalat decides on the basis of no evidence or it decides
capriciously.122 Thus dispute resolution through Permanent Lok Adalat is definitely an
ADR mechanism. A person submitting to the jurisdiction of the Permanent Lok Adalat is
presumed to know the law that in case the dispute is not amicably resolved, the
Permanent Lok Adalat would acquire an adjudicatory role and 119 The award of the
Permanent Lok Adalat is, however, amenable to the writ jurisdiction of the High Court.
120 InterGlobe Aviation Ltd. v. N. Satchidanand, (2011) 7 SCC 463. 121 However the
Jharkhand High Court by judicial interpretation has, however, held that the Permanent
Lok Adalat must inform the parties regarding the adjudicatory role of a Permanent Lok
Adalat and the fact that no appeal would lie against the award of the Permanent Lok
Adalat and if thereafter the parties expressly consent to have their matter adjudicated on
merits by the Permanent Lok Adalat then only it should proceed to dispose of the case of
merits. See Eastern Central Railway v. Ashok Kumar Verma, 2009 (4) J.L.J.R.129; See
also Branch Manager, Tata AIG General Insurance Co. Ltd. v. Bandana Devi, W.P.(S) No.
2557 of 2008 decided on 25.02.2010 by the High Court of Jharkhand. 122 Even an
arbitrator is not bound by the provisions of Code of Civil Procedure, 1908 and the Indian
Evidence Act, 1872. 112 hence the so called disadvantage can only be described as a self
imposed disadvantage, if at all it is really a disadvantage. Lawyers can also very well
apprise the client of the demerits, if any, of the machinery of PLA. In spite of that, if the
party is inclined to resort to the cheaper remedy, it cannot be said that the legislation is
anti litigant, as there is no compulsion that one shall first approach PLA before
approaching a court of law.123 The importance of Permanent Lok Adalats as ADR
mechanisms cannot be underestimated. Even the Delhi High Court, while endorsing the
importance of Permanent Lok Adalats in Abdul Hassan and National Legal Services
Authority v. Delhi Vidyut Board In practice Permanent Lok Adalats have similar benefits
and suffer from similar disabilities as ordinary Lok adalats do. However Permanent Lok
Adalats function continuously and they require additional separate expenditure. They
provide an additional state sponsored ADR mechanism with the capacity and time to deal
with much greater number of cases and more complex cases than ordinary Lok Adalats.

Introduction to Judicial Settlement:

Section 89 of the Civil Procedure Code also refers to the Judicial Settlement as one of the
mode of alternative dispute resolution. Of course, there are no specified rules framed so
far for such settlement. However, the term Judicial Settlement is defined in Section 89 of
the Code. Of course, it has been provided therein that when there is a Judicial Settlement
the provisions of the Legal Services Authorities Act, 1987 will apply. It means that in a
Judicial Settlement the concerned Judge tries to settle the dispute between the parties
amicably. If at the instance of judiciary any amicable settlement is resorted to and arrived
at in the given case then such settlement will be deemed to be decree within the meaning
of the Legal Services Authorities Act, 1987. Section 21 of the Legal Services Authorities
Act, 1987 provides that every award of the LokAdalat shall be deemed to be a decree of
the Civil Court.

Judicial Settlement PROCEDURE.

The following are guidelines for judicial settlement ethics:

· Separation of Functions:
Where feasible, the judicial functions in the settlement and trial phase of a case
should be performed by separate judges.

· Impartiality and Disqualification:

A judge presiding over a settlement conference is performing judicial functions
and, as such, the applicable provisions of the code of judicial conduct, particularly
the disqualification rules, should apply in the settlement context.

· Conference Management:
Judges should encourage and seek to facilitate settlement in a prompt, efficient,
and fair manner. They should not, however, take unreasonable measures that are
likely under normal circumstances to cause parties, attorneys, or other
representatives of litigants to feel coerced in the process. The judge should take
responsibility in settlement conferences.

