CCN UNIVERSITY OF SCIENCE & TECHNOLOGY
Chowdhury Estate, CCN Road, Kotbari, Cumilla.
DEPARTMENT OF LAW
A Pragmatic Study On
“ADR Mechanism in the Code of Civil Procedure 1908”
Course Title: Law of Alternative Dispute Resolution & Legal Aid
Course Code: Law 118
Submitted To: Submitted By:
Mostafizur Rahaman Jahid Hasan Evan
Lecturer, ID: 611119027
Department of Law Department: Law
CCN-UST Batch: Spring 2019
Semester: 4th
Submission Date: 1st December 2020 1
Acknowledgement
All Praises go to the most gracious and merciful Almighty Allah, who bestowed upon me
with his blessing for the completion of the thesis work successfully.
I am highly grateful and indebted to my assignment supervisor Mostafizur Rahaman
lecturer, Department of Law, CCN university of science & Technology, Cumilla,
Bangladesh. Whose encouragement, valuable suggestions, close co-operation and guidelines
throughout which enabled me to complete the assignment in a great manner.
All of my classmates and Seniors who help and sympathetic attitude at every point during my
study helped me to work in time for my research in course of Law of Alternative Dispute
Resolution & Legal Aid.
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Abstract
Alternative Dispute Resolution refers to a variety of techniques for resolving disputes by
means other than litigation. ADR System seeks to provide cheap, simple, quick and
accessible justice. The object behind this provision is to avoid multiplicity of litigation, save
valuable time, money and permit parties to amicably come to a settlement which is lawful, is
in writing and is a voluntary act on the part of the parties. Further, to reduce burden of the
court. The general principle is that all matters, which can be settled in a suit, can also be
settled by means of compromise. The Act of 1999 has introduced a new provision, section 89
where the court may by itself, proactively refer a dispute for ADR methods such as
Arbitration, Mediation, Conciliation and judicial settlement through Lok Adalat if it appears
that elements of settlement, which may be acceptable to the parties to the dispute.
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Research Methodology
The main target of this study is to know about ADR mechanism in the Code of Civil
Procedure 1908 of Bangladesh and collecting data from different sources and neutral reports.
At the time of preparing the term paper, I have collected necessary data from the following
sources, which are given below:
1) Secondary data
1) Secondary data: Different types of secondary data are used for this study. I have
collected secondary data from the following sources-
1. Book
2. Research Paper
3. Website
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Objective of the Study
The main object of the term paper is to know about the mechanism of ADR in the Code of
Civil Procedure 1908 of Bangladesh.
The specific objectives of this study are shown below:
To Know about analysis of section 89 its scheme
To Know about ADR mechanisms available under section 89
To Know about Problems or weakness facing in introducing the ADR in the CPC
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Introduction
The philosophy of Alternate Dispute Resolution was well-stated by Abraham Lincoln:
“discourage litigation, persuade your neighbours to compromise whenever you can. Point out
to them how the normal winner is often a loser in fees, expense, cost and time.” Litigation
does not always leads to a satisfactory result. It is expensive in terms of time and money. A
case won or lost in court of law does not change the mindset of the litigants who continue to
be adversaries and go on fighting in appeals after appeals. Alternate Dispute Resolution
systems enable the change in mental approach of the parties.
According to a report, currently there is a backlog of approximately three crore cases in
courts across the country.[2] Even after a high disposal rate per judge it seems impossible for
the judiciary to cope up with the arrears. An effort was made in 1999 to harmonize and blend
the judicial and non-judicial dispute resolution mechanisms in order to relieve the court from
overburdening of litigations and even providing a way to the parties to resolve their disputed
expeditiously. Section 89 of the Civil Procedure Code was enacted to popularize among the
public, the options available to them, to resolve their dips.
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Analysis of section 89 and its Scheme :
Section 89 was added through the Code of Civil Procedure (Amendment) Act 1999 into the Code
of Civil Procedure, 1908 and it became effective from 01-07-2002. Section 89 reads as under:
(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 shall apply as if the proceedings for 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 Authorities Act, 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 Authorities Act, 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.”
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The objective of Section 89 is to ensure that the court makes an endeavour to facilitate out-of-
court settlements through one of the ADR processes before the trial commences[3].
The related provisions which were incorporated by the same amendment Act are those
contained in Rules 1A, 1B and 1C of Order X, CPC, which are extracted hereunder:
“1A. 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 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.”
“1B. 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.”
“1C. Appearance before the Court consequent to the failure of efforts of conciliation.- Where
a suit is referred under rule 1A and the forum or authority to whom the matter has been
referred 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.”
