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ADRMechanisminIndia

Source:http://www.
Author:sujay_ilnu
Publishedon:June21,2010
AlternateDisputeResolutionMechanism
TheConcept&itsefficacy:
Itisthespiritandnottheformoflawthatkeepsthejustice
alive.LJEarlWarren

TheconceptofConflictManagementthroughAlternative
DisputeResolution(ADR)hasintroducedanewmechanismof
disputeresolutionthatisnonadversarial.Adisputeisbasically
lisinterpartesandthejusticedispensationsysteminIndiahas
foundanalternativetoAdversariallitigationintheformofADR
Mechanism.

sujay_ilnu'sProfileand
details
Sujay
Dixit,

BA.LL.B(Honsin
CorporateLaw)
InstituteofLaw,Nirma
University

NewmethodsofdisputeresolutionsuchasADRfacilitatepartiestodealwiththeunderlying
issuesindisputeinamorecosteffectivemannerandwithincreasedefficacy.Inaddition,
theseprocesseshavetheadvantageofprovidingpartieswiththeopportunitytoreduce
hostility,regainasenseofcontrol,gainacceptanceoftheoutcome,resolveconflictina
peacefulmanner,andachieveagreatersenseofjusticeineachindividualcase.Theresolution
ofdisputestakesplaceusuallyinprivateandismoreviable,economic,andefficient.ADRis
generallyclassifiedintoatleastfourtypes:negotiation,mediation,collaborativelaw,and
arbitration.(Sometimesafifthtype,conciliation,isincludedaswell,butforpresentpurposes
itcanberegardedasaformofmediation
NeedofADRinIndia:
ThesystemofdispensingjusticeinIndiahascomeundergreatstressforseveralreasons
mainlybecauseofthehugependencyofcasesincourts.InIndia,thenumberofcasesfiledin
thecourtshasshownatremendousincreaseinrecentyearsresultinginpendencyanddelays
underliningtheneedforalternativedisputeresolutionmethods.Itisinthiscontextthata
ResolutionwasadoptedbytheChiefMinistersandtheChiefJusticesofStatesinaconference
heldinNewDelhion4thDecember1993underthechairmanshipofthethenPrimeMinister
andpresidedoverbytheChiefJusticeofIndia.
Itsaid:"TheChiefMinistersandChiefJusticeswereoftheopinionthatCourtswerenotina
positiontobeartheentireburdenofjusticesystemandthatanumberofdisputeslent
themselvestoresolutionbyalternativemodessuchasarbitration,mediationandnegotiation.
Theyemphasizedthedesirabilityofdisputantstakingadvantageofalternativedispute
resolutionwhichprovidedproceduralflexibility,savedvaluabletimeandmoneyandavoided
thestressofaconventionaltrial".
InadevelopingcountrylikeIndiawithmajoreconomicreformsunderwaywithinthe
frameworkoftheruleoflaw,strategiesforswifterresolutionofdisputesforlesseningthe
burdenon[1]thecourtsandtoprovidemeansforexpeditiousresolutionofdisputes,thereisno
betteroptionbuttostrivetodevelopalternativemodesofdisputeresolution(ADR)by
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establishingfacilitiesforprovidingsettlementofdisputesthrougharbitration,conciliation,
mediationandnegotiation.2
Impact/resultingactsofADR:
ThetechniqueofADRisanefforttodesignaworkableandfairalternativetoourtraditional
judicialsystem.Itisafasttracksystemofdispensingjustice.TherearevariousADR
techniquesviz.arbitration,mediation,conciliation,mediationarbitration,minitrial,private
judging,finalofferarbitration,courtannexedADRandsummaryjurytrial.
ThesetechniqueshavebeendevelopedonscientificlinesinUSA,UK,France,Canada,China,
Japan,SouthAfrica,AustraliaandSingapore.ADRhasemergedasasignificantmovementin
thesecountriesandhasnotonlyhelpedreducecostandtimetakenforresolutionofdisputes,
butalsoinprovidingacongenialatmosphereandalessformalandlesscomplicatedforumfor
varioustypesofdisputes.
TheArbitrationAct,1940wasnotmeetingtherequirementsofeithertheinternationalor
domesticstandardsofresolvingdisputes.Enormousdelaysandcourtinterventionfrustrated
theverypurposeofarbitrationasameansforexpeditiousresolutionofdisputes.TheSupreme
Courtinseveralcasesrepeatedlypointedouttheneedtochangethelaw.ThePublicAccounts
CommitteetoodeprecatedtheArbitrationActof1940.IntheconferencesofChiefJustices,
ChiefMinistersandLawMinistersofalltheStates,itwasdecidedthatsincetheentireburden
ofjusticesystemcannotbebornebythecourtsalone,anAlternativeDisputeResolution
systemshouldbeadopted.Tradeandindustryalsodemandeddrasticchangesinthe1940Act.
TheGovernmentofIndiathoughtitnecessarytoprovideanewforumandprocedurefor
resolvinginternationalanddomesticdisputesquickly.
Thus"TheArbitrationandConciliationAct,1996"cameintobeing.Thelawrelatingto
