Concept of Alternate Dispute Resolution

Meaning and Characteristics of Alternate

Dispute Resolution
Legislative recognition of Alternate Dispute
Resolution
Advantages and Limitations of Alternate
Dispute Resolution
 ADR Techniques and processes
Negotiation: Meaning and Scope
Mediation: Meaning, Basic rules of Mediation,
Selecting Mediator, Restrictions of Mediator
Conciliation: Meaning, Scope and Difference between
Mediation and Conciliation
Arbitration: Meaning, Scope, Types, International
Arbitration, Distinction between Arbitration and
Conciliation
Other Alternative Dispute Resolution Systems: Gram
Nyayalayas; ODR; Lok Adalats; Family Courts; Section
89 and Order X, Rules 1A, 1B and 1C of The Code of
Civil Procedure.
 Disputes occur when a persons rights have
been infringed or an individual has been
injured as a result of another persons action
or inaction.
 ADR provides an alternative method(s) for
resolving a dispute which is different from the
conventional/traditional method of resolving
disputes.
ADR involves settling a civil legal dispute by a
method other than an adjudicative decision
by a Court.
 The vexatious nature of litigation
Expense
loss of social harmony
Lack of awareness:
Mystification
Delays
 ADR system seeks to provide cheap, simple,
quick and accessible justice.
ADR is a process distinct from normal judicial
process. Under this, disputes are settled with the
assistance of a third party, where proceedings
are simple and are conducted, by and large, in
the manner agreed to by the parties.
ADR stimulates to resolve the disputes
expeditiously with less expenditure of time and
money with emphasis on settlement and justice,
maintaining confidentiality.
 ADR aims at providing justice that not only
resolves dispute but also harmonizes the
relation of the parties.
ADR is not to supplant altogether the traditional
legal system, but it offers an alternative forum
to the litigating parties.
ADR tends to settle the disputes in a neutral and
amicable fashion.
ADR can be seen as integral to the process of
judicial reform signifying the access to justice
approach.
 The CPC Amendment Act, 1999 inserting
Section 89 of the Civil Procedure Code
The Arbitration and Conciliation Act, 1996
The Legal Services Authorities Act, 1997
The Industrial Disputes Act, 1947
The Hindu Marriage Act,1955 and
The Family Courts Act
Chapter XXIA on Plea Bargaining which has
been introduced in the Criminal Procedure
Code through the Criminal Law (Amendment)
Act, 2005 containing Sections 265 A to 265L
 Less adversarial or confrontational
Finality of the result,
Lesser cost
Faster resolution
Efficient
Interest-based procedure is adopted as distinct from a rights-
based approach adopted by a Court.
There is possibility of resolving multiple disputes.
Can be invoked at any time even if a matter is pending in a Court.
Results in reducing the work-load of the Courts.
Increased satisfaction of disputants.
Seeks to provide justice to the disadvantaged groups of society.
Process is determined and controlled by parties.
Can be followed without seeking legal assistance.
 Parties can choose the expert neutral third
party.
In Mediation or Conciliation, parties are
themselves prodded to take a decision, since
they are themselves decision-makers and
they are aware of the truth of their position,
the obstacle does not exist.
The formality involved in the ADR is lesser
than traditional judicial process
 As held by the Supreme Court of India in
Afcons Infrastructure Ltd. and Anr. V. Cherian
Varkey Construction Co. Pvt. Ltd. and
Ors.,(2010) 8 SCC 24, having regard to their
nature, there are certain categories of cases
are normally considered unsuitable and
suitable for ADR processes.
 i. Representative suits under Order I Rule 8
CPC which involve public interest or interest
of numerous persons who are not parties
before the court.
ii. Disputes relating to election to public
offices.
iii. Cases involving grant of authority by the
court after enquiry, as for example, suits for
grant of probate or letters of administration.
 iv. Cases involving serious and specific
allegations of fraud, fabrication of
documents, forgery, impersonation,
coercion, etc.
v. Cases requiring protection of courts, as for
example, claims against minors, deities and
mentally challenged and suits for declaration
of title against the Government.
vi. Cases involving prosecution for criminal
offences.
 All other suits and cases of civil nature
disputes arising out of contracts(including all money suits)

disputes relating to specific performance

disputes between suppliers and customers

disputes between bankers and customers

disputes between developers/builders and customers

disputes between landlords and tenants/licensor and licensees

disputes between insurer and insured

disputes relating to matrimonial causes,
maintenance, custody of children;

disputes relating to partition/division among

family members/coparceners/co-owners; and

disputes relating to partnership among

partners.
disputes between neighbours (relating to easementary
rights, encroachments, nuisance, etc.)

