Alternative Dispute Resolution (ADR) and its Nature, Lecture notes of Law

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P a g e | 1 MEANING AND NATURE OF ADR • We are rapidly approaching a stage where litigation is being replaced with alternative dispute resolution (ADR), due to the inefficiencies and drawbacks of litigation. • India hasn’t quite reached a stage where litigation has been completely displaced by ADR methods, but the legal system is beginning to see the benefits of ADR. • ADR is a general term, which has been used to describe the processes of dispute resolution amicably through various alternative techniques. • The Mechanism of Alternative Dispute Resolution System is consisting of three important words namely Alternative – Dispute- Resolution. • The word 'Alternative' according to Oxford Learner’s Dictionary (2010 Edn) means “a thing that you can choose to do or have out of two or more possibilities”. • Hence in the legal context it refers to the options that are available to resolve dispute if one doesn’t want to approach the traditional adjudication system. • For example, you may resolve your dispute through the various ADR techniques available namely, Arbitration, Negotiation, Conciliation, Mediation. • The word 'Dispute' in ordinary parlance means conflict or quarrel. • The 'Dispute' may be between two or more Countries, States or persons. The dispute may be in individual capacity or collectively but two parties are necessary. There can not be a dispute or conflict without opposite side. • It is very important to nib the dispute in its initial stages before it aggravates and disturbs peaceful co-existence in society. • The word 'Resolution' means something that is resolved or to be resolved between the contesting parties. The 'Resolution' according to Oxford Learners Dictionary (2010 Edn) means formal statement of opinion agreed on by a Committee or a Council. • The act of resolving or settling disagreement between the parties is called 'Resolution'. The 'Resolution' may mean to 'Resolve' and the 'Resolve' means an acceptable solution to a problem or difficulty in question. • Alternative dispute resolution (ADR) refers to a range of dispute settlement methods which help the parties in the dispute to come to a settlement without going to court, or without litigating on the said matter. These methods usually involve a third party, who helps them in settling the disputes. • In many cases, ADR methods are used alongside the litigation process as well through court authorisation. P a g e | 2 NATURE OF ADR • ADR techniques of resolving dispute is non-adversarial in nature. • The nature of the adversarial process is that it is procedure laden, encourages disputing, is cast in victor-vanquished mode and provides multiple appeals. • The adversarial process is characterized by numerous and complex rules of forms and procedure. This is inevitable and necessary, when parties are ranged against each other in legal battles. Unfair behaviour can be controlled only if the contest is tightly controlled by procedural rules. • The elaborate structure for legal battle, devised to make litigants behave fairly, produces excessive disputing between the parties and their lawyers. Its design provides plenty of room for technical objections, manoeuvers, diversions, obstructions and delays • Parties in litigation take extreme positions and get polarized. They will express their views in the most forceful way, so charges and counter charges will fly thick and fast, heedless of the offence they cause and the effect they have in aggravating the dispute. • The results are usually declared in a win-lose context. This is on the basis that in every dispute one side deserves victory, the other defeat. • To summarize, adversarial process entails, elongated time, increased legal costs and the worst damaged relationships. • Hence it became necessary to devise alternatives which could keep a check on disadvantages that were a by product of resolving disputes through litigation. This led to the establishment of the system of Alternative Disputes Resolution. • By non-adversarial nature of ADR we mean that the parties who come together to resolve dispute donot have a contesting approach rather they come with a cooperative mindset. • The parties at dispute try to accommodate each others demands and listen to each other with an empathetic approach. • The ADR mechanisms offer creative solutions to the dispute in hand which lead to a win-win outcome. Pros of ADR • It is less expensive. • It is less time consuming. • It is free from the technicalities that are present in the court system. • The parties are free to differ in their opinion and can discuss their opinions with each other, without any fear of disclosure of this fact before the courts. • There is no feeling of enmity between the parties as there is no winning and losing side. They also get their grievances redressed and their relationship remains as it was before, therefore, they can conduct future business deals with each other. P a g e | 5 • Later, in 1899, the British Indian government had passed the Indian Arbitration Act which was based on the British (England) Arbitration Act 1989. This Act was applied to Provincial towns only. • The unique feature of this Act was that the parties should specify the name of the arbitrator in their arbitration agreement and the arbitrator may be a sitting judge. • In 1908, the Civil procedure code got further revised and the provisions relating to arbitration were contained in section 89 clause (a) to (f) and, section 114(1) along with schedule I. This provision had not made any major change in the existing arbitration Law of that time. However, there was a hope that the British Government might enact comprehensive legislation for arbitration at any time. • In 1940 Indian Arbitration Act got enacted and it repealed the CPC section 89 (a)-(f) and schedule II. Still, the 1940 Act had some defects such as no provision for replacement of arbitrator in case of death or another incapacity of the arbitrator, unethical practices of the arbitrator, and difference proceedings for setting aside the arbitral award and nullity of the arbitral award and much intervention of the court. • Further, all High Courts were having a different set of rules for arbitration-related cases. As a result, the Arbitration and Conciliation Act got enacted in 1996. The Arbitration and Conciliation Act, 1996 • The 1996 Arbitration and Conciliation Act has consolidated the law related to domestic arbitration, international commercial arbitration, and enforcement of