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Dr.

SHAKUNTALA MISRA NATIONAL REHABILITATION


UNIVERSITY

Lucknow

Faculty of Law

PROJECT ON

[ROLE OF THE JUDICIARY IN PROMOTING ADR]

For

COURSE ON ‘ALTERNATATE DISPUTE RESOLUTION ’

Submitted by

[Shubham Tripathi ]

Academic Session: 2017-18

Under the Guidance of

Dr. Gulaab Rai


Ast. Prof. in Law & Faculty for ADR
Faculty of Law
Dr. Shakuntala Misra National Rehabilitation University

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TABLE OF CONTENTS

Contents
INDEX OF AUTHORITIES...................................................................................................... 3

Cases ...................................................................................................................................... 3

Statutes ................................................................................................................................... 3

INTRODUCTION ..................................................................................................................... 4

NEED FOR ADR ....................................................................................................................... 5

POLICY CONSIDERATIONS FACTORED INTO JUDICIAL DECISION MAKING | A


PRO ADR TREND .................................................................................................................... 5

INFORMATION DISSEMINATION THROUGH JUDGES | CREATING AWARENESS &


INSTILLING CONFIDENCE ................................................................................................... 8

CASE MANAGEMENT & REFERENCE TO ADR.............................................................. 10

CONCLUSION ........................................................................................................................ 12

BIBILIOGRAPHY .................................................................................................................. 13

References ............................................................................................................................ 13

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INDEX OF AUTHORITIES

Cases

1. Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No.
6000 of 2010.
2. BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.

3. Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.

4. Chhotelal v. Kamala Devi, AIR 1967 Pat 269.

5. Sakri v. Chhanwarlal, AIR 1975 Raj 134.

6. Sangeetha v. Suresh Kumar, JT 2000(8) SC 521.

7. TDM Infrastructure Private Limited v. UE Development India Private Limited, (2008) 14


SCC 271.

Statutes
1. The Arbitration and Conciliation Act, 1996.

2. Code of Civil Procedure, 1908.

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INTRODUCTION
Alternative Dispute Resolution (ADR) refers to a set of mechanisms which enable effective,
efficient dispute resolution outside of courtroom litigation. ADR is aimed at reducing
backlog, delay, conserving judicial resource and providing effective, accessible justice for
litigants. There are a considerable set of advantages of adopting ADR methods, as against a
negligible set of disadvantages, and the subsisting circumstances reveal that ADR methods
are the need of the hour in the Indian context. The reasons behind the need for the adoption
and proliferation of ADR methods in the Indian context are briefly explored in the beginning
sections of this paper.

This paper aims to analyse and examine the role of the judiciary in promoting these ADR
methods. The exercise will attempt to look at the various methods which the judiciary
espouses to further the cause of ADR mechanisms. The judiciary’s support towards the
promotion of ADR methods extends to beyond the mere referring of cases and disputes of a
certain character to these channels for resolution. The researcher has attempted to briefly
outline in addition to this primary method, the other methods adopted by the judiciary to lend
support to the cause.

Whether such promotion is normatively desirable is an issue and a question that is beyond the
scope of this paper, and concomitantly therefore debate and analyses over the nature of such
promotion is also beyond the scope of this paper. Some have argued that excessive and
mechanical promotion of such methods in matters of jurisprudential importance must be
avoided as it may adversely impact the interests of the nation and often causes undesirable
ramifications on the social and democratic fabric.1

The plurality of methods adopted by the judiciary towards promoting ADR is only reflective
and indicative of the favourable judicial temperament in this regard. Often the judiciary, in
addition to legislative wisdom, evaluates several policy considerations while grappling with
issues pertaining to ADR. Supplanting legislative prescriptions on occasion, the judiciary has
played a key role in the development of ADR in the Indian context.

1
See, M. Shridhar, The Initiative of the Supreme Court of India in Alternative Dispute Resolution: A Study of
Two Cases, 3(2), THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2004).