disputes between employers and employees

disputes among members of

societies/associations/apartment owners' associations
 claims for
compensation in
motor
accidents/other
accidents
disputes where a
trader/supplier/manufacturer/service
provider is keen to maintain his
business/professional reputation and
credibility or product popularity.
 The above enumeration not exhaustive or
rigid.
It is merely illustrative.
A referral judge must independently consider
the suitability of each case with reference to
its facts and circumstances.
Judges who refer the cases for settlement
through any of the ADR methods are known
as referral judges.
 It involves two parties discussing and
compromising to obtain an agreed solution.
It is usually carried out without legal
representatives, but each party can,if they so
desire, take their own legal representation to
assist.
It is non-binding.
 Mediation involves an impartial third party
who listens and directs discussion but does
not suggest outcomes.
Mediation is voluntary All parties have their
say.
Atmosphere is informal.
Mediation is non-binding.
 Circumstances where both parties are not
willing to attend mediation
Disputes where there is no continuing
relationship between the parties
Disputes where there is evidence of a gross
imbalance of power
Where there are overwhelming emotions
involved
Where there is a history of broken promises
Conciliation is a non-binding procedure

An impartial third party, the conciliator, assists the parties

to a dispute in reaching a settlement of the dispute.

The Conciliator makes suggestions

The settlement terms are mutually agreed between the

parties.
 It is a binding procedure where the dispute is
submitted for adjudication by an arbitral
tribunal consisting of a sole or an odd number
of arbitrators, which gives its decision in the
form of an award that finally settles the
dispute and is binding on the parties.
 Arbitrability is one of the matters which
involves the simple question of what type of
issues can and cannot be submitted to
arbitration.
 Arbitration is best for cases where the parties
want another person to decide the outcome
of their dispute for them but would like to
avoid the formality, time, and expense of a
trial.
Also appropriate for complex matters where
the parties want a decision-maker who has
training or experience in the subject matter of
the dispute.
 If parties want to retain control over how
their dispute is resolved, arbitration, being a
binding process, is not appropriate.
 Established under the Gram Nyayalayas Act, 2008.
Established generally at headquarter of every
Panchayat
Presided over by a Nyayadhikari, who has same
power, enjoys same salary and benefits of a JMIC;
appointed by the State Government in consultation
with the respective HC.
Jurisdiction over an area specified by a notification by
the State Government in consultation with the
respective High Court.
Can function as a mobile court at any place within the
jurisdiction of such Gram Nyayalaya, after giving wide
publicity in that regard.
 Have both civil and criminal jurisdiction
over the offences and nature of suits
specified in the First, Second and Third
schedule of the Act.
The pecuniary jurisdiction of the Nyayalayas
are fixed by the respective High Courts.
The fees charged in civil suits shall not exceed
Rs.100 irrespective of the value of property in
dispute.
 Offences to be tried in a summary manner in
accordance with Chapter XXI of Code of Criminal
Procedure.
Can follow special procedures in civil matters.
Civil suits are proceeded on a day-to-day basis, with
limited adjournments and are to be disposed of
within a period of six months from the date of
institution of the suit.
Possibility for conciliation of the dispute and
settlement of the same in the first instance.
In execution of a decree, the Court can allow special
procedures following rules of natural justice.
 In criminal matters, appeal to the Sessions
Court in the respective jurisdiction
In civil matters, appeal to the District Court
Appeal within a period of one month from
the date of judgment.
 We live in the Internet age- the new
cyberplanet!
According to latest World Internet use
statistics, 1,966,514,816 people in the world
use Internet.
Asians constitute 42% of the Internet users in
the world.
