1.

ADR PROCEEDINGS

1. INTRODUCTION:
Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes
without without courtroom litigation. Common Alternative dispute resolution processes
include mediation, arbitration, conciliation, negotiation and neutral evaluation. These
processes are generally confidential, less formal, and less stressful than traditional court
proceedings. Alternative dispute resolution often saves money and speeds settlement.

2. DEFINITION OF ALTERNATIVE DISPUTE RESOLUTION:

Alternative Dispute Resolution (ADR) means a process in which parties resort to resolving a
dispute other than by adjudication by Courts and includes, but is not limited to, arbitration,
mediation, conciliation and neutral evaluatlon.

3. BENEFITS OF ALTERNATIVE DISPUTE RESOLUTION:

ADR may offer a number of potential benefits compared to lawsuits:
 Save a lot of money, including fees for lawyers and experts.
 Save a lot of time by allowing resolution in weeks or months, compared to court, which
can take years.
 Less formal and more flexible than court proceedings.
 Less need for an attorney in some simple disputes.
 Preserve relationships by helping people co-operate instead of creating one winner and
one loser.
 Keep private disputes private, only people who are invited can attend an ADR session,
unlike court, where the proceedings are usually on the public record.

4. REFERENCE TO ADR BEFORE LEGAL PROCEEDINGS:

If the parties agree on ADR before initiating the proceedings in the Court, they may make an
application to the Court or an ADR Centre for resolution of their dispute through ADR. On
receipt of an application, the Court or ADR Centre, as the case may be, shall refer the matter
to a Neutral or such other person as may be agreed upon by the parties.

5. ADR PROCEEDINGS: (SECTION 9)

Relevant Provision: Section 9 of Alternative Dispute Resolution Act, 2017

(1) Participation in ADR Proceedings:

All parties involved in the dispute shall take part in the ADR proceedings either in person or
through duly authorized representatives or attorneys. However it is important to ensure
everyone’s active involvement for fair resolution.

(2) Timeframe for Resolution of ADR Cases by the Neutral:

A Neutral appointed by the Court or an ADR Centre to whom the matter is referred for
mediation, conciliation or other mode of ADR shall dispose of the matter within a period of
30 days. Provided that the Court or the ADR Centre may for sufflcient cause extend this
period for further 15 days on a request made by the Neutral.
(3) Timeframe for Completion of ADR Cases by the Arbitrator:
If the matter for mediation, conciliation or other mode of ADR is referred to an Arbitrator, he
shall complete the process within 60 days. Provided that the Court rnay for sufficient cause
extend this period for further 30 days on a request made by the Arbitrator.

(4) Importance of Court’s Directions in ADR:

The Court may, from time to tlme, give such directions as it deems fit regarding the conduct
of the ADR and the same shall be binding on the parties and the Neutral.

(5) Consequences of Non-Attendance or Delays in ADR:

If a party does not show up, asks for a delay or causes unnecessary delays, they may have to
pay costs to the other party as determined by the neutral.

6. CONCLUDING REMARKS:
To conclude, it can be said that, Alternative dispute resolution (ADR) is designed to settle
disputes outside of the courtroom with the help of an impartial third party. In ADR
proceedings, parties can participate in person or through authorized representatives or
attorneys. The Neutral appointed by the Court or ADR Centre should resolve the matter
within 30 days, with a possible 15-day extension. If referred to an arbitrator, the process
should be completed within 60 days, with a possible 30-day extension. The Court can give
directions binding on parties and the Neutral. Failure to attend, request adjournment, or delay
proceedings may result in cost liability.

2. SETTLEMENT AND AWARD

1. INTRODUCTION:
In ADR, settlement is when parties reach an agreement to resolve their dispute outside of
court. An award, on the other hand, is a decision made by an arbitrator that resolves the
dispute and is binding on the parties involved. Settlement allows for a mutually agreed
resolution, while an award is a decision imposed by a neutral third party.

2. SETTLEMENT AND AWARD

Section 2 (d) of Alternative Dispute Resolution Act, 2017 states that award means an
arbitration award. And Section 2 (o) of Alternative Dispute Resolution Act, 2017 states
that settlement means the agreement reached between the parties as a result of successful
ADR, other than an award.

1) Settlement Recording and Court Judgment:

If as a result of the mediation or conciliation a settlement is reached between the parties, the
Neutral shall record such settlement, duly witnessed and signed by him and by the parties or
their duly authorized representatives or attorneys and submit it to the Court which shall
pronounce judgment and pass decree in terms of the settlement. This ensures that the
agreement reached during mediation or conciliation process is legally recognised and
enforced.
2) Court Orders for Partial Resolutions and Remaining Adjudication:
In such cases, the court shall pass an order based on the settlement for the relevant part of the
dispute, while still addressing and deciding upon the remaining part. This ensures that all
aspects of the dispute are properly adjudicated.

