COMPARATIVE STUDY OF ADR IN INDIA AND AUSTRALIA

“The obligation of the legal profession is….to serve as healers of human

conflicts…..we should provide mechanisms that can produce an acceptable result in
the shortest possible time, with the least possible expense, with the minimum stress
on the participants. That is what justice is all about”

Introduction:

Alternative Dispute Resolution?

"Alternative dispute resolution" (ADR) is a term generally used to refer to informal dispute
resolution processes in which the parties meet with a professional third party who helps them
resolve their dispute in a way that is less formal and often more consensual than is done in the
courts. While the most common forms of ADR are mediation and arbitration, there are many
other forms: judicial settlement conferences, fact-finding, ombudsmen, special masters, etc.
Though often voluntary, ADR is sometimes mandated by the courts, which require that
disputants try mediation before they take their case to court

International arbitration is about settling disputes between businesses, occasionally between

businesses and States or State entities. International arbitration itself is a business, possibly too
much so. Arbitration is often about money. Many claim that mediation is a more cost effective
and time efficient process than arbitration to resolve international disputes.

Law is the command of the sovereign. It controls the working of public policies, it regulates the
working of each and every known organization, it provides statutes for the lubricated and
friction-less working of the state departments, it codifies the way and the correct/ dignified
path to the resolution of personal matters as well. However people consider law as an object of
scorn and fear, the try to shun courts, they would rather live with their problems instead of
moving to any said court for seeking justice. The following are the main reasons so as to why
people tend to vary from the idea of addressing their problems in a court of law: -

1. That, the legal proceedings are costly and time consuming, the so-called justice is delivered
after mass of, hopelessly complex, procedures are followed.

2. That, legal cases often tend to differ from the main idea or the main issue involved in a
dispute.
3. That, legal practitioners are more concerned about their fees and winning the case instead of
being concerned about finding the truth or solutions to the said issues and problems.

4. That, the legal procedures often tend to increase the areas of conflict between the parties
instead of resolving the issues placed in front of them.

The aforementioned reasons tend to force people to find alternate ways of addressing their
problems and therefore they follow the Alternate Dispute Resolution System of Arbitration,
Mediation and, or Conciliation.

Brief History of ADR

Although mediation goes back hundreds of years, alternative dispute resolution has grown
rapidly in the United States since the political and civil conflicts of the 1960s. The introduction
of new laws protecting individual rights, as well as less tolerance for discrimination and
injustice, led more people to file lawsuits in order to settle conflicts. For example, the Civil
Rights Act of 1964 outlawed "discrimination in employment or public accommodations on the
basis of race, sex, or national origin." Laws such as this gave people new grounds for seeking
compensation for ill treatment.

At the same time, the women's movement and the environmental movements were growing as
well, leading to another host of court cases. The result of all these changes was a significant
increase in the number of lawsuits being filed in U.S. courts. Eventually the system became
overloaded with cases, resulting in long delays and sometimes procedural errors.Processes like
mediation and arbitration soon became popular ways to deal with a variety of conflicts,
because they helped relieve pressure on the overburdened court system.

ADR originated in the USA in a drive to find alternatives to the traditional legal system, felt to

be adversarial, costly, unpredictable, rigid, over-professionalised, damaging to relationships,

and

limited to narrow rights-based remedies as opposed to creative problem solving. The American

origins of the concept are not surprising, given certain features of litigation in that system, such

as: trials of civil actions by a jury, lawyers' contingency fees, lack of application in full of the

rule "the loser pays the costs".

Beginning in the late nineteenth century, creative efforts to develop the use of arbitration and

mediation emerged in response to the disruptive conflicts between labor and management. In

1898, Congress followed initiatives that began a few years earlier in Massachusetts and New

York and authorized mediation for collective bargaining disputes. In the ensuing years, special

mediation agencies, such as the Board of Mediation and Conciliation for railway labor, (1913)

(renamed the National Mediation Board in 1943), and the Federal Mediation and Conciliation

Service (1947) were formed and funded to carry out the mediation of collective bargaining

disputes. Additional state labor mediation services followed. The 1913 New lands Act and later

legislation reflected the belief that stable industrial peace could be achieved through the

settlement of collective bargaining disputes; settlement in turn could be advanced through

conciliation, mediation, and voluntary arbitration.2

At about the same time, and for different reasons, varied forms of mediation for non-labor

matters were introduced in the courts. When a group of lawyers and jurists spoke on the topic
to

an American Bar Association meeting in 1923, they were able to assess court-related
conciliation

programs in Cleveland, Minneapolis, North Dakota, New York City, and Milwaukee.

Conciliation in a different form also appeared in domestic relations courts. An outgrowth of

concern about rising divorce rates in the postwar 1940's and the 1950's, the primary goal of
these

programs was to reduce the number of divorces by requiring efforts at reconciliation rather
than

to facilitate the achievement of divorces through less adversarial proceedings. Following

privately funded mediation efforts by the American Arbitration Association and others in the
late

1960s, the Community Relations Service (CRS) of the United States Department of Justice

initiated in 1972 a mediation program for civil rights disputes.

Although a small number of individual lawyers had been interested in and were practicing

mediation ADR in Britain for some years, it was only in 1989 when the first British based ADR

company - IDR Europe Ltd. - bought the idea across the Atlantic and opened its doors for

business. This was the start of ADR Group. Since then many other ADR organizations, including

CEDR (Centre for Dispute Resolution), followed suite and assisted in the development and

promotion of ADR in the UK.3

ADR, or mediation (as it is now synonymously known as), is used world-wide by Governments,

corporations and individuals to resolve disputes big or small, of virtually any nature and in most

countries of the world.

In developing countries where most people opt for litigation to resolve disputes, there is

excessive over-burdening of courts and a large number of pending cases, which has ultimately

lead to dissatisfaction among people regarding the judicial system and its ability to dispense

justi e. This opi io is ge erated largel o the asis of the popular elief, Justi e dela ed is

justi e de ied . Ho e er, the la e for the large u er of pe di g cases in these developing

countries or docket explosion, as it is called, cannot be attributed to the Courts alone. The
reason

for it being the non-implementation of negotiation processes before litigation. It is against this

backdrop that the mechanisms of Alternative Dispute Resolution are being introduced in these

countries. These mechanisms, which have been working effectively in providing an amicable
and

speedy solution for conflicts in developed economies, are being suitably amended and

incorporated in the developing countries in order to strengthen the judicial system. Many

countries such as India, Bangladesh and Sri Lanka have adopted the Alternative Dispute

Resolution Mechanism. However, it is for time to see how effective the implementation of
these mechanisms would be in these countries
Overview of ADR:

Alternative dispute resolution encompasses a range of means to resolve conflicts short of

formal

litigation. The modern ADR movement originated in the United States in the 1970s, spurred by
a

desire to avoid the cost, delay, and adversarial nature of litigation. For these and other reasons,

court reformers are seeking to foster its use in developing nations. The interest in ADR in some

countries also stems from a desire to revive and reform traditional mediation mechanisms.

ADR today falls into two broad categories: court-annexed options and community-based
dispute

resolution mechanisms. Court-annexed ADR includes mediation/conciliation—the classic

method where a neutral third party assists disputants in reaching a mutually acceptable

solution—as well as variations of early neutral evaluation, a summary jury trial, a mini-trial, and

other techniques. Supporters argue that such methods decrease the cost and time of litigation,

improving access to justice and reducing court backlog, while at the same time preserving

important social relationships for disputants.4

Community-based ADR is often designed to be independent of a formal court system that may

be biased, expensive, distant, or otherwise inaccessible to a population. New initiatives

sometimes build on traditional models of popular justice that relied on elders, religious leaders,

or other community figures to help resolve conflict. India embraced lok adalat village-level

people s ourts i the 1980s, where trained mediators sought to resolve common problems
that in
an earlier period may have gone to the panchayat, a council of village or caste elders.
Elsewhere

in the region, bilateral donors have recently supported village-based shalish mediation in

Bangladesh and nationally established mediation boards in Sri Lanka. In Latin America, there

has been a revival of interest in the juece de paz, a legal officer with the power to conciliate or

mediate small claims.