ArbitrationandConciliationisalmostthesameasintheadvancedcountries.Conciliationhas
beengivenstatutoryrecognitionasameansforsettlementofthedisputesintermsofthisAct.
Inadditiontothis,thenewActalsoguaranteesindependenceandimpartialityofthe
arbitratorsirrespectiveoftheirnationality.ThenewActof1996broughtinseveralchangesto
expeditetheprocessofarbitration.Thislegislationhasdevelopedconfidenceamongforeign
partiesinterestedtoinvestinIndiaortogoforjointventures,foreigninvestment,transferof
technologyandforeigncollaborations.
TheadvantageofADRisthatitismoreflexibleandavoidsseekingrecoursetothecourts.In
conciliation/mediation,partiesarefreetowithdrawatanystageoftime.Ithasbeenseenthat
resolutionofdisputesisquickerandcheaperthroughADR.ThepartiesinvolvedinADRdo
notdevelopstrainedrelationsrathertheymaintainthecontinuedrelationshipbetween
themselves.
ArbitrationandConciliationAct,1996
PartIofthisactformalizestheprocessofArbitrationandPartIIIformalizestheprocessof
Conciliation.(PartIIisaboutEnforcementofForeignAwardsunderNewYorkandGeneva
Conventions.)
Arbitration:
TheprocessofarbitrationcanstartonlyifthereexistsavalidArbitrationAgreementbetween
thepartiespriortotheemergenceofthedispute.AsperSection7,suchanagreementmustbe
inwriting.Thecontract,regardingwhichthedisputeexists,musteithercontainanarbitration
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clauseormustrefertoaseparatedocumentsignedbythepartiescontainingthearbitration
agreement.Theexistenceofanarbitrationagreementcanalsobeinferredbywritten
correspondencesuchasletters,telex,ortelegramswhichprovidearecordoftheagreement.
Anexchangeofstatementofclaimanddefenceinwhichexistenceofanarbitrationagreement
isallegedbyonepartyandnotdeniedbyotherisalsoconsideredasvalidwrittenarbitration
agreement.
Anypartytothedisputecanstarttheprocessofappointingarbitratorandiftheotherparty
doesnotcooperate,thepartycanapproachtheofficeofChiefJusticeforappointmentofan
arbitrator.Thereareonlytwogroundsuponwhichapartycanchallengetheappointmentofan
arbitratorreasonabledoubtintheimpartialityofthearbitratorandthelackofproper
qualificationofthearbitratorasrequiredbythearbitrationagreement.Asolearbitratoror
panelsofarbitratorssoappointedconstitutetheArbitrationTribunal.
Exceptforsomeinterimmeasures,thereisverylittlescopeforjudicialinterventioninthe
arbitrationprocess.Thearbitrationtribunalhasjurisdictionoveritsownjurisdiction.Thus,ifa
partywantstochallengethejurisdictionofthearbitrationtribunal,itcandosoonlybeforethe
tribunalitself.Ifthetribunalrejectstherequest,thereislittlethepartycandoacceptto
approachacourtafterthetribunalmakesanaward.Section34providescertaingroundsupon
whichapartycanappealtotheprincipalcivilcourtoforiginaljurisdictionforsettingasidethe
award.
Oncetheperiodforfilinganappealforsettingasideanawardisover,orifsuchanappealis
rejected,theawardisbindingonthepartiesandisconsideredasadecreeofthecourt.
Conciliation
Conciliationisalessformalformofarbitration.Thisprocessdoesnotrequireanexistenceof
anyprioragreement.Anypartycanrequesttheotherpartytoappointaconciliator.One
conciliatorispreferredbuttwoorthreearealsoallowed.Incaseofmultipleconciliators,all
mustactjointly.Ifapartyrejectsanoffertoconciliate,therecanbenoconciliation.
Partiesmaysubmitstatementstotheconciliatordescribingthegeneralnatureofthedispute
andthepointsatissue.Eachpartysendsacopyofthestatementtotheother.Theconciliator
mayrequestfurtherdetails,mayasktomeettheparties,orcommunicatewiththeparties
orallyorinwriting.Partiesmayevensubmitsuggestionsforthesettlementofthedisputeto
theconciliator.
Whenitappearstotheconciliatorthatelementsofsettlementexist,hemaydrawuptheterms
ofsettlementandsendittothepartiesfortheiracceptance.Ifboththepartiessignthe
settlementdocument,itshallbefinalandbindingonboth.
NotethatinUSA,thisprocessissimilartoMediation.However,inIndia,Mediationis
differentfromConciliationandisacompletelyinformaltypeofADRmechanism.
Mediation
Mediation,aformofalternativedisputeresolution(ADR)or"appropriatedisputeresolution",
aimstoassisttwo(ormore)disputantsinreachinganagreement.Thepartiesthemselves
determinetheconditionsofanysettlementsreachedratherthanacceptingsomething
imposedbyathirdparty.Thedisputesmayinvolve(asparties)states,organizations,
communities,individualsorotherrepresentativeswithavestedinterestintheoutcome.
