Alternate Dispute Resolution:

In a rapidly developing society multiplicity of, human needs results in conflict of interests, which is further compounded due to the lack of discipline in litigation, due to this the judicial mechanism, finds it extremely difficult to cope up with its enormous case load. Litigation particularly civil litigation in India is notoriously known for pendency of cases. Government of India Statistics indicate that a total of 23.9 million cases are pending in various courts of India1

Majority of Indian Courts are flooded by adjournments, revisions, appeals, and cross appeals; on an average a civil case takes anything from about 5 to 8 years for its final disposal & causes are not wanting when cases have lingered in courts for 15 to 20 years.

The workload of Indian Judiciary increased by leaps and bounds and has now reached a stage of unmanageable magnitude, which has in fact led to a large backlog of cases.2

In Surjit Singh’s Case3 , the Supreme Court expressed its anguish for such long delay, as the particular case was lying pending in the civil court at Patiala with no sight of its finalization.

It was in fact the common man’s disgust for traditional court litigation, which led to the evolution of alternate methods of dispute resolution.

To quote, Mr. Justice V.R Krishna Iyer 4 “Interminable, time consuming, complex and expensive court procedure impelled jurists to search for an alternate forum less formal, more effective and speedy for resolution of dispute avoiding procedural clap trap led to the Arbitration act.

The Constitution Of India Provides For The Right To Speedy Justice: The Preamble to the constitution of India, as well as Directive Principals enumerated under Art -39(A), of Indian Constitution promise to secure socio, economic, political justice and equality of status and opportunity to all citizens. However all things said and done the ground reality is that, the Indian judicial system ,has not on one but several occasions fallen short of fulfilling such promises.

1 http//Pib.nic.in/archive/ireling/Iyr2002/rjan 2002/r070/20022 html2 Arbitration And Alternate Dispute Resolution, Dr. N.V. Paranjape ,Third Edition3 Surjeet Singh & Others vs. Harbans Singh & Others, AIR 1996 SC1354 Judge Supreme Court of India

1

Malimath Committee’s, Recommendations for Dealing with Increase of Arrears in Litigation:

The Indian Judicial System has been stretched almost to a breaking point right from apex court to lower subordinate courts, thus with a view to remedy this anomaly “ The Malimath Committee ,also known as the arrears committee ,undertook a comprehensive review of the working of the court system ,particularly all aspects of arrear and law’s delay in addressing such concerns .It also made various useful recommendations for reducing litigation and making justice readily accessible to people at minimum cost of time and money .5

In its recommendations for reducing backlog of cases pending in various courts, The Malimath committee underlined the need for adopting an alternate dispute resolution mechanism, for encouraging Arbitration ,Mediation, Conciliation and Lok Adalats, as a viable alternative to conventional court litigation, In its view such alternate dispute resolution mechanism were capable of going a long way in restoring confidence of people and establishing rule of law , which is in fact a key objective of our constitution.

Alternate Dispute Resolution (Meaning):

Alternate Dispute Resolution, is a procedure for settling a dispute by means other than litigation, such as arbitration, mediation or mini-trial 6

Purpose of ADR Mechanism:

The purpose of ADR is to resolve the conflict in a more cost effective and expedited manner, while fostering long term relationships. ADR is in fact a less adverse means, of settling disputes that may not involve courts. ADR involves finding other ways (apart from regular litigation) which act as a substitute for litigation and resolve civil disputes ,ADR procedure are widely recommended to reduce the number of cases and provide cheaper and less adverse form of justice, which is a lesser formal and complicated system. Off late even Judges have started recommending ADR to avoid court cases.7

In essence the system of ADR emphasizes upon:

Mediation rather than winner take all. Increasing Accessibility to justice. Improving efficiency and reducing court delays

5 Malimath committee (1989-1990) was headed by Hon’able justice PD Desai and Hon’able Justice AS Anand.6 Black’s Law Dictionary-17th Edition7 www.slideshare.net

2

Historical Background of Development of ADR:

To Quote, Victor Hugo: An Invasion of Armies can be resisted, but not an idea whose time has come. The time to settle disputes through ADR has quietly and irresistibly come.