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NEED FOR ADR
Justice R. C. Lahoti believed that the Indian judicial machinery suffered from certain inherent
weaknesses and drawbacks and that these deficiencies led to circumstances in which a need
was felt for the incorporation of effective methods to strengthen the institutional processes.
While making this claim, the former Chief Justice emphasized the significance of ADR
mechanisms; as such mechanisms help significantly in settling and resolving disputes while
simultaneously saving time, energy, and resource for numerous litigants.2

A prominent symptom of the failure of the Indian judicial machinery is the inability of the
machinery to deliver justice in a timely manner. The enormous pendency of cases and the
concurrent inordinate delay make it imperative to have effective ADR mechanisms in place.3
ADR methods are not only quicker but are also significantly more informal, and therefore
more user friendly than courts.4 Furthermore, the adoption of ADR methods leads to a
decrease in the workload experienced by the overburdened and understaffed courts of the
country, while simultaneously affording parties to a dispute the opportunity of accessing
more economical and effective justice delivery mechanisms.5

POLICY CONSIDERATIONS FACTORED INTO JUDICIAL


DECISION MAKING | A PRO ADR TREND
The judiciary, on various occasions has helped bolster the ADR cause through indirect
methods. An example of these methods is the policy considerations which the judiciary uses
as a guiding tool in decision making. On certain crucial issues, it can be reasonably inferred,
that the judiciary renders decisions which encourage and promote ADR methods at a policy
level itself. Certain examples would help illustrate and substantiate the claim.

2
Y. F. Jayakumar, Conciliation and Family Dispute Resolution in Indian Legal System, 4(1), THE ICFAI
JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2005). See, R. C. Lahoti, Strengthening of the Judicial
System My Priority, THE HINDU, 25, (Hyderabad edn., May 29, 2004).
3
G. Singh, Mediation as a Dispute Settlement Mechanism in India, 5(1), THE ICFAI JOURNAL OF ALTERNATIVE
DISPUTE RESOLUTION, (2006). See also, Jayakumar, supra note 2.
4
S. B. Sinha, ADR and Access to Justice: Issues and Perspectives, TAMIL NADU STATE JUDICIAL ACADEMY,
available at http://www.hcmadras.tn.nic.in/jacademy/article/ADR-%20SBSinha.pdf, (Last visited on May 5,
2014).
5
Id.

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In Bhatia International v. Bulk Trading SA (“Bhatia International”),6 among other things, the
Supreme Court laid down that the Indian judiciary was empowered to order interim measures
even in arbitrations which were seated in foreign countries. Quite obviously, the decision was
met with substantial criticism, primarily because it vehemently went against the freedom of
international arbitration from domestic Indian judicial involvement. In response to this set of
circumstances, with a view to rectify the reputation of being an “arbitration-unfriendly”
jurisdiction, the Supreme Court later adopted a pro-arbitration policy and overruled Bhatia
International7 by the landmark decision rendered in BALCO v. Kaiser Aluminium
(“BALCO”).8

By overruling Bhatia International9 in BALCO10 the Supreme Court clarified and explained
that territoriality was the primary premise underlying the operation of the Arbitration and
Conciliation Act11 and that therefore Indian courts would be precluded from asserting
jurisdiction, even in the form of interim relief orders, in offshore and international
arbitrations. Further, the Supreme Court held the Indian courts would not possess jurisdiction
to intervene in or modify, or set aside awards of arbitration tribunals in respect of arbitrations
seated outside India.12 By doing so the Supreme Court has unequivocally indicated the pro-
arbitration approach that is going to characterise judicial temperament in this regard.13

It is amply evident that the decision in BALCO14 was aimed at remedying the inconveniences
that were caused by preceding decisions like Bhatia International.15 A decision guided by
policy considerations, the Supreme Court’s verdict in BALCO16 was aimed at promoting
ADR methods and simultaneously alleviating the concerns of the international business and
legal communities alike in respect of Indian judicial interference in international arbitration

6
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.
7
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.
8
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005. See, P. Nair, On the road to becoming
arbitration friendly: The decision of the Indian Supreme Court in BALCO v. Kaiser Aluminium, 1(1), LCIA
INDIA NEWS, (2012).
9
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.
10
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
11
The Arbitration and Conciliation Act, 1996.
12
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
13
Nair, supra note 8.
14
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
15
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.
16
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.

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proceedings. No doubt BALCO17 does not address all the challenges seen with reference to
arbitration - for example, BALCO18 does not address the rule laid down that in the Indian
context that Indian parties cannot contract out of Indian substantive law even if the contract
provides for a foreign arbitration seat.19 But that notwithstanding, BALCO20 certainly has
been a great start in the pro-arbitration direction.21

The landmark decision in Afcons Infrastructure v. Cherian Varkey Construction Company22


