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INTRODUCTION TO ADRS
Alternate Dispute Resolution is a process for settlement of dispute without litigation by various methods
such as Arbitration, Conciliation, Mediation, Negotiation, and most recently adopted new method of
settlement of dispute in Lok Adalat.
Alternate dispute Resolution (ADR) can be termed as substitute of the traditional methods of dispute
resolution such as litigation. It is a movement for evolving positive approach and attitude towards dispute
resolution. Thus ADR means and include:
-It is an alternate to long established litigation method.
-It includes mechanisms and strategies for resolving disputes apart from typical practice of litigation.
-It is a non- judicial process.
-It is not an alternate to traditional method in restrictive sense.
The Supreme Court of India in Salem Bar Association vs. Union of India ((2005) 6 SCC 344), has
requested prepare model rules for Alternative Dispute Resolution and also draft rules of mediation under
section 89(2)(d) of Code of Civil Procedure, 1908.
The following are the reasons as to why the ADR mechanism is required:
i. Settlement of disputes: A.D.R. provides for amicable settlement of disputes. The terms of the
settlement are decided by getting both/all the parties of the compromise by getting into the
discussion. After the addition of chapter XXIA in the Cr.P.C. (Plea Bargaining) even criminal
matters could be amicably be settled.
ii. Speedy disposal of the disputes: A.D.R. provides speedier and faster disposal of the long-
pending cases and reduces the pendency of the cases in the courts.
iii. Inexpensive methods for disposal: A.D.R. is a less costly and expensive mechanism than the
traditional method of dispute resolution.
iv. Legally renowned method: ADR is a recognized method and has been incorporated in
various statutes. For instance, Section 89 of the Code of Civil Procedure, 1908; or Section 23
of the Hindu Marriage Act, 1955; etc
v. International Commercial Disputes: With the advent of globalization and new commercial
activities are being performed by not only India but other countries as well which makes it
even more necessary to adopt the ADR mechanism for the settlement of international
commercial disputes.
vi. The advent of Multinational Corporation: A number of Multinational Companies have started
to invest in India and for speedy disposal of any dispute and settlement they already have a
clause in all the agreements i.e. arbitration clause which states the forum of arbitration that
they choose if any dispute arises in any business transaction. ADR mechanism is a tool that
they choose to settle their dispute in a quick and cost-effective manner.
vii. Resolution of all forms of dispute: In a broader sense, A.D.R. is not only restricted to
commercial transactions. Civil and criminal disputes can also be settled through the use of
A.D.R. presently, district courts have created mediation centers and many disputes are
referred to these mediation centers for settlement.
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viii. Evade scope of future litigation: The ADR techniques conclude the litigation on an eternal
basis and prevent the future scope of litigation, which is an unending process in the judicial
trials. Moreover, the Mechanism of the ADR System works in dispute resolution in
accordance with the compromise agreement. Due to the compromise agreements between the
parties are pre-requisites of their claims with reference to the performance of promises and
these are contained in that document, which is an effective instrument in ending the
controversy permanently.
Afcons infrastructure and Ors. v. Cherian Verkay Construction and Ors [2010 (8) SCC 24]
The Supreme Court also stated that all the other suits and cases of civil nature which falls under the
following categories ,whether pending in civil courts or any tribunals, can be referred for ADR Process.
The following categories of cases are normally considered to be not suitable for ADR process having
regard to their nature:
(i) Representative suits under Order 1 Rule 8 CPC which involve public interest or interest of
numerous persons who are not parties before the court. (In fact, even a compromise in such a
suit is a difficult process requiring notice to the persons interested in the suit, before its
acceptance).
(ii) Disputes relating to election to public offices (as contrasted from disputes between two
groups trying to get control over the management of societies, clubs, association etc.).
(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 government.
