ALTERNATIVE

DISPUTE RESOLUTION
COURSE CODE: LC 531
SURYA SAXENA
ASSISTANT PROFESSOR (LAW)
ICFAI UNIVERSITY, DEHRADUN
 SUGGESTED READINGS
• 1. Murthy KSR, An Introduction to ADR
Mechanism, Gogia Law Agency, Hyderabad.
• 2. Singh Avtar, Arbitration and Conciliation,
Eastern Law Book House, Lucknow.
• 3. Tripathi SC, Arbitration and Conciliation
including ADR.
• 4. Tiwari O.P., The Arbitration, and Conciliation
Act, 2nd Edition, Allahabad Law Agency.
Unit 1: Introduction to
Alternative Dispute
Resolution Mechanism
 Introduction
• Today’s world has become globalized and
commercial with the advent of technology.
• People can now contact each other and settle
business deals and disputes when they are sitting at
the opposite ends of the world.
• Most people no longer have the time to go and file
papers at the courts and then wait long periods for a
hearing.
• We are rapidly approaching a stage where litigation
is being replaced with alternative dispute resolution
(ADR), due to the inefficiencies and drawbacks of
litigation.
• India hasn’t quite reached a stage where litigation
has been completely displaced by ADR methods,
but the legal system is beginning to see the benefits
of ADR. 
 What is Alternative Dispute
Resolution?
• Alternative dispute resolution (ADR) refers to a
range of dispute settlement methods that help the
parties in the dispute to come to a settlement
without going to court, or without litigating on the
said matter.
• These methods usually involve a third party, who
helps them in settling the disputes.
• In many cases, ADR methods are used alongside the
litigation process as well through court
authorization.
 How did the concept of ADR
arise?
• As stated in the 222nd Report of the Law
Commission of India, the Constitution has
guaranteed access to justice for all, primarily
through Article 39A, which states that everyone
must have an equal opportunity of getting justice
and this must not be denied to any citizen by reason
of economic or another sort of disabilities.
• The report further states that ‘access to justice for
the common masses in India means access to the
courts of law.
• But even that has been hindered, due to factors like
poverty, illiteracy, ignorance, social and political
backwardness, etc. 
• In a developing country like India, many people still
live in poverty.
• When their rights get violated, they often do not
have the money to fight long battles in Court.
• They do not have the money to afford a lawyer.
• They do not know the legal system and procedures.
• Therefore, they often think that the court system is an
inconvenience.
• These kinds of inefficiencies are shared reasons
among many countries, which is why ADR is being
explored.
• The courts also have too many pending cases and
these cases keep going on for many years which is a
tremendous burden to the courts. 
• These reasons prompted the Indian Government to
enact Section 89 of the Code of Civil Procedure,
1908 and replace the earlier Arbitration
Act,1940 with The Arbitration and Conciliation Act
1996, in accordance with the mandates of the
United Nations Commission on International Trade
Law (UNCITRAL).
 Merits of ADR
• It is less expensive.
• It is less time-consuming.
• It is free from the technicalities that are present in
the court system. 
• The parties are free to differ in their opinion and can
discuss their opinions with each other, without any
fear of disclosure of this fact before the courts. 
• There is no feeling of enmity between the parties as
there is no winning and losing side. They also get
their grievances redressed and their relationship
remains as it was before, therefore, they can
conduct future business deals with each other.
• ADR is more suitable for multi-party disputes, as all
the parties can put forward their opinions at the same
place and in one go, rather than going to court again
and again. Also, it provides for a wider perspective of
the dispute.
• The parties often have the choice of the ADR method
to be used. They sometimes also have the choice to
select the individuals or bodies who will settle the
dispute.
• The process is also very flexible, according to what
suits the parties.
 Demerits of ADR
• ADR is not helpful where a dispute is to be decided
on the basis of a precedent.
• When there is a need for court and interim orders,
ADR would not be useful.
• ADR is less suitable when there is a need for
enforcement.
• When there is a need for live and expert evidence
and analysis in a case, then ADR would not be
useful.
• When there is an imbalance of power, between the
parties in the dispute, then ADR would not work.
• If the case is of a complex nature, then the
adjudicating body must look into minor details and
may need expert advice and suggestions. Here,
ADR would probably not work.
 Types of ADR Methods
• A. Arbitration:
• Arbitration in India is governed by The Arbitration
and Conciliation Act, 1996. It is a form of dispute
resolution where one or more parties are appointed
to adjudicate the dispute. They act as third parties.
This third party should be neutral and this party is
referred to as an ’arbitrator’ while the decision of
the arbitrator, which is essentially a determination
of merits in the case, is known as an ‘arbitration
award’.
• The arbitration process is informal and this process
allows the dispute to be resolved amicably and
efficiently as it takes less time and involves lesser
costs for the parties. Therefore, parties frequently
choose to arbitrate when disputes arise, especially in
the business world. Big corporations would rather
settle disputes quickly, rather than fighting long
cases in the courts. 
• Before the arbitration process begins, an arbitration
agreement is required to be formed. This agreement
lays down the terms and conditions on which the
arbitration process is carried out. It is determined
through this agreement how the process will be
made cheaper, and more efficient and how the rules
of evidence would be applied, etc. This agreement
should be valid as per The Indian Contract Act
1972 and the parties must have the capacity to
contract under Sections 11 and 12 of the same Act.
• Arbitral decisions are final and binding on the
parties, who have a limited scope of objecting to the
decisions.
