With the uprising development of nation the burden falls over the judiciary.
Even at this 21st century there is a lack of required law for establishing
social norms and peace. Our judiciary system should give scope to such
alternative methods. To fasten the process of resolution ADR plays an
After the implication of Arbitration and conciliation Act,
1996 occurred encourage the settlement of dispute though such alternative
methods. Followed by the establishment of Lok-Adalats Scope of ADR got enhanced.
Our legislative guidelines imposed obligation on the Indian Courts to encourage
the settlement of disputes through ADR. Various judicial pronouncements referred
the case to arbitration as commence by the parties to the case.
In this article we are going to discuss the evolution of ADR in India alongside
the judicial recognitions towards such alternate dispute settlements.
What is judicial precedent?
Article 141 of Indian Constitution provided Supreme Court the power to bind
all the courts by its decision except itself. Unless a judgement by Supreme
Court is overruled, it is binding on all the courts except Supreme Court. The
principles need interpretation by a judiciary to clarify the ambiguity. And
there should be a suppressing interpretation to guide the meaning of legislative
approaches created. Supreme Court being such supreme interpreter has provided
certain judgements on ADR to make it a more definite process in India.
Definition of ADR
ADR is a dispute resolution process occurs mostly in commercial disputes
ensuring better confidentiality. It is an alternative method to judiciary
proceedings Arbitration has been prevailed over centuries as an alternative for
dispute resolution in municipal courts. Dispute resolution by a third party
outside the court ensures many positive impacts besides a faster settlement in a
more justified way.
The first Arbitration Act, 1940 in India was not fully implemented due to
inadequacy. Later Arbitration and conciliation act, 1996 was passed followed
by the UNCITRAL Model in order to encourage the establishment of arbitration,
conciliation and other alternative dispute resolution.
As the over burdened courts started going towards slow adjudication midst rapid
development of business sector, alternative dispute resolution started digging
its way. In Indian business operations in national and international prospectus,
ADR brought its popularity. Being an alternative to all existing dispute
resolution methods with positive impact arbitration became one of the most
popular methods of ADR.
ADR in India: - Arbitration has undergone a massive replacement in India, i.e.
coming from settlements in villages under trees to enacting a progressive
legislation body. Derived from the Model law and the UNCITRAL Arbitration
Rules, India implemented the Arbitration and conciliation Act of, 1996.
Arbitration and conciliation Act aims at more effective and use full arbitration
process and reducing the technicality by incorporating modern concept of
Arbitration in India.
Large number of disputes pending before various judicial premises requires ADR
for an effective resolution in India. ADR provides frameworks such as
arbitration, mediation, conciliation, lok Adalat etc for dispute resolution in
222nd report of Law Commission of India
The report explained the crowded litigation before Indian judiciary. The time
consuming procedure becomes difficult with the lengthy pending cases. There is
this urge of faster dispute resolution. Accordingly court reforms were required.
The said report passed in 2009 stated that:
With the advent of the ADR, there is
a new avenue for the people to settle their disputes. More and more ADR centers
should be created for settling disputes out-of-court as is being done in many
other countries. ADR methods will really achieve the goal of rendering social
justice to the people, which really is the goal of the successful judicial
The recommendation stated there is a need of ADR mechanism to be carried forward
faster as justice dispension.
Judicial Precedents in India
Legislative bodies regulating ADR
Indian Constitution embedded ADR under Article 14 and Article 21 where it
explains equality and right to life and liberty. ADR is a mechanism works for
achieving constitutional goal. Other legislative body such as Arbitration and
conciliation Act, CPC, Legal service Authority Act works as regulatory
body for Indian ADR mechanism.
Indian judicial interpretations roam around the validity of court jurisdiction
and appointment of arbitrators and validity of award passed by such ADR
procedures. Following are some landmark judgement providing direction to ADR
method and the extent of acceptance.
Section 89 of CPC states that, courts should provide a fair opportunity for
parties to decide the settlement after observing the circumstances, and after
all those observation a term of settlement must be framed by such court. With
possible settlement methods such as Arbitration, conciliation, mediation and lok
adalat parties will have the power to choose through implementing clauses in
their agreement. Questions were raised for this said section which and duly
amended citing the requirement of ADR for Indian dispute settlement including
- In the case of Emkay Global Financial Service Limited v. Giridhar
Sondhi it was held that Arbitration Act aims at a speedy resolution of
- Supreme Court in the case of Kinnari Mallick and anr vs. Ghansyam Das
Damani held that a court has no jurisdiction for petition under section 34,
and the power of court is limited. Such power can be invoked before setting
aside a award with the consent of one party.
- Again in another landmark judgment of Supreme Court the place of
proceeding was questioned. In the case of Brahmani River Pellets Limited v.
Kamachi Industries Limited, it was held that when parties decide a place of
jurisdiction that excludes all other court. Exactly when parties decide a place
for Arbitration in the contract itself, it excludes the jurisdiction of all
- In case of In Konkan Railway Corporation v. Rani Construction Pvt.
Ltd it was decided that court must help the parties in selecting a
arbitrator rather than deciding the validity of arbitration clause.
- S.B.P. & Co. v. Patel Engineering Ltd. It was held that it is the
judiciary power of chief justice while appointing arbitrator.
- Supreme Court invalidates the discretionary power of High court
appointing sole arbitrator by stating that appointment must be made
according to arbitration Agreement.
- Supreme court in the case of Vinod Bhaiyalal Jain v. Wadhwani Parmeshwari
Cold Storage Pvt. Co ., Ltd. Held that there should be no biasness in part
of arbitrators in order to deliver proper justice to the parties.
Future of ADR in India
Constitution of India itself expresses the object of alternative dispute
redressal as to secure all citizens of India social Justice, economic and
political-liberty, equality, and fraternity. ADR is the best scheme for a
developing Country like India where pending disputes are rising burden for
The pressure of burden often makes it difficult to offer the
justified decision. A swifter resolution process is all required under reforming
laws of India. According to recent reports ADR is the best chosen method for
business disputes. It clearly establishes the impact of ADR in near future as
India is going through industrial revolution. A more smooth process which
provides a solution in a shorter period of time under the established rule of
law clears out path for Indian Judiciary.
- SCC Online
- Constitution of India
- Arbitration Act,1940
- Arbitration and Conciliation Act,1996
- UNCITRAL Model Law on International Commercial Arbitration (1985)
- UNCITRAL Arbitration rules,1976(amended 2013)
- Code of Civil Procedure, 1908
- Legal service Authority Act, 1987
- Section 89 ,Code of Civil procedure,1908
- Emkay Global Financial Service Limited v. Giridhar Sondhi
- Kinnari Mallick and anr vs. Ghansyam Das Damani (2018) 11 SCC 328
- Brahmani River Pellets Limited v. Kamachi Industries Limited
- Konkan Railway Corporation v. Rani Construction Pvt. Ltd(2002)2 SCC 388
- 8 (2005) 8 SCC 618
- Vinod Bhaiyalal Jain v. Wadhwani Parmeshwari Cold Storage Pvt. Co .,