The National University of Advanced Legal Studies (NUALS)

(Established in 2005 by Act 27 of 2005 of Kerala State Legislature)

Alternative Dispute Resolution

Name of the Student: Tushaar Sadanand

Roll. No. : 1634

Semester 1, B.A.LL.B (Hons.)

Name of the Faculty: Mrs. Namitha. K. L.

Designation: Assistant Professor

(NUALS)
 Acknowledgement

I am grateful to the faculty for giving me chance to learn and write about
the different Alternative Dispute Resolution systems in India. I also
thank my classmates and everyone for helping in finding the relevant
sources for researching and writing down this project report.
 Index

Contents Page No.

Introduction 1

Arbitration and Mediation 2

Conciliation and Negotiation 3

Lok Adalat and Conclusion 4

Bibliography 5
Introduction

Alternative dispute resolution systems are the mechanisms through which disputes can be
resolved outside the court in less time consuming and cost effective manner ADR mechanisms
help in reducing the burden of the courts which are already burdened with large number of cases.
These systems can be used to resolve civil, commercial, industrial and family disputes. Section
89 of civil procedure code, 1908 provides that if the court finds that there exists elements of
settlement outside court then court can formulate the terms of the possible settlement and refer
the same for ADR mechanisms. ADR mechanisms strengthen the rights provided by the Article
14 and Article 21 of the constitution.

Arbitrations in India are governed by Arbitration and Conciliation Act 1996. This Act was
amended in 2015, then in 2021 Arbitration and Conciliation (Amendment) Bill 2021 was
introduced in Parliament and was passed by Lok Sabha by voice vote.1 There are many
Alternative disputes resolution mechanisms which include arbitration, mediation, negotiation,
conciliation and Lok Adalats.

ADR mechanisms are substitutes to the conventional methods of resolving disputes through
court. These systems provide a chance reduce hostility and increase cooperation between the
parties to the dispute. There are fewer formalities in this system and the parties are more
comfortable to freely express themselves. ADR mechanisms generally involve third neutral party
who helps the parties in the dispute to reach a settlement.

The decision of the mediator will be either binding or not binding on the parties will depend on
the type of ADR mechanism chosen for dispute resolution. These systems help preserve best
interests of the parties. In ADR systems the third party needs to be impartial and these systems
help the parties to reach a mutually agreed solution and maintain good relationship and it allows
greater flexibility as it is not limited by court. The ADR system has great potential in India to
grow as we have millions of case pending in the court which can be referred to the arbitration or
mediation, so that the matters can be resolved in faster and efficient manner saving the time of
the court and creating new opportunities.

1Akshita Saxena, Lok Sabha Passes Arbitration & Conciliation (Amendment) Bill, 2021,LIVE LAW,(Feb. 12,2021,
9:50 PM), https://www.livelaw.in/news-updates/lok-sabha-passes-arbitration-and-conciliation-amendment-bill-
2021-
169792#:~:text=The%20Lok%20Sabha%20on%20Friday,promulgated%20on%204th%20November%2C%202020.

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Arbitration

An prior arbitration agreement between the parties is required for the parties to appeal for the
arbitration process to commence. An arbitration clause in the contract or a separate arbitration
agreement regarding the contract is required to appoint an arbitrator if any dispute arises
regarding the contract. Any party to the dispute can initiate the arbitration process by appointing
the arbitrator who must have proper qualifications and must be impartial. The parties can also
appoint more than one arbitrator which makes it arbitration tribunal. A statement of claim is
made by the claimant where he or she mentions the facts of the case and the relief he or she is
seeking from the defendant and then the defendant replies to it defending himself or herself by
mentioning available defenses and facts. Then the parties chose the arbitrators and then the
hearing commences. This hearing is called ‘Discovery’, in which the parties to the dispute
present their arguments and evidences in favour of their respective stands and then the arbitration
tribunal decides the case and gives its decision which is called ‘award’. This award is binding on
the parties to the dispute. If the parties are dissatisfied with the award they can challenge it
before the arbitration tribunal itself, and if that is rejected they can approach the court.2 In case a
party to the dispute approaches the court before the arbitration and the court finds that there is an
arbitration agreement between the parties then the court will refer the matter to arbitration.

Mediation

Mediation is the ADR mechanism in which the mediator assists the parties to the dispute to reach
a settlement by conducting discussions between the parties and using his or her communicative
skills. This process is mostly controlled by the parties and the decision of the mediator is not
binding on the parties. Mediation works in four different stages. The first stage is Opening
statement in which the mediator specifies that he or she is no way related to any of the parties
and gives out all the information about his appointment to the parties. The second stage is the
joint session in which mediator invites the parties to discussion and gathers all the information
regarding the disputes and tries to understand the facts. He or She acts as a moderator in the
discussions and allows the parties put forth their arguments without any interference and

2 Sujay Dixit, Alternate Dispute Resolution Mechanism, Legal Service India,(2014),

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encourages talks between the parties. Then in the third stage a separate session is conducted in
which the mediator meets each of parties separately in confidence and tries to understand
everyone’s perspective and to get a deeper understanding of the dispute. The last step in
mediation is closing of the case which involves the mediator questioning the parties about the
facts of the case and the merits and demerits of the arguments presented by the parties involved
in the dispute.