Some definitions of ADR also include commercial arbitration: private adversarial proceedings in

which a neutral third party issues a binding decision. Private arbitration services and centers
have

an established role in the United States for commercial dispute resolution, and are spreading

internationally as business, and the demand for harmonization, expands. In the last decade,
more

countries have passed legislation based on the 1985 UNCITRAL Model Law on International

Commercial Arbitration, which makes an arbitral award legally binding and grants broad rights

to commercial parties choosing arbitration.

It is important to distinguish between binding and non-binding forms of ADR. Negotiation,

mediation and conciliation are non-binding forms, and depend on the willingness of parties to

reach a voluntary agreement. Arbitration programs may be binding or non-binding. Binding

Arbitration produces a third party decision that the disputants must follow even if they disagree

with the result much like a judicial decision. Non-binding Arbitration produces a third party

decision that the parties may reject.

It is also important to distinguish between mandatory processes and voluntary processes. Some

judicial systems require the parties to negotiate, conciliate, mediate or arbitrate, prior to court

action. ADR processes may also be required as part of prior contractual agreement between

parties. In voluntary processes, submission of a dispute to an ADR process depends entirely on

the will of the parties.

These forms of ADR along with a lot of other hybrid processes are discussed in the next chapter

of the paper. Therefore, it a o ser ed that the ter Alter ati e dispute resolutio a refer
to

everything from facilitated settlement negotiations in which disputants are encouraged to

negotiate directly with each other, prior to some other legal process, to arbitration systems or

mini-trials that look and feel very much like a courtroom process. Processes designed to
manage

community tension or facilitate community development issues can also be included into the

rubric of ADR.

ADR can be termed as an effective means to solve disputes by the help of a neutral third
party. As popularl stated si e ti e i e orial E er oi has t o fa es , the said
methodology of resolving disputes through alternative means also has some pros and cons.
 Main kinds of ADR mechanism

a)Arbitration

b) Mediation:

c) Conciliation:

Use and effectiveness of Arbitration as a mechanism of ADR:

American case study (source: National Arbitration Forum, Washington)

Key Findings in the above survey:

78% of people find faster recovery in Arbitration

83% of people find Arbitration equally or more fair

59.3% of people find Arbitration less expensive

84.6% of people find ADR equally or more suitable for insurance/reinsurance sector
This survey clearly shows the increase in the number of people over the years who

would opt for Arbitration over a lawsuit for the recovery of monetary damages.
INTERNATIONAL ORGANISATIONS:

Permanent Court of Arbitration (PCA)

World Trade Organisation (WTO)

International Chamber of Commerce (ICC)

Court of Arbitration for Sport (CAS)

United Nations Commission on International Trade Law (UNCITRAL)

Other treaties
  OBJECTIVE: 1) To Study the ADR system in India and Australia: Brief History,

Process of functioning,and key elements.

Position of ADR in India.

Alternative dispute resolution in India is not new and it was in existence even under the
previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to
accommodate the harmonisation mandates of UNCITRAL Model. To streamline the Indian legal
system the traditional civil law known as Code of Civil Procedure, (CPC) 1908 has also been
amended and section 89 has been introduced. Section 89 (1) of CPC provides an option for the
settlement of disputes outside the court. It provides that where it appears to the court that
there exist elements, which may be acceptable to the parties, the court may formulate the
terms of a possible settlement and refer the same for arbitration, conciliation, mediation or
judicial settlement.

Due to extremely slow judicial process, there has been a big thrust on Alternate Dispute
Resolution mechanisms in India. While Arbitration and Conciliation Act, 1996 is a fairly standard
western approach towards ADR, the Lok Adalat system constituted under National Legal
Services Authority Act, 1987 is a uniquely Indian approach.

Reasons behind introduction of ADR in India:

Alternative Dispute Resolution in India is an attempt made by the legislators and judiciary alike

to a hie e the Co stitutio al goal of a hie i g Co plete Justi e i I dia. AD‘ first started as

a quest to find solutions to the perplexing problem of the ever increasing burden on the courts.
A

thought-process that started off to rectify docket explosion, later developed into a separate
field

solely catering to various kinds of mechanisms which would resolve disputes without

approaching the Formal Legal System (FLS). The reasoning given to these ADR mechanisms is

that the society, state and the party to the dispute are equally under an obligation to resolve
the

dispute as soon as possible before it disturbs the peace in the family, business community,

society or ultimately humanity as a whole.

I a i ilised so iet , pri iples of atural justi e alo g ith the ‘ule of La should result i

complete justice in case of a dispute. Rule of Law is defined as the state of order in which
events

conform to the law. It is an authoritative, legal doctrine, principle, or precept applied to the
facts

of an appropriate case. These definitions give us the indication that the Rule of Law is a

authoritative concept which might lead to a win-lose situation in cases of dispute. Therefore,

ADR uses the principles of natural justice in consonance with the Rule of Law, in order to create

a favourable atmosphere of a win-win situation. This is much needed in countries like India

where litigation causes a great deal of animosity between the parties due to the agony caused
by

the long-standing litigation. ADR, thus, gains its momentum in India today.17

Alternative Dispute Resolution in India was founded on the Constitutional basis of Articles 14

and 21 which deal with Equality before Law and Right to life and personal liberty respectively.

These Articles are enshrined under Part III of the Constitution of India which lists the

Fundamental Rights of the citizens of India. ADR also tries to achieve the Directive Principle of

State Policy relating to Equal justice and Free Legal Aid as laid down under Article 39-A of the

Constitution. The Acts which deal with Alternative Dispute Resolution are Arbitration and

Conciliation Act, 1996 (discussed in detail later) and the Legal Services Authorities Act, 1987.

Section 89 of the Civil Procedure Code, 1908 makes it possible for Arbitration proceedings to

take place in accordance with the Acts stated above.

In India, the quest for justice has been an ideal, which the citizens have been aspiring for

generations down the line. Our Constitution reflects this aspiration in the Preamble itself, which

speaks about justice in all its forms: social, economic and political. Justice is a constitutional

mandate. About half a century of the Constitution at work has tossed up many issues relating to
the working of the judiciary; the most important being court clogging and judicial delays.

Particularly disturbing has been the chronic and recurrent theme of a near collapse of the
judicial

trial system, its delays and mounting costs. Here, the glorious uncertainties of the law
frustrated

the aspirations for an equal, predictable and affordable justice is also a question, which crops
up

often in the minds of the people.

We are a country of a billion people. The fundamental question is: How do we design and

structure a legal system, which can render justice to a billion people? The possibility of a

justice-delivery mechanism in the Indian context and the impediments for dispensing justice in

India is an important discussion. Delay in justice administration is the biggest operational

obstacle, which has to be tackled on a war footing. As Justice Warren Burger, the former Chief

Justice of the American Supreme Court observed in the American context:

The harsh truth is that e a e o our a to a so iet o erru hordes of la ers,

hungry as locusts, and bridges of judges in numbers never before contemplated. The notion

— that ordinary people want black-robed judges, well-dressed lawyers, and fine paneled

courtrooms as the setting to resolve their disputes, is not correct. People with legal problems

like people with pain, want relief and they want it as quickly and inexpensively as possible.

This observation with greater force applies in the Indian context.

Therefore, this explains the need for Alternative Dispute Resolution in India. In a country, which

aims to protect the socio-economic and cultural rights of citizens, it is extremely important to

quickly dispose the cases in India, as the Courts alone cannot handle the huge backlog of cases.

This can be effectively achieved by applying the mechanisms of Alternative Dispute Resolution.

These are the reasons behind the introduction of ADR in India.