Alternate Dispute Resolution has become an indispensable need for today‘s world,Our Court’s are already overburdened by arrears which appear to be insoluble in near future, Cases are increasing in courts in a super fast speed and the courts have proved to be helpless in rendering speedy justice in majority of the pending cases, so much so that: A resolution had been adopted by the Chief Minister and the Chief Justices of The High Court on 4th of December 1993,declaring that the courts were not in a position to bear the entire burden of the justice system and that a no. of disputes would be better settled, if resolved by alternative modes like; Arbitration, Mediation and Negotiation ,

Alternate to dispute resolution need to have procedural flexibility in order to save time, money and avoid miseries and delays associated with conventional trial, under the scheme of ADR the litigants are in fact encouraged to resort to alternative dispute resolution, so that the actual court systems would be left with a smaller number of important disputes that demand judicial attention. Consequently ADR has received a grand welcome in each and every field in which it has ventured.

The closing years of the 20th century witnessed a world wide change, towards the growing trend of resolving problems of disputants; it was during this time that the popularity of ADR methods as a good substitute for conventional judicial convention gained popularity.

Most countries including India have accepted Arbitration, Mediation and Conciliation as the best ADR techniques for resolution of civil disputes, particularly those relating to money suits, injunctions and specific performance of contracts.

A D R as a mode of dispute resolution has been quite popular with the business community, Due to globalization of economy and competitive market policy; there has been a tremendous increase in trade, commerce and industry, which has resulted in a surge in disputes pertaining to commercial transactions and businesses. Business community and industrial entrepreneurs cannot afford to indulge in protracted litigation and thus prefer to get their disputes settled through ADR.

To Quote, Mr. Justice A.M.Ahmadi8 ,While we encourage ADR Mechanisms ,we must create a culture for settlement of disputes through these mechanisms , unless members of bar encourage their clients to settle their disputes through negotiation ,such mechanism cannot succeed.

8 Former chief Justice of India

3

Thus to summarize the above discussion ADR shall be instrumental in tackling the menace and monstrosity of what is known as Docket Explosion-,”An unmanageable upsurge in the number of pending cases , before regular courts.9

Various Types of Alternate Dispute Resolution:

Arbitration alone is not ADR; ADR may be through the following modes of ADR:

Negotiation: Is a non-binding procedure, in which discussions between the parties are initiated without the intervention of any third party, with the sole objective of arriving at a negotiated settlement of a dispute.

Conciliation/Mediation: A non-binding procedure in which an impartial third party i.e the conciliator or the mediator, assists the parties to a dispute in reaching a mutually satisfactory and agreed settlement of disputes.

Mediation/Arbitration : A Procedure which combines conciliation and mediation at a subsequent stage in instances where the dispute is not settled through either conciliation /mediation within a period of time agreed in advance by the parties to arbitration.

MEDOLA : Is a procedure in which ,if parties fail to reach an agreement through mediation, a neutral person ,who may be the original mediator or an arbitrator ,will select between the final negotiated offers of parties, such selection being binding on the parties.

Mini Trial: A Non-binding procedure in which the disputing parties are presented with summaries of their cases, so as to enable them to access the strengths, weaknesses and prospects of their case and then an opportunity to settle it is explores.

Arbitration: Is a procedure in which the dispute is submitted to an arbitral tribunal which makes a decision(an award) on the dispute, that is binding upon the parties

Fast Track Arbitration: A form of Arbitration in which the arbitration procedure is rendered in a particularly short time and that too at a reduced cost.

Lok Adalats: Besides the above , Lok Adalats are also doing well as a mode of alternate dispute resolution system

Ombudsman: Ombudsman is a person with special powers to investigate cases in certain areas such as health, pensions or in instances where there may be a dispute particularly if a government body is involved. An ombudsman can only

9 DK Sharma “Lok Adalat The Mission-2002 AIR Journal,Pg-97

4

recommend as to how a dispute may be resolved, however his/her recommendations cannot be enforced.

Tribunals: Tribunals are similar to a court without the ritual or formality they, there are a no. of specialized tribunals which bear the name of their specialization, eg: Employment Tribunal, Immigration Tribunal.

Salient Features of ADR:

ADR encompasses a variety of techniques such as mediation, arbitration, conciliation, judicial settlement, lok adalat and early neutral evaluation, which gives an opportunity to settle the disputes by mutual consent by parties through more or less informal and flexible processes.

