ADR is a substitute for the more common judicial process. ADR includes methods like negotiation, conciliation, mediation and arbitration. It avoids the cost and time involved in the normal Court procedures.
So. Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes without a trial. It refers to any method of resolving disputes without litigation. ADR regroups all processes and techniques of conflict resolution that occur outside of any governmental authority.
ADR is not intended to supplant altogether the traditional means of resolving disputes by means 0 litigation.
It offers only alternative options to litigation. There are still a large number of important areas including constitutional law and criminal law, in respect of which there is no substitute for court decisions, ADR may not be appropriate for every dispute even in other areas; even if appropriate, it can not be invoked unless both parties to a dispute are genuinely interested in a settlement.
Why the emergence of need of ADR?
- The main governing Acts of ADR in India are Arbitration and Conciliation Act, 1996, Legal Services Authorities Act, 1987 and Section 89 of the Civil Procedure Code. Any method of resolving disputes in the absence of the process of litigation can be read as Alternative Dispute Resolution. ADR brings forth a new mechanism to resolve various litigation issues where the disputed parties are unable to take a rational decision.
- With the changing needs and demands of the society, the judiciary and lawyers must incorporate these methods for resolving matters.
- The main motive of ADR is to create a fair and just alternative to our conventional method of litigation. And with the plethora of pending cases in India, these methods will definitely aid in speedy disposal and efficient justice delivery system.
MODES OF ADR
These methods are used to resolve private individuals conflicts in a shorter period of time in a cost-effective manner. Alternative of resolving disputes in Court by the settlement of disputes outside the court through various ways including arbitration, conciliation, judicial settlement through Lok Adalat, mini trials and mediation.
1. Arbitration - It is an age old alterative
dispute resolution method all over the world. It is an alternative way to resolve the dispute out any access to the regular judicial system i.e. regular courts. Arbitration has been adopted from e immemorial and it has been given the sanctity of law after its efficacy was tested by the Governments.
Essentials of Arbitration
There are four important ingredients in the arbitration, which are essential for arbitration award.
- There must be 'dispute between the parties.
- The dispute must either 'exist or may arise in future".
- There must be two or more parties to conflict or dispute in question
- There must be an agreement between the parties to refer the dispute for arbitration.
- There must be Arbitrator or Arbitrators
For the purpose of Arbitration let us understand the meaning of Arbitration award . It is the formalized outcome of Arbitration, it outlines the final settlement between the parties.
The role of Arbitrator is vital in arbitration proceedings. He should not be biased. It is axiomatic that the power predicates accountability. An arbitrator is substitute for a civil judge to determine civil disputes inter se between the parties.The Arbitrator is required to be an independent and impartial judge during determination of the disputes referred to him.
It is an informal process in which both the disputing parties appoint a neutral conciliator or a third person to bring them to an agreement and to help end the dispute. This is done by sorting out any misinterpretations between the parties and removing the technical difficulties and working out possible solutions. It is an alternative dispute resolution (ADR) process whereby the parties to a dispute using the help of a conciliator, resolve the issues bothering them.
The conciliation process requires involvement of a Conciliator who is knowledgeable and experienced person. The person to be appointed or acting as Conciliator should possess three basic qualities:
- He must possess knowledge and experience of compromise settlements.
- He should have broad thinking with objectivity.
- He must maintain Independence and Impartiality.
- He should have capability to employ the conciliation techniques efficiently like persuasion, rationalization, suggestions and coercion on equal footings on both the parties.
What are the differences between arbitration and conciliation?
The main differences between the two are as follows:
- Legal standing - Arbitration has a legal standing; conciliation does not have a legal standing.
- Authority to seek evidence or examine witnesses - An arbitrator has the right to seek evidence or call witnesses; a conciliator does not have these rights.
- Writing of decisions- An arbitrator can write decisions, a conciliator just aids the two parties in reaching to an agreement.
- Making an award - An arbitrator can pass an arbitral award; a conciliator can pass no awards; just help in a conciliation agreement.
When the two parties appoint a mediator or a person who interacts with both parties, clarifying the views of one party to the other and vice versa.
- The mediator clarifies the matter and brings about an agreement by bring greater understanding to it.
- Mediation is a process of alternative dispute resolution in which a neutral third party, the mediator, assists two or more parties in order to help them negotiate an agreement, with concrete effects, on a matter of common interest; lato sensu is any activity in which an agreement on whatever matter is researched by an impartial third party, usually a professional, in the common interest of the parties.