THE PRESENT SCENARIO:-

The legal s ste i I dia is ie ed a as part of olo ial lega . U dou tedl , judi iar is
the important institution which has withstood many challenges during the last-more than fifty
years to retain its integrity. But with the mounting pressure of cases-civil, criminal, revenue,
industrial and others the workload of judiciary increased leaps and bound and it has now
reached a stage of unmanageable magnitude and the cases remain undecided for years
together for one reason or the other.

The preamble to the constitution of India promises to secure socio-economic and political
justice and equality of status and of opportunity to all the citizens. Art. 39-A contains a directive
principle which holds that the state will ensure that the legal system operates in a manner so as
to promote justice to all an to ensure that no citizen is denied the opportunities of securing
justice by reason of economic or any other disability. But the ground reality is that the law
hardly reaches the vulnerable sections of the society here majority of the people are illiterate,
rustic and rural and are ignorant about existence of their legal rights and remedies. And those
who are aware of their right, find it difficult to get them translated into reality because of the
legal and procedural ordeals on has to undergo in the process of litigation

MALIMATH COMMITTEE:-

The report of the Malimath Committee (1989- . The o ittee as headed Ho le Mr.
Justi e V.“. Mali ath, the t o other e ers ei g Ho le Mr. Justi e P.D. Desai a d Ho le
Dr. Justice A.S.Anand.

In India the situation is all the more worse. The Indian judicial system has been stretched
almost to a breaking point right from the Apex court to the lowest subordinate courts. The
Malimath Committee which is also known as the Arrears committee, undertook a
comprehensive review of the working of the court system, particularly all aspects of arrears and
La s dela a d ade arious useful re o e datio s for redu i g litigatio a d aki g
justice readily accessible to the people at the minimum cost o time an money.

The Malimath Committee underlined the need for alternative dispute resolution mechanism
such as mediation, conciliation, arbitration, Lok Adalats etc. as a viable alternative to the
conventional court litigation.

Alternative Dispute Resolution (ADR) is a term for describing process of resolving disputes in
place of litigation and includes arbitration, mediation, conciliation, expert determination and
early neutral evaluation by a third person. In many important respects, arbitration is
similar/common with court based litigation than the other forms of ADR. Prior to the
enactment of The Arbitration and Conciliation Act, 1996, none of these forms of ADR except
arbitration have any statutory basis in India. Mediation and Conciliation require an independent
third party as mediator or conciliator to assist the parties to settle their disputes. The expert
determination requires independent experts in the subject of disagreement of the parties to
decide the case. Such expert is chosen jointly by the parties and his decision is binding.

ARBITRATION LAW IN INDIA:

In our country, in the past statutory provisions on arbitration were contained in three different
enactments i.e. the Arbitration Act 1940, the Arbitration (Protocol and Convention) Act 1937
and the Foreign Awards (Recognition and Enforcement) Act, 1961. The Arbitration Act, 1940
laid down the framework within which domestic arbitration was conducted in India, while the
other two Acts dealt with foreign awards. The Arbitration and Conciliation Act, 1996 has
repealed the Arbitration Act, 1940 (10 of 1940) and the Arbitration (Protocol & Convention)
Act, 1937 (6 of 1937) and the Foreign Awards (Recognition and Enforcement) Act, 1961 under
section 85 of the 1996 Act.

United Nations Commission on International Trade Law (UNCITRAL) prepared a Model Law on
international commercial arbitration in 1985. The General Assembly of the United Nations has
recommended that all member countries should give due consideration to the Model Law, for
the desirability of uniformity of the Law of Arbitral Procedures and the specific needs of
International Commercial Arbitration Practice. The United Nations Commission on International
Trade Law (UNCITRAL) adopted the UNCITRAL Conciliation.

1.The Arbitration and Conciliation Act, 1996.

2 . ibid

Rules in 1980. The Arbitration and Conciliation Bill 1996 was passed by both the Houses of
Parliament and received the assent of the President of India on August 16, 1996 and was
enforced w.e.f. January 25, 1996 and the enactment came on the statute book as the
Arbitration and Conciliation Act, 1996 (26 of 1996).

The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal
without unnecessary delay and expense. The parties should be free to agree as to how their
disputes are to be resolved, subject only to such safe guards as are necessary in the public
interest. In the matter governed by the provisions of the 1996 Act, the court should not
intervene except as provided by those provisions. The main object of Arbitration is to exclude
judicial intervention with the process of Arbitration. The Court is however required to direct the
parties to resort to Arbitration as per the agreement and to provide alternative dispute
resolution to those who cannot bear the cost and the time of ordinary civil court procedure as
per the provisions of Section 89 CPC. There are separate enactments specially to settle disputes
arising between employer and employee under the Industrial Disputes Act. Statutory tribunals
are also some time lacking in their effort as they do not have the simplicity, transparency and
practical approach to resolve the disputes, as in the Arbitration and Conciliation Act, 1996. The
English Arbitration Act, 1996, provides that the provisions of law must not be construed as
excluding the operations of rule of law consistent with those provisions, in particular any rule of
law as to (a) matters which are not capable of settlement by arbitration, (b) the effect of an oral
arbitration agreement or (c) the refusal of recognition or enforcement of an arbitral award on
ground of public policy. The English Arbitration Act, 1996 must not be construed as reviving any
jurisdiction of the court to set aside or remit an award on the ground of errors of fact or law on
the face of award.

Arbitration is a process used by the agreement of the parties to resolve disputes. In arbitration,
disputes are resolved with binding effect by a person or persons acting in a judicial manner in
private, rather than by the regular court of law, that would have jurisdiction to adjudicate, but
for the agreement of the parties to exclude it. The Arbitration and Conciliation Act, 1996 is a
long leap in the direction of Alternative Dispute Resolution system. It is based on UNCTRAL
model.

Commenting on arbitration as an ADR technique, Mr. V.R.Krishna Iyar of the Supreme Court
observed:-

Interminable time consuming, complex and expensive curt procedure implied jurists to
search for an alternative forum less formal, more effective and speedy for resolution of
disputes a oidi g pro edural laptrap a d this led the to the Ar itratio A t……

TRIBUNALS IN INDIA:-

With the acceptance of Welfare ideology, there was mushroom growth of public services and
public servants. The courts particularly the High Courts were inundated with cases concerning
service matters. The Swarn Singh Committee therefore, inter-alia recommended the
establishment of Administrative Tribunals as a part of Constitutional adjudicative system.
Resultantly the Constitution (42nd Amendment) Act 1976 inserted Part XIV-A to the
Constitution of India consisting of Articles 323A and 323B. Article 323A provides for the
establishment of Administrative Tribunals for adjudication or trial of disputes and complaints
with respect to recruitment, conditions of service of persons appointed to public services and
other allied matters. Article 323B makes provision for the creation of Tribunals for adjudication
or trial of disputes, complaints or offences connected with tax, foreign exchange, industrial and
labour disputes, land reforms, ceiling on urban property, election to Parliament and State
Legislatures, etc. Parliament has power to enact any law under Article 323A while both
Parliament and State Legislatures can make laws on matters of Article 323B, subject to their
legislative competence. Therefore, in some cases, expert bodies like Central Administrative
Tribunals constituted under Section 4 of the Administrative Tribunals Act 1985, have been
empowered to adjudicate matters relating to service conditions etc. Similarly the Consumer
Disputes Redressal Mechanism provided for better protection of the consumers, thereby
providing for the establishment of the District Consumer Disputes Redressal Forum at district
level, State Consumer Disputes Redressal Commission, at the State Level and National
Consumer Disputes Redressal Commission at the National Level to adjudicate the Consumer
Disputes/cases under the Consumer Protection Act, 1986. The Income-tax Appellate Tribunal
are empowered to hear appeals under Section 253 of the Income Tax Act, 1961, Central Excise
and Gold Appellate Tribunal (now known as Central Excise and Service Tax Appellate Tribunal) is
empowered to hear appeals under Section 35(b) of the Central Excise and Salt Act, 1944. The
Debt Recovery Tribunals set up under the provisions of The Recovery of Debts due to Banks and
Financial Institutions Act 1993, have been empowered to adjudicate cases relating to debts
/loans of Commercial Banks and Financial Institutions. The tribunal system was evolved in our
country to provide an alternative to the regular courts. The tribunals are presided over by the
experts of the respective fields and the adjudication mechanism is cost effective, thus less
costly in comparison to the regular courts and they are effectively resolving the disputes by
taking much less time in comparison to the regular courts.