 Types of Arbitral Proceedings
• 1. AD-HOC Arbitration:
• Under ad hoc arbitration, the parties involved in the
dispute determine the conduct of the arbitration
proceedings themselves, without going to an arbitral
institution. In case the parties are not able to settle on one
arbitrator, or one of the parties is reluctant to appoint that
particular arbitrator, then Section 11 of The Arbitration
and Conciliation Act 1996 will be invoked by the other
party. Under Section 11 of the Act, the arbitrator for that
dispute will be appointed by either the Chief Justice of the
Supreme Court or his designate or the Chief Justice of the
High Court or his designate.
• If it is a domestic arbitration, then the Chief Justice
of the High Court or his designate will appoint the
arbitrator.
• If it is International Commercial Arbitration, then
the Chief Justice of India or his designate will
appoint the arbitrator. In ad hoc arbitration, the fee
of the arbitrator is decided mutually by the parties
and the arbitrator.
• 2. Institutional Arbitration:
• In this kind of arbitration, the parties decide in the
agreement itself, that an arbitration institution will
administer the arbitration. The Indian institutions are
the International Centre for Alternative Dispute
Resolution and the Indian Council of Arbitration.
These institutions formulate the rules for arbitration
owing to their experience in observing arbitral
procedures and situations, therefore they are prepared
for all possible situations that may arise in future
arbitration cases. 
• B. Mediation
• In mediation, a third neutral party aims to assist two
or more disputants in reaching a settlement. This
third party is referred to as the mediator. The
mediator needs to properly communicate with both
parties and use proper negotiation techniques, in
order to make one party fully aware of the other
party’s perspective, through empathy and dialogue.
This process is controlled by the parties.
• One of the characteristics of this type of dispute
resolution is that the mediator is not allowed to give
an outcome of the dispute. The solution is given
mutually, and the agreements are generally non
binding. Parties are in significant control of the
mediation process and it is strictly confidential. The
parties can even go for litigation if they are not
satisfied with the mediation process. 
• It must be observed that the main aim of the
mediation process is to build relationships, and not
to make a decision. It is more of an amicable
resolution of differences with potential form future
business between the parties.
• C. Negotiation:
• A Negotiation is also a form of dispute resolution,
but there is no third party to adjudicate the matter,
therefore the parties work together to find a
mutually acceptable solution or a compromise. The
parties may choose to be represented by their
attorneys during their negotiations. Negotiation is
not statutorily recognized in India. There are no set
rules for conducting a negotiation. 
• Essentials of negotiation -
• It is a process of communication that helps to
resolve conflicts.
• It can be entered into voluntarily and its outcome is
non-binding. 
• The parties are benefitted here as they have control
over the outcome and procedure and the process is
carried out keeping their interests in mind. 
• D. Conciliation:
• In conciliation, the third party, who is called the
conciliator, talks to the parties involved separately
so that the parties can arrive at a mutually
acceptable solution through facilitating talks
between the parties. Conciliation is also governed in
India under The Arbitration and Conciliation Act,
1996. Under Section 61, conciliation is provided for
disputes arising out of legal relationships, whether
they are contractual or not. 
 Difference Between Mediation
and Conciliation
• In mediation, the mediator plays a more active role
in the process by proposing compromise solutions
after hearing all parties while in the case of
conciliation, the conciliator has to bring the parties
into such a state of mind as to facilitate the parties
to come to an acceptable compromise. 
• E. Lok Adalat:
• In a country like India where there are many
illiterate people, the concept of Lok Adalats is a
necessity. This was first introduced in 1982 in
Gujarat. This concept mainly focused on reducing
the burden of pending cases on the Courts and has
incorporated the concept keeping in mind various
factors like social justice.
• Lok Adalats are governed under The Legal Services
Authorities Act,1987. Sections
19, 20, 21 and 22 specifically deal with Lok Adalats.
They have been organised by the State Legal Aid and
Advice Boards with the aid of District Legal Aid and
Advice Committees. These have helped poor people
to avoid the inefficiencies of litigation. The aim of
The Legal Services Authorities Act was to provide
access to justice for all, whether he be poor or rich.
Since the poor masses of the society were not being
delivered on this promise, this Act was formed.
• This access has been further strengthened by
judgements of various courts, such as the Delhi
High Court, in the case of Abul Hasan and National
Legal Service Authority v. Delhi Vidyut Board &
Ors. AIR 1999 Del 88, where it gave an order for
setting up permanent Lok Adalats.
• Further, the decision given by the Lok Adalat is
binding and shall be treated akin to the order of a
civil court, thereby increasing poor people’s access
to justice. 
UNDERSTANDING DOCKET
EXPLOSION
• The Constitution of India reflects the quest and
aspiration of mankind for justice when its preamble
speaks of justice in all its forms; social, economic,
and political.
• They refrain from taking law into their own hands,
as they believe that one day or the other, they would
get justice from the Courts.
• Justice Delivery System, therefore, is under an
obligation to deliver prompt and inexpensive justice
to its consumers, without in any manner
compromising on the quality of justice or the
elements of fairness, equality, and impartiality.
• The success of the Indian judiciary on the
Constitutional front is unparallel.
• Its contribution to enlarging and enforcing human
rights is widely appreciated.
• Its handling of Public Interest Litigation has
brought its institutions closer to the oppressed and
weaker sections of society.
• Indian Courts are held in high esteem not only by
developing but by developed countries as well.
• There is widespread praise for the quality of the
judgments delivered, and the hard-work being done by
Indian Judiciary.
• The citizens of India can therefore legitimately feel
proud of this recognition.
• However, there is growing criticism, sometimes from
uninformed or ill-informed quarters about the inability of
our Courts to effectively deal with and wipe out the huge
backlog of cases.