(“Afcons”) serves as yet another example of the judiciary rendering decisions aimed at
promoting the ADR movement. The 2010 Supreme Court decision considered certain
rigorously contested issues revolving around the requirement of consent among parties as a
pre-requisite for reference to arbitration under Section 89 of the Code of Civil Procedure. 23
While addressing this issue and ruling that prior consent is necessary in the context of
reference to arbitration but not in cases of reference to other ADR mechanisms, the Supreme
Court simultaneously observed that Section 89 of the Code,24 a significant provision in the
context of ADR, was inconveniently drafted. The drafting of the provision, in the opinion of
the apex court required substantial correction.25

Section 89,26 clumsily drafted, mixes up definitions of various ADR mechanisms, and
expressly imposes an obligation upon the courts that not only tremendously overburdens the
courts, but also defeats the very purpose of the provision in question.27 Section 8928 requires
judges of trial courts, in cases wherein the judge believes that there may be a chance that the
parties could arrive at a settlement, to formulate terms of such settlement and forward these
terms to the parties for consideration and observation. After such consideration and making
of observations, the parties are to return the formulated settlement terms to the judge for

17
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
18
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
19
TDM Infrastructure Private Limited v. UE Development India Private Limited, (2008) 14 SCC 271.
20
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
21
A. Chugh, The Bharat Aluminium Case: The Indian Supreme Court Ushers in New Era, KLUWER
ARBITRATION BLOG, available at http://kluwerarbitrationblog.com/blog/2012/09/26/the-bharat-aluminium-case-
the-indian-supreme-court-ushers-in-a-new-era/, (Last visited on May 5, 2014). See also, Nair, supra note 8.
22
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
23
Sec. 89, Code of Civil Procedure, 1908.
24
Sec. 89, Code of Civil Procedure, 1908.
25
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
26
Sec. 89, Code of Civil Procedure, 1908.
27
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
28
Sec. 89, Code of Civil Procedure, 1908.

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further reconsideration, and then the judge is to reframe these settlement terms before
referring the dispute to ADR methods mentioned in the provision.29

Clearly, the provision imposes an unnecessary, redundant and cyclic obligation on the courts
which defeats the very purpose of the provision. Invoking doctrines of purposive
interpretation and other canons of statutory interpretation, the Supreme Court observed that
the only practicable way to correct the deficiencies and absurdities of Section 8930 was to
comprehensively reformulate the provision. The Court did away with the inconvenient and
redundant requirement of framing and reframing possible terms of settlement. The Supreme
Court redefined the various ADR methods, outlined the procedure to be adopted in cases
which fell under Section 8931 and provided numerous exhaustive guidelines in this regard.32

As was the case in the BALCO33 judgement, the Afcons34 decision is another such decision
which paves the way for a more ADR friendly legal environment and statutory framework.
The judiciary has systematically, with policy based objectives in mind, rendered decisions
which clear several hurdles and statutory impediments which have and may come in the way
of the growth of the ADR movement, and as such thereby has been bolstering and promoting
the cause through rendering such decisions and creating a favourable legal climate.

INFORMATION DISSEMINATION THROUGH JUDGES |


CREATING AWARENESS & INSTILLING CONFIDENCE
Judges have used alternate channels to promote the cause of ADR methods. While
emphasizing the issues plaguing the judiciary in the form of enormous backlog and pendency,
judges have, through formal and informal channels promoted ADR mechanisms. Justice
Sinha of the Supreme Court in his paper on ADR methods encouraged the use of such
methods citing the various advantages that such methods offer, including that of delivering
speedy and effective justice to litigants and simultaneously reducing court case burden. In his
paper, the Judge also explained that ADR methods can be best implemented if there was an

29
Sec. 89, Code of Civil Procedure, 1908.
30
Sec. 89, Code of Civil Procedure, 1908.
31
Sec. 89, Code of Civil Procedure, 1908.
32
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
33
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
34
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.

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active and mandatory reference of cases to such methods by the judiciary, and effective case
management by judges.35

Justice Khanwilkar of the Bombay High Court in his paper on ADR methods outlines the
importance and benefits of ADR methods and proposes that in order to further the benefits
provided by such methods of dispute resolution it is imperative that in addition to providing
speedy justice through these channels, efforts are taken to ensure that the quality of justice is
also remains uncompromised. Further, to promote ADR methods, the Bombay High Court
has effected a unique form of case management. So not only does the High Court insist and
promote ADR methods by referencing cases to such mechanisms, but it also assures the
parties that in the event settlement by these ADR methods fails for any reason the case will
immediately be taken up for hearing by the court.36

Justice Chandrachud of the Bombay High Court has formulated certain strategies aimed and
developing the efficacy of mediation as an ADR tool and presented these strategies publicly
at conferences37 with a view to have such information percolate through various channels and
consequently enhance the quality, efficacy, and efficiency of mediation practice. Other
informal channels have also been utilised by senior members of the judiciary to promote the
cause of ADR.

