"Keep The Option Of Going To Courts As Last Resort
" -- CJI NV Ramana
Every legal system is trying to attain the legal idea that whenever there is
wrong there must be a remedy so that no one shall have to take law into his own
hands. Court has become overcrowded with litigation and large numbers of cases
are pending in the court which ultimately leads to dissatisfaction among the
people regarding the justice delivery system and its ability to dispense
justice. It is important that this dissatisfaction can be restored, and
mechanism be adopted which do not have complexities of long drown litigation
procedure but be as effective and binding on the parties adopting it.
Alternate Dispute Resolution is a panacea to almost all disputes which can be
settled outside the court in an amicable manner. It is used since ages and
through histories by innumerable countries and its people in an informal manner
to address any conflict. In contemporary times, the uses of ADR have rather
increased in an institutionalized manner by countries to address any problem
arising out of international trade and business.
It is a technique through which the disputes can be settled without intervention
of court proceeding. The main purpose of existence of ADR is to make available
economical, easy, speedy and reachable justice. ADR techniques are
non-judicial body in nature which always deals with all controversial issues
which can be resolved in the law through conformity among the parties and this
idea inspired by most approved faith i.e., justice delayed is justice denied.
Meaning And Modes Of ADR
In today's context, ADR can be elucidated as the most amicable form of dispute
resolution. A well-suited panacea to costly and time- consuming litigation or
discord resolution. Litigation is utterly complex for a layman whereas ADR is a
client friendly technique where a client fully understands his case and can
track its progress.
An alternative for the cumbersome and needless litigation is provided by ADR. In
general, a third party or independent person such as an ADR practitioner;
mediator, negotiator, or conciliator is set to reach a proportionate and
plausible decision making. ADR often exhaust a dispute at its initial stage and
prevents the litigants to seeks courts assistance.
Types Of ADR In India
Arbitration, an alternative dispute resolution mechanism (ADR), is often
described as "a binding voluntary alternative dispute resolution process by
a private forum chosen by the Parties".
It is inherently expected, that:
If the Parties with their eyes wide open have consented to refer the matter
to the arbitration, then normally the finding of the Arbitrator should be
accepted without demur.
Apparently, after the pronouncement of the arbitral award the Court(s) are
expected to discharge a mere "supervisory role",
In ONGC vs Saw Pipes, one of the first detailed judgment(s)
analysing and interpreting Section 34 and Associate Builders vs DDA, that
had the benefit of the ONGC judgment (supra), the Supreme Court
painstakingly defined and re-defined, the limited scope of interference with
Mediation is an Alternative Dispute resolution where a third neutral party
aims to assist two or more disputants in reaching agreement.
It is an easy and uncomplicated party centered negotiation process where
third party acts as a mediator to resolve dispute amicably by using
appropriate communication and negotiation techniques.
This process is totally controlled by the parties. Mediator's work is just
to facilitate the parties to reach settlement of their dispute. Mediator
doesn't impose his views and make no decision about what a fair settlement
- Conciliation is a form of arbitration but it is less formal in nature.
- It is the process of facilitating an amicable resolution between the
parties, whereby the parties to the dispute use conciliator who meets with
the parties separately to settle their dispute
- Conciliator meet separately to lower the tension between parties,
improving communication, interpreting issue to bring about a negotiated
- There is no need of prior agreement and cannot be forced on party who is
not intending for conciliation. It is different from arbitration in that
Lok Adalat is called 'People's Court' presided over by a sitting or retired
judicial officer, social activists or members of Legal profession as the
chairman. National Legal Service Authority(NALSA) along with other Legal
Services Institutions conducts Lok Adalats on regular intervals for exercising
Any case pending in regular court or any dispute which has not been brought
before any court of law can be referred to Lok Adalat. There is no court fees
and rigid procedure followed, which makes the process fast. If any matter
pending in court of referred to the Lok Adalat and is settled subsequently, the
court fee originally paid in the court when the petition filed is also refunded
back to the parties.
Parties are in direct interaction with the judge, which is not possible in
regular courts. It depends on the parties if both the parties agree on case long
pending in regular court can be transferred to Lok Adalat. The persons deciding
the cases have the role of statutory conciliators only, they can only persuade
the parties to come to a conclusion for settling the dispute outside the regular
court in the Lok Adalat.
Legal Services Authorities (State or District) as the case may be on receipt of
an application from one of the parties at a pre-litigation stage may refer such
matter to the Lok Adalat for which notice would then be issued to the other
party. Lok Adalats do not have any jurisdiction to deal with cases of
Implications Of ADR In Indian Society
India is a country of 1.3 Billion where we have only 21.03 judges per million
population and approximately 4 crore cases are pending in various district
court, about 59 lakhs in High courts and 70k in Supreme Court. This makes
expeditious trial a distant reality and the naïve judicial infrastructure with
its slow rate of disposal further exacerbate the situation.
