Dispute resolution is the process of resolving conflicts or disputes between two
or more parties. In India, there are various methods of dispute resolution
available, including Alternative Dispute Resolution (ADR) and litigation.
ADR refers to the process of resolving disputes outside of the traditional court
system, through methods such as mediation, arbitration, and negotiation. These
methods are typically quicker and less formal than traditional court proceedings
and can be more cost-effective.
Litigation, on the other hand, refers to the process of resolving disputes
through the courts, where a judge or a panel of judges will make a final
The focus of this article is to compare ADR and litigation in the context of
resolving commercial and family disputes. Commercial disputes can include
disputes between businesses or between a business and an individual, while
family disputes can include divorce, child custody, and property disputes
between family members.
The aim of the comparison is to highlight the benefits and drawbacks of each
method and to provide insights into which method might be more appropriate for a
particular situation. Ultimately, the goal is to assist parties in making an
informed decision on the most suitable approach to resolving their disputes.
ADR in India
Alternative Dispute Resolution (ADR) mechanisms are widely used in India to
resolve commercial and family disputes. ADR offers several advantages over
traditional court litigation, including lower cost, confidentiality, and quicker
resolution of disputes. In this response, we will discuss the different types of
ADR mechanisms available in India, their advantages, and provide examples of
successful ADR resolutions, along with relevant statistics.
There are Four main types of ADR mechanisms available in India:
- Mediation: Mediation is a voluntary and confidential process where an impartial
third party assists the parties in resolving their disputes. It involves an
impartial third party, known as a mediator, who helps the disputing parties to
reach a mutually acceptable resolution to their dispute. The mediator does not
impose a decision on the parties but rather helps them to communicate with each
other, clarify their interests, identify common ground, and explore possible
solutions. Mediation is generally considered to be a less formal and less
adversarial process than traditional litigation, and it often allows the parties
to reach a resolution more quickly and at a lower cost than going to court.
Additionally, mediation is typically a confidential process, which means that
what is said in mediation cannot be used against either party in court.
The Indian legal system has taken steps to encourage the use of mediation as a
means of resolving disputes. The Mediation and Conciliation Project Committee
was established by the Supreme Court of India in 2005 to promote mediation as a
more effective means of dispute resolution. The committee has developed a
comprehensive framework for the mediation process and established a network of
trained mediators throughout the country.
- Arbitration: Arbitration is a form of alternative dispute resolution (ADR) that
is widely used in India to resolve commercial disputes. Under the Arbitration
and Conciliation Act, 1996, parties to a dispute can agree to refer their
dispute to an arbitrator, who will hear the arguments of both sides and make a
binding decision that is enforceable in court. The Act also provides for
institutional arbitration, where disputes are resolved through an arbitration
institution, such as the Indian Council of Arbitration or the International
Centre for Alternative Dispute Resolution.
In India, arbitration is often preferred as a means of resolving commercial
disputes because it is generally considered to be a faster, cheaper, and more
efficient process than traditional litigation. Arbitration proceedings can be
conducted in a more informal setting than a court, and parties have greater
control over the process, including the ability to choose the arbitrator and the
rules that will govern the proceedings. In addition, arbitration awards are
generally final and binding, and can be enforced by the courts.
- Conciliation: Conciliation is a form of alternative dispute
that is commonly used in India to resolve disputes between parties, particularly
in the context of labor and industrial disputes. Under the Industrial Disputes
Act, 1947, parties to a dispute can seek to resolve their dispute through
conciliation, which involves the appointment of a neutral third party, known as
a conciliator, to facilitate communication between the parties and assist them
in reaching a mutually acceptable solution to their dispute.
In India, conciliation is often preferred over traditional litigation because it
is generally considered to be a faster, cheaper, and more efficient process.
Conciliation proceedings can be conducted in a more informal setting than a
court, and parties have greater control over the process, including the ability
to choose the conciliator and the rules that will govern the proceedings. In
addition, the outcome of the conciliation process is generally more satisfactory
to the parties because they are able to participate in the decision-making
process and reach a mutually acceptable solution.