Scope of ADR:

Under ADR, a dispute may be settled out of court and that too without litigation, however ADR system applies to only those disputes, as have arisen out of a legal relationship which may or may not be contractual.

Benefits of Alternate Dispute Resolution:

Speed: ADR is far quicker than the traditional litigation methods of going to courts, certain types of ADR supply very quick solutions, and ensure that the legal system can operate more quickly with lesser damage.

Economy of Cost: ADR proceedings tend to be less formal and expensive than traditional litigation, more particularly because, in most cases ADR processes are successful in avoiding the expenses incurred for engaging court barristers or solicitors.

Expertise: In ADR experts are frequently used, in matters where judges are unlikely to have expert knowledge.10

Restores Good Relations between Disputing Parties: An ADR system brings, both parties to terms without damaging their good relations, and is in fact quite instrumental in restoring their relations to a position, as had existed before the creation of such dispute.

ADR System Is Devoid Of Corruption: ADR system is bereft of corruption, which is on and off found and of whose existence there is always a likely apprehension in any of the traditional justice systems.

10 www.slideshare.net

5

Free From Prejudice: Since both parties to ADR come to terms on mutually agreeable terms, & that too out of their own free will, without having any fear of consequences of winning or losing, the system on a whole is quite free from prejudice.

Confidentiality: ADR process maintains confidentiality and is not open to public at large. And thus consequently saves the parties from the fear of any adverse publicity

Option Of Withdrawing From Some Kinds Of ADR Is Always Open: ADR reserves the freedom of parties to withdraw from conciliation without prejudice to their legal position, inter-se at any time during the commencement of such proceedings.

ADR Is a Flexible and Independent Dispute Resolution System: ADR is a very flexible and independent system of dispute resolution, which is free of any statutory or custom ridden procedural law.

Choice of Decision Maker: The Choice of selecting the mediator and the arbitrator lies with the parties and they are free to appoint any mutually agreeable, expert to adjudicate over any issue in dispute.

ADR Helps In Clearing Bottle Necks In Litigation: ADR mechanism is quite instrumental in clearing bottlenecks, within the domestic judicial system

ADR Is Capable of Achieving Results That Meet the Needs of All the Parties Involved, at least in some measure.11

Disadvantages of Alternate Dispute Resolution Mechanism:

11 www.newperimeter.com

6

Even though ADR has many benefits, yet it is pertinent to disclose its disadvantages, not with the aim of criticizing the system, but rather with a positive mission of further betterment of this hugely popular dispute resolution system:

The Key Pit Falls Of ADR, Needing The Attention Of Legislatures Are:

Even Where Beneficial, Parties Cannot Be Compelled To Go In For ADR: Parties to a dispute cannot be compelled to go in for ADR, unless they sign an agreement to solve their disputes by ADR.

ADR Decisions Lack The Force of Precedent: In ADR precedent has no value, and consequently under ADR, precedents are not given much importance.

Outcome Of ADR May Not Be Similar In Similar Circumstances: Outcome of ADR can vary even under similar circumstances. As a general observation outcome of ADR depends on several external factors such as the discretion, priority and considerations of mediator or arbitrator, thus consequently decision of an arbitrator or a mediator may not be same in similar circumstances.

An Incompetent Mediator Can Defeat the Purpose of ADR: Appointment of a poor arbitrator or mediator results in unsuccessful resolution and can defeat the very purpose of encouraging ADR.

Unenforceability of Some Forms of ADR: Means that in some forms of ADR, the outcome is not enforceable.

Extra Cost Where ADR Is Unsuccessful: If ADR does not work then court action is required, this is often followed by an extra costs that all such process entail.

Common Modes of Alternate Dispute Resolution and Their Importance: (Explanation)

7

Importance given to ADR in Indian Context can be gauged from the fact that Civil Procedure Code, 1908 has laid down that the cases must be encouraged to go for ADR12

To Quote: Former US President Abraham Lincoln “Discourage litigation ,persuade your neighbor to compromise ,when ever you can point out to them ,how the nominated winner, is often a real loser in fee, expenses and waste of time.13

After due deliberation and several trials Arbitration and Mediation emerged as the most common modes of ADR, though Conciliation and Negotiation also comprise of ADR, they are however seldom used.

