The process of resolving a disagreement or conflict between various parties
is known as dispute resolution. Importantly, conflict resolution can be a means
to settle a dispute without going to court. Business owners must be
knowledgeable about dispute resolution techniques so they can deal with any
problems that can arise internally or with clients or customers.
The traditional method of resolving disputes, which is through litigation, is a
drawn-out procedure that impedes the administration of justice and overburdens
the judicial system. Alternative Dispute Resolution (ADR) techniques including
arbitration, conciliation, mediation, etc. are helpful in this situation.
A problem or dispute can be resolved through alternative dispute resolution,
frequently without the necessity for litigation. Litigation expenses can be
extremely significant, particularly if a judgment is appealed. Despite the
availability of payment options like litigation funding, small firms cannot
afford the high risk of filing a lawsuit.
ADR, with its variety of methodologies, plays a vital role in India in dealing
with the problem of cases that are pending in Indian courts. Alternative Dispute
Resolution mechanisms give the Indian judiciary scientifically established tools
that aid in lightening the load on the courts. Arbitration, conciliation,
mediation, negotiation, and Lok Adalat are just a few of the different
techniques of dispute resolution offered by ADR.
Various Modes of Alternative Dispute Resolution
Arbitration is the out-of-court resolution of a dispute by one or more (odd
number) individuals chosen by both parties to serve as arbitrators. The
Arbitration and Conciliation Act, 1996 states in Section 2(1)(a) that
"Arbitration means any arbitration, whether or not administered by permanent
In other words, by putting arbitration under the purview of the Arbitration and
Conciliation Act, of 1996, all forms of arbitration, regardless of their nature,
have been statutorily recognized in India. It consists of a streamlined trial
with streamlined evidence procedures and no discovery. Depending on the
nationality of the parties, the arbitral decision, or the arbitrators involved,
there are many forms of arbitration.
- Ad Hoc Arbitration:
Ad hoc arbitration refers to a form of arbitration in which the parties
mutually agree to have their disputes resolved through arbitration
proceedings before arbitrators they have jointly chosen, as opposed to an
institution. One of the most popular types of arbitration in India is one in
which the parties voluntarily agree on the arbitration. In this form of
arbitration, the parties and the arbitrators decide the arbitration's rules
mutually and independently without consulting a third-party arbitral
- Institutional Arbitration:
Institutional arbitration is a type of arbitration in which the arbitration
is conducted by an institution that has been established with the intent of
resolving conflicts through arbitration or other ADR procedures. These
organizations might have a national or global scope, and they typically
establish their own arbitration rules. However, these regulations cannot
supersede the provisions of the 1996 Arbitration and Conciliation Act.
- Domestic Arbitration:
Domestic arbitration is a type of arbitration that occurs when both parties
are subject to the same jurisdiction and the arbitration is held there. In
other words, both parties must be citizens of the same country as the
arbitration venue, or in the case of body corporates, they must have been
incorporated in the same country as the venue
- International Arbitration:
In international arbitration, at least one of the disputing parties must be
a foreign national or, in the case of a body corporate, must have been
established abroad. Or, to put it another way, at least one of the parties
must be a foreign national or a resident of a foreign country regularly.
Additionally, the primary control and central administration of a body
corporate, association, or group of individuals must be run from a location
outside of India. Another possibility is that one of the parties is a
- Emergency Arbitration:
Emergency arbitration is a type of arbitration when the arbitral tribunal
grants temporary relief to a party seeking to prevent the loss or alteration
of their assets and/or evidence. It is comparable to the idea of temporary
injunctions issued by civil courts. The Arbitration and Conciliation Act, of
1996 does not currently contain any references to "emergency arbitration" in
India, and its enforceability is still up in the air. However, several
arbitral institutions, including the Delhi International Arbitration Centre,
the Madras High Court Arbitration Centre (MHCAC), the Mumbai Centre for
International Arbitration, and the Court of Arbitration of the International
Chambers of Commerce-India, have adopted the idea of emergency arbitration
The parties to a dispute come together during the mediation process.
Nevertheless, with an impartial third party present, the mediator strives to
assist the parties in reaching an amicable agreement. The mediator is objective,
and their job is to assist both parties in resolving rather than making a
decision. Since mediation is more formal than arbitration and litigation, it is
typically far less expensive. In mediation, a resolution outlining the terms
that both parties have agreed to abide by is created first.
There Are Various Steps Involved In Mediation
- Opening paragraph
- Joint meeting
- Distinct session.
The mediator welcomes everyone, outlines the mediation's objectives and ground
rules, and exhorts all parties to cooperate to reach a resolution when the
parties are seated at a table.
Depending on how receptive the participants are, the mediator may encourage the
parties to speak immediately to the opening statements to clarify the issues.
The mediator may bring the parties back together to actively negotiate after
caucuses, but this is unusual. The parties are typically not brought back
together by the mediator until a settlement has been achieved or the mediation's
allowed time has passed.
If the parties can agree, the mediator will usually put its principal terms on
paper and request that both parties sign the written agreement. If the parties
are unable to agree, the mediator will assist them in deciding if it would be
beneficial to meet again later or have further discussions over the phone.
The mediator must guarantee that all parties and their attorneys are present
before the mediation process may begin.
BATNA stands for the best alternative to negotiated agreement - It is the best
result that either party could have envisioned. It's an appropriate setting as
each party considers what their ideal case scenario might include.
MLATNA stands for the most likely alternative to negotiated agreement - For a
successful negotiation, the result always lies in the middle, the mediator after
considering both parties comes up with the most likely outcome. Here the result
is not always in the middle but a little left or right of the center depending
on the negotiation situation.
WATNA stands for Worst Alternative to Negotiated Agreement - It represents the
worst scenario that any party can imagine could occur during negotiations.
Examining the alternative outside of mediation-specifically, litigation-and
talking about the repercussions of failure to settle, such as how it would
affect the parties' relationships or businesses-might be useful to the parties
and mediator. The worst and most likely scenarios should always be taken into
account, as people don't always receive the best results.
Conciliation is a flexible and informal method of alternative dispute resolution
(ADR) where opposing parties settle their differences amicably with the help of
one or more conciliators who work impartially. A conciliator, as opposed to a
mediator, is more proactive in encouraging the parties to seek a settlement by
putting forward settlement options at any point during the conciliation process.
In this regard, it should be noted that neither the Civil Procedure Code (CPC)
nor the Indian Evidence Act binds the mediator nor the conciliator. They are
constrained by the rules of natural justice and are not permitted to impose
their preferences on the parties in any way.
Today, it is undeniable that India has made great strides in recognizing,
promoting, and putting other alternative dispute resolution (ADR) techniques
into practice. The dedication of the Indian government to turning India become a
hub for arbitration and other ADR mechanisms is demonstrated by the several
revisions made to the Arbitration and Conciliation Act, of 1996 to meet the
demands of the constantly changing international business community.
However, India still has a long way to go before it is the preferred country by
international commercial organizations for the simplicity of arbitrating
business disputes and using other ADR techniques. The only way to properly apply
constant modifications based on lessons learned from the relevant commercial
jurisdictions around the world about arbitration capitalize on India's position
as the world's expert in rapid and effective dispute resolution.