Conciliation

Conciliation is an ADR mechanism similar to the arbitration but it is more informal in nature. In
this process a prior conciliation agreement is not required between the parties involved in the
dispute. Any party in the dispute can start the conciliation proceeding by sending an invitation to
the other party, but if the other party rejects the invitation then there can be no conciliation as no
party can be forced to conciliate. The conciliator talks to all the concerned parties in the dispute
and holds discussions and tries to reach a settlement. The conciliator can formulate a solution to
the dispute but his or her decision is not binding on the parties. They can agree to it or not agree
to comply with it if they wish so. The conciliation proceedings can be held simultaneously even
when the arbitral proceedings are ongoing. 3

The Arbitration and Conciliation Act 1996 governs the procedures and processes involved in
Arbitration and Conciliation.

Negotiation

Negotiation is an informal way of resolving the dispute between the parties. Negotiations can
occur between business groups, individuals, states, nations and different organizations, etc. The
parties in the dispute can resolve the disputes themselves or can appoint professional negotiators
on their behalf. They can conduct discussions and find a mutually agreeable solution.
Professional negotiators may include diplomats, brokers, hostage negotiators, union negotiators,
business negotiators, etc. This is also a form of Alternate dispute resolution.

3Anubhav Pandey, All you need to know about Alternative Dispute Resolution (ADR),Ipleaders,( May9,2017),
https://blog.ipleaders.in/adr-alternative-dispute-resolution/

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Lok Adalat

The Lok Adalat system is constituted under the National Legal Services Act, 1987 and are given
statutory status under it. These Lok Adalats are held time to time by state authority or district
authority or Supreme Court Legal Services committee, High Court Legal Services committee or
by Taluk Legal Services committee. These courts are in form of informal courts without any
rigid procedural practices. These courts are presided by retired judges, lawyers, social activists or
any persons from the legal profession. There is no court fee for these courts and its informal
ways make the dispute resolution faster. The objective of the Lok Adalat is find a mutually
agreeable solution to the dispute, if the all parties in the dispute agree to the solution then the
court gives out a judgment which is legally enforceable and is binding on the parties. Here the
role of the person hearing the case is to persuade the parties to reach a settlement and give
judgment to enforce the settlement. The regular courts can refer the pending cases to the Lok
Adalats if the parties in the dispute agree to it and the court fee of the regular court is also
refunded to the parties in case the case is referred to Lok Adalat since there is no fee there. If the
case is not resolved in the Lok Adalat then the matter goes back to the regular court. Once a
judgment is given by the Lok Adalat , no appeal in any court can lie against it since the judgment
was given after the mutual consent between the parties and the judge regarding the solution. In
Lok Adalat, the parties can directly interact with the Judges which is different from the regular
court. Lok Adalats do not have jurisdiction over non-compoundable offences; they generally deal
with matrimonial cases, property disputes, damages, etc.

ADR mechanisms are getting more and more popular with the rise in contractual obligations
between the various business groups and more people particularly business houses are opting for
it since it is cost-effective, less time consuming and less formal process.

Conclusion

Alternate Dispute Resolution (ADR) mechanisms are novel methods of resolving the disputes in
lesser time and with lesser costs. These processes of dispute resolution are simpler and more
informal than the regular courts and the regular courts India are heavily burdened with a great
number of cases which these mechanisms can reduce. The ADR can aid the judicial system to
ensure proper justice to the people. The other benefit of these systems is that they take us closer
towards the goal of achieving equal justice and free legal aid provided under Article 39-A. ADR
systems in India has great potential to grow. It must be encouraged in resolving small disputes
among different business groups, organizations, and individuals.

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Bibliography

Dr. (CA) Rajkumar S. Adukia, A Practical Guide on Concept and Practice of Arbitration,
( Rishabh Academy Private Limited 2016)

Krishna Sarma, Momota Oinam, Angshuman Kaushik, DEVELOPMENT AND PRACTICE OF

Dharmendra Rautrey, Principles of Law of Arbitration in India, (Wolters kluwer india Pvt Ltd
2018)

Tushar Kumar Biswas, Introduction to Arbitration in India: The Role of the Judiciary, (Kluwer
Law International 2014)

Avtar Singh, Law of Arbitration and Conciliation ( 11th ed. 2018)