(vi) Cases involving prosecution for criminal offences. All other suits and cases of civil nature in
particular the following categories of cases (whether pending in civil courts or other special
Tribunals/Forums) are normally suitable for ADR processes:
(i) All cases relating to trade, commerce and contracts, including - disputes arising out of
contracts (including all money claims); - 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;
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(ii) All cases arising from strained or soured relationships, including - disputes relating to
matrimonial causes, maintenance, custody of children; - disputes relating to partition/division
among family members/co- parceners/co-owners; and - disputes relating to partnership
among partners.
(iii) All cases where there is a need for continuation of the pre-existing relationship in spite of
the disputes, including - Disputes between neighbours (relating to easementary rights,
encroachments, nuisance etc.); - disputes between employers and employees; - disputes
among members of societies/associations/Apartment owners Associations;
(iv) All cases relating to tortious liability including - claims for compensation in motor
accidents/other accidents; and
(v) All consumer disputes including - disputes where a trader/supplier/manufacturer/service
provider is keen to maintain his business/professional reputation and credibility or `product
popularity
ADRS as the name suggest is an alternative to the traditional judicial system. It embraces dispute
resolution methods and techniques that act as a means for incompatible parties to reach an agreement
without resorting to litigation. This system is usually considered to be alternative to litigation.
ADR is a method of dispute resolution that is non adversarial, i.e. working together considerately to reach
the best declaration for everyone.
ADR can be involved in sinking the burden of litigation on courts, even as delivering a well-formed and
gratifying understanding for the parties concerned.
Alternative Dispute Resolution (ADR) refers to any means of setting disputes outside of the Court Room.
Alternative Dispute Resolution (ADR) refers to a variety of processes that help parties to resolve disputes
without a trial.
The process by which disputes between the parties are settled or brought to an amicable result without the
intervention of Judicial Institution and without any trail is known as Alternative Dispute Resolution
(ADR).
ADR offers to resolve all type of matters including civil, commercial, industrial and family etc., where
people are not being able to start any type of negotiation and reach the settlement.
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Generally, ADR uses neutral third party who helps the parties to communicate, discuss the differences
and resolve the dispute.
It is a method which enables individuals and group to maintain co-operation, social order and provides
opportunity to reduce hostility.
ADRS is defined as encompassing all legally-permitted processes of dispute resolution other than
litigation. It is also known as “Appropriate dispute resolution” or “Amicable dispute resolution”.
Even though ADR is a private way of resolving dispute, it must work within the broad legal framework in
which it operates. This means the use of ADR to settle disputes must be done within the confines of law.
INQUISITORIAL METHOD:
In a trial or legal procedure charaterized by the judge who performs an examining role. It is a legal
system where the court is actively involved in proof taking by investigating the facts of the case.
ADVERSARIAL METHOD:
It is also a legal system used in the common law countries where two advocates represent their party’s
case or position before an impartial person or group of people, usually a jury or judge, who attempt to
determine the truth and pass judgment accordingly. It is an informal legal process of settling the dispute.
India follows the adversary system of legal procedure. This means that the judge acts as a neutral
arbiter upholding the balance between the contending rivals without actively taking part in the
forensic debate in the court. The legal hierarchy places the Supreme Court at the Apex.
The Indian legal system is mainly adversarial. However, in certain aspects it is hybrid of adversarial and
inquisitorial functions. Particularly the criminal justice system is not strictly adversarial, as some
provisions in the criminal code require the judge to perform inquisitorial functions
The adversarial system is really a competitive system of discovering rules and facts. Therefore, it may
perform better than an inquisitorial system for the first two types of information gathering.
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ARBITRATION:
Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes
outside the courts, where the parties to a dispute refer it to one or more persons – arbitrators, by whose
decision they agree to be bound. It is a resolution technique in which a third party reviews the evidence in
the case and imposes a decision that is legally binding for both sides and enforceable
-The dispute is submitted to an arbitral tribunal which makes a decision (an "award") on the dispute that is
mostly binding on the parties.
-It is less formal than a trial, and the rules of evidence are often relaxed.
-Generally, there is no right to appeal an arbitrator's decision.
