ALTERNATIVE DISPUTE RESOLUTION

The Author of this blog is Pragya Gandhi, who is pursuing B.B.A LL.B (Hons.) from Jagran Lakecity University, Bhopal.

Dispute settlement is the process of redressing or settling the dispute which exist between the parties. The settlement of dispute is necessary to provide remedy to the injured party. The traditional process of dispute settlement is taking the dispute before a competent court for adjudication. The court after listening to both the parties arrives at a decision. Although one of the major drawbacks of approaching court is that the process is time consuming. Due to the process being lengthy people at times do not even prefer approaching court at all. In India, there exists pendency of cases due to which many matters remain unsettled. This has led to the development of Alternative Dispute Resolution in India. ADR provides an alternative to the aggrieved party to seek remedy. The parties through ADR can amicably settle the dispute without having to approach the court.

ADR is a non-adversarial method where the parties amicably settle the dispute by coming yo a decision which is beneficial for everyone. Civil matters, commercial matters, industrial matters, etc can be resolved through ADR. It reduces the burden of the court and also provides a decision which is favourably to both the parties. Generally a third party helps the parties in ADR process. ADR is cost effective and less time consuming process due to which it is preferred by the parties. ADR helps in maintaining the privacy of the parties as the proceedings can be kept confidential. The need of ADR was felt due to the delay in providing justice because of the pendency of cases in court. ADR opened up various modes of settlement to the parties to resolve their dispute.

ADR is also founded on the principle of equality before law which is provided in Article 14 of the Constitution and right to life and personal liberty provided in Article 21 of the Constitution. ADR’s motive is to provide social-economic and political justice and maintain integrity in the society enshrined in the preamble. ADR also strive to achieve equal justice and free legal aid provided under article 39-A relating to Directive Principle of State Policy (DPSP).[1]

Legislation relating to ADR in India

·         The Legal Services Authority Act, 1987 established the system of Lok Adalat where the parties to the dispute can settle their dispute expeditiously and cheaply. 

·         The Arbitration and Conciliation Act, 1996 regulates Arbitration and Conciliation in India. The Act provides for the procedure relating to Arbitration and Conciliation.

·         The Civil Procedure Code (Amendment) Act, 1999 provided for Section 89 which enables the court to refer the parties before it for settlement of disputes through the modes provides in the Section. The Section provides that when the court is of the opinion that there exist elements of settlement in a case which the parties to the dispute may find acceptable, the court formulate the term of settlement and give it to parties for their observation. The court after receiving the observation of the parties, if required, may reformulate the term of settlement and can refer the matter to:

                                i.            Arbitration,

                              ii.            Conciliation,

                            iii.            Judicial settlement including Lok Adalat, or

                            iv.            Mediation

The section further prescribes the different law governing the procedure of abovementioned modes of settlement.

Modes of Alternative Dispute Resolution

The various modes of ADR which is usually used in India are:

1.Arbitration

Arbitration is the process where a neutral third party chosen or agreed by the parties hears the dispute and makes a decision which is binding on the parties. Arbitration and Conciliation Act, 1996 regulates the process of Arbitration in India. The parties may refer the dispute to one or more persons known as arbitrator. The decision which is passed by the arbitrator is known as arbitral award. It settlement of dispute takes place outside the court. The court can interfere in certain specific matters only. This mode of settlement is speedy, cheap and less formal which provides for fair settlement of dispute.

Any party can refer any dispute to arbitration only when there exists arbitration clause in their contract or and arbitration agreement. It means that the parties have to depict their intention to settle their dispute through Arbitration beforehand. The Arbitration agreement can be for a dispute which have aroused or which may arise in future. Further such arbitration agreement must be in writing. The parties are bound to settle their dispute through arbitration if they have entered into an arbitration agreement. If any party approaches the court for such a dispute the other party is can approach the court to send back the party to arbitration.

