Alternative Dispute Resolution

Draft Record Entry: 1

9 B.B.A. LL.B. (Hons.) - ‘A’

School of Law, Christ (Deemed) to be University

Submitted to: Submitted by:

Ms. Sawmya Suresh 1750449 Ipkshita Singh
Significance of Alternative Dispute Resolution
I. Meaning of Alternative Dispute Resolution (ADR)

ADR includes different methods through which people can resolve disputes without a
litigation. ADR is usually less formal, less expensive and less time consuming than regular
trial. The ADR describes its various forms of dispute resolution viz. arbitration, conciliation,
negotiation mediation, compromise settlement, mini trials, expert determination and early
neutral evaluation etc.

The ADR is a common term used to define and express various alternative techniques and
forums of dispute resolution. The ADR cannot be specifically used for arbitration and its
elaborated procedure. The arbitration process is different and easy from the Court viewpoint
of litigation. The arbitration in many important aspects is more common with Court based
litigation than various other forms of ADR System. The arbitration may be a class and form
of ADR system but can't substitute this mechanism in its entirety. The mechanism of ADR
system and arbitration cannot exchange each other. It would be potentially misleading the
mechanism of ADR System, If both the terms are allowed to spell out inter- changeably. It
will be of worth in supporting this version that different kinds and various forms of ADR
system have not a statutory recognition as arbitration under the Arbitration and Conciliation
Act, 1996.

The ADR is a generic term and that refers to a wide array of practices and the purpose of
which is to manage and resolve disagreements at possible lowest cost, quickly and with little
adverse impact on business and other relationships. The ADR is a relatively new term for
dealing with an age-old problem. The wide array of practices as has been referred means
mediation, arbitration and conciliation to ensure conformity which suits to the community
mores and resorting to legal system only as a last resort. There have been many segments of
society that have preferred to settle dispute without litigation and decision of the Court.

The ADR may mean 'Compromise' or 'Mutual Settlement' in dispute resolution. The system
accelerates the resolution of controversies, uncertainties or any sort of conflict. A
'Compromise' is a term designed to prevent or terminate litigation. Whereas the 'Settlement'
refers to the fulfilment of any conditions that, in accordance, with the compromise agreement
are prerequisite to the discharge of claim. It may refer to the performance of promises, which
are expressed in the compromise agreements. The ADR system also means 'participatory
justice' because it provides for parties the opportunity of active participation in the process of
justice. The mechanism of ADR system offers a spirit of compromise amongst the litigants
across the table, which explains the meaning of ADR as 'distributive justice'.

II. Types of Alternative Dispute Resolution

1. Negotiation

Mediation and negotiation are quite similar. However, it is more commonly referred to as a
procedure by which the disputants themselves settle their differences. The negotiating process
allows the parties to share ideas, discover irritating areas of difference, find a solution, and
gain each other's commitment to achieve an agreement. A typical component of the
negotiating process is bargaining. Even if a third-party negotiator is involved in the
negotiation process, his responsibility is restricted to persuading the parties to engage in it.

2. Conciliation

Conciliation is an informal, private procedure in which a neutral third party assists conflicting
parties in reaching an agreement. It is a procedure in which the parties, with the help of a
neutral third party or individuals, systematically isolate the problems in disagreement,
explore possibilities, examine alternatives, and find a mutually agreeable solution that meets
their interests. Typically, the conciliator would conduct an impartial 1 (2005) 6 SCC 344.
investigation into the disagreement and write a report outlining the technique of conflict
resolution. The parties are then free to negotiate a final settlement in accordance with the
conciliator's report, with or without any revisions agreed upon by the parties. Thus, the
conciliator’s report is not binding on the parties like in the case of an Arbitration. Part III of
the Arbitration and Conciliation Act, 1996 provides for the Conciliation regime in India.

3. Mediation

Mediation is the process of resolving disagreements amicably between parties with the
assistance of a mediator. The mediator's job is to bring the parties together in order to
facilitate an amicable resolution of their disagreements. In order to establish a mutually
agreeable agreement, the mediator would persuade the parties to reduce their demands. As a
result, the mediator acts as a facilitator in achieving collaboration between the disputants.
Instead of a third person deciding the fate of the parties to the disagreement, mediation
emphasises the parties' own responsibility for making decisions that influence their life. As a
result, mediation may be described as aided negotiation, in which the mediator, via his
influence, gets the parties to the negotiating table and supports them in resolving their
differences.

4. Arbitration

Arbitration is a mechanism for settling conflicts fairly and equitably through a person or
individuals, or an institutional body, without recourse to litigation by the conflicting parties,
as agreed upon by the disputing parties. Such an arbitration maybe ad-hoc, institutional,
contractual or statutory. The decision in an arbitral proceeding is called an ‘award’ and the
parties shall be bound by the same unless the Courts find it to be patently illegal, principles of
natural justice have been violated or the said award is against public policy. In India, the
Arbitration and Conciliation Act, 1996 is the regulatory regime for Arbitration and Section
2(1)(a) of the Act defines the term ‘arbitration’ in a wide manner and means any arbitration
whether or not administered by permanent arbitral institution.