3) Court Judgment and Decree Based on Arbitrator's Written Award:

The arbitrator on determination of the dispute shall render a written award, duly signed by
him and by the parties or their duly authorized representatives or attorneys and submit it to
the Court which shall pronounce judgment and pass decree based on the award.

4) Court Recognition and Enforcement of Settlements and Awards:

If the Neutral was appointed by an ADR Centre before initiation of legal proceedings, he
shall submit the settlement or award, duly witnessed and signed by him and by the parties or
their duly authorized representatives or attorneys, to the said Centre which shall submit the
same to the Court and the Court shall pronounce judgment and pass decree in terms of the
settlement or award. It is an important step in resolution process.

5) Making an ADR Settlement Legally Binding in Court:

If the parties have reached a settlement through ADR, they can apply to the court to make it
legally binding. The court shall review the settlement document, ensuring it's properly
witnessed and signed by the parties. Once satisfied, the court shall pronounce judgment and
pass a decree in line with the settlement. It's an important step in formalizing the agreement.

3. CONCLUDING REMARKS:
To conclude, it can be said that if parties reach a settlement through mediation or conciliation,
the neutral party records it and submits it to the court. The court then pronounces judgment
and passes a decree based on the settlement. The same goes for an arbitrator's award. If the
ADR process was initiated through an ADR center, they can also submit the settlement or
award to the court. It's all about making sure the agreement is legally recognized.

3. PANEL OF NEUTRALS AND ITS METHODS OF

APPOINTMENT

1. INTRODUCTION:
A panel of neutrals in Alternative Dispute Resolution (ADR) refers to a group of individuals
who are qualified and experienced in resolving disputes. They are selected to serve as neutral
third parties in the resolution process. When it comes to the appointment of neutrals, it
typically happens when the parties involved in a dispute cannot agree on a neutral person. In
such cases, the court has the authority to appoint a neutral based on its discretion. This
ensures a fair and unbiased resolution process.

2. Neutral:
Section 2 (j) of Alternative Dispute Resolution Act, 2017 states that neutral includes an
arbitrator, conciliator, evaluator and mediator or any other impartial person who is included
in the panel.
3. Panel:
Section 2 (k) of Alternative Dispute Resolution Act, 2017 states that Panel means the
panel of Neutrals notified under Sectlon 4 of Alternative Dispute Resolution Act, 2017.

4. PANEL OF NEUTRALS: (SECTION 4)

1) Forming a Qualified and Inclusive Panel of Neutrals for Dispute

Resolution:
The government, after consultation with the High Court, shall publish a list of Neutrals in the
official Gazette for each district. The panel shall include experienced lawyers, retired judges,
retired civil servants, ulema, jurists, technocrats, and other reputable individuals with the
required qualifications and experience. Women shall also be given proper representation in
the panel.

2) Empowering Neutrals through Specialized Training Programs:

The government has the authority to organize training courses for Neutrals, as per the
prescribed guidelines. These courses aim to enhance the skills and knowledge of Neutrals in
order to better serve in their roles.

3) Flexibility in Modifying the Panel of Neutrals:

The government has the authority to make changes to the panel of Neutrals by adding,
modifying, or removing entries as needed. This flexibility allows for the panel to be updated
and adapted to meet the evolving needs of dispute resolution.

4) Government's Rule for Neutral Replacement in Dispute Resolution

Process:
Once a Neutral is assigned to a matter, the government cannot remove them without the
agreement of both parties involved. This ensures fairness and impartiality in the dispute
resolution process.

4. APPOINTMENT OF NEUTRALS: (SECTION 5)

While referring the matter for ADR, the Court shall appoint a Neutral person or any other
person agreed upon by the parties or refer the matter to an ADR Centre. ADR Centre means
the ADR Centre notified by the Federal Government fot the purposes of tnis Act.

1) Court's Authority to Appoint a Neutral in the Absence of Agreement:

Where the parties neither agree on a Neutral nor any other person, the Court shall appoint a
Neutral in its discretion.

2) Preference for Female Neutrals in Disputes Involving Women:

If one or both parties to the dispute are women, a female Neutral having prescribed
qualifications and experienceis preferred in order to ensure fairness and comfort.

5. CONCLUDING REMARKS:
To conclude, it can be said that when appointing neutrals, the court considers factors like
expertise, experience, and impartiality to ensure a fair resolution process. They aim to select
individuals who can bring a balanced perspective and effectively facilitate the resolution of
disputes.
 3. ADR IN COMPOUNDABLE OFFENCES

1. INTRODUCTION:
Compoundable offenses are offenses that can be settled or compromised between the victim
and the accused, usually by the payment of a sum of money or other forms of restitution. For
example, some common compoundable offenses can include minor cases of theft, mischief,
criminal breach of trust, and defamation. These offenses can be resolved through a settlement
between the parties involved.