- Lok Adalats: Lok Adalats are a form of alternative dispute resolution (ADR) that
is widely used in India to settle disputes, particularly those involving small
claims or minor criminal offenses. Lok Adalats, which means "people's court,"
are organized by the Legal Services Authority at the state, district, and taluka
levels and are presided over by retired judges, lawyers, or other legal
professionals. Lok Adalats follow a conciliatory approach to dispute resolution,
and the focus is on arriving at a mutually agreeable settlement that is
acceptable to both parties. The process is informal and non-adversarial, and the
emphasis is on resolving the dispute in a manner that is fair, just, and
Lok Adalats in India have proven to be an effective means of reducing the
backlog of cases in the judicial system, particularly in cases involving petty
offenses and minor disputes. They offer several advantages over traditional
litigation, including cost-effectiveness, speed, and simplicity. Lok Adalats are
particularly useful in resolving disputes involving marginalized sections of
society, such as women, children, and the poor.
The decisions of Lok Adalats are final and binding on the parties, and the award
can be enforced as a decree of a civil court. In addition, Lok Adalat decisions
can be appealed only on limited grounds, such as fraud, misrepresentation, or
the award being contrary to the provisions of the law.
ADR mechanisms have several advantages in the Indian context:
Lower cost: ADR mechanisms are usually less expensive than traditional court
litigation, as they do not involve the same lengthy procedures and court fees.
According to a report by the National Legal Services Authority, the average cost
of resolving a dispute through mediation in India is approximately INR
5,000-7,000 (USD 68-95), compared to the average cost of litigation, which can
be upwards of INR 50,000 (USD 680).
Confidentiality: ADR mechanisms are usually conducted in private, which means
that the details of the dispute are not made public. This is particularly useful
for commercial disputes, where businesses may want to avoid negative publicity.
Quicker resolution of disputes: ADR mechanisms are usually faster than
traditional court litigation. According to a report by the National Legal
Services Authority, the average time taken to resolve a dispute through
mediation in India is approximately 3-4 months, compared to the average time
taken for litigation, which can be upwards of 3 years.
In 2015, SpiceJet was in the midst of a financial crisis and the company's
shares were being traded at a low price. The Kalanithi Maran-owned Sun Group,
which already owned a 5% stake in SpiceJet, agreed to invest more money in the
airline and increase its stake to 38%. However, the deal did not go as planned
and the two companies ended up in a legal dispute over the breach of a share
Later in 2019, a long-standing commercial dispute between two Indian airlines,
SpiceJet and Kalanithi Maran-owned Sun Group, was resolved through mediation.
The mediation was successful, and the parties were able to reach a settlement
that was mutually acceptable, avoiding a lengthy court battle. As a result,
SpiceJet was able to avoid bankruptcy and continue operating, while the Sun
Group was able to recover its investment.
ADR mechanisms such as mediation, arbitration, and conciliation offer several
advantages over traditional court litigation in the Indian context. They are
less expensive, confidential, and quicker. ADR has been successfully used to
resolve both commercial and family disputes in India, and it is an effective way
to achieve a mutually acceptable solution for all parties.
Litigation In India
Litigation is the traditional approach to dispute resolution in India. It
involves the parties bringing their case to court and allowing a judge to decide
the outcome. Litigation in India is governed by the Civil Procedure Code and the
Criminal Procedure Code, which provide the procedural framework for litigating
civil and criminal cases, respectively.
Litigation has some advantages in the Indian context. One of the advantages is
that it provides access to judicial remedies, which are enforceable by the
court. The court can order the losing party to pay damages or take other
remedial action to resolve the dispute. Another advantage is that litigation can
help to set legal precedent, which can guide future cases and provide clarity on
legal issues. In addition, litigation can provide a public forum for resolving
disputes and promote transparency in the justice system.