• Many countries the world over are facing the problem of
delay in the dispensation of justice.
• It is a major problem being faced by the Indian Judicial
system.
• `Delay' in the context of justice denotes the time
consumed in the disposal of a case, in excess of the time
within which a case can be reasonably expected to be
decided by the Court.
• In an adjudicatory system, whether inquisitorial or
adversarial, an expected life span of a case is an inherent
part of the system.
• No one expects a case to be decided overnight.
• However, difficulty arises when the actual time
taken for disposal of the case far exceeds its
expected life span and that is when we say there is a
delay in the dispensation of justice.
• Scanning of the figures would show that despite
efforts being made at various levels and a
substantial increase in the output being given by the
system, the gap between the expected and actual life
span of the cases is only widening.
• The problem is much more acute in criminal cases,
as compared to civil cases.
• Many times such inordinate delay contributes to the
acquittal of guilty persons either because the
evidence is lost or because of a lapse of time, or the
witnesses do not remember all the details of the
witnesses do not come forward to give true
evidence due to threats, inducement or sympathy.
• Whatever may be the reason, it is justice that
becomes a casualty.
• The inadequate judge strength is a major cause for the delay in
the disposal of cases. It is not merely the raising of the strength
of the judges in the subordinate courts and High Courts which is
the need of the day –a greater need is of making the right
appointments.
• An unfilled vacancy may not cause as much harm as a wrongly
filled vacancy. To some extent delay in the disposal of cases is
also "judge-made”.
• Lack of punctuality, laxity, and lack of control over the case file
and the court proceedings contributes in no small measure to
the delay in the disposal of cases.
• Unless the judges have complete control over the file, they
cannot control the proceedings resulting in a loss of time.
• The "inspection" of subordinate courts by District Judges
and the High Court judges should be real and not "routine".
• The grant of unnecessary adjournments on the mere asking
or on account of a “strike call” adds to the problem.
• The Bar and Bench have to resolve to remedy these ills.
• Immediate attention is to be given to these aspects if we
wish to preserve people's faith in the Rule of Law and the
effectiveness of the justice delivery system.
• Court must remember that no party to trial has a vested right
in slow motion justice.
• They should see to it that by slow tact justice is not
made sterile.
• Yet another cause for delay in the disposal of cases
is “procedural delays”.
• The Code of Civil Procedure and the Code of
Criminal Procedure have been amended to cut short
avoidable delays.
 Legislative Efforts in India
towards Speedy Justice
• The legislative sensitivity towards providing a
speedy and efficacious justice in India is mainly
reflected in two enactments.
• The first one is the Arbitration and Conciliation Act,
1996 and the second one is the incorporation of
section 89 in the traditional Civil Procedure Code
(CPC).
• The adoption of the liberalized economic policy by
India in 1991 has paved way for integration of
Indian economy with global economy.
• This resulted in the enactment of the Arbitration and
Conciliation Act, 1996 (new Act) by the legislature as
India had to comply with well-accepted International
norms.
• It superseded the obsolete and cumbersome Arbitration
Act, 1940.
• One of the most commendable objects of the new Act is to
minimize the role of the courts in the arbitration process.
• The Arbitration and Conciliation Act, 1996 laid down the
minimum standards, which are required for an effective
ADRM.
• Section 89(1) of CPC deals with 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.
• While upholding the validity of the CPC amendments in
Salem Advocate Bar Association v. U.O.I, the Supreme Court
had directed the constitution of an expert committee to
formulate the manner in which section 89 and other provisions
introduced in CPC have to be brought into operation.
• The Court also directed to devise a model case
management formula as well as rules and
regulations, which should be followed while taking
recourse to alternative dispute redressal referred to
in Section 89 of CPC.
• All these efforts are aimed at securing the valuable
right to speedy trial to the litigants.
 Emerging Trends in Dispute
Resolution
• With the maturing of the economy and our society
and the speed of modernization in all spheres
contractual obligations have expanded accordingly.
• Dispute resolution mechanisms have to evolve over
time to take into account these changes.
• It has been a process of gradual evolution in all
aspects covering the mode of dispute resolution, the
laws affecting it and the nature of cases.
• One of the strengths of democracy is that it can take
a fresh look at itself in order to keep pace with
changing times.
• The Indian legal system has always been able to
adapt to the changing society.
• The law has changed because of globalization,
development of technology and the evolving
society.
 Mode of Dispute Resolution
(Institutional Structure, New forums -
New tools)
• The traditional method of practice i.e. court
proceedings has seen a gradual change. Some
changes have been made even to ease the pressure
on courts (backlog of cases) by the setting up of
new forums (specialized courts and tribunals).
Under this head, we will look at some of the
changes that have taken place in the mode of
dispute resolution like litigation (commercial courts
act, class action), arbitration (amendments to
arbitration act), and new tools like mandatory pre-
suit mediation and online dispute resolution.
 Laws affecting Dispute Resolution
(Legal Framework, Lack of
Regulation, and Emerging Laws)
• The government has been concerned with the issues of
the economy and rapid development of technology
including the failure of proper regulation. The
government has taken steps keeping in mind the new
challenges that are taking place in line with the nature of
disputes. Under this head we will discuss some new
changes in laws like the new economic offenders’ act,
new areas of disputes under the criminal laws relating to
online space (fraud), the space bill, the privacy bill,
insolvency laws, social legislation like surrogacy, and
issues of liability surrounding new areas of technology
(drones and driverless cars) and climate change.