Internet powerful medium for social
interactions & business.
 IP
Commercial
Privacy
Consumer based
Family
Social
Defamation
 Online Dispute Resolution adapts electronic means to
traditional alternative dispute resolution processes,
such as negotiation, mediation and arbitration and/or
use software automated processes for dispute
resolution
Key advantage is that parties need not submit their
disputes for adjudication before the courts of a
different jurisdiction
Broad approach-In ODR, not only e disputes are
resolved online but also traditional disputes such as
commercial or social disputes are capable of being
resolved by use of information technology.
 Commercial Contract performance
Partnership differences
Industrial Construction contracts
Personal injury
Family disputes
Defamation
Privacy
Intellectual property rights
Product liability
Business disputes
Insurance coverage
Professional liability
Banking
Joint ventures
Real estate
Securities
 According to Katsh and Rifkin, the three
important factors, namely convenience, trust
and expertise forms the essence of ODR.
Other Essential factors
Affordability
Accessibility
Secure
Flexibility
Enforceable
Transparency
 Qualitatively distinct from judicial process
Can be initiated and terminated at any point of time
Neutral third party of the parties own choice settles
the dispute
Proceedings are informal -without procedural
technicalities
Proceedings are conducted in the manner agreed by
the parties or as per ODR institutions set of rules
Confidentiality of the subject matter of the dispute is
maintained
Reduces acrimony between parties
Encourages customer loyalty in B2C
 Filing of complaint with ODR provider
Appointment of panelist
Respondent may respond
File supporting doc
Oral hearing
If dispute resolved, Settlement
 E-Mediation
E-Conciliation
E-Arbitration
E-Negotiation
 When goal is resolving a straight-forward
dispute in a cost effective manner
Disputes can be easily documented
Parties have geographical limitations
Time is of the essence
No existing relationship
 Inexpensive - Save money on travel, attorney
and court costs
Time saving
Parties have more control
Flexibility
Private Reduces workload of the judicial system
Voluntary
Can overcome language and cultural differences
Reduces acrimony
Enforceable by agreement
 These generally use an automated or facilitated
negotiation mechanism.
Most often they involve only monetary settlements.
e.g. Cybersettle , ResolveitNow, Settle Online,
SettleSmart etc
Online mediation services - These might utilize an
automatic software program, or could employ the
services of a live mediator who uses email e.g. One
Accord, WebMediate,Internet Neutral, BBBonline for
consumer disputes etc.
Online adjudication - These include arbitration
services, and virtual juries e.g. Resolution Forum,i-
Courthouse, NAF
 Information Technology Act, 2000 based on
UNCITRAL Model law of e-commerce 1996
Section 4- Legal recognition of electronic records
Section 5- Legal recognition of electronic signatures
Section 10A -Validity of contracts formed through
electronic means
Section 11-13-Attribution, acknowledgement and
dispatch of electronic records Section 14-Secure
electronic record Section 15- Secure electronic
signatures Chapter IX on cyber contraventions and
chapter XI on offences Section 72 A punishment for
disclosure of information in breach of lawful contract
 Indian Evidence Act ,1872-Section 65A,B-
Admissibility of electronic records
Legal precedents encouraging ODR-
State of Maharashtra vs Dr. Praful B. Desai (2003
SC (Held that the recording of evidence by way
of video conferencing might be done in cases
where the attendance of the witness cannot be
ensured without delay, expense and
inconvenience)
Grid Corporation of Orissa Ltd. vs. AES
Corporation
 Need more awareness & training
More funding to set up ODR
Creating Uniform standards and rules for ODR
Rules pending under Section 3A, 15,16,67C,IT
Secure electronic signatures
Low cost internet access
Need clear Law on Internet surveillance
Need stronger security mechanisms
Institutional ODR providers missing/nominal in
India
 Established under
The Legal Services
Authorities Act,
1987
Lok Adalat is a system of ADR

Lok Adalat is the most up-to-date cheap method of

providing justice at peoples doorstep.