Contemporarily, the global bi-lateral, trilateral or multiliterate trade demands
the expeditious dispute resolutions. National or international companies can't
afford to lose 10-20 precious years to resolve simple disputes. More so it gives
a major set- back to the economies.
The Constitution of India spells out egalitarian urges with socio-economic
goals, imposing upon all the organs of the State the responsibility to promote
the Constitutional ethos and the goals. The existence of a properly functioning
justice system increases citizens' confidence and their willingness to bring
disputes to court.
Unfortunately, the picture of the Indian legal system at present appears gloomy.
In order to cope up with 1.3 billion population and provide them the inherent
right of access to justice, can be done through ADR systems with more strength.
The accelerated pressure upon the judicial system is to an extent reduced with
empowering ADR system. ADR is the best suited option for the future of Indian
dispute resolution and its ever growing economy.
Evolutionary Road Of ADR In India
Although, ADR is a young theoretical phenomenon but it has been practiced since
ages by people and countries. In ancient India when there was Kulas, people used
to live in joint families with their clans and when there was caste system
prevalent in the society. The disputes among the kulas were resolved by the head
of the of the family, clan or Kula. Likewise, when there was common trade,
corporations or Shrenis among the people, they used to appoint person to resolve
the disputes within the Shrenis.
Pre- Independence: British rule
During the British rule in India, many legislations were introduced and a
drastic change came in the administration of India. In 1772, the courts were
empowered to refer disputes to arbitration either at the request of the parties
or by its own discretion. Then after a decade, in 1859 The Code of Civil
Procedure was enacted, sections 312 to 327 of the act mentioned arbitration but
in 1882 the sections relating to arbitration was repealed.
In 1899 The Indian Arbitration Act, 1899 was enacted to give effect to alternate
dispute mechanism in India. The act was based on the English legislation.
Then in 1908, CPC was again amended and section 89 with second schedule gave
wide powers to the courts to refer the disputes to ADR mechanism. Then, The
Indian Arbitration Act, 1899 and section 89 read with second schedule of Code of
Civil Procedure, 1908 were two effective legislation to deal with arbitration.
Thereafter, in 1937 Geneva Convention was signed and adopted by India and a
parallel legislation was introduced in the form of The Arbitration (Protocol and
Convention) Act, 1937. In 1940, The Indian Arbitration Act, 1899 and section 89
with second schedule of CPC was repealed and replaced by The Arbitration Act,
In local levels Panchayats were very effective in resolving the disputes in
villages in India.
Post- Independence Era
The Arbitration (Protocol and Convention) Act, 1937 for the enforcement of
foreign awards and The Arbitration Act, 1940 for referring disputes to ADR
mechanism were presently in force in India. Then in 1961, India became signatory
to the New York Convention and The Foreign Award (Recognition and Convention)
Act, 1961 was enacted.
In 1981, in M/S Guru Nanak Foundation vs. Rattan Singh & Sons, the Supreme Court
described the Arbitration Act, 1940 in off- quoted passage. It observed that
"the way in which the proceedings under the act are conducted and without an
exception challenged in courts, has made lawyers laugh and legal philosophers
weep. Experience shows and law reports bear ample testimony that the proceedings
under the act have become highly technical and accompanied by unending
prolixity, at every stage providing a legal trap to the unwary."
In 1985, the UNCITRAL model law was adopted and signed by India on International
In 1996, finally The Arbitration (Protocol and Convention) Act, 1937; The
Arbitration Act, 1940 and The Foreign Award (Recognition and Convention) Act,
1961 was repealed and consolidated in a single piece of legislation following
the UNCITRAL model law, the act was called the Arbitration and Conciliation Act,
1996. to make the act more effective and efficient Section- 89 with Order- X
(Rule- 1A to 1C) was re- introduced in CPC in 2002. The act of 1966 was amended
twice in 2015 , 2019 and 2021. 
Contemporary Judicial Dogmas On ADR
In India ADR is a mechanism which puts forward the constitutionally enshrined
principle of social, economical, and political justice. ADR is also embedded
under Article 14 and Article 21 where it explains equality and right to life and
liberty. Indian judicial interpretations roam around the validity of court
jurisdiction and appointment of arbitrators and validity of award passed by such
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 disputes.
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 other courts.
In case of In Konkan Railway Corporation v. Rani Construction Pvt. Ltd
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
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.
Recent Trends And Future Possibilities In ADR
The covid-19 pandemic has a sweeping effect on how ADR functions in India at
present. ADR has been potentially transformed into ODR(Online dispute
resolution). ODR though a branch of ADR has emerged as the most preferred mode
of dispute resolution outside courts. Traditionally, communication – both verbal
and non-verbal in dispute resolution has existed without technology and required
the physical presence of parties in a pre-identified, designated physical space.
However, the developments in ICT and increased access to the internet has
brought into question this assumption– that effective communication and thereby
dispute resolution, necessarily requires physical congregation.