· Setting Ground Rules on Issues Such as Confidentiality, Disclosure and Ex Parte

Communications:
In settlement conferences, judges should establish ground rules at the onset, either
orallyor in writing, informing parties and their attorneys of the procedures that
will be followed. The rules should include ground rules governing issues such as
confidentiality, disclosure of facts and positions during and after conferences, and
ex parte communications.

· Focusing the Discussions:

A judge should use settlement techniques that are both effective and fair, and be
 mindful of the need to maintain impartiality in appearance and in fact.

· Guiding or Influencing the Settlement:

The judge should guide and supervise the settlement process to ensure its
fundamental fairness. In seeking to resolve disputes, a judge in settlement
discussions should not sacrifice justice for expediency.
CONCLUSIONS

Because justice is not executed speedily men persuade themselves that there is no such
thing as justice. Sharing the same sentiments, Chief Justice Bhagwati said in his speech
on Law Day, I am pained to observe that the judicial system in the country is on the verge
of collapse. These are strong words I am using but it is with considerable anguish that I
say so. Our judicial system is creeking under the weight of errors.

Arrears cause delay and delay means negating the accessibility of justice in true terms to
the common man. Countless rounds to the Courts and the lawyers chambers can turn any
person insane. Even then loitering and wasting time in the corridors of Courts has
become a way of life for a majority of Indians who day by day are becoming litigous.
Some of the main reasons for delay in the disposal of cases are abnormal increase in the
number of cases going to Courts and Tribunals, mainly due to faulty legislation enacted
hurriedly, arbitrary administrative orders, increased consciousness of ones rights and
gamblers instinct in a litigant due to multiplicity of appeals and revisions provided in law.

The disputants want a decision, and that too as quickly as possible. As the problem of
overburdened Courts has been faced all over the world, new solutions were searched.
Various Tribunals were the answer to the search. In India, we have a number of Tribunals.
However, the fact of the matter is that even after the formation of so many Tribunals, the
administration of justice has not become speedy. Thus, it can be safely said that the
solution lies somewhere else. All over the globe the recent trend is to shift from litigation
towards Alternative Dispute Resolution. It is a very practical suggestion, which if
implemented, can reduce the workload of Civil Courts by half. Thus, it becomes the
bounden duty of the Bar to take this onerous task of implementing ADR on itself so as to
get matters settled without going into the labyrinth of judicial procedures and
technicalities. The Bar should be supported by the Bench in this herculean task so that no
one is denied justice because of delay.

It is important here to mention the statement made by John F. Kennedy in this respect:
Let us never negotiate out of fear but let us never fear to negotiate.

Summary of Conclusions

ADR has proved to be one of the most significant instruments for contemporary dispute
resolution and judicial reform and it has become an absolute necessity in Delhi. The
enormous spurt in litigation and the insurmountable arrears of cases piling up in the
courts in Delhi coupled with escalating costs and inherent delays of the litigative process
make ADR a sine qua non for preventing the judicial system from collapsing. Initially
advocated as a safety valve and a via media to divert the burden on the clogging judicial
system, ADR, in the contemporary period, has not only accomplished the goal of clearing
the judicial dockets, but has also become an inalienable part of the justice delivery system
providing an additional and appropriate mode of resolution of disputes in an economical,
expeditious and acceptable manner.

ADR, however, is not intended to supplant altogether the judicial system and it only
offers an additional mode of dispute resolution and is therefore sometimes referred to as
Additional Dispute Resolution. In fact the judicial system and ADR need to operate
collaboratively so that the ultimate goal of justice for all is achieved. Further ADR aims
at providing a remedy to disputant parties which is most appropriate in the circumstances
of the case and is therefore also referred to as Appropriate Dispute Resolution.

A continuum of individual ADR mechanisms are available in Delhi but arbitration,

mediation, conciliation and dispute resolution through LokAdalats and Permanent
LokAdalats are the primary ones which flourish in Delhi. These ADR mechanisms have
been quite successful and effective in Delhi and the statistical and empirical data reflects
their success in relieving docket congestion and as instruments of effective dispute
resolution.
ADR has been extremely effective in Delhi in the recent past and it has tremendous
potential in times to come and time is not far when ADR would be the preferred and
inevitable option as a mode of dispute resolution at the pre- litigation stage itself.