4. Mediation Arbitration (MED-ARB)
A procedure where the parties agree to settle their dispute first by attempting a conciliation within a specified time, failing which by arbitration. This is distinct from conciliation in the course of arbitral proceedings where, if a settlement is reached, the arbitration proceedings are terminated by making an award on agreed terms.
A non-binding procedure where the disputing parties present their respective cases before their senior executives who are competent to take decisions and who are assisted by a neutral third party. Thus, the executives have an objective assessment of the dispute and, if possible; they can mutually arrive at settlement.
6. Lok Adalats
The Lok Adalat in India as the very name suggests, means People's Court. The word 'Lok' stands for people and the term 'Adalat' suggests its meaning as the Court. The Lok Adalat traditionally may mean Panchayat, which has taken the form of arbitration.
- It is a forum where cases pending on panchayat, or at a pre-litigation stage in a court of law, are settled. Under this Act, the award (decision) made by the Lok Adalats is deemed to be a civil court case and is final and binding on all parties. No appeal against such an award lies before any court of law.
- Lok Adalats are a unique blend of three forms of traditional ADR: arbitration, mediation, and conciliation.
What nature of Cases to be Referred to Lok Adalat?
1. Any case pending before any court.
2. Any dispute which has not been brought before any court and is likely to be filed before the court.
- Provided that any matter relating to an offence not compoundable under the law shall not be settled in Lok Adalat.
- The teams of Lok Adalats are consisting of retired judges, advocates, law teachers, spirited public men and voluntary social organizations including learned elders of the locality.
Negotiation is another form of an Alternative Dispute Resolution System. Like conciliation and mediation, negotiation is also a non-binding procedure but a suitable formula for dispute resolution.
- A non-binding procedure involving direct interaction of the disputing parties wherein a party approaches the other with the offer of a negotiated settlement based on an objective assessment of each other's position. A trade-off of other interests not involved in the dispute is not uncommon in a negotiated settlement. Objectivity and willingness to arrive at a negotiated settlement on the part of both parties are essential characteristics of negotiation.
- Arbitrator - A person appointed by the parties to settle a dispute .
- Arbitral award - It includes an interim award. An arbitral award is an arbitration tribunal's decision on the merits of an arbitration tribunal and is equivalent to a court judgment.
- Arbitration agreement - It means an agreement between parties to refer present or future disputes arisen or arising between them to arbitration. Such disputes may arise out of contractual or other capacities. Such an agreement can take two forms-it can be pan of a contract, Le, in the form of a clause in the main contract, or it can be a separate contract by itself. (Section 7)
- Fast-track Arbitration: A binding procedure where parties agree to accelerated arbitral proceedings resulting in rendering the arbitral award in a short time.
- Arbitral tribunal -It means a sole arbitrator or a panel of arbitrators .
- Ad hoc arbitration- An ad hoc arbitration is one which is not administered by an arbitral institution . This includes the time, place and methodology to be used. If the parties approach the arbitration with open minds and a spirit of co-operation, ad hoc proceedings have the potential to be more flexible, faster and cheaper than institutional proceedings. There can be substantial cost and time savings as compared to Institutional arbitration.
Can arbitration award be set aside?
An arbitral award can be set-aside on application to the High Court having juradiction, and any civil court of an inferior grade. This has been provided under Section 34 of the Arbitration and Conciliation Act, 1996.
The grounds based on which an application under this section can be fed are as follow:
- Invalid or unacceptable arbitration agreement
- Incapacity of parties. Improper notice of arbitration proceedings.
- Inability in presenting a proper case to the arbitral authority.
- Award not according to the terms of reference. Improperly constituted arbitral tribunal.
- Proceedings not as per agreement.
- Award against the public policy of India.
INTERNATIONAL COMMERCIAL ARBITRATION
As per Section 2(1)(1) of the Arbitration and Conciliation Act, 1996, 'international commercial arbitration means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is the following:
An individual who is a national of, or habitually resident in any country other than India.
1. A body corporate which is incorporated in any country other than India,
2. A company or an association or a body of individuals whose central management and control is exercised in any country other than India,
3. The Government of a foreign country.
The Mechanism of ADR System is a viable substitute and an effective instrument in providing speedy, cheap and timely justice to the litigants. It has various advantages. The litigant can opt any of the various forums. The ADR System does not mean to replace the existing judicial system. But to aid and assist the existing judicial and justice delivery system in providing timely relief. The ADR System may be able to check the docket problem in the Courts. The ADR System and its proceedings always maintain confidentiality.
"I realized that the true function of a lawyer was to unite parties... The lesson was so indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromise of hundreds of cases. I lost nothing thereby not even money; certainly not my soul" - MahatmaGandhi