Nature of Cases (Some Pointers
to Future Trends)
• The Supreme Court does not work in isolation. As
the country has developed certain issues have been
thrown up from time to time. The courts have
responded to the issues each time. We will see some
of the highlights of this journey and show how the
court is responding to the new challenges today and
some future trends that the court may be faced with
as the economy develops rapidly.
 Trend 1
• We will deal with the first trend which is the mode
of dispute resolution.
• This aspect has seen a gradual change.
• The traditional method of dispute resolution like
litigation and alternative dispute resolution
mechanism have remained the same, however the
government has introduced urgent reforms in these
areas to ensure speedy and new ways of resolving
disputes.
Trend 2
 Trend 3
• The Supreme Court has evolved over time both in
terms of administrative aspects and jurisprudence.
• On the administrative side the court is still
struggling with the appointment of judges through a
collegium system which is an independent process
with no interference from the executive.
• However, the appointments through this system
have recently been criticized by many because of
the lack of transparency and arbitrariness in
appointments.
• The government had a few years back proposed a
National Judicial Appointments Commission
(NJAC) for appointment of judges through a
process which was struck down by a five judges
bench of the Supreme Court as being
unconstitutional and impinging on the independence
of the judiciary.
• On the jurisprudence side, the court has been
concerned with the issues of the economy and the
failure of proper regulation and policy making.
• The court has recently dealt with issues of corruption
that are rampant, social issues concerning women’s
rights, child rights, and human rights and has also
struck down laws made by parliament which are
arbitrary.
• On the technology side the court struck down a section
of the IT act that provided for arrest for posting
offensive content on the internet.
• The court has struck down legislations that are
against the basic structure of the Constitution by
upholding the rule of law, exercising its power to
judicial review, and protecting the right of the
independence of the judiciary.
• Though the judiciary has been at the forefront of
criticism by the media and civil society it has still
been active and has passed decisions and has
stepped up when the executive has failed.
 Unit 2: ADR
Mechanisms in India
 NEED FOR ALTERNATIVE DISPUTE
RESOLUTION MECHANISM
• It is a well known fact that the present Judicial
System is extremely expensive and delaying.
• The parties to a dispute have to wait for Justice for
years.
• This lengthy and expensive process of litigation has
reduced the faith of common people in the Judicial
System being followed by the Courts.
• These weaknesses of Judicial System has given
birth to alternative remedies for the disposition of
disputes.
• Alternative remedies provide cheap and speedy
Justice and that is the reason that ADR mechanism
is being preferred by the disputing parties for the
resolution of their disputes.
 ALTERNATIVE DISPUTE
RESOLUTION (ADR)
• Arbitration was very popular and prevalent in
ancient India, too and ‘Awards’ were the decisions
of Panchayats, which were binding in nature.
• ADR refers to the methods of resolving a dispute,
which are alternatives for litigation in Courts.
• ADR processes are decision making processes that
do not involve litigation or violence.
• In India, an alternative system is available to the
disputing parties including Arbitration, Conciliation,
Mediation, Negotiation etc.
• The approach of judges, lawyers and parties all over
the world is changing in favour of adoption of ADR
instead of Court litigation.
• Arbitral institutions provide ADR services for
quicker, less costly and consensual resolution of
civil disputes outside the crowded court system.
• ADR promotes communication between the parties
and enables them to solve their actual concerns
behind the disputes.
• Many disputes like consumer complaints, family
disputes, construction disputes, and business
disputes can be effectively resolved through ADR.
• It can be used in almost every kind of dispute which
can be filed in a court as a civil dispute.
• When a civil suit is filed in a court of law, a formal
process takes place, which is operated by advocates
and managed by the court and the parties are then
left to wait for the orders of the Court.
• The outcome of the case is uncertain.
• After the decision of the case there can be an appeal
or other proceedings which may further delay the
implementation of the decision of the case.
 VARIOUS TECHNIQUES OF ADR, THEIR
PROCESSES AND THEIR ADVANTAGES TO
THE PEOPLE
• Following are the main techniques of the Alternatives Dispute
Resolution (ADR) Mechanism.
• A. Arbitration
• B. Conciliation
• C. Mediation
• D. Pre-Trial Conciliation/Mediation
• E. Negotiation/Discussion
• F. Lok Adalat
• G. Med Arbitration
• H. Medola.
• I. Mini-Trial
 Arbitration
• Where two or more persons agree that a dispute or
potential dispute between them shall be decided in a
legally binding way by one or more impartial
persons in a judicial manner, that is, after recording
evidence, the agreement is called an Arbitration
Agreement.
• When, after a dispute has arisen, it is put before
such person(s), the procedure is called as
‘Arbitration’, and the decision made is called
“award”.
• The person conducting the Arbitration proceeding is called
an Arbitrator.
• The Arbitrator is appointed by the parties to the dispute and
in case of any dispute about the appointment of the
Arbitrator, the Court may be asked to appoint an Arbitrator.
• Where there is more than one Arbitrator the leading
Arbitrator is called an Umpire, who is responsible for
conducting the proceedings.
• The number of arbitrators can only be in odd number.
• The decision in such cases is decided by the majority of
arbitrators.
• Arbitration is a method whereby parties can resolve
their disputes privately.
• In this mechanism parties can refer their case to an
Arbitral Tribunal where arbitration proceedings are
conducted.
• Arbitration is preferred over traditional litigation
because Arbitration is generally less expensive than
litigation.
• It provides for faster resolution of disputes through
flexible time schedules and simpler rules.
• A Court is burdened with a number of cases taken up
for hearing every day.