2. ADR IN COMPOUNDABLE OFFENCES

1) Facilitating Compounding of Offenses:

When the court takes cognizance of a compoundable offence specified in Section 345 of the
CrPC, 1898 or under any other law for the time being in force, they have the authority to
appoint a neutral or any other person agreed upon by the parties. This person's role is to
facilitate the compounding of the offense, making the resolution process smoother. The court
cannot refer a case for compounding of an offense without the consent of the parties involved.

2) The Role of Neutrals to Facilitate Compounding Efforts Efficiently:

The neutral appointed shall try to facilitate compounding of the offence within 30 days.

3) Court's Decision Based on Compounded Offence Report and Neutral's

Testimony:
When an offense is compounded, the Neutral, shall prepare a report. This report shall be
signed and witnessed by the Neutral and the individuals authorized to compound the offense
under the law. After reviewing the report, the Court shall issue an order for the discharge of
the accused. This means that the accused shall no longer be held responsible for the offence.

4) Continuation of Trial:
If the Neutral's efforts to compound the offense don't succeed, the Court shall continue the
trial from where it was referred to the Neutral.

5) Voluntary Compounding of Offences and Discharge:

If the parties have themselves resorted to ADR and the offence is compounded under Section
345 of the CrPC, 1898 or any other applicable law, they may make application to Court
interims thereof. If the Court is satisfied that the offence has been voluntarily compounded
and the agreement document is properly witnessed and signed, the Court shall order the
discharge of the accused.

6) Section 345 and the Application of Relevant Laws in this Chapter:

Section 345 of the Code of Criminal Procedure, 1898 (Act V of 1898), or any other relevant
law that allows for the compounding of the offence, applies to the proceedings in this chapter.
It governs the process and requirements for compounding offences.
3. CONCLUDING REMARKS:
To conclude, it can be said that, if the court agrees, a neutral person can help parties settle a
compoundable offense. If successful, the accused is discharged. If not, the trial continues.
Parties can also resort to ADR. This allows for a potential resolution without a lengthy trial.
1. INTRODUCTION:
Over time, the Panchayat/Jirga institution has evolved and adapted. Even today, these
systems continue to be relevant and play a role in dispute resolution, with legal recognition
and modern adaptations.

The Alternative Dispute Resolution Act, 2017 is a legislation that provides a framework
for resolving disputes outside of traditional court proceedings. It encourages parties to seek
alternative methods such as mediation, arbitration, or negotiation to reach a resolution. This
act aims to promote efficiency, cost-effectiveness, and flexibility in dispute resolution,
offering parties more control over the process.

Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes
without without courtroom litigation. Common Alternative dispute resolution processes
include mediation, arbitration, conciliation, negotiation and neutral evaluation. These
processes are generally confidential, less formal, and less stressful than traditional court
proceedings. Alternative dispute resolution often saves money and speeds settlement.

2. DEFINITION OF ALTERNATIVE DISPUTE RESOLUTION:

Alternative Dispute Resolution (ADR) means a process in which parties resort to resolving a
dispute other than by adjudication by Courts and includes, but is not limited to, arbitration,
mediation, conciliation and neutral evaluatlon.

3. BENEFITS OF ALTERNATIVE DISPUTE RESOLUTION:

ADR may offer a number of potential benefits compared to lawsuits:
 Save a lot of money, including fees for lawyers and experts.
 Save a lot of time by allowing resolution in weeks or months, compared to court, which
can take years.
 Less formal and more flexible than court proceedings.
 Less need for an attorney in some simple disputes.
 Preserve relationships by helping people co-operate instead of creating one winner and
one loser.
 Keep private disputes private, only people who are invited can attend an ADR session,
unlike court, where the proceedings are usually on the public record.

4. ADR PROCEEDINGS:
Alternative dispute resolution (ADR) is designed to settle disputes outside of the courtroom
with the help of an impartial third party. In ADR proceedings, parties can participate in
person or through authorized representatives or attorneys. The Neutral appointed by the Court
or ADR Centre should resolve the matter within 30 days, with a possible 15-day extension. If
referred to an arbitrator, the process should be completed within 60 days, with a possible 30-
day extension. The Court can give directions binding on parties and the Neutral. Failure to
attend, request adjournment, or delay proceedings may result in cost liability.

5. SETTLEMENT AND AWARD:

In ADR, settlement is when parties reach an agreement to resolve their dispute outside of
court. An award, on the other hand, is a decision made by an arbitrator that resolves the
dispute and is binding on the parties involved. If parties reach a settlement through mediation
or conciliation, the neutral party records it and submits it to the court. The court then
pronounces judgment and passes a decree based on the settlement. The same goes for an
arbitrator's award. If the ADR process was initiated through an ADR center, they can also
submit the settlement or award to the court. It's all about making sure the agreement is legally
recognized.

6. ADR IN COMPOUNDABLE OFFENCES:

Compoundable offenses are offenses that can be settled or compromised between the victim
and the accused, usually by the payment of a sum of money or other forms of restitution. If
the court agrees, a neutral person can help parties settle a compoundable offense. If
successful, the accused is discharged. If not, the trial continues. Parties can also resort to
ADR. This allows for a potential resolution without a lengthy trial.

