In recent years, it is evident that our justice delivery system failed to provide relief to aggrieved parties in a timely manner. Due to the slow speed of trial and the excess cost of litigation, a party is discouraged to knock on the doors of the court. Further, the growing demand for quick resolution in our commercial sector was not met by ordinary litigation due to the huge pendency of cases. Thus, an alternative mechanism was discovered for the timely settlement of cases. This is known as Alternative Dispute Resolution (ADR).
In this article, we will explore the meaning and various forms of Alternative Dispute Resolution.
Meaning of Alternative Dispute Resolution
The term ADR denotes the process through which the parties settled their disputes without the intervention of the court. It is also known as “out of the court settlement of disputes”. It is different from adverse litigation and in this process, the parties cooperate with each other to reach a settlement for the benefit of both parties. This mechanism resolves the issues timely and in a cost-effective manner. All kinds of disputes ranging from civil, criminal, commercial, and family disputes are resolved through this. The emergence of ADR in India is a sign of a positive attitude in the justice delivery mechanism.
Concept of ADR in Constitution
The Concept of ADR is also enshrined in our Constitution. Article 21 of our Constitution speaks about the right to life which includes the right to receive speedy justice. Further, the objectives of ADRs of providing socio-economic and political justice are mentioned in the Preamble of the constitution. Lastly, ADR provides for free legal aid and equal justice in order to enforce Article 39(a) of the Constitution in the truest sense.
Various Forms of ADR
As per Section 89 of CPC, the court can refer a case for outside settlement which include
Apart from it, the parties in a commercial agreement generally put out an arbitration clause for the settlement of disputes. The Arbitration and Conciliation Act, 1996 governs the process of Arbitration and conciliation in India.
It is the most common form of ADR. Under this process, the dispute between the parties refers to a third party which is known as an Arbitrator. He examined the evidence and pronounced his decision that is called the Arbitral award which is binding on both parties. The Arbitrator is independent of both parties to maintain the sanctity of the process. It is an informal and non-judicial process for settling the dispute.
The arbitration can be voluntary as well as mandatory. There are 4 types of Arbitration namely –
- Ad Hoc Arbitration
It refers to that arbitration in which all the aspects like the number of arbitrators, manner of appointment, etc are decided by the parties themselves. There is no administration by the judicial institution. This method is quite flexible and cost-effective in nature.
- Institutional Arbitration
It refers to that form of arbitration in which a specialized institution administers the entire arbitration process. It is important to note that the institution doesn’t arbitrate but only provides the rule for the entire process. The international commercial agreements are arbitrated through this method. The International Chamber of Commerce is one of the renowned arbitration institutions.
- Statutory Arbitration
It refers to that arbitration in which the law specifies that a particular dispute will be referred to the arbitration, then it is called statutory arbitration. The Indian Council of Arbitration (ICA) introduced this concept in India.
- Fast Track Arbitration
It refers to that form of Arbitration in which the entire proceedings shall be completed in a time-bound manner as it does not allow any extension of time. The Indian Council of Arbitration has introduced this concept in India.
It is an informal and voluntary process to resolve the dispute. Under this process, an independent third person assists the parties to find a solution. It is important to note that the mediator has no power to impose any decisions on them. His primary task involves the negotiation between both the parties and ending the dispute. The mediator doesn’t have any power of enforcement.
In India, the concept of mediation can be seen in the level of village Panchayat wherein they assist the party to settle the dispute. However, the mediation process is not much popular as it can’t be enforceable by law. Further, the government hasn’t shown much enthusiasm about the mediation process.
It refers to that dispute resolution mechanism in which the disputes are tried to resolve through a conciliator which meets both the parties and facilitates communication among them. The main objective of Conciliation is to show the contrary aspect of the transaction to both sides in order to bring them together for settlement of the dispute. As with the mediator, he is also not empowered to issue any decisions with respect to the dispute.
However, there are some differences between conciliation and mediation. The conciliation is enforced by the law under Section 61 of the Arbitration and Conciliation Act, 1996 whereas the mediation is not enforceable. Secondly, the scope of functioning of a mediator is quite wide in comparison to a conciliator. The mediator plays a more active role by giving various settlement formulas whereas the role of conciliator is limited to bring the party in a frame of mind by way of communication.
It is also a mechanism of dispute resolution in which the parties come and work together to settle their existing dispute. The chief characteristic of negotiation is that there is not much involvement of the third party. The parties generally sit and try to resolve their dispute among themselves. However, if they wish to, then the parties may be represented by their attorneys. The concept of Negotiation is not recognized in India. There is no definite rule for this process.
The Lok Adalat or the People’s court has gained utmost importance in our society. These are the courts established by the government to provide speedy justice to the poor section of the society. As an instrument of social justice, these courts allow the settlement through systematic negotiation. The first Lok Adalat in India was established in Gujarat in 1982. These courts mainly fulfill the needs of the downtrodden section of society.
The Lok Adalat is statutorily recognized through the Legal Service Authority Act, 1987. The Lok Adalat is mentioned under Sections 19, 20, 21, and 22 of the Act. The type of cases that can be referred to as Lok Adalat is mentioned in Section 20 of the Act. Recently, the Delhi H.C highlighted the importance of Lok Adalat in the case of Abdul Hasan & National Legal Services Authority v. Delhi Vidyut Board and Others. In that case, the court ordered setting a permanent Lok Adalat.
The mechanism of Alternative Dispute Resolution is a serious effort to provide a fair and workable alternative to our traditional judicial system which was based on adverse litigation. Under this technique, justice is delivered in a timely and cost-effective manner. There are various mechanisms of ADR namely arbitration, mediation, conciliation, negotiation, and Lok Adalat. The emergence of Lok Adalat has served a dual purpose in India as it not only provides a platform for justice for the poor people but it also reduces the backlog of cases in our courts.