• An arbitrator conducts only the proceedings referred
to him by the parties.
• Arbitration offers advantages that cannot be provided
by litigation in courts.
• In many cases, a big advantage is that the Arbitrator
or Arbitral Tribunal is an expert in the field of the
dispute so the proceedings can be conducted without
the intervention of lawyers or any other representative
in an expeditious manner.
• Disputes in trade, rent of properties, partition of
properties, partition of partnership firms and various
consumer disputes can be resolved this way.
• The ‘Award’ of the Arbitrator is binding on the
parties and may be enforced by the Courts.
• There is no appeal against the Award. (Challenge is
allowed only on specific grounds as mentioned
under S. 34 of the Act)
• Virtually all disputes can be resolved by Arbitration unless
prohibited by law.
• The following cases cannot be decided by arbitration:-
• a) Matters involving criminal questions, or questions of
public laws;
• b) Matrimonial matters, like divorce, maintenance or
custody of the child;
• c) Insolvency matters, like declaring a person as insolvent;
• d) Dissolution of an incorporated Company; and
• e) Disputes relating to age.
 Conciliation
• ‘Conciliation’ is a process in which a third party assists
the parties to resolve their dispute by agreement.
• The person assisting the parties is called Conciliator.
• The Conciliator is appointed by the consent of both
parties to the dispute.
• A Civil Court may also refer both parties to the dispute
to a Conciliator.
• A Conciliator may do so by expressing an opinion to
the parties about the merits of the dispute to help the
parties to reach a settlement.
• Conciliation is a compromise settlement between
the parties with the assistance of a Conciliator.
• The Conciliator does not take any decision on the
dispute before him.
• No evidence is recorded by the Conciliator nor are
any arguments heard.
• Both the parties may discuss their respective points
of view and with the help of the Conciliator resolve
their differences.
• The proceedings before the Conciliator are
confidential and do not have any bearing on the
proceedings before the Court or before the
Arbitrator regarding the dispute.
• Conciliation is a voluntary and non binding process
in comparison to Arbitration and Litigation in
courts.
• Any party may terminate the conciliation
proceedings at any time without assigning any
reason.
• The other important difference is that the parties
control the process and outcome of the dispute.
• In the case Arbitration and litigation in Courts the
parties have no role in the decision of the case by
the Court or in the making of the Award by the
Arbitrator.
• The Conciliator solemnly urges the parties for an
amicable reconciliation.
 Mediation
• ‘Mediation’ is a process for resolving the dispute
with the aid of an independent third person that
assists the parties in the dispute to reach a
negotiated resolution.
• ‘Mediation’ is the acceptable intervention into a
dispute of a third party that has no authority to make
a decision.
• The person conducting the mediation process is
called a Mediator.
• The mediation process, like the Conciliation process
is voluntary and is one more alternate way of
resolving a dispute.
• The Mediation proceedings are confidential,
whether or not it results in the settlement and
resolution of the dispute.
• A Mediator assists the parties to reach an agreement
for resolving the dispute.
• He/She does not express his/her opinion on the
merits of the dispute.
• On the other hand a Conciliator may express an
opinion about the merits of the dispute to the
parties.
• In both processes, a third party is appointed to assist
the parties to reach a settlement of their dispute.
• His/her function is only to try to break any deadlock
and encourage the parties to reach an amicable
settlement.
• A Mediator does not determine a dispute between
parties.
 Pre-Trial Mediation
• ‘Pre – Trial Mediation’ process is a provision which
has been introduced in Section 89 of The Code of
Civil Procedure 1908 by virtue of Amendment Act
2002.
• It was introduced for pre-trial alternatives for
settling the disputes.
• Pretrial mediation is a settlement of disputes by
efforts of the Courts before initiation of proceedings
before it.
• The Code of Civil Procedure 1908 is an enactment
that governs the procedure to be adopted in hearing
and disposing of civil suits.
• Section 89 of The Code of Civil Procedure 1908
takes a special role, especially in matters related to
family members as its main objective is to resolve
the family dispute without getting into the bitterness
of litigation.
 Negotiation
• Negotiation’ is another form of ADR for resolving
disputes.
• The parties agree upon a course of action and
bargain for advantage. Sometimes they try to adopt
a creative option that serves their mutual interests.
• And because of its mutual advantages, people
negotiate in almost all walks of life from home to
the Courtroom
• It is the most common form of resolving a dispute
and this process solves most disputes if negotiation
fails, it is necessary to seek the assistance of a
neutral third party to reach a solution.
• Negotiation bargaining is a process in which both
parties cooperate and seek a solution that is
beneficial to both sides.
• If and when negotiation succeeds, the parties sign a
settlement agreement incorporating the terms and
conditions of the agreement.
• Our legal procedures also provide for settling
criminal cases.
• However, the Court allows for settlement in
criminal cases which are mostly trivial in nature.
• These cases are governed under section 320 of the
Code of Criminal Procedure, 1973 and the cases
settled under this provision are termed as
compounded.
• The code specifies a category of cases which can be
compounded.
• Code of Criminal Procedure, 1973 governs the procedure
to be adopted in criminal cases.
• Yet another provision available is Plea Bargaining under
section 265 A of the Code of Criminal Procedure, 1973.
• Under this provision if the accused is willing to plead
guilty for the offense alleged, and expresses his/her
willingness to compromise the case with the victim then
he/she can be allowed to do the same but only with the
consent of the Court.
• All these provisions have been provided for to ease the
workload of the Courts and speedy disposal of cases.
 Lok Adalats
• Lok Adalat’ is yet another form of ADR created as
per the requirements of people in particular areas.