THE ARBITRATION ACT, 1940

1. Introduction:
The Arbitration Act, 1940 is a legislation that provides a legal framework for resolving
disputes through arbitration, which is an alternative to traditional court proceedings. The act
sets out the rules and procedures for conducting arbitration, including the appointment of
arbitrators, the conduct of hearings, and the enforcement of arbitral awards. It aims to
promote fair and efficient resolution of disputes while respecting the autonomy of the parties
involved.

2. Arbitration:
Arbitration is a method of resolving disputes outside of traditional court proceedings. It
involves the parties submitting their disagreement to one or more neutral third parties, known
as arbitrators. The arbitrators review the evidence, listen to arguments from both sides, and
then make a binding decision called an "award." The arbitration process is generally faster,
more flexible, and less formal than litigation, offering a private and efficient way to resolve
conflicts.

3. Essentials of Arbitration Agreement:

In order for an arbitration agreement to be valid and enforceable, it must fulfill certain
essentials. These essentials include:

1) Written Agreement:
The arbitration agreement must be in writing, whether it's in the form of a separate agreement
or a clause within a larger contract.

2) Intent to Arbitrate:
The agreement must clearly express the intention of the parties to resolve their disputes
through arbitration rather than through traditional court proceedings.

3) Scope of Disputes:
The agreement should specify the types of disputes that are subject to arbitration. It can be
broad, covering all disputes arising out of the contract, or it can be limited to specific issues.
4) Mutual Consent:
Both parties must voluntarily and willingly agree to the arbitration process. It should not be
imposed on either party against their will.

5) Clear and Unambiguous Language:

The terms of the agreement should be clear, unambiguous, and capable of being understood
by both parties.

4. Arbitrator and Umpire:

In the context of arbitration, the terms "arbitrator" and "umpire" are often used
interchangeably, but there can be a slight difference in their roles depending on the specific
arbitration process.

ARBITRATOR UMPIRE
An arbitrator refers to a single individual An umpire is a term used when there is a
who is appointed to hear and decide the panel of arbitrators involved in the arbitration
dispute between the parties. They have the process. In this case, the umpire acts as the
authority to make the final decision, known presiding arbitrator or the chairperson of the
as the award, based on the evidence and panel. They have additional responsibilities,
arguments presented. such as managing the proceedings, ensuring
fairness, and potentially casting a deciding
vote in case of a tie among the other
arbitrators.

5. Meaning of Award:
In arbitration, an "award" refers to the final decision or judgment made by the arbitrator or
umpire. It is binding on the parties involved and serves as the resolution of the dispute. The
award outlines the rights, obligations, and remedies granted to each party involved in the
arbitration.

6. Procedure for Arbitration:

The Arbitration Act of 1940 in Pakistan outlines the procedure for arbitration.

1) Agreement:
The parties involved agree to resolve their dispute through arbitration. This agreement is
usually outlined in a contract or a separate arbitration agreement. An arbitration agreement is
defined as "a written agreement to submit present or future differences to arbitration, whether
an arbitrator is named therein or not.

2) Appointment of Arbitrators:
The parties appoint one or more arbitrators to act as neutral decision-makers in the dispute.
The arbitrators are chosen based on their expertise and impartiality. When both parties fail to
appoint arbitrators, the Act provides a process for the court to step in and make the
appointments.

3) Preliminary Hearing:
The arbitrators hold a preliminary hearing to discuss the procedural aspects of the arbitration,
such as the timeline, documents to be exchanged, and any other relevant matters.
4) Powers of Arbitrators or Umpire:
The parties submit their statements of claim and defense, presenting their arguments and
supporting evidencee. The Act then gives arbitrators or umpires the authority to conduct the
arbitration proceedings, including making decisions on evidence, examining witnesses, and
determining the final award.

5) Deliberation and Award:

After considering the evidence and arguments, the arbitrators deliberate and make a decision
known as the "award." The award is a binding decision that resolves the dispute.

6) Enforcement:
Once the award is issued, it can be enforced by the courts. The parties are legally bound to
comply with the terms of the award.

7) Challenge and Appeal:

Parties may challenge the award in court on specific grounds however the scope for
challenging award is usually limited. The Act refers to the "court" in several instances, which
typically means the relevant civil court where the arbitration proceedings are taking place.

8) Fees and Costs of Arbitration:

The cost of the reference, including legal fees, and award shall be at the discretion of the
arbitrators.

9) Court's Power to Remove Arbitrators or Umpire:

The Act grants the court the power to remove an arbitrator or umpire under certain
circumstances. This can happen if the arbitrator fails to proceed with the reference, shows
misconduct, or fails to use reasonable dispatch.

7. Agreement Between Parties:

Under the Arbitration Act of 1940, parties can enter into agreements for arbitration in a few
different ways:

1) Arbitration Clause:
Parties can include an arbitration clause in their contract or agreement. This clause specifies
that any disputes arising from the contract will be resolved through arbitration.