CIVIL PROCEDURE CODE:-

The use of ADR, is promoted by the enactment of section 89 of the Code of Civil Procedure
which is inserted by Section 7 of the Code of Civil Procedure (Amendment) Act 1999. The courts
also encourage the parties to use an ADR procedure in appropriate cases. The Governments
including Central Government are committed to settle their legal disputes out of the court by
ADR methods whenever the other party agrees for it. Normally ADR is an alternative way of
settlement of the disputes or issues. ADR is simple, cheaper, quicker and less stressful to all
parties, in comparison to adversarial litigation.

CONCILIATION/ MEDIATION:-

The ter o iliatio a d ediatio ha e ot ee used ith a pre isio . To egi ith
the ter o iliatio as used ore idel , hile of late the ter ediatio has e o e
more popular. By and large these terms are used inter changeably. Section 61 of the Act1
provides for application of Part-Ill of the Act to conciliation of disputes arising out of legal
relationship, whether contractual or not and to all proceedings relating thereto. The provisions
of Part-Ill shall not apply where by virtue of any existing law which is in force, certain disputes
may be in the exclusionary category of conciliation. Section 62 of the Act2 provides for
commencement of conciliation proceedings. Section 63 provides for the number of conciliators
and Section 64 provides for the appointment of conciliators. The parties may submit brief
written statement describing the general nature of the dispute and the points at issue with a
copy of such statement to the opposite party under Section 65 of the Act. The Code of Civil
Procedure, 1908 or the Indian Evidence Act, 1872 are not binding upon the conciliators as per
the provisions of Section 66 of the Act. The conciliator assists the parties in an independent and
impartial manner in their attempt to arrive at an amicable settlement of their dispute. The
conciliator is guided by the principles of objectivity, fairness and justice by taking into account
the rights and obligations of the parties. The conciliators are free to conduct the proceedings,
by taking into account, the circumstances of the case and willingness of the parties, including
any request by a party that the conciliator should hear oral statement requiring speedy
disposal/ settlement of the dispute. The conciliator is free to make any proposal for settlement
of dispute at any stage under Section 67 of the Act. Section 75 of the Act provides that the
proceedings before conciliator shall be confidential. The parties shall keep all matters relating
to the conciliation proceedings as confidential. The agreement is also confidential except where
its disclosure is necessary for the purposes of implementation and enforcement of the
settlement. Section 73 empower the conciliator to formulate the terms of a possible settlement
and submit the same to the parties for their observance. On observance, if the parties agreed, a
written settlement agreement may be signed. The settlement agreement shall be final and
binding on the parties and their representatives. The conciliator shall authenticate the
settlement agreement and furnish a copy of such agreement to each of the parties under
Section 73 of the act.

Arbitration and Conciliation Act, 1996

Part I of this act formalizes the process of Arbitration and Part III formalizes the process of
Conciliation. (Part II is about Enforcement of Foreign Awards under New York and Geneva
Conventions.)

Arbitration

The process of arbitration can start only if there exists a valid Arbitration Agreement between
the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be
in writing. The contract regarding which the dispute exists, must either contain an arbitration
clause or must refer to a separate document signed by the parties containing the arbitration
agreement. The existence of an arbitration agreement can also be inferred by written
correspondence such as letters, talex, or telegrams which provide a record of the agreement.
An exchange of statement of claim and defence in which existence of an arbitration agreement
is alleged by one party and not denied by other is also considered as valid written arbitration
agreement.

Any party to the dispute can start the process of appointing arbitrator and if the other party
does not cooperate, the party can approach the office of Chief Justice for appointment of an
arbitrator. There are only two grounds upon which a party can challenge the appointment of an
arbitrator – reasonable doubt in the impartiality of the arbitrator and the lack of proper
qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or a
panel of arbitrators so appointed constitute the Arbitration Tribunal.

Except for some interim measures, there is very little scope for judicial intervention in the
arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a
party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the
tribunal itself. If the tribunal rejects the request, there is little the party can do except to
approach a court after the tribunal makes an award. Section 34 provides certain grounds upon
which a party can appeal to the principal civil court of original jurisdiction for setting aside the
award.

The period for filing an appeal for setting aside an award is over, or if such an appeal is rejected,
the award is binding on the parties and is considered as a decree of the court.

Conciliation

Conciliation is a less formal form of arbitration. This process does not require an existence of
any prior agreement. Any party can request the other party to appoint a conciliator. One
conciliator is preferred but two or three are also allowed. In case of multiple conciliators, all
must act jointly. If a party rejects an offer to conciliate, there can be no conciliation.

Parties may submit statements to the conciliator describing the general nature of the dispute
and the points at issue. Each party sends a copy of the statement to the other. The conciliator
may request further details, may ask to meet the parties, or communicate with the parties
orally or in writing. Parties may even submit suggestions for the settlement of the dispute to
the conciliator.

When it appears to the conciliator that elements of settlement exist, he may draw up the terms
of settlement and send it to the parties for their acceptance. If both the parties sign the
settlement document, it shall be final and binding on both.

Note that in USA, this process is similar to Mediation. However, in India, Mediation is different
from Conciliation and is a completely informal type of ADR mechanism.

Lok Adalat

Etymologically, Lok Adalat means "people's court". India has had a long history of resolving
disputes through the mediation of village elders. The current system of Lok Adalats is an
improvement on that and is based on Gandhian principles. This is a non-adversarial system,
whereby mock courts (called Lok Adalats) are held by the State Authority, District Authority,
Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal
Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are
usually presided by retired judge, social activists, or members of legal profession. It does not
have jurisdiction on matters related to non-compoundable offences.

While in regular suits, the plaintiff is required to pay the prescribed court fee, in Lok Adalat,
there is no court fee and no rigid procedural requirement (i.e. no need to follow process given
by [Indian] Civil Procedure Code or Indian Evidence Act), which makes the process very fast.
Parties can directly interact with the judge, which is not possible in regular courts.

Cases that are pending in regular courts can be transferred to a Lok Adalat if both the parties
agree. A case can also be transferred to a Lok Adalat if one party applies to the court and the
court sees some chance of settlement after giving an opportunity of being heard to the other
party.

The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes
back to the court. However, if a compromise is reached, an award is made and is binding on the
parties. It is enforced as a decree of a civil court. An important aspect is that the award is final
and cannot be appealed, not even under Article 226 of the Constitution of India [which
empowers the litigants to file Writ Petition before High Courts] because it is a judgement by
consent.

All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is
deemed to be a Civil Court.

Permanent Lok Adalat for public utility services

In order to get over the major drawback in the existing scheme of organisation of Lok Adalats
under Chapter VI of the Legal Services Authorities Act, 1987, in which if the parties do not arrive
at any compromise or settlement, the unsettled case is either returned to the back to the court
or the parties are advised to seek remedy in a court of law, which causes unnecessary delay in
dispensation of justice, Chapter VI A was introduced in the Legal Services Authorities Act, 1987,
by Act No.37/2002 with effect from 11-06-2002 providing for a Permanent Lok Adalat to deal
with pre-litigation, conciliation and settlement of disputes relating to Public Utility Services, as
defined u/sec.22 A of the Legal Services Authorities Act, 1987, at pre-litigation stage itself,
which would result in reducing the work load of the regular courts to a great extent. Permanent
Lok Adalat for Public Utility Services, Hyderabad, India

The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two
other members, usually a lawyer and a social worker. There is no court fee. If the case is already
filed in the regular court, the fee paid will be refunded if the dispute is settled at the Lok Adalat.
The procedural laws, and the Evidence Act are not strictly followed while assessing the merits
of the claim by the Lok Adalat.

Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The
decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of
execution through legal process. No appeal lies against the order of the Lok Adalat.
Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages
and matrimonial cases can also be easily settled before Lok Adalat as the scope for compromise
through an approach of give and take is high in these cases.

Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and
free of cost.

“e tio of the Code of Ci il Pro edure, talks a out “ettle e t of disputes outside the
ourt . The o te ts of the said se tio are as follo s:

[13]Where it appears to the court that there exists 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 observations 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
Position of ADR in Australia.

Historically, in Australia Alternative Dispute Resolution ("ADR") has largely been perceived as
a non-judicial function. Indeed, ADR has been described as "a process of solving problems
without the assistance of the Courts."1

More recently however, cost pressures and the search for greater efficiencies and fairness has
led to a greater focus on ADR processes in the context of the litigation process, a trend which
has been driven by both the legislature and the Courts themselves.

Mediation is the main form of ADR used in Australian Courts (Victorian). The Victorian Courts
refer cases to conferences, which are normally pre hearing conferences, conciliation and
sometimes arbitration. Mediation is a process in which the conflicting parties discuss, formulate
and reach to a conclusion with the help of a mediating person known as the mediator. The
mediator does not decide or advise, he has no advisory role in the proceedings. He, however,
does advise on determining the process of mediation. Mediation can be followed voluntarily, by
the order of the Ho le Court a d or e isti g o tra tual agree e t.

The “upre e, the Magistrates a d the Cou t Courts ha e the right to order any part of the
proceeding or all of the proceeding to mediation, with or without the consent of the parties.

AUSTRALIA

Australia is a Federal State. Under the Constitution of

Commonwealth of Australia, powers are divided between the Central

Government and the State Government. Arbitration is a matter that is

traditionally been covered by State and Territory, rather than

Commonwealth, legislation. The Commonwealth Parliament legislates

with respect to external affairs, and to trade and commerce with other

countries, and in international commercial arbitration. It has done so in

the Arbitration (Foreign Awards and agreements) Act 1974, which gives

effect to the 1958 New York Convention. All other law affecting

commercial arbitration is to be found in the statutes and common law of

the States and territories. Arbitration is commonly used to settle building

disputes arising out of insurance policies. In agreements between

Australia and other parties, which contain an international element,

arbitration is increasingly accepted, as it may lead to the avoidance of

problems arising from the conflict of law, especially since the adoption of

the 1958 New York Convention, the recognition and enforcement of

foreign arbitral awards604. Thus, Australian law on arbitration is based

on international conventions, legislations both federal and State and

common law which is the judge made law. Australia being party to three

international conventions on international arbitration has given effect to it

within Australia by federal International Arbitration Act 1974 (IAA). The

Part II of the IAA contains the provisions for implementation of the

Convention on the Recognition and Enforcement of Foreign Arbitral

Award of 1958(New York Convention). Part III of IAA gives the

UNCITRAL Model Law on International Commercial Arbitration of

1885 a force of law in Australia. Part IV gives effect to the Convention

on the Settlement of Investment Disputes between States and Nationals of

other States of 1975 (Washington Convention). The State and Territories

of Australia all have their own uniform legislation on arbitration, which is

called the Commercial Arbitration Act (CAA)605.

Australia had no national accreditation system for alternative

dispute resolution mechanisms. However, following the National

Mediation Conference in May 2006, the National Mediation

Accreditation Standards system has apparently started to move to its

implementation phase. Mediation is now accepted procedure for

resolution of domestic disputes in Australia. Its popularity has grown

remarkably over the past few years. In the area of neighborhood disputes

and family law disputes, it has assumed particular importance. It is also

used in commercial disputes for a contractual and non-contractual nature.

Specialist bodies have been set up for promoting or foster mediation and

numbers of instructional courses are offered on mediation skills and

techniques606. ADR practitioners recognize that mediators (as distinct from

arbitrators or conciliators) need to be recognized as having professional

accreditations the most. There are a range of organizations within

Australia that do have extensive and comprehensive accreditations for

mediators but people that use mediation are unsure as to what level of

accreditation is required for the quality of service that they receive.

Standards will tend to vary according to the specific mediation and the

level of specificity that is desired. Due to the wide range of ADR

processes that are conducted, it would be very difficult to have a set of

standards that could apply to all ADR processes, but standards should be

developed for particular ADR processes607.

The clients need the assurance that mediators have some form of

ongoing assessment and training throughout their careers. Mediators must

satisfy different criteria to be eligible for a variety of mediator panels. In

addition, different mediator organizations have different ideals of what

makes a good mediator that in turn reflects the training and accreditation

of that particular organization. Selection processes for ADR practitioners

are based on the needs of the service, but a problem is posed when

organizations, such as the Court want to refer a client to mediation and

they usually have to rely on their in-house mediators or rely on word of

mouth. There are inconsistent standards. A National Accreditation

System could very well enhance the quality and ethics of mediation and

lead mediation to become more accountable. There is a need for a unified

accreditation system for mediators across Australia to establish clarity

and consistency608. Suitable education and training for mediators becomes

a complex issue, largely due to the breadth of areas, which may call on

mediation as a means of dispute-resolution. The educational requirements

for accreditation as a mediator differ between accrediting groups and

from Country to Country. In some cases, legislation mandates these

requirements; whilst in others, professional bodies impose standards and

applicants must comply prior to becoming accredited by them.

In Australia, professionals wanting to practice in the area of family

law must have tertiary qualifications in law or in social science, undertake

5 days training in mediation and engage in at least 10 hours of supervised

mediation. Furthermore, they must also undertake 12 hours of mediationeducation

or training every 12 months. Tertiary institutions globally offer

units in mediation across a number of disciplines such as law, social

science, business and the humanities. In Australia, not all fields of

mediation-work require academic qualifications, as some deal more with

the practical skills rather than with theoretical knowledge: to this end

membership-organization such as LEADR provide training-courses to

further the adoption and practice of mediation609. Internationally the

organisation CEDR takes a similar approach to mediator training. No

legislated national or international standards on the level of education,

hi h should appl to all ediatio pra titio ers orga izatio s, e ist.
However, organisations such as the National Alternative Dispute

Resolution Advisory Council (NADRAC) in Australia continue to

advocate for a wide scope on such issues. Other systems apply in other

jurisdictions such as Germany, which advocates a higher level of

educational qualification for practitioners of mediation610.

A tendency exists for professional to develop their own codes of

conduct, which apply to their own members. Examples of this in

Australia include the mediation codes of conduct developed by the Law

Societies of South Australia and Western Australia and those developed

by organisations such as Institute of Arbitrators & Mediators Australia

(IAMA) and LEADR for use by their members. Other organizations such

as the American Center for Conflict Resolution Institute have developed

both classroom and distance learning courses, which subscribe to its

mission of promoting peace through education611. The CPR Georgetown

Ethics Commission, the Mediation Forum of the Union International des

Avocats, and the European Commission have also promulgated Codes of

Conduct for mediators612.

The most common aspects of a mediator Code of Conduct include

a commitment to inform participants as to the process of mediation, the

need to adopt a neutral stance towards all parties to the mediation,

revealing any potential conflicts of interest. The requirement for a

mediator to conduct the mediation in an impartial manner within the

bounds of the legal framework under which the mediation is undertaken

any information gained by the mediators should be treated as

confidential. The mediators should be mindful of the psychological and

physical wellbeing of all the mediations participants. The mediators

should not offer legal advice, rather they should direct participants to

appropriate sources for the provision of any advice they might need. The

mediators should seek to maintain their skills by engaging in ongoing

training in the mediation process. The mediators should practice only in

those fields in which they have expertise gained by their own experience

or training.