• Camps of Lok Adalat were initially started at
Gujarat in 1982 and now they have been extended
to all over India.
• The main purpose of establishment of Lok Adalats
is to diminish the heavy burden of pendency of
cases in the Courts which were of petty nature.
• The seekers of justice are in millions and it is
becoming rather a heavy burden on the courts to
dispose off such matters keeping in view the ever
increasing litigation.
• Lok Adalats are organized with financial assistance
from the Government and monitored by the Judiciary.
• Lok Adalats have set conciliation process in motion
in India. Lok Adalats have assumed statutory
recognition under the Legal Services Authority Act,
1987.
• The Section 19 of Legal Services Authorities
provides for organization of Lok Adalats.
• Furthermore, it has the jurisdiction to determine and
arrive at a compromise or settlement between the
parties to a dispute.
• Every award of the Lok Adalat shall be deemed to
be a decree of a civil court, or as the case may be,
an order of any other civil court.
• Where a compromise is or settlement is arrived at, by Lok
Adalat, the court fee paid in such cases shall be refunded.
• Similar is the condition in cases settled in the mediation
cell referred through courts.
• Lok Adalats is the most popular of Alternative Dispute
Resolution (ADR) Technique.
• Lok Adalats are providing less expensive and speedy
Justice.
• Lok Adalats have assumed statutory recognition under the
Legal Services Authority Act, 1987.
 Med Arbitration
• Another Alternative Dispute Resolution Technique
is Med Arbitration.
• When a dispute is not resolved by ‘Conciliation’,
then a third person is authorized by the parties to the
dispute for resolving the dispute and the decision of
the third person is binding on both the parties.
• Med Arbitration is a method which is not governed
by Arbitration Act and there is no formality.
• The dispute is referred in an unofficial way and the
decision of the authorized third person is binding.
• Mediation-Arbitration is a mode of dispute resolution
in which mediation and arbitration are combined and is
thus also known as ‘med-arb’ method of alternative
conflict settlement.
• It is a two-stage dispute resolution method in which the
dispute is initially tried through mediation, and if
mediation fails, the matter is then referred to
arbitration.
• When the mediation fails, the mediator is automatically
converted into an arbitrator and initiates the arbitration
proceedings.
• On the one hand, where the mediation proceedings
are not binding upon the parties unless they both
agree to it, the arbitration proceedings are binding
upon the parties and cannot be discarded at the
instance of one party if they had consented to it in
the past.
• It is a unique mode of dispute resolution as it allows
the parties to refer to two ADR methods.
• Mediation allows the parties to present their case
and understand the opposite party’s statements.
• Once mediation is concluded, there is no need to
start arbitration afresh but convert the mediation
into arbitration.
• This saves time and expense for parties and also the
adjudicator is already familiar with the issues of the
case and can speedily dispose of the matter by
making an award.
 Medola

• ‘Medola’ is another technique of Alternative

Dispute (ADR) Mechanism.
• When it becomes impossible for the parties to reach
an agreement, the third party (either the mediator or
arbitrator) uses this method in which the person
negotiating replaces the arbitrator and acts without
bias.
• Such a person tries to reach at medium way during
discussion and attempts for the ‘Agreement’ of the
disputing parties over it.
• This is binding on the disputing parties.
• To put it simply, MEDOLA is –
A procedure in which if the parties fail to reach an
agreement through mediation, a neutral person, who
may be the original mediator or an arbitrator, will
select between the final negotiated offers of parties
such selection being binding on the parties.
 Mini Trial
• ‘Mini–Trial’ is also an important alternative dispute
resolution (ADR) technique.
• This is different from an official trial of a suit.
• The disputing parties elect an independent person
known as an ‘advisor’.
• Parties then present their contention before him/her,
lay their arguments, and produce evidence in their
favour.
• The elected independent person after hearing both the
parties, produces a ‘Conclusion’.
• The disputing parties believe that such a person is
impartial, honest, and independent and he/she gives
his/her opinion after hearing both the parties, both
the disputing parties, therefore, agree on that
‘Conclusion’.
 UNIT – 3
INTERNATIONAL
COMMERCIAL
ARBITRATION
 Introduction
• An increase in international trade and investment is
accompanied by growth in cross-border commercial
disputes.
• International arbitration has emerged as the preferred
option for efficiently resolving such cross-border
commercial disputes and preserving business
relationships.
• With open-ended economic policies acting as a
catalyst, there has been an influx of foreign
investments and an increase in cross-border
transactions involving Indian parties.
• Consequently, international commercial disputes
involving Indian parties are also steadily rising.
• This has drawn the tremendous focus of the
international community on India’s international
arbitration regime.
• The Indian legislature and the executive have also
taken measures to bolster the ‘ease of doing
business in India’ and to clearly reflect a pro-
arbitration policy.
• The Arbitration and Conciliation (Amendment) Act,
2015 (“2015 Amendment Act”) came into effect
from October 23, 2015.
• The 2015 Amendment Act was well received and
significantly improved the efficiency of arbitration
in India.
• Subsequently, a High-Level Committee to review
the Institutionalizing of Arbitration Mechanism in
India was set up under the chairmanship of retired
Justice B.N. Srikrishna (“Committee”).
• After considering the Committee’s
recommendations (“Committee Report”), the
Arbitration and Conciliation (Amendment) Act,
2019 was enacted on August 9, 2019 (“2019
Amendment Act”).
• On August 30, 2019, the Central Government notified Sections 1,
4–9, 11–13, and 15 of the 2019 Amendment Act.