2) Separate Arbitration Agreement:

Parties can also enter into a separate agreement that specifically outlines their intention to
resolve disputes through arbitration. This agreement can be independent of any underlying
contract. These agreements ensure that both parties are aware of and has given consent to the
use of arbitration as the method for resolving any future disputes.

8. The Powers and Functions of Arbitrators:

The powers and functions of arbitrators are as follows.

1) Decision-Making: Arbitrators have the power to make decisions on the issues

presented in the arbitration. They carefully consider the arguments, evidence, and
applicable laws to reach a fair and impartial resolution.
2) Evidence Examination:
Arbitrators can examine and evaluate the evidence presented by both parties. This includes
documents, witness testimonies, expert opinions, and any other relevant information.

3) Witness Examination:
Arbitrators can question and examine witnesses during the arbitration proceedings. This helps
them gather additional information and clarify any uncertainties.

4) Award Determination:
After considering all the evidence and arguments, arbitrators make a final decision known as
an "award." This award is binding on the parties involved.

5) Procedural Decisions:
Arbitrators also have the authority to make procedural decisions throughout the arbitration
process. This includes determining the timeline, admitting evidence, and managing the
overall proceedings.

6) Section 11 of Arbitration Act, 1940:

Section 11 states that the powers of the arbitrators or umpire, unless a different intention is
expressed in agreement, are as follows.
(a) They can administer oaths to the parties and witnesses who are involved in the arbitration
process.
(b) They can ask the court for their opinion on any legal questions that come up during the
case, or they can present the award as a special case for the court's opinion.
(c) They can make the award conditional or provide alternative options.
(d) If there are any mistakes or errors in the award that are just accidental slips or omissions,
they can correct them.
(e) They can also ask the parties involved in the arbitration to answer questions that they
believe are necessary for the case.

9. Responsibilities of Arbitrators:
Arbitrators also have the following responsibilities.
 Arbitrators must maintain neutrality and treat both parties fairly throughout the
arbitration process.
 Arbitrators ensure that the process is conducted smoothly and efficiently, allowing both
parties to present their arguments and evidence.
 They must keep all information related to the arbitration confidential, respecting the
privacy of the parties involved.
 When making their award, arbitrators provide a clear and reasoned explanation for their
decision.

10. PROVISIONS OF ARBITRATION ACT, 1940

1. Arbitration agreement not to be discharged by death of party: (Section 4)

Section 4 of Arbitration Act, 1940 states that, an arbitration agreement remains valid and
enforceable even in the event of the death of one of the parties involved. In such cases, the
legal representative of the deceased can continue to participate in the arbitration process.
Additionally, the authority of an arbitrator appointed by a party is not affected by the death of
that party. However, this section does not affect any other laws that may extinguish certain
rights upon the death of a person.

2. Provisions in case of Insolvency: (Section 5)

If there is a contract with an insolvent party that says any disputes should go to arbitration,
that term remains enforceable if the receiver adopts the contract. And if an insolvent person
was already part of an arbitration agreement before the insolvency proceedings, and the
matter is related to the proceedings, the other party or the receiver can ask the Court to order
arbitration. The Court will decide if arbitration is the best way to handle it. The term
"receiver" includes the Official Assignee.

3. Power of Court to appoint Arbitrator or Umpire: (Section 6)

If there is an arbitration agreement, but the parties can not agree on an arbitrator, or if the
appointed arbitrator is unable or unwilling to act, or if the parties fail to appoint an umpire,
then one party can send a written notice to the others, asking them to agree on the
appointment. If they can't reach an agreement within 15 days, the Court can step in and
appoint an arbitrator or umpire. This person will have the power to act and make decisions
just like if they were appointed by all parties.

4. Power to party to appoint new arbitrator, or, in certain cases, a sole

arbitrator: (Section 7)
If one of the appointed arbitrators neglects or refuses to act, or is incapable of acting, or dies,
the party who chose them can pick a new one. And if one party does not appoint an arbitrator
within 15 days after receiving a notice, the other party's arbitrator can act as the sole
arbitrator. The court can review and make decisions about these appointments too.

5. Provision as to appointment of three or more arbitrators: (Section 8)

If the arbitration agreement says there should be three arbitrators, here is what happens:
1) Scenario 1: Each party picks one arbitrator, and those two arbitrators choose an umpire.
The umpire acts as the third decision-maker.
2) Scenario 2: If the agreement does not explain how the three arbitrators will be appointed,
the decision made by the majority of the arbitrators will be the final one.
3) Scenario 3: If the agreement calls for more than three arbitrators, the decision made by
the majority of the arbitrators (or the umpire if they're equally divided) will be the final
decision.