In India, the judiciary has been leading the way. There have been several
pivotal initiatives through the eCourts Mission Mode Project whose impact will
percolate both vertically and laterally. However, to make dispute resolution far
more effective, there is a need for an efficient framework that resolves
disputes before they approach the courts. This Committee is concerned with
creating one such framework, which builds on past efforts and takes a leap
towards truly achieving the ideal enshrined in our Constitution -'access to
justice' for all.
In the context of the pandemic, the judiciary has led the way by responding
positively to the technological needs of the system. It has conducted a large
volume of virtual hearings8 and as a result, the judiciary has in many ways
redefined the very idea of a traditional judiciary synonymous with crowded court
complexes, overflowing paper files and courtroom hearings. However, the
successful use of technology has not been limited to just the courts but
extended to other institutions. The Lok Adalat has been transformed into online
versions- e-Lok Adalats.
fortunately, the current ecosystem and preparedness has been very promising. For
instance, the judiciary has been unequivocal in its support for ODR both in
terms of judges vocally recognizing its potential and in terms of the judicial
decisions that have set the foundation for future ODR integration (such as the
recognition of online arbitration or electronic records as evidence). The
Executive, in the form of Government Departments and Ministries have also been
leading the way.
For instance, the RBI released an ODR policy for digital payments, the MSME
sector saw the introduction of the SAMADHAAN portal and the Department of Legal
Affairs is in the process of collating the details of ODR service providers
across the country.
Another aspect that makes India ODR ready is its legislative preparedness.
Though in a piecemeal fashion, there are numerous support legislations which
provide legislative backing for the ADR aspect of ODR (such as the Arbitration
and Conciliation Act, 1996 or the Code of Civil Procedure, 1908) as well as the
technology aspect of ODR (such as the Indian Evidence Act, 1972 and the
Information and Technology Act, 2000). Further, India has also brought into
force the United Nations Convention on International Settlement Agreements
Resulting from Mediation, 2018 this year.
The concept of ODR is still evolving. At a preliminary level, ODR refers to the
usage of ICT tools to enable parties to resolve their disputes. From instances
seen around the world, in its first phase, ODR shares its fundamentals with ADR
mechanisms such as negotiation, mediation and arbitration. To this extent, most
of the early ODR efforts have mirrored ADR processes through aggregated use of
simple ICT tools.
ODR however is not to be understood to mean just e-ADR. At a more advanced
stage, ODR can work as the fourth party through the use of algorithmic
assistance tools that help parties find resolutions. Such technology can take
the form of intelligent decision support systems, smart negotiation tools,
automated resolution, and machine learning.
Eventually, ODR can also offer multi-door dispute resolution through tailored
processes for specific parties and their dispute. With the help of technology
tools, these tailored processes can be designed to achieve an ideal dispute
resolution for all the disputants.
Regulating Future Of ODR
Since ODR is still in its nascent stages of development in India, it is
important that the governance framework encourages the growth of innovation both
within the Government and in the private sector. To enable this, a balance has
to be struck between protecting the rights and interests of its users while
ensuring that over-regulation does not stifle innovation.
Benefits Of ODR
- Cost effective:
The economic burden of dispute resolution often turns the process itself
into a punishment and thereby hinders access to justice. In this light, ODR
offers a cost effective mode of dispute resolution for the disputants as
well as the Neutrals.
- Convenient and quick:
The pendency of cases in Courts across India has been one of the major
challenges for the justice system. As per the India Justice Report, 2019, in
21 States and Union Territories, cases in District Courts remain pending for
5 years on average or more. ODR can address such delays by providing a
faster and more convenient process for resolution of disputes.
- Encourages dispute resolution:
ODR can contribute significantly to improve access to a variety of dispute
resolution processes by addressing major concerns such as lack of access to
physical courts or ADR centres, cost of dispute resolution as well as the
barriers due to disabilities.
- Limits implicit bias caused by human judgment:
With the increased awareness regarding racial, caste and gender justice,
there have been some concerns regarding the impact of biases, prejudice, and
stereotype on decision-making processes and outcomes.
Currently, the dispute resolution framework in India is facing many
long-standing challenges including the lack of efficiency and access. Due to
delay in the disposal and high pendency in the traditional courts and tribunals,
dispute resolution in India involves a high expenditure of time and resources.
This has an adverse effect on the ease of doing business in India.
Though India has made recent advancements in the ease of doing business ranking
released by the World Bank, the inefficiency of the dispute resolution framework
prevents the country from providing an ideal environment for businesses and
The future of dispute resolution revolves around the ICT innovations and new
ideas to make dispute resolution efficient and accessible for every section of
ODR can play an important role in this aspect. Through easily accessible and
user-centric processes, ODR can offer curated dispute resolution solutions for
businesses, thereby enabling entrepreneurs to enforce contracts efficiently.
Further, it can also provide an accessible mode of dispute resolution to masses
which will eventually reduce the burden on the traditional court system.