HISTORY OF ADR GLOBALLY

Alternative Dispute Resolution is a method of settling disputes without approaching the court
of law. ADR procedure is often collaborative and allows parties in dispute to understand the
position of the other side and also allows them to come up with mutually benefiting solutions
such that a court may legally not be permitted to impose. Alternate dispute resolution is
becoming more and more popular throughout the world mostly because of the backlog of
cases that is alarmingly increasing and also because many people don’t want to go to the
court as litigation does not always lead to satisfactory results as it is expensive in terms of
time and money. However, the concept of Alternate dispute resolution is not a new one it has
been a vital and vibrant part of our historical past.

The history of ADR can be traced back to the 1800 BC when the Mari kingdom used
mediation and arbitration in disputes with other kingdoms, then to 960 B.C. when the king of
Israel, Solomon used arbitration to end a dispute over a baby by threatening to split the child,
then in 100 B.C. where the post of mediator was established in the Western Zhou Dynasty.
ADR mechanisms like arbitration, mediation, etc., have been used by many rules in their
kingdoms when there were no written laws to abide by. Then in 1632, the Irish government
had provided a statutory basis for arbitration via the Irish Arbitration Law. Then in 1624-
1664 during the Dutch colonial period, commercial arbitration in wide use in New York City
also during the British colonial period in 1664-1776 commercial arbitration use continued.
Then in the year 1906, Teddy Roosevelt mediated a peace agreement which ended the Russo-
Japanese War. Then in 1965, The Civil Rights Act was introduced with the motive to protect
minority rights and create Community Relations Service to conciliate civil rights disputes.
The Ford Foundation in 1968 created a National Centre for Dispute Settlement and Centre for
Mediation and Conflict Resolution to apply labour-management ADR to civil rights, campus,
and community disputes. Then the National Institute for Dispute Resolution established to
encourage ADR with foundation funds in the year 1983 and very recently in 2000-2001
mediation was used to settle the Microsoft monopoly cases. Hence, The ‘ADR Timeline’
starts from 1800 BC and continues till this day.
HISTORY OF ARBITRATION IN INDIA

Arbitration refers to a mode of dispute resolution that involves one or more neutral third
parties known as the arbitrators who are either agreed to by the disputing parties or are
appointed by the High Court under Section 9 of the Arbitration and Conciliation Act, 1996
and the decision of the arbitrator/s is binding. Arbitration process comprises of a private
judicial determination of a dispute by an unbiased and independent third party. The process
of arbitration is highly encouraged for achieving the dual motive of reducing the burden of
high pendency of cases from the courts and reducing the cost of litigation. It is looked up to
as the best alternative to courts because of its prominent feature that, instead of filing a case
in court, the parties can refer their dispute before an arbitral tribunal whose decision is final
and binding.
The process of arbitration is very formal in nature and is almost the same as the proceedings
of the court of law. The process is described in the Arbitration and Conciliation Act, 1996 as
after an arbitrator is appointed and a date is decided for the first hearing and on this day an
outline is made as to how the case will go on. It is a very systematic and speedy mode of
dispute resolution and it also ensures the rights of both the parties to be heard.
The history of arbitration can be traced in the earliest known treatise as per the Hindu Law
that says “Brhadaranayaka Upanishad” is arbitration. It is a detailed study of the three
primary arbitral bodies that were collectively known as Panchayats, the three bodies are
namely, ‘Puga’ the local courts, ‘Srenis’ the people engaged in the same business or
profession and the ‘Kulas’, who were members concerned with the social matters of a
particular community. The members of the Panchayats were called the Panchas, the then
arbitrators who would deal with the disputes under a system; we now refer to as Arbitration.
The traces of arbitration can also be found in the times when our country was ruled by kings
as at that time there were no statutes established for dispute resolution and hence any dispute
that arose between two parties was brought before the king or any minister of the king and
was decided after hearing both the parties. Arbitration was usually used by the rulers to settle
territorial disputes, family disputes and also for commercial disputes. The disputes which
were referred to the Panchas and the courts have been duly recognised and have received
credence to the awards passed by them. The same was observed by the Privy Council in the
case of Vytla Sitanna vs. Marivada Viranna (AIR 1934 PC 105)
Though arbitration was always present in the Indian society it was codified in the British era
by the enactment of the Indian Arbitration Act, 1899. The said act was essentially based on
the British Arbitration Act, 1889 but the application of the Indian Arbitration Act was
confined to the presidency towns of Calcutta, Bombay and Madras. In the case of Dakarai
Lakshmiprasad vs. Yeshwantrai Hariprasad (AIR 1930 Bom 98), the Hon’ble High Court
observed that the Indian Arbitration Act, 1889 was very complex, bulky and needed reforms.
Later in 1940 a more specific act i.e. The Arbitration Act, 1940 was enacted and this act was
applied in the whole country. This act received a lot of criticism and was silent on many
issues and hence was replaced by The Arbitration and Conciliation Act 1996, which came
into force from 22nd August 1996. The basic intent of the act was to ensure a speedy dispute
resolution mechanism between the parties and also to limit the judicial interference and to
enforce the arbitral award as the decree of the court. The main purpose of the act was to cover
the international and domestic commercial arbitration and conciliation. The act of 1996 was
last amended in the year 2015, the amendments were made to improve the process of
arbitration and build up the trust of people in it.