6. Power to Court to remove arbitrators or umpire in certain

circumstances: (Section 9)
Here are the key points about the court's power to remove an arbitrator or umpire:
1) The court can remove an arbitrator or umpire in certain situations.
2) Reasons for removal can include a failure to promptly start or proceed with the case. L
3) Misconduct during the proceedings can also lead to removal.
4) If removed, the arbitrator or umpire won't be paid for their services.
5) When the matter is referred to the umpire, all parties involved are notified.
7. Power of Court where arbitrator is removed or his authority revoked:
(Section 10)
When an arbitrator or umpire is removed or their authority is revoked, the court can take
action.
1. If an umpire or some arbitrators have not started the case, the court can appoint new people
to take their place.
2. If an arbitrator's authority is revoked or they are removed by the court, the court can do
two things:
a) Appoint a new person to be the sole arbitrator instead.
b) Decide that the arbitration agreement does not apply to the issue/matter anymore.
3. The new arbitrator or umpire appointed by the court has the same power as if they were
chosen according to the arbitration agreement.

8. Application to file in Court arbitration agreement: (Section 18)

(1) If parties have an arbitration agreement before filing a lawsuit regarding the subject
matter, they can choose to apply to a court to have the agreement filed.
(2) The application needs to be in writing and treated as a suit, with the parties involved as
plaintiffs and defendants.
(3) The court will notify all parties, except the applicants, to show cause within a specified
time why the agreement should not be filed.
(4) If no sufficient cause is shown, the court will order the agreement to be filed and refer the
matter to the appointed arbitrator or, if there is no agreement, to an arbitrator appointed by the
court.
(5) The arbitration will then proceed according to the other provisions of the applicable Act.
This process allows parties to have their arbitration agreement recognized and the dispute
resolved through arbitration. It's a way to enforce the agreement and proceed with the
arbitration process.

9. Parties to suit may apply for Order of Reference: (Section 19)

Where in any suit all the parties interested agree that any matter in difference between them
in the suit shall be referred to arbitration, they may at any time before judgment is
pronounced apply in writing to the Court for an order of reference.

10. Appointment of arbitrator: (Section 20)

The arbitrator shall be appointed in such manner as may be agreed upon between the parties.
This allows them to have control over the selection process and ensures that both parties are
comfortable with the choice of arbitrator.

11. Power of arbitrators to make an interim award: (Section 25)

Unless otherwise specified in the arbitration agreement, the arbitrators or umpire have the
power to make an interim award if they deem it appropriate. So, if they believe that it's
necessary to make a temporary decision or ruling during the arbitration process, they can do
so. It is important to note that any references to an award in the Act also include references to
interim awards made under this provision.

12. Power to Court only to enlarge time for making award: (Section 26)
The court has the power to extend the time for making an award. Whether the original time
for making the award has already expired or not, and regardless of whether the award has
been made or not, the court can choose to enlarge the time for making the award if it deems it
appropriate. This ensures that parties have sufficient time to present their case and reach a fair
resolution.
Additionally, any provision in an arbitration agreement that allows the arbitrators or umpire
to extend the time for making the award without the consent of all parties is considered void
and has no effect.

Interim Award:
This interim award acts as a temporary ruling to maintain the status quo until a final decision
is made. Let's say two parties are involved in a dispute over a construction project. The
arbitrators, during the arbitration proceedings, may make an interim award that requires one
party to temporarily stop construction until further evidence is presented or a specific issue is
resolved.

13. Grounds for setting aside award: (Section 28)

An award shall not be set aside on one or more of the following grounds, namely:
(a) The arbitrator or umpire has misconducted themselves or the proceedings.
(b) The award is made after the court issues an order superseding the arbitration or when the
arbitration proceedings become invalid under Section 35.
(c) The award has been improperly obtained or is otherwise invalid. These grounds help
ensure fairness and the integrity of the arbitration process.

14. Power to stay legal proceedings where there is an arbitration agreement:

(Section 32)
If any party in an arbitration agreement starts legal proceedings instead of referring the matter
to arbitration, the other party can ask the court to stop the proceedings. This request can be
made anytime before filing a written statement or taking any other steps in the proceedings.
The court can grant the request if they find no valid reason not to refer the matter to
arbitration and if the requesting party was ready for arbitration from the beginning. This helps
ensure that arbitration agreements are honored.

15. Disputes as to arbitrator’s remuneration or costs: (Section 36)

1. If an arbitrator or umpire refuses to deliver their award without receiving the fees they
demanded, the court can intervene.
2. The court can order the arbitrator or umpire to deliver the award to the applicant if the
applicant pays the demanded fees into the court.
3. The court will then conduct an inquiry, if necessary, and determine a reasonable amount to
be paid to the arbitrator or umpire as fees.
4. The remaining balance of the money paid into the court will be refunded to the applicant.
5. This applies unless the fees have already been fixed by a written agreement between the
parties.
6. Any party to the reference can make an application under this provision, and the arbitrator
or umpire has the right to be heard during the application.
7. If the award does not sufficiently address the costs of the arbitration, the court has the
power to make appropriate orders regarding the costs.