When any dispute arises, any of the party to the agreement can approach the arbitral tribunal for settlement of dispute. The parties to the dispute submit their claim and defence before the arbitral tribunal. The arbitration after hearing the party and taking into consideration all the evidences pass an arbitral award which is binding on the parties. The award passed can be appealed only in certain specific cases before the court under Section 34.

2.   Conciliation

Conciliation is a less formal mode of settlement where the parties approach a neutral third party known as conciliator who facilitates amicable settlement between parties. The conciliator meets the parties separately to settle the dispute. The Arbitration and Conciliation Act, 1996 governs the procedure of conciliation. In conciliation the parties do not need to have a prior agreement between them like arbitration. Any one party to the dispute can refer the matter to conciliation only after receiving the acceptance of the other party. If a party rejects the invitation, there will not be any conciliation proceedings and the other party cannot be forced to refer the matter to conciliation. The conciliator helps the parties to arrive at a settlement. When the conciliator is of the opinion that settlement can be arrived between the parties, the conciliator will frame the terms of settlement and send it to the parties for their acceptance. If the parties agree to the term of settlement they will sign the settlement agreement and it becomes binding on the parties.

3.      Mediation

Mediation is a process in which the mediator assists the parties to reach a settlement. The mediator is a neutral third party who brings both the parties to the dispute together to arrive at an agreement. The parties to the dispute have the control over the whole process. The mediator only assists and does not make any decision for the parties. The mediator cannot impose the outcome of the dispute on any party. The mediator first makes an opening statement in which he discloses the information about his appointment. Further the mediator conducts joint session with both the parties to the dispute and separate session with the parties to gain a proper understanding of the dispute. The mediator, after understanding the issues between the parties, helps the parties to resolve the disputes.

In India, the use of mediation as a mode of settlement of dispute can be seen in divorce cases. The court usually sends the parties to mediation so that their dispute can be solved without divorce. Mediation is not a formal proceeding and cannot be enforced in court of law due to which it is not termed as a preferable mode of settlement of dispute.

4.   Negotiation

In negotiation the dispute between the parties in resolved without intervention of any third party. In other words, the parties to the dispute come together to discuss and settle their dispute by themselves without any help of a third party. One of the benefits of negotiation is that it is voluntary and non- binding process in which the control is retained with the parties to the dispute. There exists no established procedure for negotiation which provides flexibility to the party. The negotiation process is a confidential process as the dispute remains between the parties which provide privacy to the parties. The parties can first make an attempt to resolve any dispute through negotiation. If an agreement cannot be reached between the parties they can resort to various other legal remedies available.

5.   Lok Adalat

It is termed as People’s Court. In Lok Adalat the dispute is presented before a sitting or retired judge, social activists or members of legal profession for settlement. In this mode when the parties to the dispute are of the opinion that the matter can be settled without going to regular court they take the matter before Lok Adalat. When the court is of the opinion that any matter can be settled than the court can also refer such matter to Lok Adalat, with the consent of the parties, which is pending before it. Lok Adalat cannot provide for settlement of any non-compoundable offence. The Legal Services Authorities Act, 1987 have provided statutory recognition to Lok Adalats. The Act also provides for permanent Lok Adalat. One of the benefits of Lok Adalat is that the parties are not required to pay the court fees and the procedure followed is not rigid. The parties can have direct interaction with the judge in Lok Adalat. Lok Adalat provides speedy justice to the parties. The parties can settle their dispute when they reach an agreement. The decision of the Lok Adalat is binding on the parties and there lies no appeal against such decision.

Conclusion

ADR provides speedy justice to the parties to the dispute. The parties have the option to choose any of the dispute settlement mechanism for resolution of their dispute. ADR also reduces the burden of the court. It is in the interest of the state that there is end to litigation. ADR helps in attaining this objective by provides various new avenue to settle dispute. Although even today many people are not aware about ADR due to which creating awareness is a need of the hour. It will provide access to justice to each and every person which will ensure social justice in the country.