Arbitration as a Mode of Alternate Dispute Resolution:

Arbitration is a method of dispute resolution involving one or more neutral third parties who are usually agreed to by the disputing parties and whose decision is binding14

Arbitration at its core is a form of dispute resolution, which comprises of a private judicial determination of a dispute by an independent third party. It is considered as a private dispute redressal process which is widely encouraged for promoting twin motives of overcoming high pendency of cases and reducing the cost of litigation. The prominent feature of the system is that, instead of filing a case in court, the parties can refer their case to an arbitral tribunal whose decision is binding and is termed as an award.

Essentials of an Arbitration Agreement: For an agreement to be considered as an arbitration agreement there must be:

An intention of the parties to settle their differences by a private tribunal. Such Parties must agree in writing, to be bound by the decision of such tribunal. Parties must be ad-idem(consensual on the same point or effect)

Scope of Arbitration:

Scope of Arbitration is quite wide, thus a karta of a HUF, a Company and parties to an arbitration agreement can all submit their disputes to arbitration.12 Section-89 CPC,1908,Amended and implemented in 2002,enables the court to refer to arbitration or conciliation any matter, where there is a possibility of settlement13 www.legalserviceindia.com14 Black’s Law Dictionary -17th Edition

8

To Quote Mr. Justice V.R Krishna Iyer of Supreme Court of India:

“Intermediate time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum less formal, more effective and speedy for resolution of disputes, by avoiding procedural clap trap, led to the arbitration act.

General Principles and Objectives of Arbitration:

The Main Objectives Which Are Sought To Be Fulfilled By Arbitration As A Means Of ADR Are:

To facilitate a fair resolution of disputes by an impartial third party, without unnecessary expense or delay.

One of the primary objectives of Arbitration is to facilitate disputing parties, a complete freedom for resolving their disputes, in a manner of their choice, subject only to such safeguards as are necessary in public interest.

Avoiding court’s interference in dispute resolution ,is another key feature of Arbitration

Types of Arbitration:

Arbitration may either be an adhoc or an institutional arbitration. While in case of an adhoc arbitration, parties jointly select the arbitrator(s), to work out details of procedure, together with arbitral tribunal, as and when a dispute arises.

However in instances where parties to dispute agree to employ, services of an arbitration institution, it is termed as institutional arbitration.

As against Adhoc Arbitration, Institutional Arbitration has many advantages, more particularly so, because it is conducted according to its own set of rules and procedures and is duly supervised by a professionally trained staff, Thus chances of its procedural breakdown are quite remote.

Types of Disputes Which Can Be Referred To Arbitration, For Redressal through Arbitration as a Mode of ADR:

9

Almost any type of civil dispute can be settled by ADR, Disputes related to Business, Contract, Construction, Commercial recoveries, Family disputes, Property and Insurance are some of the disputes open to resolution by Arbitration as a mode of ADR.

Exceptional Circumstances Where a Dispute Cannot Be Referred To Arbitration:

Instances Where A Dispute Cannot Be Referred To Arbitration Are As Follows:

Matrimonial matters ,like divorce or maintenance;

Insolvency matters like declaring a person as insolvent.

Criminal offences.

Dissolution or winding up of a company :

Questions as to genuineness or authenticity of a will: cannot be referred to arbitration and such matters must be decided in accordance with, law dealing with probate of wills under succession act.

Disputes outside the purview of contract: cannot be referred to arbitration, only courts are competent to interpret a contract, where it is found that the dispute raised in a suit is outside or independent of a contract. Then arbitration clause shall not encompass such an issue.

Advantages of Arbitration as a Mode of ADR:

Supporters of Arbitration hold that it has a multitude of advantages over the regular court litigation, The Advantages of Arbitration as a mode of ADR can be summarized as follows:

Freedom of choice of Decision Maker: Parties to Arbitration are free to choose a technical person as arbitrator, in case of disputes involving questions of technical nature.

Efficiency: Hearings of arbitration proceedings are finished sooner than court proceedings, In addition Arbitration proceedings are of a shorter length and preparation work is less demanding.