16. Procedure and powers of Court: (Section 39)

According to the Arbitration Act, the court follows certain procedures and possesses specific
powers.
a) The court applies the provisions of the Code of Civil Procedure, 1908, to all proceedings
and appeals under the Act.
b) The court has the authority to make orders concerning the matters listed in the Second
Schedule of the Act in relation to arbitration proceedings. These powers are similar to the
powers the court has in any other proceedings.
However, it's important to note that the powers of the court do not undermine any powers that
may be given to an arbitrator or umpire to make orders regarding these matters.

17. Power of Court to issue processes for appearance before arbitrator:

Section 41 of the said Act says that, the court has the power to issue processes for the
appearance of parties and witnesses before the arbitrator or umpire. These processes are
similar to the ones issued in suits tried before the court. If someone fails to attend as required,
makes a default, refuses to give evidence, or is found guilty of contempt towards the
arbitrator or umpire during the investigation, they may face disadvantages, penalties, and
punishments as determined by the court. The term "processes" includes summonses and
commissions for examining witnesses and summonses to produce documents.

18. Power to High Court to make rules: (Section 42)

High Court has the power to make rules that are consistent with the Arbitration Act. These
rules cover various aspects, such as the filing of awards and all related proceedings, special
cases and their subsequent proceedings, staying of suits or proceedings that go against an
arbitration agreement, the forms to be used for the Act's purposes, and in general, all
proceedings in court under this Act. These rules help ensure a smooth and organized process.

11. Civil Court:

When we talk about the "court" in the context of arbitration, we're referring to a Civil Court
that has the power to decide the same question that is being referred to arbitration. It is like
the court that would handle the matter if it was a regular lawsuit instead of arbitration.
However, it is important to note that for arbitration proceedings under Section 21, the term
"court" doesn't include a Small Cause Court. So, in most cases, we are talking about the
regular Civil Courts that have the authority to decide the question.

12. Alternative Dispute Resolution (ADR) Centers in Pakistan:

Pakistan does have Alternative Dispute Resolution (ADR) centers. These centers provide a
platform for parties to resolve their disputes outside of traditional court proceedings.
1) One well-known ADR center in Pakistan is the Pakistan International Mediation Centre
(PIMC), which is located in Islamabad.

2) National Centre for Dispute Resolution (NCDR), formerly known as Karachi Centre for
Dispute Resolution (KCDR) was established in February 2007 with the approval of the High
Court of Sindh. The Centre has given recommendations to the government for the
implementation of ADR in Pakistan. It has also drafted “Mediation Bill 2014” and submitted
it to the Federal Government. The Centre also recommends amendments in the High Court
Rules related to Alternative Dispute Resolution.

11. Arbitration Centers in Pakistan:

Besides the courts, Pakistan has arbitration centers where parties can choose to resolve their
disputes. These centers provide services for conducting arbitration proceedings and have
experienced arbitrators to help in the resolution of disputes.
1) The Center for International Investment and Commercial Arbitration (CIICA) is Pakistan’s
first international arbitration center that offers both domestic and international arbitration and
mediation services. Its office is in Lahore, Pakistan.
2) Musaliha International Center for Arbitration and Dispute Resolution (MICADR) is an
Alternate Dispute Resolution center that provides state-of-the-art mediation, arbitration and
negotiation services for individuals and entities. It is headquartered in Karachi, Pakistan, with
a presence in the Capital (Islamabad). MICADR has on its Panel of ADR Practitioners,
nationally and internationally accredited Mediators and Arbitrators with several years of
experience in multiple thematic areas such as contract disputes, construction, insurance
dispute, family issues, etc.

CONCILIATION COURTS ORDINANCE, 1961

1. Introduction:
This ordinance, which may be referred to as The Conciliation Courts Ordinance, 1961, was
passed in order to create Conciliation Courts and allow parties to certain disputes to be
resolved through conciliation. It extends to the whole of Pakistan. The cases that are included
and excluded from the Conciliation Courts’ authority are listed in Section 3 of this
Ordinance in accordance with the schedule. An application shall be made to the chairman of
union council for the constitution of Conciliation Court.

2. Aim of Conciliation Courts:

Conciliation Courts are established to provide an alternative dispute resolution mechanism
for resolving conflicts and disputes outside of traditional court proceedings. These courts aim
to facilitate amicable settlements between parties through the assistance of a neutral
conciliator. It is a way to promote peaceful resolution and reduce the burden on the formal
court system.

3. Conciliation:
Conciliation is a process where a neutral third party helps two or more parties resolve their
dispute by facilitating communication and finding a mutually agreeable solution.

4. Procedure adopted in Conciliation Courts:

In Conciliation Courts in Pakistan, the procedure generally involves the following steps.

1) Initiation:
The parties involved in a dispute voluntarily agree to go through the conciliation process.

2) Appointment of Conciliator:
A neutral third party, known as a conciliator, is appointed to facilitate the resolution of the
dispute.