5. Lok Adalats

Lok Adalat is a one-of-a-kind Indian system. It refers to the court of the people. It is a forum
where the parties make a deliberate attempt to resolve their differences via conciliatory and
persuasive approaches. It includes strategies such as negotiation, mediation, and conciliation
for resolving issues between parties. The powers of the Lok Adalats stem from the Legal
Services Authorities Act, 1987. Under the Code Civil Procedure, Lok Adalats have been
given civil court powers. The brief approach used in Lok Adalats aids the team of experts
engaged in Lok Adalats in disposing of matters in a quick manner. One of the benefits of Lok
Adalat is that it allows a lot of issues between various parties to be resolved all at once,
saving time. With the advent of mobile Lok Adalat systems to deliver justice to the doorsteps
of the needy and destitute, revolutionary changes are also taking place in the management of
Lok Adalats. The Lok Adalat's decision is regarded as a civil court judgement, and it is final
and binding on the parties.
III. Significance of ADR

ADR has a lot of advantages and benefits a country like India which has over 4.4 Crore
pending cases nationally. Some of the benefits that ADR provides making it a significant
dispute resolution mechanism is as follows:

1. Party Autonomy

Apart from the processes, the parties to a dispute have complete authority on the appointment
of an arbitrator, conciliator, or mediator, as well as the date and location of the settlement.
The freedom to pick the arbitrator, conciliator, or mediator can lead to the nomination of
individuals who are familiar with the business or have other relevant experience, and so can
play an effective role in conflict settlement. As a result, it is beneficial to all parties involved
in the conflict.

2. Confidentiality

The ADR processes are held in private, and the rewards are kept private as well. Section 75
of the Arbitration and Conciliation Act 1996 particularly provides for the secrecy of all
matters relevant to the proceedings in conciliation procedures. Parties to arbitration
agreements frequently include provisions regarding the confidentiality of the proceedings and
the verdict. The confidentiality of ADR processes is extremely beneficial in resolving issues
that the parties do not want others to know about.

3. Cheaper means of dispute resolution

In comparison to the traditional legal procedure, ADR techniques are also quite affordable.
As a result, these methods assist litigants who are unable to cover the costs associated with
the traditional procedure of resolving disputes through the courts. When poverty is a major
issue in our country, ADR may be extremely beneficial to the poorest sectors of society due
to its low cost. The efficient use of alternative dispute resolution to address various types of
conflicts would also help traditional courts deal with the problem of rising case backlogs,
allowing the traditional court system to dispose of cases more quickly.

4. Speedy disposal of cases

Court processes do not provide an acceptable approach for resolving conflicts since they
entail inexorable delays as a result of their extensive procedures and complications. ADR, on
the other hand, is a cost-effective, quick, and informal method of resolving conflicts. This
cost-effective and timely remedy is critical since delays in the administration of justice
sometimes result in unfairness to the plaintiffs. Excessive delays, which are part of the
normal legal procedure, can damage the parties emotionally and produce dissatisfaction,
weakening public faith and confidence in the legal system.

5. Amicable settlement of disputes

ADR is essential in sustaining or mending relationships since it is non-adversarial and

attempts for all parties to reach an agreement that is acceptable to all parties concerned. The
ADR mechanism's bargaining process aids the parties in better understanding each other's
difficulties. As a result, ADR focuses on resolving disputes without jeopardising the parties'
future relationships.

6. Flexible procedure with fewer technicalities

The strict norms of process do not apply to ADR procedures. There are no clear norms in
place, whether in mediation, negotiation, or even Lok Adalats. However, in the case of
arbitration, the defined norms of the arbitration institution are occasionally implemented.
Otherwise, the parties may convene and devise their own processes with the assistance of a
mediator. It is considerably simpler to avoid the confusion that normally comes with more
formal processes with more casual practises. This saves an ordinary man from suffering
injustice as a result of his incapacity to comprehend and follow intricate processes.

IV. Objectives of ADR

The main object of Mechanism of ADR system is not to replace the judicial process or
procedural laws. The mechanism of alternative techniques does not denigrate the existing
system adopted by the regular Courts under procedural codes. Its few main objectives are
enumerated below:

1. The ADR System provides cheap and speedy justice to the disputant.
2. It aims at to settle the dispute on less lawyering.
3. Its main object is to settle the issue amicably by way of compromise settlement,
conciliation, mediations and negotiations.
 4. The parties may resort to settlement under Arbitration and Conciliation Act 1996.
5. The utmost objective behind the policy is to avoid the trial and decision in the Courts
through unscrupulous evidences.

Hence, with growing commercial activities and globalization, it has become a widespread
phenomenon to determine commercial disputes through arbitration and other ADR
mechanisms so as to ensure speedy justice and confidentiality of parties is upheld.