Australia has incorporated mediation extensively into the disputesettlement

process of family law and into the latest round of reforms

concerning industrial relations under the Work Choices amendments to

the Workplace Relations Act 1996. Where prospects exist of an ongoing

disputation between parties brought on by irreconcilable differences

stemming from such things as a clash of religious or cultural beliefs,

mediation can serve as a mechanism to foster communication and

interaction. Mediation can function not only as a tool for dispute

resolution but also as a means of dispute prevention. Mediation can be

used to facilitate the process of contract negotiation by the identification

of mutual interests and the promotion of effective communication

between the two parties. Examples of this use of mediation can be seen in

recent enterprise bargaining negotiations within Australia614

The Governments can also use mediation to inform and to seek

input from stakeholders in formulation or fact-seeking aspects of policymaking.

Mediation in wider aspect can also be used in to prevent conflict

or develop mechanisms to address conflicts as they arise615.

The Australian Government sought to alleviate the concerns of a

wide section of the population and industry on the decisions implications

on land tenure and use by enacting the Native Title Act 1993. A

cornerstone of the Act is the use of mediation as a mechanism to

determine future native title rights within Australia. Although not barring

litigation, the Act seeks to promote mediation through a process

incorporating the Federal Court and the National Native Title Tribunal

(NNTT). This has a better long tern success by providing flexible and

practical solutions to the needs of the various stakeholders. The extensive

use of mediation in the resolution of native title matters does not stop the

referral of matters to the Courts for resolution, nor is mediation precluded

from occurring whilst legal challenges are being pursued. In the cases

where native title rights is found to exist over a large portion of the City

there is simultaneous use of mediation and formal legal appeals

processes. A key feature of Native Title mediation lies in the use of

Indigenous Land Use Agreements (ILUAs). These binding agreements

are negotiated between native title claimant groups and others such as

pastoralists, miners and local governments and cover aspects of the use of

the land and any future act such as the granting of mining leases616
There are three main types of ADR processes:

 facilitative
 advisory
 determinative.

TYPES OF ADR PROCESSES:

MEDIATION:

Mediation is a form of assisted, structured, problem solving, negotiation process. It is an

excellent process for resolving most types of dispute and conflict. It is also highly effective at
producing mutually acceptable outcomes when there are competing interests AND an
underlying need to resolve the clash amicably, rather than by winning a contest of wills, or
resources.

The mediator guides individuals, groups, organisations and businesses ("parties") through the
mediation process. The main objective is to resolve the dispute or problem constructively and
to record the agreement(s) reached in a document that is regarded by all parties as being both
morally and legally binding on them.

Mediation is easily the most widely used dispute resolution process in Australia - mainly
because it is both so flexible and so effective. For over fifteen years we have ourselves
consistently achieved successful outcomes in over 90% of our mediations.
In skilled hands, Mediation addresses and removes the causes of conflict, thereby repairing, or
at least dignifying, the damaged relationships that are at the core of all disputes. Contrast this
with adversarial processes such as litigation, which is designed specifically to deal only with the
symptoms of conflict (ie: breaches of the law). The difference is critical when long-term family,
friendship, commercial, business or customer relationships are involved.

Most Australian courts and tribunals now regard mediation as an important and efficient
dispute resolution process. Perhaps it's the ultimate irony that, after submitting to much of the
stress and expense of preparing for trial, many courts now require parties to mediate before
they allow them their day in court!

Mediation Processes

The literature suggests a bewildering array of mediation process models, based on a variety of
applied principles and philosophies. Our own research, training, teaching and, more than
anything else, practical experience of conducting a great many successful mediations over many
years, have led us to develop our own signature style of practical mediation. The two
mediation processes we describe below are, therefore, the actual processes we deliver.

The mediation processes can and have been adapted to suit almost every size and type of
dispute, from non-financial family, family business and workplace conflicts to multi-million
dollar commercial disputes.

Two distinct styles of mediation building the flexibility to respond to the individual needs of
each dispute into the processes themselves. These processes are:

Facilitated Mediation
Directed Mediation.

Facilitated Mediation

This pro ess follo s the lassi ediatio odel. The mediator manages a negotiation
process designed to help the parties to develop their own agreement.

The mediator does not express opinions, or make recommendations, although they do help to
reality check options and proposals. Their main role is to maintain order and to provide
direction and momentum in the mediation.

Directed Mediation

This is a more robust process than Facilitative Mediation. The mediator is expected to use his
or her professional knowledge, judgment and experience more pro-actively - to express views
and opinions and to make suggestions that will help guide, or nudge, the parties towards
resolution.
Which Process ?

Mediators have substantial experience and credibility in the areas in which they mediate. They
are also exceptionally good at gaining the trust and respect of parties and advisers involved in
their mediations. Consequently, most parties choose the Directive Mediation model, with its
substantially more pro-active approach.

Of course, we are equally happy to use a Facilitative process, whenever requested to do so and
there is always the option of changing the process in mid-stream, provided all parties agree to
do so.

Process Stages

Just as we try to keep things simple with our two types of mediation process, so we believe that
each process essentially comprises just four fundamental stages, each of which will be familiar
to students of problem solving:

Stages (1) and (2) - analyse the problem in the here a d o .

Stages (3) and (4) - develop and implement go-for ard solutions.

Mediation Process Stages:

here and now analysis go-forward solutions

1. Identify Issues - Situation and Needs
Analysis – understand (without
judgment) what is going on, what are
the perceived problems and what are
the parties appare t eeds a d
interests?
2. Assess & Understand - Separate the
people (ie: personalities and egos)
from the problem (ie: the issues). De-
construct and analyse the identified
problem(s) by: goi g hard o the
pro le a d easy o the people .
1. Generate Options– Examine possibilities
and alternatives through a joint problem
sol i g pro ess. Agai , ork on the
problem, work with the people . Generate
options for solutions that could work –
propositions the other party can easily say
yes to.
2. Develop Agreement – craft the best and
most attractive of the proposed solutions
into a workable, written agreement.
Produ e the est possi le out o e for
everybody, under all the circumstances.

Example of a Mediation Process

As soon as a dispute is referred to us we conduct an intake session to help us, and the parties,
to work out and decide which process, style and mediator are best suited to the matter at
hand. A typical mediation develops as follows:
 1. Preliminary contact. This is usually a telephone or face-to-face contact and may be with
one, some, or all of the parties, or their advisers. We see hether the asi he istr
between us is right; offer and explain process options; identify information
requirements and sources; identify required outcomes; estimate process time frames
and provide estimates of likely costs.
2. Preliminary contact with reluctant party(s). Sometimes, a party to a dispute is resistant
to, or even oblivious of, the need to get the problem resolved. If necessary we make
contact, provide explanations and get a preliminary commitment to, at the least, start a
dialogue.
3. Preliminary Planning Meeting (1 hour). Used to establish trust in the mediator and
commitment to the process. The parties define and confirm the problem that needs to
be resolved, agree their respective information requirements, set the style for the
mediation process, agree costs and how to deal with them and commit to a process
timetable.

Usually, we involve all the parties in the process from the outset. However, where levels
of emotion, aggression or insecurity are very high (eg: family, partnership or workplace
conflicts), we may instead initially conduct a series of individual meetings.

We much prefer face-to-fa e o u i atio , ut if that s ot possi le e o du t

meetings by phone or video conference. We believe it is essential for us to get a real feel
for the people and issues and similarly, for the parties and their advisers to understand us
and the way we work.
4. The mediation meeting(s). This is usually a half or a full day meeting. Alternatively, it
may comprise a series of shorter sessions with individual, some or all of the parties
(especially in family, family business and workplace conflicts). The mediator ensures that:
 All relevant issues are identified, presented and explored.
 The needs and interests of all parties are validated and acknowledged. Note that
this is not the same as their being accepted.
 Options and alternatives are generated that could become possible solutions /
resolutions.
 The risks and rewards of adopting the various options and alternatives are
considered and evaluated.
 Solutions, being the perceived best choice option(s) from above, put into some
form of workable structure, are agreed by the parties.
 Finally, when the parties are satisfied that they have arrived at and agreed the best
possible mutual solution for their problem or dispute, the mediator helps them to
develop a written agreement for signing. The agreement is, or will become, legally
binding.