The consequence of such information dissemination is that ADR mechanisms now enjoy the
endorsement of the judiciary and the judiciary regularly refers matters for resolution to such
channels. It is imperative that such ADR methods enjoy judicial backing in order to promote
confidence in such a system.38 Further, courts must take efforts to see to it that recourse is
taken to these ADR methods before litigation is invoked, specifically, negotiation and
conciliation before arbitration.39 A strenuous challenge that ADR methods face is the lack
ofawareness and confidence in such systems. This lack of awareness and confidence can be
remedied by the judiciary’s consistent endorsement and encouragement.40

35
Sinha, supra note 4.
36
A. M. Khanwilkar, Need to Revitalise ADR Mechanism, 4(3), NYAYADEEP, (2005).
37
D. Y. Chandrachud, Mediation – Realizing the Potential and Designing Implementation Strategies, presented
at, Law Commission of India International Conference on ADR and Case Management, (New Delhi, May 3 to
May 4, 2003).
38
Singh, supra note 3.
39
Singh, supra note 3. See also, F. S. Nariman, Arbitration and ADR in India, in P. C. Rao and W. Sheffield,
ALTERNATIVE DISPUTE RESOLUTION: WHAT IT IS AND HOW IT WORKS, (1st edn., 1997).
40
Id.

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CASE MANAGEMENT & REFERENCE TO ADR
A long list of statutory provisions incorporated by the legislature direct the courts, and
imposes a duty on the courts to take an effort towards resolving a dispute before them by
reference to ADR mechanism.41 Notwithstanding such legislative efforts, the judiciary has
suo moto gone ahead and laid down several guidelines promoting the use of such ADR
methods for dispute resolution.

The Supreme Court in the Afcons42 decision laid down certain guidelines which would help
courts determine broad categories of disputes which could be referred to ADR methods for
resolution before trial. These include disputes which are related to trade and commerce,
money disputes, disputes of specific performance, disputes between builders and customers,
bankers and customers, cases pertaining to tortious liability, disputes between partners,
disputes relating to family law and so on.43

The judiciary in consonance with legislative provisions and intent makes a significant and
sincere effort to refer matters that come before it to ADR mechanisms for resolution. As has
been seen in the Bombay High Court, the court actively promotes these methods by assuring
parties that in the event of failure of such ADR methods to resolve the dispute, the matter will
immediately be taken up for hearing by the court.44

Several statutory provisions urge to courts to endeavour to have the dispute before it resolved
through ADR mechanisms.45 In several cases, especially in matters pertaining to family law,
the judiciary has actively promoted the ADR mechanisms by referring these matters to be
resolved through such channels. In Sangeetha v. Suresh Kumar46 in a divorce and
maintenance dispute between a man and wife, the Supreme Court was of the opinion that

41
See, Jayakumar, supra note 2.
42
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
43
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
44
Khanwilkar, supra note 36.
45
See, Jayakumar, supra note 2.
46
Sangeetha v. Suresh Kumar, JT 2000(8) SC 521.

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there was a possibility that the dispute could be resolved through means of reconciliation, and
accordingly referred the matter to conciliation and adjourned the proceedings.47

In Sakri v. Chhanwarlal48 the Rajasthan High Court remarked that the courts should
endeavour to bring about conciliation at the beginning of the proceedings, but in the event
that such efforts are not made at the beginning of proceedings, such efforts should be made
before granting relief. The efforts must be a reasonable human effort and should be made in
every case.49 Similarly, the Patna High Court in Chhotelal v. Kamala Devi50 observed that
before usual proceedings, the courts should endeavour to bring about conciliation and that
such effort must be made even if the advocates for the parties submit that such reconciliation
is not possible.51

The judiciary’s endorsement of such ADR methods is of tremendous significance and has
serious implications on the success of such methods. A significant impetus given to the ADR
movement by the judiciary was the 1984 experiment conducted by the Himachal Pradesh
High Court. Facing rising arrears in subordinate courts, the High Court implemented a project
which aimed at disposal of pending cases by mandating compulsory pre-trial conciliation in
new cases being brought before the courts. The experiment was on the lines of a similar
experiment conducted in Canada and was tremendously successful and commended,52 and it
was recommended that other states follow the Himachal Project in their courts as well.53