Privacy: Arbitration hearings are confidential private meetings in which attendance of media and members of public is not permitted and even final decision of such proceedings is not published, this procedure is particularly

10

beneficial to those who don’t wish to wash their dirty linen in public, and has consequently become a routine with corporate enterprises.

Convenience: Arbitration hearings are arranged at times and places which suit the parties, arbitrators and witnesses.

Flexibility: Arbitration Procedures can be segmented, streamlined or simplified according to change of circumstances.

Finality: There is as such no right of appeal in arbitration, even though the court has the power to remit or set aside the arbitration, more or less the award of an arbitrator is final.

Drawbacks of Arbitration:

After enumerating the large number of advantages of arbitration, it would be unjustified to hide certain commonly perceived drawbacks of ADR system. Thus some of the commonly perceived loopholes of Arbitration requiring a timely redressal consist of:

System of Payment of Cost of Arbitration: One or both the parties to arbitration shall have to pay for the arbitrator’s services, which is in fact quite contradictory to the court system, where the adjudicator does not charge a fee. Arbitration involves the payment of a very large adjudication fees, for e.g. for an amount of claims of up to $100, 000, the minimum fee charged by a single arbitrator is $ 2000,the maximum fee of an arbitrator can be as high as 10 % of the value of claims .

Lack of Provision of Appeal: Unless and until there is an evidence of outright corruption or fraud, the arbitration award is binding and is usually not appealable, thus in instances where an Arbitrator makes a mistake ,the losing party is usually left without any remedy .

Mediation as Mode of Alternate Dispute Resolution:

11

Mediation is basically negotiations carried out with the assistance of a neutral third party; however recommendations of a mediator are not binding.

In true sense of the term mediation is a method of non-binding dispute resolution involving a neutral third party, who tries to assist the disputing parties to reach a mutually agreeable solution.15

Advantages of Mediation as an ADR:

The Advantages of Mediation as Enumerated In Delhi High Court Conciliation and Mediation Centre16are:

It puts the parties in control of both dispute as well as its resolution.

Law Mandates mediation and the courts encourage and enforce it.

Process of Mediation is confidential.

Procedure adopted in mediation is simple and the atmosphere at mediation cell is informal.

Mediation as a mode of ADR is voluntary and parties to mediation can at any time opt out of mediation, if it does not help.

Mediation saves costs on what actually becomes a prolonged litigation.

Mediation makes the disputing parties aware of the strengths and weaknesses of their case and helps them find a realistic solution.

Mediation as a mode of dispute resolution concentrates on long term interest and creates an opinion for settlement.

Mediation is instrumental in restoring broken relationships; its main focus is on improving future and not dissecting the past.

Parties to mediation can, in fact opt for more by signing a settlement that works to the benefit of both the aggrieved as well as his opponent.

At the end of the mediation, the relationship of the parties can be restored to a position as had existed before the culmination of such a dispute.

Role Played By A Mediator In Making Mediation A Success:

15 Black’s Law Dictionary- 17th Edition16 Samadhan

12

A Mediator plays an active role in settling the dispute between parties to mediation: Some of the Key roles played by a mediator for settling the conflict between the disputing parties are as follows:

Mediator organizes meeting related logistics. Ensures adequate representation of interests of both parties to dispute. Mediator assists in keeping the discussion focused on track. Mediator actively participates in assisting the development of an agreement. Presents series of settlement options available to parties.

Conciliation as a Mode of Alternate Dispute Resolution:

Conciliation is a settlement of a dispute in an agreeable manner, it is a process in which a neutral person meets with a party to dispute and explores how the dispute might be resolved.17

Any Democracy worth the name must provide adequate means of dispute resolution. Settlement of disputes by mutual compromise is a much better method, than seeking adjudication in the adversary legal system. The System of conciliation was for the first time tried in Japan, France and Norway. In India the idea of conciliation was evolved on an experimental basis by the High Court of Himachal Pradesh.

Conciliation as a method of alternate dispute resolution has been quite instrumental in relieving congestion, particularly at trial court level; in addition it has been quite successful in reducing the inflow of cases in superior courts. It was in fact the conciliatory principle of not allowing revision or appeal at the insistence of any of the reconciled parties that led to a dramatic reduction in the increasing inflow of revision and appeal cases in superior courts.