The advantages of mediation are that the parties do not have to meet and lawyers can be
present or not. Further advantages are as follows:

(i) the introduction of the third party mediator enables parties to appraise their cases in
confidence;
(ii) the process is focused on the interests of the parties rather than on their legal rights alone –
additional factors come into play such as external commercial pressures, personal emotions
and other surrounding circumstances;

(iii) the process is conciliatory by nature – there is not an imposition of a solution – it is a

mutual and consensual outcome;

(iv) scope for non-monetary remedies including the provisions for services, payments in kind
and apologies. This may be contrasted with the fixed remedies available in litigation – those
being damages, specific performance and injunction etc;

(v) quick, cheap and confidential. The process is conducted under the "without prejudice" head
of privilege. Further, discussions in mediation cannot be discussed in litigation or arbitration
proceedings;

i a ore refle ti e approa h to sol i g disputes – the process provides parties with an
opportunity to focus on the issues in dispute, consider the true economic costs and risks and
ill pro ide a opportu it to re-establish lines of communication which are often broken
when the dispute escalates.

However, mediation may be negative in that:

(vii) It is not appropriate where a court remedy is necessary e.g. injunctions, specific
performance;

(viii) The mediator has no power to impose a binding decision on the parties; and 3.

(ix) Mediation rarely produces a satisfactory resolution unless both parties to a dispute are
committed to a resolution.

Conciliation:

Many complaints that the Australian Human Rights Commission receives are resolved through
conciliation.

Conciliation is an informal, flexible approach to resolving complaints – matters can be settled by

an exchange of letters, a telephone negotiation between the Commission and the people
involved, a telephone conciliation conference or a face to face conciliation conference.

We will discuss with you the best way to try and resolve the complaint and what sort of
outcome you are seeking. We will also talk with the respondent about the options they have
and the benefits of resolving the complaint through conciliation.

The conciliation conference is not a public hearing, a court of law or a tribunal. That means
parties do not have to prove or disprove the complaint. Instead conciliation allows people to
state their point of view, discuss the issues in dispute and settle the matter on their own terms.

There is generally no need for legal representation. However, parties may request that a
lawyer, advocate or support person attend the conference with them.

The Commission is an impartial third party during the conciliation process. Our role is to assist
the parties to consider different options to resolve the complaint and provide information
about possible terms of settlement. We can also help write up the conciliation agreement.

Outcomes will vary depending on the nature of the complaint. However, agreements can
include an apology, reinstatement to a job, compensation for lost wages, changes to a policy or
putting in place anti-discrimination policies.

If the o plai t a t e resol ed through o iliatio , ou a appl to ha e the atter heard

in the Federal Court of Australia or the Federal Circuit Court of Australia

Arbitration

Each of the States and Territories have introduced uniform Commercial Arbitration Acts. In
NSW this is the Commercial Arbitration Act 2010.

Arbitration is when the matter in question is determined by a professional arbitrator who is

usually given the power to impose a binding decision on both parties. Arbitration can, in that
sense, be seen as a direct replacement for litigation and is usually complex and potentially
expensive.

The advantages of arbitration is that it avoids using the courts and is confidential. It is therefore
advantageous for companies wishing to continue a business relationship after the dispute or
looking to minimise negative publicity. In comparison to litigation, it is speedier and more
informal, and the exclusionary rules of a hearing do not apply (in other words, everything can
come into evidence so long as it is relevant and non-cumulative). Furthermore, there is limited
discovery, since it is controlled by what the parties have agreed upon.
The disadvantages mainly concern costs with arbitrations potentially taking a similar amount of
time to litigation.

A ar itrator s a ard a o l e appealed o the li ited grou ds of a ifest error of la o

the face of the award, where the question is one of the general public importance and the
decision of the arbitrator is at least open to serious doubt or misconduct.

Early Neutral Evaluation ("ENE")

ENE is a non-binding ADR process where a neutral party gives non-binding evaluations on the
merits and flaws of a dispute.

Apart from the general advantages over litigation that ADRs offer, specifically ENE is
advantageous in that the opinions of a mutually respected neutral individual may assist in the
negotiations and the opinion from a QC/retired judge etc can assist the parties to break
deadlock.

Disadvantages include the fact that the process is non-binding and parties can ignore an
opinion that they do not agree with.

Expert Determination

Expert Determination is a process whereby an independent third party, with recognised

expertise in the subject matter in dispute between the parties, assists the parties to resolve
their dispute.

(i) Advantages:

can be effective where the parties anticipate a specific type of technical dispute arising in
which the expertise of the decision maker will be critical, such as technical engineering
disputes;

quicker/cheaper than litigation/arbitration;

confidential;

gives parties a greater knowledge of how the factual evidence is likely to be decided if the case
goes to trial

(ii) Disadvantages:

expert has no power to force his findings on the parties. The parties may provide that the
determination of the expert is final and binding upon them, but recourse to the Courts is still
necessary to enforce any determination.
ADR in the Courts

In 1996 Lord Woolf, Master of the Rules, published a report on access to civil justice in the
United Kingdom. Included within this report were recommendations as to the adoption of pre-
litigation protocols to encourage a more co-operative approach to dispute resolution, to
promote fair settlements and to avoid litigation wherever possible.4

The pre-litigation protocols, which were later developed, provided guidelines which parties to
prospective litigation were expected to follow before commencing proceedings before the
Courts. The purposes of such protocols were:

(a) to focus the attention of litigants on the desirability of resolving disputes without litigation;

(b) to enable them to obtain the information they reasonably need in order to enter into an
appropriate settlement; or

(c) to make an appropriate offer (of a kind which can have cost consequences if litigation
ensues); and

(d) if a pre-action settlement is not achievable, to lay the ground for the expeditious conduct of
the proceedings.

Lord Woolf noted that the vast majority of cases in the UK settled without trial, by negotiation
and considered that pre-litigation protocols would further encourage early settlement. 5.

In 2009 Lord Jackson conducted a review of the costs of civil litigation in the UK.5 Lord Jackson
found that pre-action protocols were of benefit in particular categories of litigation (e.g.
construction, large scale commercial litigation), but the adoption of a protocol applicable to all
general litigation had led to substantial delay and additional cost. He recommended that the
general protocol be repealed, because "one-size does not fit all".6

‘egretta l , the Australia Go er e t has ot heeded Lord Ja kso s re o e datio s.

From 2008 a number of reports were produced in Australia which recommended parties to
litigation take "genuine" or "reasonable" steps to resolve disputes before commencing
litigation, which steps might include, but need not necessarily include, ADR processes.7

The Civil Dispute Resolution Act (2011) Cth ("Act") came into effect on 1 August 2011. The
objects of the Act are:

(a) to change the adversarial culture often associated with disputes;

(b) to have people turn their minds to resolution before becoming entrenched in a litigious
position; and

(c) where a dispute cannot be resolved and the matter proceeds to court, the issues are
identified reducing the time required for a court to consider the matter.8

The Act applies to the Federal Court of Australia and the Federal Magistrates Court and requires
an applicant to file a genuine steps statement at the time of filing the application. The genuine
steps statement must specify the steps taken to resolve the issues in dispute or, if no such steps
have been taken, to provide appropriate reasons. An example of the latter is the urgency of the
proceedings.9

A respondent is also required to file a genuine steps statement before the first directions
hearing. This statement is required to state whether or not the respondent agrees with the
appli a t s genuine steps statement and to specify any disagreement.10

The Act is not prescriptive as to the genuine steps a litigant is required to take. Section 4
provides that a person takes genuine steps to resolve a dispute:

"….if the steps take y the perso i relation to the dispute constitute a sincere and genuine
atte pt to resolve the dispute, havi g regard to the perso ’s ir u sta es a d the ature a d
circumstances of the dispute." 6.