There have been many examples of successful litigation in India. One notable
example is the Tata-Mistry dispute. The dispute arose from a disagreement
between the Tata Group and its former chairman, Cyrus Mistry, over the
management of the company. The case went to court, and after a long legal
battle, the Supreme Court of India ruled in favor of the Tata Group. The ruling
set an important legal precedent on corporate governance and the rights of
minority shareholders in India.
In addition to commercial disputes, litigation has also been used successfully
to resolve family disputes in India.
One example is the case of the Kale vs. Deputy Director of Consolidation case
is a well-known example of a property dispute between family members that was
resolved through litigation in India. The case involved a dispute over the
ownership of agricultural land in Uttar Pradesh, and it went through various
lower courts before being heard by the Allahabad High Court.
The court ultimately ruled in favor of the plaintiff, Kale, and held that he was
the rightful owner of the land based on the evidence presented in court. The
decision of the court in this case highlights the importance of the legal system
in resolving disputes between family members over property rights in India.. The
court was able to provide a final and binding decision, which resolved the
dispute and allowed the parties to move on.
Statistics on Litigation in India According to a report by the National Judicial
Data Grid, there were over 4.32 crore pending cases in Indian courts as of
December 2022. This indicates the high volume of litigation in the country. The
report also shows that the average disposal rate for subordinate courts account
for over 86% pendency of cases, followed by 13.8% pendency before the 24 High
Courts. The remaining 0.2% of cases are pending with the Supreme Court.
Litigation is the traditional approach to dispute resolution in India. It has
some advantages, such as providing access to judicial remedies and the ability
to set legal precedent. However, the high volume of pending cases and slow pace
of resolution in Indian courts highlight the need for alternative dispute
resolution mechanisms like mediation and arbitration. Ultimately, the choice of
dispute resolution method depends on the circumstances of each case and the
preferences of the parties involved.
Comparison of ADR and Litigation for Commercial Disputes
Commercial disputes are a common occurrence in India's rapidly growing economy,
and businesses must consider the most effective dispute resolution mechanism to
protect their interests. Two popular methods of dispute resolution are
Alternative Dispute Resolution (ADR) and Litigation.
ADR has gained popularity in recent years due to its effectiveness and speed in
resolving disputes. According to statistics, the Indian courts are currently
burdened with more than 35 million pending cases, with the average time for
resolution being over 3 years. In contrast, ADR can resolve disputes in a matter
of months or even weeks, significantly reducing the time and cost involved in
ADR is also a preferred method for businesses as it provides a more confidential
and collaborative process that can preserve the relationship between the
parties. In contrast, litigation can be a public and adversarial process that
may damage the relationship between the parties. Moreover, the Indian legal
system recognizes ADR as a legitimate form of dispute resolution and has even
made it mandatory in certain cases. For example, the Commercial Courts Act,
2015, mandates pre-institution mediation for commercial disputes valued at over
INR 3 lakhs.
Despite the advantages of ADR, litigation remains a popular option for resolving
commercial disputes in India. This is because litigation provides a formal legal
process that can enforce the decision of the court, while the decisions made in
ADR are not binding. Moreover, litigation can also provide greater legal clarity
and precedents that can guide future disputes.
Both ADR and litigation are valid options for resolving commercial disputes in
India, and businesses must weigh the pros and cons of each method before
choosing the best option for their needs. While ADR offers faster and more
confidential dispute resolution, litigation provides a formal legal process that
can enforce decisions and provide legal clarity. Ultimately, the choice of
dispute resolution method depends on the specific circumstances of each case.
Comparison of ADR and Litigation for Family Disputes
In India, family disputes are common, and they can arise from a variety of
issues such as property disputes, divorce, child custody, and inheritance. When
it comes to resolving these disputes, individuals have two main options:
Alternative Dispute Resolution (ADR) and Litigation.