47
Sangeetha v. Suresh Kumar, JT 2000(8) SC 521. See, Jayakumar, supra note 2.
48
Sakri v. Chhanwarlal, AIR 1975 Raj 134.
49
Sakri v. Chhanwarlal, AIR 1975 Raj 134. See, Jayakumar, supra note 2.
50
Chhotelal v. Kamala Devi, AIR 1967 Pat 269.
51
Chhotelal v. Kamala Devi, AIR 1967 Pat 269. See, Jayakumar, supra note 2.
52
Singh, supra note 3. The experiment was commended in the Law Commission of India 77 thand 13thReports;
the Conference of Chief Ministers and the Chief Justices in their resolution in December, 1993; and the Calcutta
Resolution of the Law Ministers and Law Secretaries Meeting in 1994.
53
Singh, supra note 3.

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CONCLUSION
The role of the judiciary as far as promoting ADR is concerned is multidimensional. Through
the course of this paper, the different approaches to promoting ADR that the judiciary has
adopted have been examined and analysed. The need for the proliferation of ADR methods is
evident given the massive pendency and backlog of cases. In order to help reduce the burden
on the court system and to provide speedy, effective and efficient justice it is essential that
sustainable and robust ADR mechanisms are put into place.

On several occasions certain decisions rendered by the judiciary in the context of ADR seem
to be guided by policy considerations and seem to aimed at promoting ADR at a policy level.
The judiciary has repeatedly ironed out any impediments that may come in the way of ADR
movement. Whether in the international context, or domestic, the judiciary seems to be
handing out decisions which overcome legal hurdles, statutory in character or otherwise.
Some of these decisions even have larger implications in the context of international
commerce and business.

Judicial promotion of ADR has also been extended to other channels, somewhat epistemic in
nature. Senior members of the judiciary have authored several papers and articles delineating
the advantages of such methods of dispute resolution. These papers also often revolve around
strategies to help further the usage of these methods of dispute resolution more effectively.
Not only does such judicial endorsement create awareness of such methods, but it also
simultaneously instils the confidence of people in such methods of dispute resolution.

The judiciary has through a number of decisions laid down that cases must be referred to
ADR methods on a regular basis and to this end the courts shall endeavour to promote the
resolution of disputes that come before them through these methods. In fact, in certain cases
the courts have assured litigants that in the event of failure of such mechanisms, the matter
will be taken up immediately by the courts. It is amply evident that the judiciary has a
predominantly favourable attitude towards ADR methods, and through numerous channels
attempts to promote the cause of ADR.

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BIBILIOGRAPHY

References

1. A. Chugh, The Bharat Aluminium Case: The Indian Supreme Court Ushers in New Era,
KLUWER ARBITRATION BLOG, available at
http://kluwerarbitrationblog.com/blog/2012/09/26/the-bharat-aluminium-case-the-indian-
supreme-court-ushers-in-a-new-era/, (Last visited on May 5, 2014).

2. A. M. Khanwilkar, Need to Revitalise ADR Mechanism, 4(3), NYAYADEEP, (2005).

3. D. Y. Chandrachud, Mediation – Realizing the Potential and Designing Implementation


Strategies, presented at, Law Commission of India International Conference on ADR and Case
Management, (New Delhi, May 3 to May 4, 2003).

4. F. S. Nariman, Arbitration and ADR in India, in P. C. Rao and W. Sheffield, ALTERNATIVE


DISPUTE RESOLUTION: WHAT IT IS AND HOW IT WORKS, (1st edn., 1997).

5. G. Singh, Mediation as a Dispute Settlement Mechanism in India, 5(1), THE ICFAI JOURNAL
OF ALTERNATIVE DISPUTE RESOLUTION, (2006).

6. M. Shridhar, The Initiative of the Supreme Court of India in Alternative Dispute Resolution: A
Study of Two Cases, 3(2), THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2004).

7. P. Nair, On the road to becoming arbitration friendly: The decision of the Indian Supreme
Court in BALCO v. Kaiser Aluminium, 1(1), LCIA INDIA NEWS, (2012).

8. R. C. Lahoti, Strengthening of the Judicial System My Priority, THE HINDU, 25, (Hyderabad
edn., May 29, 2004).

9. S. B. Sinha, ADR and Access to Justice: Issues and Perspectives, TAMIL NADU STATE
JUDICIAL ACADEMY, available at http://www.hcmadras.tn.nic.in/jacademy/article/ADR-
%20SBSinha.pdf, (Last visited on May 5, 2014).

10. Y. F. Jayakumar, Conciliation and Family Dispute Resolution in Indian Legal System, 4(1),
THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2005).

13