People have no grievance even if the decision of a Lok

Adalat is not favorable to them since Lok Adalat is free
from prejudice, bias and revenge.
 Presided over by a sitting or retired judicial
officer as the chairman, two other members,
usually a lawyer and a social worker.
If the case is already filed in the regular court,
the fee paid will be refunded if the dispute is
settled at the Lok Adalat.
 The procedural laws, and the Evidence Act
are not strictly followed while assessing the
merits of the claim by the Lok Adalat.
The decision of the Lok Adalat is binding on
the parties to the dispute and its order is
capable of execution through legal process.
 No appeal lies against the award of the Lok
Adalat.
Main condition for referring a case to the Lok
Adalat is that both parties in dispute should
agree for settlement.
 Focus is on Compromise.
When no compromise is reached, the matter
goes back to the court.
If a compromise is reached, an award is made
and is binding on the parties.
It is enforced as a decree of a civil court.
The award is final and cannot be appealed
because it is a judgment by consent.
 Money Disputes.
Partition Suits.
Cases seeking damages.
Matrimonial Cases.
MACT Cases
 Same powers as that of a civil court.
the summoning and enforcing the
attendance of any witness and examining
him on oath. the discovery and production of
any document;
the reception of evidence on affidavits;
 the requisitioning of any public record or
document or copy of such record or
document from any court or office; and
such other matters as may be prescribed.
 No Court Fee.
No strict application of the procedural laws
and the Evidence Act.
Disputes can be brought before the Lok
Adalat directly.
Award is final without any appeal.
Faster and inexpensive remedy with legal
status.
 If properly, thoughtfully and wisely
constituted, Lok Adalats can become
welcome additional arm of the existing
judicial system.
If the process of accumulation of arrears is
reversed and there is less burdening, its
qualitative performance can improve.
Established under
the Family Courts
Act, 1984
 Marriage as an institution has become the subject of great
judicial scrutiny.
There are a number of judicial provisions dealing with
marriage and its various aspects.
Need to establish the Family Courts was first emphasized
by the late Smt. Durgabai Deshmukh. After a tour of China
in 1953, where she had occasion to study the working of
family courts, Smt. Deshmukh discussed the subject with
Justice Chagla and Justice Gajendragadkar and then made
a proposal to set up Family Courts in India to Prime
Minister Pt. Jawahar Lal Nehru.
The formation of family court was a milestone in the
history of Indian judiciary.
 To be established in a town or city where the
population exceeds one million.
One or more judges constitute the Family
Courts.
 The Preamble to the Family Courts Act, 1984
enacted by the Indian Parliament states that
it is An Act to provide for the
establishment of Family Courts with a view
to promote conciliation in, and secure
speedy settlement of disputes relating to
marriage and family affairs and for matters
connected therewith.
 The Family Courts are free to evolve their own
rules of procedure
Special emphasis is put on settling the disputes
by mediation and conciliation.
This ensures that the matter is solved by an
agreement between both the parties and
reduces the chances of any further conflict.
Aim of these courts is to form a congenial
atmosphere where family disputes are resolved
amicably.
 Cases are kept away from the trappings of a formal
legal system.
A party is not entitled to be represented by a lawyer
without the express permission of the Court.
Proceedings first referred to conciliation and only
when the conciliation proceedings fail to resolve the
issue successfully, the matter is taken up for trial by
the Court.
The Conciliators are professionals who are appointed
by the Court.
If the party desires, in camera proceedings can be
conducted.
 All matters that pertain to matrimonial issues.
Maintenance, alimony and custody of children in
a marital dispute or a divorce.
Suits or proceedings between parties to a
marriage for a decree of restitution of conjugal
rights, judicial separation, nullity of marriage or
divorce.
For declaring legitimacy of any person.
Suits or proceedings between parties regarding
dispute about the property.
Guardianship or custody of any minor or child.
 Appeal to the High Court can be filed within
thirty days from the date of judgment, order
or decree of the Family Court.
 institutions or organisations engaged in social
welfare or the representatives thereof,
persons professionally engaged in promoting
the welfare of the family,
persons working in the field of social welfare
any other person whose association with a
Family Court would enable it to exercise its
jurisdiction more effectively in accordance
with the purposes of this Act.
 Lack of uniformity regarding the rules laid down
by different states leads to confusion in the
proper application of the Act.
Though the Act was aimed at removing the
gender bias in statutory legislation, the goal is
yet to be achieved.
The frequent changing of marriage counsellors is
causing hardship to parties who have to explain
their problems afresh to the new counsellors
each time.
Settlement of
Disputes
Outside the
Court
 Where it appears to the court that there exist
elements of a settlement which may be acceptable
to the parties, the court shall formulate the terms of
settlement and give them to the parties for their
observations and after receiving the observation of
the parties, the court may reformulate the terms of a
possible settlement and refer the same for-
(a) arbitration
(b) conciliation
(c) judicial settlement including settlement through
Lok Adalat; or
(d) mediation
 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.
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.
 Where a suit is referred under rule 1A, the
parties shall appear before such forum or
authority for conciliation of the suit.
 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.
 The appropriate stage for considering
reference to ADR processes in civil suits is
after the completion of pleadings and before
framing the issues.
 Under section 89 CPC, consent of all the parties to the
suit is necessary for referring the suit for arbitration
where there is no pre-existing arbitration agreement
between the parties.
Similarly the court can refer the case for conciliation
only with the consent of all the parties.
However, in terms of the judicial pronouncements,
consent of the parties is not mandatory for referring a
case for Mediation, Lok Adalat or Judicial Settlement.
The absence of consent for reference does not effect
the voluntary nature of the mediation process as the
parties still retain the freedom to agree or not to
agree for settlement during mediation.