MODULE 5
Application of ADR methods in different types of disputes: Commercial, and
Financial Disputes; Family and Matrimonial Disputes; Labour and Industrial
Disputes; Consumer Disputes; Accidents Claims
Commercial and Financial Disputes
• Best applicability in these disputes
• Section 89 of the Civil Procedure Code 1908 contains the provisions of
the settlement of disputes outside the Court. It says 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 the
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-
• (1) Arbitration
• (2) Conciliation
• (3) Judicial settlement including settlement through Lok Adalat or
• (4) Mediation
• The Honorable Supreme Court in M/s. Afcons Infra. Ltd Vs. M/s Cherian
Varkey Constructions Pvt Ltd, said the following categories of cases are not
suitable for ADR.
• 1) Representative suits under Order 1 Rule 8 CPC which involve public interest
or interest of numerous persons who are not parties before the Court
• 2) Disputes relating to election to public offices (as contrasted from disputes
between two groups trying to get control over the management of societies,
clubs, associations, etc).
• 3) Cases involving the grant of authority by the Court after inquiry, for
example, suits for grant of probate or letters of administration
• 4) Cases involving serious and specific allegations of fraud, fabrication of
documents, forgery, impersonation, coercion, etc.
• 5) Cases requiring protection of Courts, as for example, claims against minors,
deities and mentally challenged and suits for declaration of title against the
Government.
• 6) Cases involving prosecution for criminal offenses.
• 7 Those cases having special jurisdiction
• Sale purchase contracts
• M&A deals
• IP contracts
• Engineering contracts
• Joint Venture Disputes
• Construction contracts
• Investment and Trade contracts
• Financial agreements
• Cross border disputes
• Matters under Negotiable Instrument Act
• Matters under Bank recovery
• Traffic Challan matters
Family and Matrimonial Disputes
• These disputes can often be resolved effective ADR. Going
to Court in these matters can be very painful.
• EXISTING STATUTORY PROVISIONS FOR ADR IN LAW IN
INDIA
• The sensitivity of the legislature to providing speedy and
efficacious justice in India is mainly reflected in several
enactments which are enumerated as hereunder:
• 1 Arbitration under The Arbitration and Conciliation Act,
1996- property disputes, business disputes;
• 2 Settlement under Order XXXIIA of the Indian Code of Civil
Procedure, 1908;
• 3 The incorporation of section 89 in the traditional
Civil Procedure Code (CPC) read with Order X Rules
I-A, I-B, and I-C for Settlement of Disputes outside
court.
• 4 The Establishment of Lok Adalat under The Legal
Services Authority Act, 1987;looks to mediation,
conciliation and informal settlement of disputes in
litigation.
• 5 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;
• 6 Duty of family court to make efforts for settlement
under Family Courts Act, 1984.
Labour and Industrial Disputes
• Under section 10(a) of the Industrial Disputes Act, the parties
may agree to refer the dispute to arbitration at any time before
the dispute is referred for adjudication. The statute requires the
parties to sign an arbitration agreement specifying the terms of
the reference and the names of the arbitrator or arbitrators.
• Once the arbitration agreement is signed, the government has
the power to terminate and prohibit any strikes and lockouts or
the continuation of any strikes and lockouts in connection with
the dispute. An arbitrator has the power to bind unions and
workers who are not parties to the arbitration agreement if he
is satisfied that the union represents the majority of the
workers in the unit
• The Industrial Disputes Act establishes the
court of inquiry to investigate any matter
connected with a dispute. The court’s only
purpose is to inquire into the dispute and
submit its findings to the appropriate
government. The court of inquiry, like labor
courts and industrial tribunals, has powers
equivalent to those of a civil court.
• There are also conciliation officers who can
look into matters and offer solutions
• Matters in the second and third schedule
would be adjudicated with the National and
Industrial Tribunals
• Industrial tribunals have jurisdiction over all
substantive points of the employer-employee
relationship, in addition to the areas under the
jurisdiction of the labor courts
Consumer Disputes
• Aftab singh v emaar mgf land ltd and Booz
Allen Hamiltan v SBI Home Finance Limited
specified “Any dispute between the private
parties can be adjudicated by arbitration as
per the choice of the parties as long as
disputes are not barred by legislation.”
• Overburdening of consumer courts and
speedy justice is encouraging ADR in
consumer disputes.
Accidents Claims
• The Supreme Court has recommended measures,
including mediation, to speed up settlement of motor
accident claim cases so that victims can receive
compensation without having to wait endlessly.
• Lok Adalats for Motor Accident Claims matters
• "The Motor Accident Claim Lok Adalats are organized in
all court complexes from time to time and cases of all
the insurance companies are taken up in these Lok
Adalats.
• A large number of accident claims are settled through
Lok Adalats.
• Till the time an amendment is made by
Parliament, the National Legal Services
Authority (NALSA) should take up the work as a
project, the court said.
• The NALSA has been directed to prepare a
report about the functioning of the motor
accident mediation cell (MAMC).
• The exercise should be completed within two
months, after which the project can be shared
with all state legal services authorities, which
will implement the same through their
respective district legal services authorities.
