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Alternative Dispute Resolution

I realized that the true function of a lawyer was to unite parties... The lesson was so indelibly burnt into me that a large part of my time during the twenty years of my practice as a lawyer was occupied in bringing about private compromise of hundreds of cases. I lost nothing thereby not even money; certainly not my soul. -Mahatma Gandhi

In order to make our social life peaceful, dispute resolution is an indispensable process. This dispute resolution aids to resolve conflicts so as to enable group and persons to maintain co-operation. It is sine quo non for maintenance of social life and security of social order so that it does not become difficult for the individuals to carry on their life together.

The term ‘Alternative Dispute Resolution’ is used to describe several modes of resolving legal disputes. But such resolution has become impracticable for many individuals including both business world as well as common men as experienced by them to file suits and get timely justice. For the parties to be heard and decided it takes years, so in order to solve this issue of delayed justice ADR Mechanism has been displayed in response thereof.[1]

Concept of Alternative Dispute Resolution
Both nationally and internationally, the method of Alternative Dispute Resolution is being increasingly acknowledged in field of law and commercial sectors. These methods help the parties in order to resolve the disputes at their own terms that too cheaply and as expediously as possible. In almost all contentious matters, which are capable of being resolved under law by way of agreement between parties, ADR can be used. In several categories of disputes, especially civil, commercial, industrial and family disputes, ADR techniques are used. The preamble of the Indian Constitution enshrines the goal of ADR, which enjoins the state to secure to all the citizens of India, justice social, economical, political- liberty, equality and fraternity.[2]

According to the 14th Law Commission Report, the reason for the delay results not from the procedure laid down by the legislations but by the reason of non-observance of its important decisions. In the case of Brij Mohan Lal v. Union of India[3], it was held by the court that -‘An independent and efficient judicial system in one of the basic structures of our constitution… It is our Constitutional obligation to ensure that the backlog of cases is declared and efforts are made to increase the disposal of cases.’

Alternative Dispute Resolution Under Code Of Civil Procedure, 1908
In India, the Code of Civil Procedure, 1908 was amended and the insertion of Section 89 and Order 10 Rule 1A-1C. Section 89 of the Code provides for the settlement of disputes outside the court and it is based on the recommendations which were made by the Law Commission of India and Malimath Committee. The suggestion made by the Law Commission of India was that the attendance of any party to the suit or proceedings may be required to appear in person with a view to arrive at an amicable settlement of dispute between the parties. The recommendation made by the Malimath Committee was that it is the obligation on the court to refer the dispute after the framing of the issues for the settlement either by way of Arbitration, Conciliation, Mediation, Judicial Settlement through Lok Adalat. The parties can resort to filing of suits only when they fail to get their disputes to be settled through any of the alternative disputes resolution.[4]

Section 89 of the Code of Civil Procedure, 1908 runs as follows:
(1) Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for –

(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.

(2) where a dispute has been referred –
(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for - 59 - arbitration or conciliation were referred for settlement under the provisions of that Act;

(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;

(c) for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed."

Of course, section 89 of the Code is to be read with Rule 1-A of Order 10, which runs as follows:
Order 10 Rule 1-A. Direction of the Court to opt for any one mode of alternative dispute resolution.--After recording the admissions and denials, the Court shall direct the parties to the suit to opt either mode of the settlement outside the Court as specified in sub- section (1) of section 89. On the option of the parties, the Court shall fix the date of appearance before such forum or authority as may be opted by the parties.
Order 10 Rule 1-B. Appearance before the conciliatory forum or authority.--Where a suit is referred under rule 1A, the parties shall appear before such forum or authority for conciliation of the suit.
Order 10 Rule 1-C. Appearance before the Court consequent to the failure of efforts of conciliation.--Where a suit is referred under rule 1A and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the Court and direct the parties to appear before the Court on the date fixed by it.[5]

Different Methods of Alternative Dispute Resolution
Different methods of ADR can be summarized as:
1. Arbitration
2. Conciliation
3. Mediation
4. Judicial Settlement and
5. Lok Adalat

· Arbitration
One of the forms of alternative dispute resolution (ADR) is arbitration which is a technique for the resolution of disputes outside the courts where the parties to dispute refer to one or more persons who are called as Arbitrators, by whose decision they are bound to abide with. In this technique a third party reviews the evidence and imposes the decision which will be legally binding on both the parties. The parties to the dispute have limited rights of appeal and review of arbitration awards.[6]

Arbitration may be either voluntary or compulsory. It is clear that compulsory arbitration can come from a contract where the parties have voluntarily entered into.