With the introduction of these provisions, a mandatory duty has been cast on the civil courts
to endeavour for settlement of disputes by relegating the parties to an ADR process. Five
ADR methods are referred to in section 89. They are: (a) Arbitration, (b) Conciliation, (c)
Judicial settlement, (d) Settlement through Lok Adalat, and (e) Mediation.
Cases not suited for ADR :
Section-89 of the Code provides for settlement of disputes outside the Court. The cases,
which are not suited for ADR process should not be referred under Section 89. These cases
may be broadly categorised as:
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(1) representative suits under Order 1 Rule 8 of the Code, involving public interest or interest
of persons, who are not parties before the Court.
(2) disputes relating to election to public office, except those, where two groups in case of
dispute of management of societies, clubs, associations are clearly identifiable and are
represented.
(3) cases involving granting relief in rem, such as grant of probate or letters of administration.
(4) cases involving serious allegations of fraud, fabrication, forgery, impersonation, coercion
etc.
(5) cases involving protection of courts for minors, deities, mentally challenged persons and
suits for declaration of title against government.
6) cases involving prosecution of criminal offences etc.
Cases suited for ADR :
All other suits and cases of civil nature normally suited for ADR processes, are:
(1) all cases relating to trade, commerce and contracts including money claims, consumer
disputes, banking disputes, tenancy matters, insurance matters etc.
(2) all cases arising out of strained or soured relationship (social issues) including
matrimonial, maintenance, custody matters; family disputes such as partition/ division, and
disputes amongst partners.
(3) all cases in which there is need for continuation of pre-existing relationship inspire of
disputes such as easementary rights, encroachments, nuisance, employer and employee
matters, landlord and tenant, and disputes involving members of societies, associations,
apartment owners.
(4) all cases relating to tortuous liability such as motor accident and other accident claims.
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(5) all consumer disputes including disputes with traders, suppliers, service providers, who
are keen to maintain their reputation, credibility or product popularity.
ADR mechanisms available under section 89
Arbitration
Arbitration is an adjudicatory dispute resolution process by a private forum governed by the
AC Act. If there is pre-existing arbitration agreement, the matter has to be referred to
arbitration invoking Section 8 or Section 11 of the Act. S.89 CPC pre-supposes that there is
no pre-existing arbitration agreement.
The Court can looking to the nature of the dispute and the possibility of settlement, in the
category of cases mentioned above such as the disputes relating to trade, commerce and
contracts, cases relating to tortuous liability or consumer disputes, may gently persuade the
parties, to refer the matter to arbitration with the consent of both the sides and not otherwise.
If the parties agree to arbitration then the provisions of AC Act will apply and the case will
go outside the stream of the Court. The Court will in such case, where parties agree to refer
the dispute to arbitration, make a short order referring to the nature of the dispute, the
agreement between the parties, the name of the arbitrator/ arbitrators; take their consent on
record or allow the parties to sign the order and refer the case to arbitrator, closing the file.
Conciliation
Conciliation is a non-adjudicatory ADR process, also governed by the provisions of the AC
Act (Ss.61 to 81). Where the Court, looking to the nature of dispute arrives at a satisfaction
that there are elements of settlement, it can make a reference to Conciliation, if both the
parties to the dispute agree to have negotiations with the help of third party, or third parties,
either by an agreement or by the process of invitation and acceptance provided under Section
62 of the Act followed by appointment of Conciliator(s) as provided in Section 64.
Conciliation may include an advisory aspect. The settlement with the help of the conciliator
under S.74 of the AC Act has same status and effect as if it is arbitral award on substance of
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dispute given by arbitral tribunal under S.30. Where the dispute settled with the help of
Conciliator is not subject matter of suit/ proceedings, the Court will have to direct that the
settlements shall be governed by S.74 of the AC Act (in respect of conciliation proceedings),
or S.21 of the Legal Services Authority Act, 1987, (in respect of settlement by a Lok Adalat
or a mediator) to make the settlement effective.
On a reference of conciliation, the matter does not go out of the stream of the Court process
permanently. If there is no settlement, the matter returns to the Court for framing of issues
and trial.
Lok adalat
The reference to Lok Adalat does not require consent of the parties. The satisfaction of the
Court to the nature of the dispute, and the elements of settlement, where the issues are not
complicated and do not require determination or adjudication of any dispute, may be referred
to the Lok Adalat. The Court should make a short order preferably in a few lines recording its
satisfaction that the nature of dispute is not complicated; the disputes are easily sort able and
may be settled by applying clear-cut legal principles.