3) Communication:
The conciliator communicates with the parties separately or together to understand their
perspectives and interests.
4) Negotiation:
The conciliator helps the parties engage in negotiations, exploring options and potential
solutions to reach a mutually agreeable resolution.

5) Agreement:
If the parties reach a settlement, an agreement is drafted, outlining the terms and conditions
of the resolution.

6) Confidentiality:
The proceedings in the Conciliation Court are confidential, ensuring privacy and encouraging
open communication.

7) Enforceability:
If the parties agree to the settlement, the agreement can be enforceable as a contract.
However, specific procedure may vary depending on the nature of the dispute and the rules of
the Conciliation Court.

5. Powers of Conciliators:
 Conciliators in conciliation courts have the power to facilitate communication between
the parties involved in a dispute.
 They help parties explore potential solutions and reach a mutually agreeable settlement.
 However, conciliators do not have the power to make legally binding decisions or award
compensation. Their role is to assist in the negotiation process and encourage parties to
find a resolution on their own terms.

6. Application of Constitution of Conciliation Court:

If a case is eligible for conciliation, any party in the dispute can apply to the Chairman of the
Union Council or the ward member. Unless the application is rejected, a Conciliation Court
will be formed. If the rejection is unfair, they can seek revision.

7. Composition of Conciliation Courts:

In Conciliation Courts, there is a Chairman and two representatives nominated by each party
involved in the dispute. The Chairman is usually the Union Council Chairman or a designated
ward member. If the Chairman can not fulfill their role, another impartial person can take
over. If a party consists of multiple individuals, the Chairman will ask them to nominate the
two representatives, and if they can not decide, the Chairman will authorize someone to make
the nominations.

8. Jurisdiction of Conciliation Courts, etc.:

Conciliation Court has jurisdiction over a case when the parties involved live in the same area
where the offence was committed or the cause of action arose. If the parties live in different
wards within the same city, municipality, or cantonment, a Conciliation Court may be set up
in the ward where the offense occurred or the cause of action arose. It is all about making
sure the court has the authority based on where the parties are located.

9. Power of Conciliation Courts to Award Compensation:

A Conciliation Court can not give imprisonment or fines, but it can order compensation the
amount of which may not exceed 500 rupees. For offences under Section 428 or Section 429
of PPC, the compensation can go up to 1,000 rupees. The court also has the power to order
payment of money or delivery of property in certain cases.

10. Finality of the Decisions of Conciliation Courts:

If a party is not satisfied with the decision of the Conciliation Court, they can apply to the
Controlling Authority or the District Judge within 30 days. The Controlling Authority or the
District Judge can set aside or modify the decision if they believe there has been a failure of
justice. They can also direct the dispute to be reconsidered by the Conciliation Court. The
decision of the Conciliation Court is final unless there is a failure of justice.

11. Enforcement of Decree:

When the Conciliation Court awards compensation or orders property delivery, it passes a
decree and enters the details in a register. If the compensation is not paid on time, it can be
recovered as arrears of land revenue. The decree can be executed in a civil court as directed
by the District Judge. And if the court decides, the compensation can be paid in installments.

12. Procedure on Failure of Conciliation:

If conciliation fails and a certificate is issued, any party to the dispute can go to court for their
remedy as if this Ordinance did not exist. They can seek their legal remedy in the appropriate
court.

13. Power of Conciliation Courts to Summon Witnesses, etc

Conciliation Courts can summon witnesses and request documents. Exemptions apply,
though. Court can refuse summons if it causes unreasonable delay or inconvenience. Court
can't require out-of-jurisdiction people to give evidence without covering their expenses.
Disobeying summons can result in a fine.

14. Contempt of Conciliation Courts:

Contempt of court includes insulting the court, causing interruptions, not producing
documents, or refusing to answer questions.

15. Procedure:
In the procedure of Conciliation Courts, the provisions of the Evidence Act, except Sections
123, 124, and 125 of the CrPC, as well as the CPC, do not apply. However, Sections 8 to 11
of the Oaths Act, 1873, do apply to all proceedings before Conciliation Courts.
The Oaths Act of 1873 applies to Conciliation Courts by providing guidelines for taking
oaths during the proceedings. These guidelines ensure that oaths are administered properly,
with the necessary solemnity and adherence to legal requirements. They help maintain the
integrity of the oath-taking process during Conciliation Court proceedings.

Concluding Remarks:
To conclude, it can be said that the Conciliation Courts Ordinance of 1961 is a law in
Pakistan that deals with resolving disputes through conciliation. Conciliation Court shall have
jurisdiction to try a case only when the parties to the dispute ordinarily reside within the
jurisdiction of the same Union Council in which the offence has been committed or the cause
of action has arisen. These courts have the power to award compensation according to the
provisions of this Ordinance. It is a way to settle matters without going to a full trial. An
appeal can be made against the decisions of the Conciliation Court but provisions of The
Limitation Act, 1908 shall apply.