Settlement by disputes my mutual compromise, envisaged by conciliation as a mode of alternate dispute resolution is a much better method than seeking adjudication in the adversary legal system which apart from generating tension and leaving a trail of bitterness, burdens the parties with heavy financial expenditure. In certain instances even the successful party, has to wait for years before enjoying the fruits of litigation.

Conciliation as a Beneficial Means of ADR

17 Black’s Law Dictionary-17th Edition

13

Conciliation as a means of alternate dispute resolution has stood the test of time and has emerged as a beneficial mode for sharing the burden of litigation by encouraging quick amicable settlement of disputes. Conciliation has minimized the pendency of old cases and has been instrumental in ensuring that litigation is brought to an end by resorting to a mutually acceptable and amicable settlement of issues pending litigation.

With a view to relieve regular courts of the excessive overflow of litigation, certain categories of cases with reasonable possibility of amicable settlement are transferred to conciliation courts ,which in fact do their best to assist parties to dispute to arrive at a mutually agreeable reconciliation.

A settlement agreement reached by parties to conciliation has a status and effect similar to an arbitral award.

The liberty given to civil courts under sec-89 of CPC, to refer a dispute for conciliation even where the parties do not consent, provided the court in all earnestness deems it fit for conciliation, has been one of the most important reasons for the phenomenal success of conciliation as a key alternate dispute resolution procedure.

Drawbacks of Conciliation

Though Conciliation proceedings have proved themselves to be a beneficial mode of Alternate Dispute Resolution, yet certain aspects of the system demand an overhaul.

Some Drawbacks of Conciliation as a Mode of Alternate Dispute Resolution: which need a mention are that:

Once litigation starts there will rarely be negotiations as litigants have already invested some money and would not be willing to give up their chance of winning.

In addition to this lawyers of both sides, who charge their fee on the basis of every appearance, would have no incentive for considering any possible compromise.

How Does a Mediator Differ From A Conciliator:

Conciliator is understood as one who simply passes on what each party state to the other, without any proposals emanating from him for settlement, while on the other hand in case

14

of mediation a third party intermediary puts forward different alternative proposals for arriving at a settlement.

It becomes quite difficult to maintain a clear line of demarcation between mediation and conciliation.

Generally a mediator is likely to make directly or indirectly, some basis for settlement.

Thus consequently what was purely mediation may slowly slide in to conciliation while on the other hand a conciliator may slowly assume the passive role of a mediator.

Negotiation as a Means of Alternate Dispute Resolution:

Negotiation is the most common mode by which parties resolve their disputes without ever coming to the notice of third parties. Everyday several disputes are being resolved through negotiations.

Negotiation consists of a mutual discussion by the parties of their dispute or difference, with a view to find out as to how to their best can they settle their disputes & differences.

In true sense of the term negotiation entails bargaining, which is some what similar to an agreement between disputing parties.

During the course of negotiation each party endeavors to obtain the best possible solution in its favor, and with a view to accomplish this, each of them puts forward the minimum it is prepared to accept in settlement of mutual claims or the limits of the maximum which it is prepared to concede.

In Instances where either party adheres to its demand or concession which it is prepared to make and the other party does not accept such demand or concession, then in such a situation there is a breakdown of negotiation.

However on the other hand where the parties agree on mutually acceptable terms, then in such situation the dispute shall be deemed to have been resolved.

Lok- Adalat as a Means for Alternate Dispute Resolution:

15

What Is Lok Adalat18

The Lok-Adalat is an old form of adjudicating system that prevailed in ancient India and its validity has not been taken away even in modern days ,The word Lok-Adalat means people’s Court, this system is based upon the Gandhian Principles .It is one of the components of ADR Systems ,as the Indian courts are over burdened with backlog of cases and regular courts decide cases involving lengthy ,expensive, and tedious procedure courts take years together to settle even petty cases ,Lok-Adalat therefore provides alternative resolution or device for expeditious and inexpensive justice. The Lok-Adalat system was introduced in India at the beginning of the 1980’s, starting from the state of Gujarat, the Lok Adalat System evolved as a means of alternate Dispute resolution.

Though meant to settle disputes at grass root level, in traditional manner, yet it became popular as an ADR mechanism for improving access to justice and for alleviating institutional burden of regular law courts.