-Except for some interim measures, there is very little scope for judicial intervention in the arbitration
process.
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CONCILIATION:
A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute
in reaching a mutually satisfactory agreed settlement of the dispute.
Conciliation is a less formal form of arbitration.
The parties are free to accept or reject the recommendations of the conciliator.
However, if both parties accept the settlement document drawn by the conciliator, it shall be final and
binding on both.
MEDIATION:
In mediation, an impartial person called a "mediator" helps the parties try to reach a mutually acceptable
resolution of the dispute.
The mediator does not decide the dispute but helps the parties communicate so they can try to settle the
dispute themselves.
NEGOTIATION:
It is a non-binding procedure in which discussions between the parties are initiated without the
intervention of any third party with the object of arriving at a negotiated settlement to the dispute
Order 23 Rule 3 CPC – it is to avoid multiplicity of litigation & permit the parties to amicably come to a
settlement which is lawful , in writing & it is voluntary on the part of the parties.
Order32-A CPC- In every suit or proceeding to which the order applies, an endeavour shall be made by
the courts in the first instance where it is possible to do so consistent with the nature & circumstances of
the case, to assist the parties in arriving at a settlement.
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•Sec 80, CPC Section 80 of the Code provides that no suit shall be instituted against the Government or
against a Public Officer in respect of any act purporting to be done by such public officer in his
official capacity until the expiration of 2 months next after notice in writing has been delivered.
Now section 320 of the Code of Criminal Procedure provides list of offences which are compoundable
directly and some of them may be compounded with the permission of the court even compounding is
possible by the guardian and legal representative of minor, indict and deceased complainant or injured
with the permission of the court. Even compounding has been permitted during the hearing of Appeal and
revision in High Court or Supreme Court, but if the accused is previous convict and he is liable to
enhanced or different kinds of punishment from the ordinary punishment then compounding is not
permitted. It has been further mentioned in this section that the effect of compounding shall be deemed to
be the acquittal of the case.
In India the parliament has amended the civil procedure code by inserting section 89 as well as order 10
rule 1-A to 1-c.
Section 89 of the CPC provides for settlement of disputes outside the court.
It is based on the recommendations made by the law commission of India and Malimath Committee.
Section 89 of the Code of Civil procedure was introduced with a purpose of amicable, peaceful and
mutual settlement between parties without intervention of the court.
(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 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.
(d) for mediation, the court shall affect a compromise between the parties and shall follow such procedure
as may be prescribed.]
It was suggested that the court may require attendance of any to the suit or proceedings to appear in
person with a view to arriving at an amicable settlement of dispute between the parties and make attempt
to settle the dispute.
The committee makes the court obligatory to refer the case to Arbitration, Conciliation, Mediation,
judicial settlement through Lok Adalat.
CPC Amendment Act 1999 was passed by parliament on 20/12/99. Section 89 and rules 1A to 1C to order
X was inserted This provisions make it incumbent upon the courts where it appears that there exist
elements of settlements to call upon the parties at their option to agree for one or the other Alternative
Methods of Dispute Resolution.
Rule1A:- Direction of the Court to opt for any one mode of alternative dispute resolution:-
- The court shall after hearing the admission and denial it shall direct the parties to the 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.
Rule 1B:- Appearance before the court consequent to the failure of efforts of conciliation:-
Where a suit is referred under rule 1-A the parties shall appear before such forum or authority for
conciliation of the Suit.
Rule 1C:- Appearance before the court consequent to the failure of efforts of conciliation: where a suit
is referred under rule 1-A 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.
Disadvantages of ADRS
1. There is no guaranteed resolution
2. Arbitration decisions are final
3. Limits on Arbitration Awards
4. Discovery of certain facts have limitations
5. Fee for the Neutral mediator /arbitrator
INTERNATIONAL COMMITMENTS:
To effectively implement the ADR mechanism, organizations like Indian Council of Arbitration (ICA)
and the International Centre for Alternative Dispute Resolution were established.