foreign arbitral awards. • It has minimized the judicial intervention and has provided the mechanism for removal and replacement of arbitrator. • The 1996 Act got further amended in 2015 for ensuring speedy disposal of disputes by the arbitral tribunals, encouraging institutional arbitration and ensuring fairness in arbitral proceedings it got further amended in 2019. • Once, the parties have agreed to resolve their disputes through arbitration then, they cannot approach courts for the resolution of the same disputes. • The parties have the freedom to appoint the arbitrator on their choice and they can fix the place and language of the arbitration. The arbitral tribunal hears the dispute on merits and the arbitral award is considered as the decree of the courts. • Unless the arbitral award has been made on some defects mentioned under section 34 of Indian Arbitration and Conciliation Act, it is always enforceable by courts. P a g e | 6 HISTORY OF CONCILIATION • Conciliation is one of non-adjudicatory dispute resolution mechanism in which a neutral third party helps the disputing parties to resolve their disputes amicably. • In conciliation, the conciliator may give his views and suggestions to the parties for the resolution of the disputes. In conciliation, the conciliator plays an active role. • Conciliation got legal recognition under the Trade Disputes Act 1920. As per this Act board of inquiry had given the power to conciliate the employment disputes. However, this Act had not implemented by the British government. • In 1929, the British government re-enacted Trade Disputes Act 1929 and it contained voluntary conciliation. The board of conciliation had been entrusted the power of resolving labour disputes through conciliation. • The conciliation board consists of 4 members each from both employer and employee and one independent chairman. A royal commission of labour had pointed out the conciliation mechanism under the Trade Disputes Act was not fully utilized by the parties and government. • The state of Bombay had enacted Bombay trade Disputes Conciliation Act 1934. As per this Act, the Bombay government entrusted the conciliation power to labour commissioner. • Later, the central government enacted Industrial Disputes Act in 1947. This Act has created two different bodies for providing conciliation to the disputants namely conciliation board and conciliation officer. • Law Commission of India in its 77th report had recommended that incorporation of Conciliation Courts” model which was prevailing in Japan, France, and Norway can be incorporated in Indian judicial system and civil cases can be resolved through conciliation. • In 1980, UNCITRAL has framed Conciliation Rules for resolving international commercial disputes through Conciliation uniformly across the world. This model rule has been adopted by the UN general assembly on December 4th, 1980. India is one of the signatories to these rules. Hence, it has an obligation to incorporate the same in its domestic legislation. • Based on the experiences of conciliation courts in various countries, the Himachal Pradesh High Court had initiated a “Conciliation Court” pilot project in the entire state of Himachal Pradesh and asked the trial courts of civil side to refer all the cases to Conciliation Courts before the commencement of trial. It got substantial success. • However, there were some difficulties faced by the conciliation courts including the impossibility of compelling the parties to appear before the conciliation courts. • Law Commission of India in its 129th report had recommended that the conciliation court system which was there in the state of Himachal Pradesh can be implemented in across the country. • It suggested as for as possible, the conciliation courts must be presided by the judges who are not going to hear the same cases in the trial. P a g e | 7 • In the same 129th report, the law commission highlighted the concerns of judges on the referral of pending disputes to arbitration especially the 1940 arbitration Act did not contain any provision for the referral of the pending dispute to arbitration and stated that this issue will be taken in another report. • Meanwhile, the Indian government had amended the CPC amendment Act and included the Law Commission's recommendations on the conciliation court system under section 89 of CPC. HISTORY OF MEDIATION • Mediation is known as third-party facilitated negotiation in which, the neutral third party will facilitate the disputants to come with settlement. In mediation, the neutral party known as mediator plays a passive role. • Unlike Conciliation, the mediation moment got started in the late nineties. • In 1995-96, The Indian Supreme Court under the leadership of Justice Mr A. M. Ahmadi along with the Institute for Study and Development of Legal Systems [ISDLS] which is situated at San Francisco had carried out an Indo-U.S. joint study on “delay in Indian justice system” and finding solutions to overcome this problem. • Every High Court was asked to appoint a study team to cooperate with the delegates of ISDLS. A centralized study team had gathered all information from High Courts and analyzed it. After the detailed review of situation India, the team had given appropriate suggestions on civil case management with reference to Indian scenario. ISDLS had also suggested for the promotion of mediation in India.* • ISDLS had rendered its cooperation for promoting mediation in India. It had sent its American trainers to India for giving mediation training. The first mediation training had conducted in 2000 in Ahmedabad, Gujarat. • Two Indian lawyers had created a trust called Institute for Arbitration Mediation Legal Education and Development (AMLEAD) for training the mediators. • This institute has conducted a lot of training programs for the mediators since its inception. Ahmedabad Mediation Centre was established on 22 July 2002, Which is the first lawyer managed mediation center in India. • On 2002, the Chief Justice of India had called a meeting of all High Court judges for emphasizing the importance of mediation and the requirement of implementation of section 89 of CPC. • In January 2003, AMLEAD and Gujarat Law Society have developed 32 hours certificate course on mediation. The U.S. Educational Foundation in India (USEFI) had conducted training workshops at Jodhpur, Hyderabad, and Bombay in June 2003. • The first court-annexed mediation center got established at Chennai High Court on April 1, 2005. After this, many courts annexed mediation centers got established in various High Courts. Delhi