BIBLIOGRAPHY
PRIMARY SOURCES (Books).

· Alexander Bevan, Alternative Dispute Resolution (Sweet and Maxwell, London,

1992).

· AnirudhWadhwa and Anirudh Krishnan (Eds.), R.S. Bachawats Law of

Arbitration and Conciliation (Lexis Nexis Butterworths Wadhwa, Nagpur,
thEdn., 2010).
5

· Ashwanie Kumar Bansal, Arbitration and ADR (Universal Law Publishing

Company Pvt. Ltd., Delhi, 2005).

· Avtar Singh Law of Arbitration and Conciliation (Eastern Book Company,

thEdn, 2005).
Lucknow, 7
· Bryan A. Garner (Ed.), Blacks Law Dictionary (West Publishing Company, St.
Paul,

· D.P. Mittal, Taxmanns Law of Arbitration, ADR & Contract (Taxmann Allied
ndEdn.).
Services (P) Ltd., Delhi, 2

· Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration
rdEdn., 2007).
(Sweet and Maxwell, London, 23

· Fali S. Nariman, Indias Legal System: Can it be Saved? (Penguin Books, Delhi,
2006).

· G.K. Kwatra, Arbitration & Alternative Dispute Resolution (Universal Law

Publishing Company Pvt. Ltd., Delhi, 2008).

· G.K. Kwatra, Arbitration & Conciliation Law of India (Universal Law Publishing
thEdition, 2008).
Company Pvt. Ltd., Delhi, 7

thEdn., 2006).
· and Company, Nagpur, 11

· V.A. Mohta&Anoop V. Mohta, Arbitration, Conciliation and Mediation

ndEdn., 2008).
(Manupatra, Noida, 2

ARTICLES.

· A.K. Bansal, Conciliation: Quick Settlement of Disputes, (1) Arb. L.R. (Journal)
22 (1999).

· A.M. Khanwilkar, Need to Revitalise ADR Mechanism, available at: http://

bombay highcourt.nic.in/mediation (last visited on 11.04.2012).

· Anil Xavier, An Argumentative Indian?, 2 (8) The Indian Arbitrator 2 (August

2010). Anil Xavier, Bringing Justice to your Doorsteps: IIAM Community
Mediation Service,

· 1(8) The Indian Arbitrator 2 (September 2009).

Anil Xavier, Lawyer Mediator, Non-lawyer Mediator: Who is Better?, 1(6) The
Indian
· Arbitrator 2 (July 2009).
Anil Xavier, Mediation: Its Origin and Growth in India, 27 Hamline J. Pub. L.
&Pol'y

· 275 (2006).
Anil Xavier, Mediation is here to Stay, 2 (3) The Indian Arbitrator 2 (March
2010).

· Anurag K. Agarwal, Strengthening LokAdalat Movement in India available at:

http:// airwebworld.com/articles/index. (last visited on 15.05.2012).

· Anurag K. Aggarwal, Party Autonomy in Commercial Arbitration, XLI (3) ICA

Arbitration Quarterly 9 (October — December 2006).

· Ari Davis, Moving from Mandatory: Making ADR Voluntary in New York
Commercial Division Cases, 8 Cardozo J. Conflict Resol. 283 (2006).

· Arno R. Lodder& John Zeleznikow, Developing an Online Dispute Resolution

Environment: Dialogue Tools and Negotiation Support Systems in a Three Step
Model, 10 Harv. Negot. L. Rev. 287 (Spring 2005).

· ArunvirVashista, Emerging Trends in ADR as Dispute Resolving Techniques,

XLIX ICA Arbitration Quarterly 31 (January — March 2011).

· Ashok H. Desai, Challenges to an Award — Use and Abuse, XLI (2) ICA
Arbitration Quarterly 1 (July — September 2006).

· Barbara Wilson, Mediation Ethics: An Exploration of Four Seminal Texts, 12

Cardozo J. Conflict Resol. 119 (2010).