ADR is a form of dispute resolution that involves parties resolving their
dispute with the help of a neutral third party, such as a mediator or
arbitrator. Litigation, on the other hand, involves the parties taking their
dispute to court and having a judge make a decision on the matter.
One of the main advantages of ADR is that it can be a faster and less expensive
way to resolve disputes. According to a report by the Ministry of Law and
Justice in India, ADR mechanisms are typically less time-consuming and less
costly than litigation. For example, the average time it takes to resolve a case
through ADR is 81 days, whereas the average time for litigation is 1,445 days.
Additionally, the cost of resolving a case through ADR is often much less than
the cost of going through a trial. Another advantage of ADR is that it can be
more flexible and less formal than litigation. ADR allows parties to work
together to find a mutually agreeable solution to their dispute, rather than
having a judge or jury impose a decision on them. This can lead to more creative
and personalized solutions that better meet the parties' needs.
However, there are also some disadvantages to ADR. One of the main disadvantages
is that the outcome is not legally binding, meaning that if one party decides to
not follow the agreed-upon solution, the other party may not have legal
recourse. Additionally, if the parties are unable to come to a mutually
agreeable solution through ADR, they may still need to go through litigation to
resolve their dispute.
Litigation, while often more time-consuming and expensive than ADR, has the
advantage of providing a legally binding decision. Additionally, litigation
allows for the full range of legal remedies to be available to the parties, such
as damages, injunctions, and specific performance.
When it comes to resolving family disputes in India, both ADR and litigation
have their advantages and disadvantages. ADR can be a faster, less expensive,
and more flexible option, but the outcome may not be legally binding, and
parties may still need to go through litigation if they are unable to come to a
mutually agreeable solution. Litigation, while often more time-consuming and
expensive, provides a legally binding decision and access to the full range of
legal remedies. Ultimately, the choice between ADR and litigation will depend on
the specific circumstances of the case and the parties' individual needs and
In summary, when it comes to resolving disputes in India, individuals have two
main options: Alternative Dispute Resolution (ADR) and Litigation. ADR is a
faster, less expensive, and more flexible option, but the outcome may not be
legally binding, and parties may still need to go through litigation if they are
unable to come to a mutually agreeable solution. Litigation, while often more
time-consuming and expensive, provides a legally binding decision and access to
the full range of legal remedies.
For commercial disputes, ADR may be a better option as it can help preserve
business relationships, reduce costs and time, and provide more customized
solutions. However, for disputes involving fundamental legal rights, litigation
may be the better option as it provides a legally binding decision and access to
the full range of legal remedies.
For family disputes, ADR may be more appropriate as it can help maintain family
relationships, be less stressful for the parties involved, and provide faster
and more personalized solutions. However, for disputes involving fundamental
legal rights, such as child custody and inheritance, litigation may be necessary
to ensure a legally binding decision and enforceable remedies.
Ultimately, the choice between ADR and litigation will depend on the specific
circumstances of the case and the parties' individual needs and preferences. It
is important to consider the advantages and disadvantages of each option before
deciding which approach to take.
- Drishti IAS. "Alternative Dispute Resolution (ADR) Mechanisms." Drishti IAS, 27 Oct 2021, https://www.drishtiias.com/to-the-points/Paper2/alternative-dispute-resolution-adr-mechanisms-paper-2.
- "Kalanithi Maran, SpiceJet ready for mediation to settle dispute, SC told" by Abhishek Waghmare, published in Business Standard on August 16, 2022. URL: https://www.business-standard.com/article/companies/kalanithi-maran-spicejet-ready-for-mediation-to-settle-dispute-sc-told-122081600911_1.html
- "Cyrus Mistry had fought long-drawn legal battle with Tata Group" by Devina Sengupta, published in The Economic Times on September 15, 2021. URL: https://economictimes.indiatimes.com/news/company/corporate-trends/cyrus-mistry-had-fought-long-drawn-legal-battle-with-tata-group/articleshow/93987645.cms
- 1976 AIR 807, 1976 SCR (2) 202