Lok Adalat has no adjudicatory or judicial functions. Their functions relate purely to
conciliation. A Lok Adalat under S.20 of Legal Service Authority Act, 1987 determines a
reference on the basis of a compromise or settlement between the parties at its instance, and
put its seal of confirmation by making an award in terms of the compromise or settlement.
When the Lok Adalat is not able to arrive at a settlement or compromise, no award is made
and the case record is returned to the court from which the reference was received, for
disposal in accordance with law from the stage, which was reached before reference. No Lok
Adalat has the power to “hear” parties to adjudicate cases as a court does. It discusses the
subject matter with the parties and persuades them to arrive at a just settlement.
In their conciliatory role, the Lok Adalat is guided by principles of justice, equity, fair play.
When the LSA Act refers to ‘determination’ by the Lok Adalat and ‘award’ by the Lok
Adalat, the said Act does not contemplate nor require an adjudicatory judicial determination,
but a non- adjudicatory determination based on a compromise or settlement, arrived at by the
parties, with guidance and assistance from the Lok Adalat. The ‘award’ of the Lok Adalat
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does not mean any independent verdict or opinion arrived at by any decision making process.
The making of the award is merely an administrative act of incorporating the terms of
settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of
an executable order under the signature and seal of the Lok Adalat.
To provide compulsory pre-litigation mechanism for settlement and conciliation relating to
public utility services, the parliament has amended Legal Services Authority Act, 1987 in the
year 2002, providing for Permanent Lok Adalat in every district, exercising jurisdiction in
public utility services, such as transport, postal, communications, water supply, hospitals and
insurance. The party can make an application under S.22C of the Act to the Permanent Lok
Adalat for assistance to conciliate under Sub-Section (4) to settle the dispute in an
independent and impartial manner. If the parties fail to reach an agreement under sub-section
(7), the Permanent Lok Adalat shall under sub-section (8), if the dispute does not relate to any
offence, decide the dispute. The award will be final and binding on all the parties under
S.22E, and will be deemed to be a decree of Civil Court and shall not be called in question in
any suit, application or execution proceedings.
Mediation
Mediation is a structured process of dispute resolution in which a mediator, a neutral person
trained in the process of mediation, works with the parties to a dispute, to bring them to a
mutually acceptable agreement. The mediator does not decide the dispute or give an award.
He is only a facilitator and in charge of the process of mediation. Mediation rules of each
State under Chapter X CPC, as recommended in Salem Advocate Bar Association and
(II) by the Supreme Court provide for a detailed procedure for mediation.
The mediation is a purely voluntary process in which parties continue out of their free will.
They can opt out at any time. Once an agreement is reached and signed, and is accepted by
the Court, it is enforceable in law by the Court. The mediation avoids adversarial approach
and instead adopts cooperative methods. The parties focus on mutual agreement with long
term gains, which improve their relationship. It offers win situation putting to end to the
dispute in an amicable manner. The mediation looks forward and offers long time acceptable
solution to the parties.
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Judicial settlement
The Court may at the stage of Section 89 or Order X Rule 1A, 1B, 1C, looking to the nature
of dispute and on being satisfied that there are elements of settlement, refer the dispute for
judicial settlement. If the Court feels that a suggestion or guidance by a judge would be
appropriate, it may refer the dispute to another judge for dispute resolution. The Judicial
Officer to whom the case is referred shall make efforts for settlement between the parties and
follow such procedures as may be prescribed. Where the settlement is arrived at before such
other judge, the settlement agreement will have to be placed before the court, which referred
the matter, and that Court will make a decree in terms of it. The case may not be tried by the
same judge to whom the matter is referred for judicial settlement but the parties did not agree
to settle the matter.
In case of arbitration and conciliation, it is essential that the parties shall agree to refer the
matter to the Arbitrator or Conciliator. In the case of other three ADR processes namely Lok
Adalat, mediation and judicial settlement, the consent of the parties is not essential to refer
the matter. The Court may on a satisfaction arrived at, on its own discretion even ex-parte
refer the matter to these ADR processes. In Family Courts it is recommended that the ideal
stage for mediation is before the respondent files objections/ written statements, as in such
case, the pleadings written with the help of lawyers very often leads to allegations, which
aggravates the hostility between the parties.
Afcons case: A judicial relook
The first shortcoming pointed out is that there has been error in drafting the meaning of
“Mediation” and “Judicial Settlement” under section 89(2). Clause (c) states that for “judicial
settlement”, the court shall refer the same to a suitable institution or person who shall be
deemed to be a Lok Adalat and clause (d) states that for “mediation”, the court shall effects a
compromise between the parties by following such procedure as may be prescribed. The
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Supreme Court pointed out that in order to give proper meaning to section 89, the said two
words should be interchanged.