The Arbritration Act 1940 was repealed and a new enactment The Arbitration and Conciliation Act, 1996
was enacted which was based on United Nations Commission on International Trade Law (UNCITRAL)
It is also an obligation under the United Nations commission on international trade law.
Undoubtedly, the modern system of alternate dispute resolution is the need of the hour as it is much
efficient and cost-effective in comparison to the old legal system. The burden of cases on the Indian
judicial system is rising on day to day basis and ADR is proving to be an efficient alternative for solving
the grievances of people. The following are the reasons as to why the ADR mechanism is required:
i. settlement of disputes: A.D.R. provides for amicable settlement of disputes. The terms of the
settlement are decided by getting both/all the parties of the compromise by getting into the
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discussion. After the addition of chapter XXIA in the Cr.P.C., even criminal matters could be
amicably be settled outside the court.
ii. Speedy disposal of the disputes: A.D.R. provides speedier and faster disposal of the long
pending cases and reduces the pendency of the cases in the courts.
iii. Inexpensive methods for disposal: A.D.R. is a less costly and expensive mechanism than the
traditional method of dispute resolution.
iv. Legally renowned method: ADR is a recognized method and has been incorporated in
various statutes. For instance, Section 89 of the Code of Civil Procedure, 1908, or Section 23
of the Hindu Marriage Act, 1955.
v. International Commercial Disputes: With the advent of globalization and new commercial
activities are being performed by not only India but other countries as well which makes it
even more necessary to adopt the ADR mechanism for the settlement of international
commercial disputes.
vi. The advent of Multinational Corporation: A number of Multinational Companies have started
to invest in India and for speedy disposal of any dispute and settlement they already have a
clause in all the agreements i.e. arbitration clause which states the forum of arbitration that
they choose if any dispute arises in any business transaction. ADR mechanism is a tool that
they choose to settle their dispute in a quick and cost-effective manner.
vii. Resolution of all forms of dispute: In a broader sense, A.D.R. is not only restricted to
commercial transactions. Civil and criminal disputes can also be settled through the use of
A.D.R. presently, district courts have created mediation centers and many disputes are
referred to these mediation centers for settlement.
viii. Evade s cope of future litigation: The ADR techniques conclude the litigation on an eternal
basis and prevent the future scope of litigation, which is an unending process in the judicial
trials. Moreover, the Mechanism of the ADR System works in dispute resolution in
accordance with the compromise agreement. Due to the compromise agreements between the
parties are pre-requisites of their claims with reference to the performance of promises and
these are contained in that document, which is an effective instrument in ending the
controversy permanently.
Afcons infrastructure and Ors. v. Cherian Verkay Construction and Ors [2010 (8) SCC 24] The Supreme
Court also stated that all the other suits and cases of civil nature which falls under the following
categories ,whether pending in civil courts or any tribunals, can be referred for ADR Process.
SYSTEMS OF TRIALS:-
This is used for criminal cases in Australia. Some features of this system are that: the court is separate
from the police. The judge is like a referee. The two opposing sides (the prosecutor and the defence) put
forward their cases. The prosecutor has to prove the case against the accused beyond reasonable doubt.
Each side may be represented by lawyers and can call witnesses to give evidence to establish facts to help
their case. Judges do not generally ask questions of witnesses. The accused person may have the right to
be tried by a jury of twelve people from the community. They will decide whether he or she is guilty or
not guilty. the trial is heard by a magistrate (in less serious cases) or by a judge and jury, or by judge
alone the most serious cases may first go to a magistrate who will determine whether there is enough
evidence for the accused to be sent to trial in a higher court in a jury trial it is the jury who decides if the
accused is guilty or not guilty. The judge assists the jury by telling them about the law. The process is
open to the community.