• The 2019 Amendment Act was passed with a view to making India
a hub of institutional arbitration for both domestic and
international arbitrations.
• The ever-evolving arbitration regime in India witnessed its latest
amendments in the year 2020.
• On November 4, 2020, the Arbitration and Conciliation
(Amendment) Ordinance, 2020 (“2020 Ordinance”) was
promulgated to further amend the Arbitration and Conciliation
Act, 1996 (“Act”).
• Subsequently, the 2020 ordinance took shape as the Arbitration
and Conciliation (Amendment) Act, 2021 (“2021 Amendment
Act”).
Definitions: ‘Court’ and ‘International
Commercial Arbitration
• Section 2(1)(e): ‘Court’
• 2. Definitions.—(1) In this Part, unless the context otherwise
requires, -
• (e) “Court” means:
• (i) in the case of arbitration other than international
commercial arbitration, the principal Civil Court of original
jurisdiction in a district, and includes the High Court in the
exercise of its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the subject-matter
of the arbitration if the same had been the subject-matter of a
suit, but does not include any Civil Court of a grade inferior to
such principal Civil Court, or any Court of Small Causes;
• (ii) in the case of international commercial
arbitration, the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had
been the subject-matter of a suit, and in other cases,
a High Court having jurisdiction to hear appeals
from decrees of courts subordinate to that High
Court;
• After the amendment brought about by the 2015 Act,
the definition of the term ‘Court’ as enshrined u/s
2(1) (e) is clearly bifurcated into two parts both of
which define the term ‘court’ respectively in cases
where there is a domestic arbitration and where there
is international commercial arbitration. Sub-clause (i)
of Section 2(1)(e) stipulates that in cases where there
is a domestic arbitration, ‘Court’ shall be construed to
mean the Principal Civil Court of Original
jurisdiction including in specific cases the High
Court in the exercise of its original civil jurisdiction.
• On the hand sub-clause (ii) stipulates that where there is
International Commercial Arbitration the appropriate
‘court’ shall be the High Court irrespective of such High
Court possessing original jurisdiction over civil matters.
• The direct implication of such an amendment is that in all
such disputes arising after 23rd October 2015 taking
shape of an international commercial arbitration none of
the parties would have to approach the district courts first.
• The High Courts having requisite territorial jurisdiction to
hear civil matters will be directly accessible for all such
parties under such disputes.
• Such an amendment to the definition of the term
‘court’ has been welcomed and much appreciated by
the international stakeholders as it not only ensures
that parties to such international commercial
arbitrations can present their disputes in front of
judges having a sound commercial understanding of
disputes which transcend the national boundaries
but also provides them with access to a forum with
vast powers which guarantees delivery of justice
based on the complete application of mind and
sound principles.
• Section 2(1)(f): ‘International Commercial Arbitration –
• Whenever there is a dispute that arises out of a legal
relationship that is commercial in nature, it is termed as
‘international commercial arbitration’ in terms of the
definition of the same u/s 2(1)(f) of the 2015 Act.
• The other essentials stipulated by Section 2(1)(f) is that
such a dispute must be between parties where at least one
of them is a resident/national/body corporate residing or
incorporated in a foreign nation; association or body of
individuals having central control and management in a
country outside India.
• It has to be kept in mind that while construing the
meaning of the term ‘commercial’ the same has to
be given the widest meaning possible considering
the multifarious operations that are integral to the
contemporary practices in the sphere of
International Trade. (R.M. Investments & Trading
Co. Pvt. Ltd. v. Boeing Co., AIR 1994 SC 1136.)
• Upon careful perusal of Section 2(1)(f) of the 2015
Act, it can be observed that the words “a company
or” have been deleted from sub clause (iii) thereby
restricting the effective applicability of the
provision to only those parties which comprise of an
association or body of individuals having central
control and management in a country outside India.
• This amendment has been a conscious effort made
by the legislature to clarify that the sole test to
determine the applicability of this section is to
consider the place of incorporation of such a
company.
• If the place of incorporation is in India then there
arises no need to further go into the facts of the
location of such a company’s central control and
management.
• The amendment not only brings more clarity to the
prevailing law but also bolsters the stand taken by
the Supreme Court in TDM Infrastructure.
• The amendment also strengthens the stand of the
legislature that strives to prevent any kind of
multiplicity of litigation and any attempted
measures amounting to forum-shopping.
 UNCITRAL Model Law on International
Commercial Arbitration
CHAPTER I. GENERAL PROVISIONS
Article 1. Scope of application
(1) This Law applies to international commercial
arbitration, subject to any agreement in force between
this State and any other State or States.
(2) (2) The provisions of this Law, except articles 8,
9, 17H, 17I, 17J, 35, and 36, apply only if the place of
arbitration is in the territory of this State.
• (3) An arbitration is international if:
• (a) the parties to an arbitration agreement have, at the
time of the conclusion of that agreement, their places of
business in different States; or
• (b) one of the following places is situated outside the
State in which the parties have their places of business:
(i)the place of arbitration if determined in, or pursuant to,
the arbitration agreement;
(ii) any place where a substantial part of the obligations
of the commercial relationship is to be performed or the
place with which the subject matter of the dispute is most
closely connected; or
• (c) the parties have expressly agreed that the subject
matter of the arbitration agreement relates to more than
one country.
• (4) For the purposes of paragraph (3) of this article:
• (a) if a party has more than one place of business,
the place of business is that which has the closest
relationship to the arbitration agreement;
• (b) if a party does not have a place of business,
reference is to be made to his habitual residence.