The Act does provide examples of genuine steps which might be taken which include
attempting to negotiate, providing relevant documents and information and considering and
participating in an ADR process.11

Lawyers are obliged to inform their clients of the above obligations and assist them to
comply.12 A failure to do so may result in a costs award against the lawyer.13

While the failure to file a genuine steps statement does not invalidate proceedings14 and, for
the moment at least, the Federal Court Registry has been accepting applications without a
genuine steps statement, the failure to comply with these requirements may result in an award
of costs against the defaulting party.

Finally, the Act provides that the Courts may make rules providing for the form of genuine steps
statements and the matters which are to be specified in them16.
The Federal Court Rules provide that an applicant must file a genuine steps statement in
accordance with the requirements of the Civil Dispute Resolution Act at the time of filing the
original application.17 However, apart from providing for a form the Rules do not, as yet,
provide any guidance as to the genuine steps which must be undertaken by a party.

Various concerns have been expressed about the genuine steps requirements and, in particular,
the "one-size fits all approach", which Lord Jackson recommended against. Such concerns
include an increase in the costs of litigation, particularly in matters of a minor commercial
nature where resolution is unlikely. It has also been suggested that the genuine steps
requirements will give rise to mini-trials concerned with whether or not the requirements have
been complied with and what the consequences of any non-compliance should be.

It is fair to say that the Federal Court was not an enthusiastic proponent of the genuine steps
requirements and, thus far, has taken a light touch to these obligations. Whether this continues
or the Court decides to be more prescriptive in terms of the genuine steps parties are required
to take, remains to be seen.
 OBJECTIVE: 2) To compare the ADR Systems in India and Australia on the basis of key
parameters and identifying similarity ,differences and possible reforms

Parameters ADR IN INDIA ADR IN AUSTRALIA

Types

(a)arbitration; (a) Arbitration

(b) Mediation
(b)conciliation; (c) Conciliation
(d) Earl Neutral E aluatio ENE
(c) judicial settlement
including settlement
through Lok Adalat; or

(d) mediation
CONCLUSION:-

The justice dispensation system in India has come under great stress for several reasons, mainly
due to huge pendency of cases in the courts. Alternative Disputes Resolution is a mode of
resolution of disputes through arbitration, conciliation or mediation which provides an
alternative route for resolution of disputes instead of resolution of such disputes through
courts. The principle of ADR are successfully adopted in the Indian Legal System as an
alternative to the justice delivery system.

With the advent of the alternate dispute resolution, there is new avenue for the people to
settle their disputes. The settlement of disputes in Lok Adalath quickly has acquired good
popularity among the public and this has really given raise to a new force to alternate dispute
resolution and this will no doubt reduce the pendency in law Courts. The scope of alternate
dispute resolutio s ste AD‘ has ee highlighted the Ho le Chief Justi e of I dia i his
speech in the joint conference of the Chief Ministers of the State and Chief Justice of High
Courts, held at Vigyan Bhavan, New Delhi on September 18, 2004 and insisted the Courts to try
settlement of cases more effectively by using alternate dispute resolution system so as to bring
down the large pendency of cases in law Courts. I conclude the article by saying that alternate
dispute resolution will really achieve the goal of rendering social justice to the parties to the
dispute, which is really the goal of the successful judicial system.

With a very laudable objective of speedy disposal of cases, Alternative Dispute Resolution
Mechanism (ADR) is mooted. Among the modes of Alternative Dispute Resolution Mechanism,
Arbitration is most discussed issue always as many agreements or contracts contain an
Arbitration Clause now-a-days. The difference between Arbitration Mechanism and the
adjudication through Civil Court etc. issues can be summed up as follows:

1. There is no need of paying court fee when a dispute is adjudicated by an Arbitrator.

2. Arbitrator is less burdened compared to Civil Court and the parties have the liberty of
choosing their own judge.
3. Arbitrator need not follow the procedure prescribed under Civil Procedure Code, 1908
though he will follow the principles of natural justice.
4. The procedure, the fees, the place of Arbitration etc. can be mutually agreed by the
Parties and in the absence of any consensus, the Court or the Arbitrator will take a
decision on the issues.

Despite so much relaxation in the established civil procedure, the adjudication before the
Arbitrator or the issue of getting an Arbitrator appointed is delayed very often. The general
issues or challenges to the adjudication through Arbitrator are as follows:

1. Even when there is no real lis between the parties, one party to an agreement
containing Arbitration clause, may initiate Arbitration proceedings with untenable claim.
 The issue is settled to some extent now in view of the recent development that the
Court entertaining an application under section 11 of Arbitration and Conciliation Act,
1996 discharges judicial function and can look into the issues as to whether there is any
existing agreement prima facie, whether there is any lis between the parties and
whether the subject matter is capable of being arbitrated.
2. When there exist a special mechanism dealing with certain issues, the adjudication
before the Arbitrator may not appear to be effective. For example, Rent Control Laws
provide many reliefs to the tenants and also the landlords. There is a provision for
deposit of rent by the tenant when the landlord refuses to receive the rent under the
Rent Control Laws. When it comes to depositing rent, the Arbitrator may not be
effectively deal with the issue.
3. c. Even when there is no specific provision under the Arbitration and Conciliation Act,
1996, litigants who wants to drag the case may file many interim applications. When an
interim application is filed, the same can be rejected by the Arbitrator when it is found
that the interim application is unnecessary and motivated to drag the case. But, in many
cases, the Arbitrator entertains the interim applications and disposes the same in
accordance with law and it consumes time as is the case before the Civil Court. Against
the order in the Interim Application, an aggrieved party tends to approach the High
Court under section 34 as we see practically.
4. When hearing fees is fixed or agreed to the Arbitrator, then, at times, the Arbitrator
may feel it convenient to grant so many adjournments and it is happening as we wee.
5. Even when a fixed fee is ordered to pay to the Arbitrator or agreed upon, the parties
usually not pay the entire fee in the beginning. Till the fee is paid the Arbitration
proceedings will go on at times, though the Arbitrator can exercise his right of lien over
the award until his agreed remuneration or fee is paid.

Looking at the pendency of cases before various courts in India, if we think about the time to be
taken for disposing all the pending cases, it is recently reported that it will take some 320 years
to dispose of the pending cases or to clear the backlog.

Arbitration mechanism is always Alternative, but, still we depend on the Civil Courts and the
procedure lay down under the Code of Civil Procedure, 1908 for getting the civil disputes
adjudicated. We need many reforms in our judicial system in India to ensure speedy disposal of
cases and it will certainly take years to bring the proper reforms.

Simultaneous to bringing the proper reforms or initiating measures to bring the reforms in our
Indian Judiciary aiming at speedy and effective disposal of cases, we also need to concentrate
as to how make the Arbitration Mechanism truly effective.

The measures to make the Arbitration Mechanism truly effective, as I think, are as follows:

1. Rather practicing to appoint retired judges as Arbitrators, it is better to have panel of

Arbitrators who are talented and with very good legal knowledge. There is nothing
wrong if a practicing legal advocate is appointed as an Arbitrator when he is willing to
act as such.
 2. When it comes to the fee or the remuneration to be paid to the Arbitrator, it is better to
fix lumsum remuneration for deciding an issue and having mechanism that the entire
fee is paid to the Arbitrator at once.
3. It is better to avoid the practice of paying sitting fees to the Arbitrators if one needs to
make the adjudication through arbitration really speedy.
4. Applications under section 34 of Arbitration and Conciliation Act, 1996 to be carefully
gone into and the implications of entertaining an application under section 34 on the
main Arbitration claim before the Arbitrator to be carefully considered.
5. The present legal position with regard to appointment of Arbitrators to be continued
and the process of appointment of arbitrators to be judicial always.

Ar itratio Me ha is a e ade trul effe ti e a d I do t thi k that the e ha is is trul

effective as of now for the few among many reasons referred to above.