By Aditya Singh Raghav
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“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.”
-
Abraham Lincoln
Conflicts and disputes can easily arise in society. It is important to maintain peace and this requires that people have faith in the justice delivery system. However, in recent times, the justice delivery system in India has not functioned properly due to uncertain and unending litigation processes, huge pendency of cases, and expensive litigation resulting in physical and mental suffering for the seekers of justice. Thus, it has become very difficult for the poor and marginalized sections of society to have access to the system. In such a situation, it becomes necessary for a country like India, with a huge population, to find alternatives to the court system – that is Alternative Dispute Resolution (ADR), which can prove to be an effective mechanism to provide speedy and cost effective justice to the people of India.
Alternative Dispute
Resolution (ADR)
Article
39-A of Indian Constitution provides that the State shall set up an effective
legal system that promotes justice on the basis of equal opportunity, and
provide free legal aid by enacting legislations or schemes. In a developing
country like India, where economic reforms for the framework of the rule of law
are under way, there is a need for a mechanism like ADR for swift dispute resolution
and to lessen the burden on the courts. ADR is capable of providing an
alternative to the court system in India by setting up a dispute resolution
process for civil, commercial, industrial, family matters, etc. The ADR system acts
as a third party – it facilitates the mutual resolution of the conflict between
the parties by making them communicate and discuss their differences. It helps
individuals or groups to cooperate with each other and provides a cost
effective mechanism. It provides for socio-economic and political justice and
maintains integrity in the society as given in the Preamble. This mechanism also
secures the Fundamental Rights of people under Article 14 and 21 dealing with
equality before law and the right to life and personal liberty.
Provisions related to ADR
- Section 89 of the Civil Procedure Code 1908 provides that, if it appears to the court that there exists an opportunity for settlement outside the court, the court can refer the case for Arbitration, Conciliation, Mediation or to the Lok Adalat
- Alternative Dispute Resolution mechanisms have been provided for under the Arbitration and Conciliation Act 1996 and under the Legal Services Authority Act 1987
Arbitration and
Conciliation Act 1996
The
Arbitration and Conciliation Act 1996 was enacted after the Arbitration Act
1940, which was unsuccessful in providing effective standards for resolving disputes.
Traders and the industry demanded changes in the act of 1940. The Government of
India thought it was necessary to provide new standards and thus introduced the
new act to update the ADR mechanism in India. It was based on the United
Nations Commission on International Trade Law (UNCITRAL) model of the
International Commercial Arbitration Council.
Various forms of processes
under the ADR Mechanism
1. Arbitration
To
start with the process of arbitration, there must be a valid Arbitration Agreement between the parties prior to the
dispute. As per Section 7 of the Arbitration and Conciliation Act 1996, such an
agreement must be in writing. This may either be in the form of an arbitration
clause in a contract or a separate document signed by the parties. Such agreements
can also be in the form of letters, telex, or telegraphs, which record the statement
in writing. Even if one of the parties has not denied any statement made by the
other party regarding an agreement for arbitration process, such denial still
acts as a valid agreement.
Any
party to a contract can invoke the arbitration clause by themselves or through an
authorized agent. An arbitrator is appointed and if there is a dispute in
appointing an arbitrator then either party can approach the court for
appointment of an arbitrator. A party can challenge the appointment of an arbitrator
either on the basis of reasonable doubt in the impartiality of the arbitrator
or lack of proper qualifications. There is little scope for judicial
intervention in the arbitration process as the parties may challenge the
jurisdiction of the arbitration tribunal before the tribunal itself. If the
tribunal rejects the request made by the party, then the party may approach the
court only in certain specific cases. After the proceedings with an arbitrator,
the decision of the arbitrator is binding on the parties and this decision is
called an “Award”. An appeal can be filled after the award is made but if the appeal
is rejected, the award acts as a decree of the court and both the parties have
to follow the order.
Arbitration
aims at providing fair and just settlement of disputes outside the court system
while reducing the expense and avoiding delays in the decision making process.
2. Mediation
Mediation is a form of ADR where the process involves assisting the disputants in reaching in an agreement. All the conditions of settlement are put forward by the disputants themselves rather than being imposed by a third party. A skilled mediator facilitates dialogue between the disputants or parties to arrive at a settlement. Mediation may be used in commercial, trade, legal, diplomatic, family matters, etc. The process of mediation involves:
- Opening statement
- Joint session
- Separate session
- Closing
If there is a failure to reach an agreement through mediation, the mediator can use different reality check techniques like:
- Best Alternative to Negotiated Agreement (BATNA): it is the best alternative available to the parties, which generally shows them that the most favourable scenario to all the involved parties is in reaching an agreement
- Most Likely Alternative to Negotiated Agreement (MLATNA): the mediator explains what the most likely alternative outcome is if there is no settlement between the parties
- Worst Alternative to Negotiated Agreement (WATNA): it is the worst possible alternative outcome which the parties can think of if they do not successfully conclude the negotiations
3. Conciliation
In this process, a conciliator is approached by both the parties. The conciliator meets with the parties separately to understand the problem and come up with a settlement. If either party denies the use of a conciliator than this process of conciliation cannot be used. A conciliator improves communication between the parties which helps in bringing about a settlement. The process of conciliation is as follows:
- The party interested in using the conciliation process sends a written invitation to the other party to conciliate and the cause of dispute is identified
- If the other party accepts the invitation, then a conciliator starts with the proceedings
- The conciliator draws the terms of settlement and sends it to the parties for acceptance
- If both the parties sign the settlement, it becomes binding on the parties
It
is not a formal process like arbitration, and thus, no prior agreement is
required.
4. Negotiation
The
process of negotiation involves a dialogue between the disputants to solve the
dispute and reach an agreement. By negotiating, all the parties involved try to
avoid arguing and agree to some form of compromise. It involves a discussion
that helps to solve the dispute in an effective way and is accepted by both the
parties. A skilled negotiator will understand the process and try to increase the
chances to arrive at a settlement by avoiding conflicts. Such negotiations can
happen in organizations, businesses, government, legal proceedings etc. The
BATNA, MLATNA, and WATNA are studied in negotiation as well to emphasise the
importance of reaching a settlement mutually.
5. Lok Adalat
The
system of Lok Adalats was constituted under the National Legal Services
Authority Act 1987. It is termed as the “People’s court”. These Lok Adalats are
organized under the State Legal Services Authority, District Authority, Supreme
Court Legal Services Committee, and High Court Legal Services Committee. These
are presided over by retired judges, social activists, or members of the legal
profession. Any pending case can be referred to them except cases involving non-compoundable
offenses. No court fee is charged and it provides a fast and effective solution
to any dispute. The parties can directly interact with the judges and a rigid
procedure is not followed. If a compromise is not reached, then the matter is
sent back to a regular court. However, when a compromise is reached, an award
is made and it is binding on the parties. No appeal lies against the order of
the Lok Adalat.
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Aditya is a 2nd year law student at National Law University Delhi. An adventurous person, he actively participates in sports activities and loves to go trekking. He is a football fan and you can easily find him discussing football matches with his friends. His interests include Commercial Law, Constitutional Law, Criminal Law and Competition Law.
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