Many European (and some Asian) countries use a different system of trial that incorporates some of the
following features:
Judges/magistrates act as investigators and supervise the role of police in the gathering of evidence both
for and against the suspect. The public can observe the trial but not the investigation. If the investigating
magistrate decides there is a case against the accused, he/she compiles a dossier and refers the accused to
a court for trial. The accused is innocent until proven guilty but the case does not have to be proved
beyond reasonable doubt. The trial may be heard by a judge and in some countries judges and a jury. The
judge calls witnesses and questions them. There are no strict rules of evidence. In some instances trials
may adjourn for the gathering of more evidence.
In the adversary system the judge or magistrate is an independent umpire, making sure that the ‘battle’ is
fair and the parties follow the rules. The decision-maker does not enter the arena, but leaves it entirely up
to the parties.
In the inquisitorial system the decision-maker’s role is more active. They will investigate the facts,
question the parties and relevant witnesses, examine the law, apply the law to the facts, and reach a
decision. The decision-maker is not restricted to considering only those facts that are deemed relevant by
the parties, but can take the investigation further to get at the truth.
In the adversary system, the court is bound by strict rules of evidence and procedure. The parties are
restricted in the timing and method of producing new material, and there are restrictions on the type of
evidence that can be produced.
In the inquisitorial system the decision-makers have the discretion to bring out any new material at any
time in the process, in their attempt to reach the truth. Furthermore, the inquisitorial system of trial does
not insist on strict rules of evidence and procedure. Any evidence that will help to find out the truth is
examined.
3 Collection of evidence
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In the adversary system evidence is collected by the parties. All evidence gathered in a committal
proceeding in a criminal case is collected in depositions before the trial. In a civil case, information is
collected by both sides during the pleadings and discovery stage, but witnesses’ statements are not
collected.
In the inquisitorial system evidence is collected by the examining judge. A dossier, which contains all
statements made and evidence collected, is kept by the examining judge.
4 Types of evidence
In the adversary system the system relies mainly on oral evidence, although use of written evidence is
increasing. There are strict rules of evidence and procedure.
The inquisitorial system relies mainly on written statements, although some witnesses are interrogated at
the trial. There are no strict rules of evidence and procedure.
In the adversary system character evidence and past record are NOT usually available. Evidence of bad
character is usually inadmissible in a criminal as it could be seen as unduly influencing the case against
the accused.
In the inquisitorial system character evidence and past record are available. Reports of the character,
personality and past record of the accused in a criminal case are included in the dossier. The investigating
judge would generally have a thorough knowledge of the background of the accused.
6 Witnesses
In the adversary system witnesses respond to questions. Witnesses are generally only allowed to respond
to questions and are often cut off if they try to elaborate on a point. Important information might not be
brought to light.
In the inquisitorial system witnesses tell their story uninterrupted by questions. Witnesses are allowed to
give their own version of the facts without interruption.
Due to the complex rules of evidence and procedure, each party in the adversary system needs to be
represented by an expert legal representative who understands these rules. The legal representative for
each party will prepare and argue their case to the court.
There is less need for legal representatives in the inquisitorial system, where their role is mainly to assist
the judge in finding truth.
The emphasis in the adversary system is on party control, with the parties determining whether the case
will go to court, which court, the mode of trial, and the evidence to be presented at trial.
The parties in the inquisitorial system have less control over their case. This control is predominantly with
the judge.
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Finding the truth of the matter before the court is the primary objective of the inquisitorial system. The
burden of proof and the standard of proof are not as relevant because the case is conducted by the judge
from investigation through to the outcome.
10 Primary objective
The adversary system is designed to allow the parties to control their own case and to give both parties
equal opportunity to win the case. In the process, however, the truth might not always come out.
The inquisitorial system is designed to get at the truth. The judge investigates the case to find out the
truth. This might not be the outcome, hobecause the judge might not uncover all the evidence
SITUATION IN INDIA:
India follows the adversary system of legal procedure. This means that the judge acts as a neutral arbiter
upholding the balance between the contending rivals without actively taking part in the forensic debate in
the court. The legal hierarchy places the Supreme Court at the Apex.