 Article 2. Definitions and rules
of interpretation
• For the purposes of this Law:
• (a) “arbitration” means any arbitration whether or
not administered by a permanent arbitral institution;
• (b) “arbitral tribunal” means a sole arbitrator or a
panel of arbitrators;
• (c) “court” means a body or organ of the judicial
system of a State;
• (d) where a provision of this Law, except article 28,
leaves the parties free to determine a certain issue,
such freedom includes the right of the parties to
authorize a third party, including an institution, to
make that determination;
• (e) where a provision of this Law refers to the fact
that the parties have agreed or that they may agree
or in any other way refers to an agreement of the
parties, such agreement includes any arbitration
rules referred to in that agreement;
 Article 3. Receipt of written
communications
• (1) Unless otherwise agreed by the parties:
• (a) any written communication is deemed to have been
received if it is delivered to the addressee personally or if it
is delivered at his place of business, habitual residence, or
mailing address; if none of these can be found after making
a reasonable inquiry, written communication is deemed to
have been received if it is sent to the addressee’s last-known
place of business, habitual residence or mailing address by
registered letter or any other means which provides a record
of the attempt to deliver it;
• (b) the communication is deemed to have been received on
the day it is so delivered.
• (2) The provisions of this article do not apply to
communications in court proceedings.
 Article 4. Waiver of right to
object
• A party who knows that any provision of this Law
from which the parties may derogate or any
requirement under the arbitration agreement has not
been complied with and yet proceeds with the
arbitration without stating his objection to such non-
compliance without undue delay or, if a time-limit
is provided therefor, within such period of time,
shall be deemed to have waived his right to object.
 Article 5. Extent of court
intervention
• In matters governed by this Law, no court shall
intervene except where so provided in this Law.
CHAPTER II. ARBITRATION
AGREEMENT
• Article 7. Definition and form of the arbitration
agreement (As adopted by the Commission at its
thirty-ninth session, in 2006)
• (1) “Arbitration agreement” is an agreement by the
parties to submit to arbitration all or certain disputes
which have arisen or which may arise between them
in respect of a defi ned legal relationship, whether
contractual or not. An arbitration agreement may be
in the form of an arbitration clause in a contract or
in the form of a separate agreement.
• (2) The arbitration agreement shall be in writing.
• (3) An arbitration agreement is in writing if its
content is recorded in any form, whether or not the
arbitration agreement or contract has been
concluded orally, by conduct, or by other means.
• (4) The requirement that an arbitration agreement be
in writing is met by an electronic communication if
the information contained therein is accessible so as
to be useable for subsequent reference; “electronic
communication” means any communication that the
parties make by means of data messages; “data
message” means information generated, sent,
received or stored by electronic, magnetic, optical
or similar means, including, but not limited to,
electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy.
 Article 8. Arbitration agreement
and substantive claim before court
• (1) A court before which an action is brought in a
matter which is the subject of an arbitration
agreement shall, if a party so requests not later than
when submitting his first statement on the substance
of the dispute, refer the parties to arbitration unless
it finds that the agreement is null and void,
inoperative or incapable of being performed.
• (2) Where an action referred to in paragraph (1) of
this article has been brought, arbitral proceedings
may nevertheless be commenced or continued, and
an award may be made, while the issue is pending
before the court.
Article 9. Arbitration agreement
and interim measures by court
• It is not incompatible with an arbitration agreement
for a party to request, before or during arbitral
proceedings, from a court an interim measure of
protection and for a court to grant such measure
CHAPTER III. COMPOSITION
OF ARBITRAL TRIBUNAL
• Article 10. Number of arbitrators
• (1) The parties are free to determine the number of
arbitrators.
• (2) Failing such determination, the number of
arbitrators shall be three.
 Article 11. Appointment of
arbitrators
• (1) No person shall be precluded by reason of his
nationality from acting as an arbitrator, unless
otherwise agreed by the parties.
• (2) The parties are free to agree on a procedure of
appointing the arbitrator or arbitrators, subject to the
provisions of paragraphs (4) and (5) of this article.
• (3) Failing such agreement,
• (a) in an arbitration with three arbitrators, each party shall
appoint one arbitrator, and the two arbitrators thus appointed
shall appoint the third arbitrator; if a party fails to appoint the
arbitrator within thirty days of receipt of a request to do so
from the other party, or if the two arbitrators fail to agree on
the third arbitrator within thirty days of their appointment, the
appointment shall be made, upon request of a party, by the
court or other authority specified in article 6;
• (b) in an arbitration with a sole arbitrator, if the parties are
unable to agree on the arbitrator, he shall be appointed, upon
request of a party, by the court or other authority specified in
article 6.
• (4) Where under an appointment procedure agreed upon
by the parties,
• (a) a party fails to act as required under such procedure, or
• (b) the parties, or two arbitrators, are unable to reach an
agreement expected of them under such procedure, or
• (c) a third party, including an institution, fails to perform
any function entrusted to it under such procedure, any
party may request the court or other authority specified in
article 6 to take the necessary measure unless the
agreement on the appointment procedure provides other
means for securing the appointment.
• (5) A decision on a matter entrusted by paragraph (3) or
(4) of this article to the court or other authority
specified in article 6 shall be subject to no appeal. The
court or other authority, in appointing an arbitrator,
shall have due regard to any qualifications required of
the arbitrator by the agreement of the parties and to
such considerations as are likely to secure the
appointment of an independent and impartial arbitrator
and, in the case of a sole or third arbitrator, shall take
into account as well the advisability of appointing an
arbitrator of a nationality other than those of the parties.