The second shortcoming is that section 89 (1) requires the court to formulate the terms of
settlement and refer the same to the parties for their observation and once the parties approve
it the terms shall be reformulated and refer to appropriate forum. However if the court does
these things there will be nothing left for the conciliator or mediator to do as this is the task of
the conciliator or mediator at the final stage. Also if the dispute is referred to Arbitration it
will be of no use as the arbitrator does not adjudicate upon the terms of settlement. This will
in no way reduce the burden of the court and the pendency will continue. Thus formulation
and reformulation of terms of settlement by the court is wholly out of place in the pre-
reference stage of ADR process.
Thirdly, section 89 states that “where it appears to the court that there exist elements of a
settlement” and uses the words “shall” and “may”. This implies that the court needs to
determine in each case whether it is suitable for ADR or not and refer only those suits which
it thinks are capable of being resolved by ADR. However in Order X Rule 1A the term
“shall” makes it mandatory for court to refer the suit for ADR. However this ambiguity was
cleared in Afcon’s case where the court held that on harmonious construction of both the
provisions it is clear that it is mandatory to consider a case for ADR whether or not it is
actually referred to.
Another anomaly is with regard to Court fees. The amendment act of 1999 also brought about
an amendment in section 16 of the court fees Act, 1870 which states that where a suit is
referred by court to any other mode of settlement under section 89 of CPC, the person shall
receive back the full amount of the fees that he had paid for plaint. However no remedy has
been suggested in case in the person returns back to the court on failure to resolve the dispute
through ADR process.
Advantages of ADR
The advantages of ADR are:
(1) to facilitate access to justice to the poor and disadvantaged.
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(2) to provide for informal, quick and inexpensive resolution of disputes.
(3) to take away cases inappropriate for adjudicatory process.
(4) remove petty cases, which do not require any adjudication by courts.
(5) to reduce the burden of statistical load of cases on the courts.
(6) to help promoting in trade and commerce, “fair practice, good commerce and equality”
(7) to maintain peace and harmony in society, by reducing hostility and promoting resolution
of disputes in a peaceful manner.
(8) enhancing faith and confidence in the judicial system; and (9) to provide for dispute
resolution by morals and not coercion.
Problems or weakness facing in introducing the ADR in the CPC
The ADR in the Code of Civil Procedure 1908 is totally new initiative which leads a lot
problem in application of the ADR. The main problems are:
In the CPC there is no general or specific guideline for the mediators regarding
the maintenance of equal participation and opportunity for the parties that may
create serious problem in case of power imbalance. There is also no explicit
provision pertaining to reviewing the agreement arrived at upon conclusion of
mediation under the CPC
Further, the CPC incorporates mediation provisions at the pre-trial and the
appellate stage but mediation mechanism upon conclusion of the trial before the
pronouncement of judgment has not been incorporated into the CPC. It is an
established fact that the parties usually are aware of the merits of their case
just upon conclusion of the Therefore, post-trial mediation may prove to be more
effective than that of the mediation at the appellate stage. Section 89A as it stands
after the amendment in 2012 requires the court to refer the suit for compulsory
mediation. If either or both the parties and their lawyers remain absent, the court has
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no option but to postpone the stage to another date. Again, when the parties are in
attendance and the court has referred the suit to the parties for mediation, but the
parties or any of them does not appear before mediator, then the mediation is
bound to fail. In this backdrop, the section does not empower the court with the tools
to enforce the attendance of the parties. Thus the present provision adds to the
existing practice of delay.
Quite often it happens that after the suit has been referred to mediation any of the party
does not want to compromise and withdraws from mediation without assigning any
reason in which case a mediator has no other option but to report the court about the
failure of the mediation. Under section 89A there is no penal provision for the party who
unreasonably withdraws from mediation.
It is often alleged that lawyers discourage their clients for resolving their disputes through
ADR in fear of reduction of their income level.
Conclusion
Although ADR programs can accomplish a great deal, however, no single program can
accomplish all these goals. They cannot replace formal judicial systems which are
necessary to establish a legal code, redress fundamental social injustice, provide
governmental sanction, or provide a court of last resort for disputes that cannot be
resolved by voluntary, informal systems. Furthermore, even the best-designed ADR
programs under ideal conditions are labour intensive and require extensive management.
In the development context, particular issues arise in considering the potential impacts of
the ADR. Firstly, some are concerned that ADR programs will divert citizens from the
traditional, community-based dispute resolution systems. To modernize the ADR in the
Civil Procedure Code the mentioned loopholes should be removed.
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