· Conciliation
Conciliation as a form of alternative dispute resolution is a technique in which the parties to the dispute use a conciliator who meets the parties separately so as to resolve their differences. The way they do this is by is by lowering tensions, improving communications, interpretation of issues and bringing about a negotiable settlement.

This form of ADR is considered to be a voluntary proceeding where the parties to the dispute are free to agree and attempt to resolve their dispute by this method. Such form of ADR is flexible as it allows the parties to define the time, structure and the content of the conciliation proceedings. Conciliation, being a voluntary process involves a conciliator who will be a trained and qualified neutral and facilitates negotiations between the parties by getting himself involved in discussions and listening to both the sides and to arrive at a mutually acceptable agreement. Basically, a conciliator does not decides for the parties but strives to support them and aiding them to find a solution which will be compatible to both the parties.[7]

· Mediation
Mediation is seen as a voluntary and informal process of resolution of disputes. Mediation technique is a simple, voluntary, and a structured negotiation process, where the assistance is given to the parties by a neutral third party for amicably resolving disputes by using negotiation techniques. Basically, mediation is controlled by the parties themselves and the duty of the mediator is only to act as facilitator to help the parties in order to reach a negotiated settlement of their dispute. No decision of the mediator can be impose upon the parties.[8]

· Judicial Settlement
Judicial settlement as one of the mode of the alternative dispute resolution is given under Section 89 of the Code of Civil Procedure, 1908. As such, there are no specified rules framed so far. In judicial settlement, the concerned judge tries to settle the dispute between the parties amicably.

· Lok Adalat
Lok Adalat also known as people’s court as established by the government to settle the disputes is gaining popularity through conciliation and compromise. It is a judicial institution which is developed by the people themselves for social justice based on settlement. The first Lok Adalats was held in Una aim the Junagadh district of Gujarat state. When the matter is referred to the Lok Adalat, then the provisions of the Legal Services Authority Act, 1987 will

Section 19- Organization of Lok Adalats
(1) Every State Authority or District Authority or the Supreme Court Legal Services Committee or every High Court Legal Services Committee or, as the case may be, Taluka Legal Services Committee may organise Lok Adalats at such intervals and places and for exercising such jurisdiction and for such areas as it thinks fit.

(2) Every Lok Adalat organised for an area shall consist of such number of:-
(a) serving or retired judicial officers; and
(b) other persons, of the area as may be specified by the State Authority or the District Authority or the Supreme Court Legal Services Committee or the High Court Legal Services Committee, or as the case may be, the Taluka Legal Services Committee, organising such Lok Adalat.

(3) The experience and qualifications of other persons referred to in clause (b) of sub-section (2) for Lok Adalats organised by the Supreme Court Legal Services Committee shall be such as may be prescribed by the Central Government in consultation with the Chief Justice of India.

(4) The experience and qualifications of other persons referred to in clause (b) of sub-section (2) for Lok Adalats other than referred to in subsection (3) shall be such as may be prescribed by the State Government in consultation with the Chief Justice of the High Court.

(5) A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or settlement between the parties to a dispute in respect of –
(i) any case pending before it; or
(ii) any matter which is falling within the jurisdiction of, and is not brought before any court for which the Lok Adalat is organized. Provided that the Lok Adalat shall have no jurisdiction in respect of any case or matter relating to an offence not compoundable under any law.[9]

Alternative Dispute Resolution techniques such as arbitration, mediation, conciliation, judicial settlement and lok adalat now represent an array of other possible ways in which a third party can be involved in dispute resolution.[10]

[2] Ibid.
[3] (2012) 6 SCC 502.
[4] Supra note 2.
[5] Section 89 of Code of Civil Procedure, 1908
[6] Supra note 4.
[7] Ibid.
[8] Ibid.
[9] Section 9 of Legal Services Authority Act, 1987

Written by: Shubham Mongia

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