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Mediatorsuseappropriatetechniquesand/orskillstoopenand/orimprovedialoguebetween
disputants,aimingtohelpthepartiesreachanagreement(withconcreteeffects)onthe
disputedmatter.Normally,allpartiesmustviewthemediatorasimpartial.
Disputantsmayusemediationinavarietyofdisputes,suchascommercial,legal,diplomatic,
workplace,communityandfamilymatters.
Athirdpartyrepresentativemaycontractandmediatebetween(say)unionsandcorporations.
Whenaworkersuniongoesonstrike,adisputetakesplace,andthecorporationhiresathird
partytointerveneinattempttosettleacontractoragreementbetweentheunionandthe
corporation.
Negotiation
Negotiationisadialogueintendedtoresolvedisputes,toproduceanagreementuponcourses
ofaction,tobargainforindividualorcollectiveadvantage,ortocraftoutcomestosatisfy
variousinterests.Itistheprimarymethodofalternativedisputeresolution.
Negotiationoccursinbusiness,nonprofitorganizations,governmentbranches,legal
proceedings,amongnationsandinpersonalsituationssuchasmarriage,divorce,parenting,
andeverydaylife.Thestudyofthesubjectiscallednegotiationtheory.Thosewhoworkin
negotiationprofessionallyarecallednegotiators.Professionalnegotiatorsareoften
specialized,suchasunionnegotiators,leveragebuyoutnegotiators,peacenegotiators,hostage
negotiators,ormayworkunderothertitles,suchasdiplomats,legislatorsorbrokers
LokAdalat:
WhileArbitrationandConciliationAct,1996isafairlystandardwesternapproachtowards
ADR,theLokAdalatsystemconstitutedunderNationalLegalServicesAuthorityAct,1987is
auniquelyIndianapproach.
Itroughlymeans"People'scourt".Indiahashadalonghistoryofresolvingdisputesthrough
themediationofvillageelders.ThesystemofLokAdalatsisanimprovementonthatandis
basedonGandhianprinciples.Thisisanonadversarialsystem,wherebymockcourts(called
LokAdalats)areheldbytheStateAuthority,DistrictAuth[2]ority,SupremeCourtLegal
ServicesCommittee,HighCourtLegalServicesCommittee,orTalukLegalServices
Committee,periodicallyforexercisingsuchjurisdictionastheythinksfit.Theseareusually
presidedbyretiredjudge,socialactivists,ormembersoflegalprofession.Itdoesnothave
jurisdictiononmattersrelatedtononcompoundableoffences.
Thereisnocourtfeeandnorigidproceduralrequirement(i.e.noneedtofollowprocessgiven
byCivilProcedureCodeorEvidenceAct),whichmakestheprocessveryfast.Partiescan
directlyinteractwiththejudge,whichisnotpossibleinregularcourts.
CasesthatarependinginregularcourtscanbetransferredtoaLokAdalatifboththeparties
agree.AcasecanalsobetransferredtoaLokAdalatifonepartyappliestothecourtandthe
courtseessomechanceofsettlementaftergivinganopportunityofbeingheardtotheother
party.
ThefocusinLokAdalatsisoncompromise.Whennocompromiseisreached,themattergoes
backtothecourt.However,ifacompromiseisreached,anawardismadeandisbindingon
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theparties.Itisenforcedasadecreeofacivilcourt.Animportantaspectisthattheawardis
finalandcannotbeappealed,notevenunderArticle226becauseitisajudgementbyconsent.
AllproceedingsofaLokAdalataredeemedtobejudicialproceedingsandeveryLokAdalat
isdeemedtobeaCivilCourt.
LokAdalat(peoplescourts),establishedbythegovernment,settlesdisputethrough
conciliationandcompromise.TheFirstLokAdalatwasheldinChennaiin1986.LokAdalat
acceptsthecaseswhichcouldbesettledbyconciliationandcompromiseandpendinginthe
regularcourtswithintheirjurisdiction.
TheLokAdalatispresidedoverbyasittingorretiredjudicialofficerasthechairman,with
twoothermembers,usuallyalawyerandasocialworker.Thereisnocourtfee.Ifthecaseis
alreadyfiledintheregularcourt,thefeepaidwillberefundedifthedisputeissettledatthe
LokAdalat.TheprocedurallawsandtheEvidenceActarenotstrictlyfollowedwhile
assessingthemeritsoftheclaimbytheLokAdalat.
MainconditionoftheLokAdalatisthatbothpartiesindisputeshouldagreeforsettlement.
ThedecisionoftheLokAdalatisbindingonthepartiestothedisputeanditsorderiscapable
ofexecutionthroughlegalprocess.NoappealliesagainsttheorderoftheLokAdalat.
LokAdalatisveryeffectiveinsettlementofmoneyclaims.Disputeslikepartitionsuits,
damagesandmatrimonialcasescanalsobeeasilysettledbeforeLokAdalatasthescopefor
compromisethroughanapproachofgiveandtakeishighinthesecases.
LokAdalatisaboontothelitigantpublic,wheretheycangettheirdisputessettledfastand
freeofcost.
Theauthorcanbereachedat:sujay_ilnu@legalserviceindia.com

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