In essence Lok-Adalats provide an efficient, cost effective and assessable form of equitable justice; it is in fact in total contrast to inaccessible and inefficient dispensation of justice by formal law courts.

Purpose behind Promoting Lok-Adalats as a Means Of ADR:

It has been generally agreed that the adverse model of judicial adjudication has proved to be inadequate to meet the needs of Indian rural masses, which by and large are poor, indigent, illiterate and unfamiliar with formalities of legal procedure.

Thus there arose a dire need for a more conciliatory, less formal, more client friendly and consensual mode of alternate dispute resolution mechanism for making access to justice as more humane, simple and effective.19

Functioning of Lok-Adalat as an Alternative Dispute Resolution Body:

18 PT Thomas vs Thomas Job, AIR 2005 SC 357519 Lok-Adalats came into vogue, with the passing of the Legal Services Authority Act of 1987.

16

Benefits of Lok-Adalats as A means of ADR:

There is no court fee for reference of dispute to Lok-Adalats; in addition if court fee is already paid, then such amount will be refunded, if dispute gets settled according to Lok-Adalat rules.20

Lok-Adalats ensure procedural flexibility and speedy trial of dispute, and there is no strict application of procedural laws like Civil Procedure Code and Evidence Act., while assessment of claims by Lok-Adalat.21

Parties to dispute can directly, through their counsel interact with the Judges, which is in fact not quite possible in regular court of law.22

Lok-Adalats are judicial bodies, set up for facilitating a peaceful resolution of disputes between the litigating parties. Settlements in Lok-Adalats are guided by the principles of equity, justice and good conscience.

Another beneficial feature of Lok-Adalat lies in the fact that, in instances where no settlement or compromise has been arrived through conciliatory methods of Lok –adalat, then the matter shall be returned to that very court which had referred such matter to a lok-adalat, and on such an occasion that court shall proceed to deal with such a case from the very stage, which had been reached before such reference was made.

So as to make Lok-Adalats an affective means of Alternate Dispute Resolution, the Legal Services Authority Act of 1987, has laid down that every award of the lok-adalat shall be deemed to be equivalent to a decree of a civil court.

In order to grant finality to the awards passed by The Lok Adalats. The Legal Services Authority Act of 1987 has laid down that no appeal shall be preferred against such award.23

Award of Lok Adalat is binding upon the parties and has the status of a decree of a civil court. It is non –appealable which in fact prevents any delay in final settlement of disputes.24

Lok Adalats are a boon to the litigating public ,as they can get their disputes settled fast and free of cost and that too amicably25

20 PT Thomas vs. Thomas Job ,AIR 2005 SC 357521 PT Thomas vs. Thomas Job ,AIR 2005 SC 357522 PT Thomas vs. Thomas Job ,AIR 2005 SC 357523 Section-21(2)Legal Service Authority Act 198724 PT Thomas vs. Thomas Job ,AIR 2005 SC 357525 PT Thomas vs. Thomas Job ,AIR 2005 SC 3575?

17

Lok-Adalats have been quite instrumental in dealing with compoundable cases involving: Motor Vehicle Accident Claims, Labor, Banking, Insurance and a host of such other matters.

Off late various specialized types of Lok-Adalats are being organized to dispense with particular types of cases involving Motor Accident Claim Settlement Lok-Adalat, Pension, Women and Electricity Lok-Adalats.

The experiment of Lok Adalats as a means of Alternate Dispute resolution has proved fairly successful, in view of the fact that they provide cheaper, quicker and consumer friendly remedies.

Comparison of Various Modes of Alternate Dispute Resolution:

In Negotiation, Mediation and Conciliation ,a settlement is reached by arriving at terms that are agreeable to both parties, in case of such modes of alternate dispute resolution each party ,may find in a particular agreed settlement, some advantage to be gained which outweighs the loss that might be suffered.

As these settlements are based upon, free consent of parties and are not opposed to public policy, there arise no challenges to their enforceability.

While Arbitration and Judicial settlement involve a decision by a third party, which is based upon finding of fact and applicability of relevant legal rules and principles to the facts so determined.

Though in negotiation a party may adopt a recalcitrant attitude and may prevent a settlement, however in case arbitration and judicial settlement that is not possible,& generally Award of an arbitrator is a necessary outcome which is imperative and binding upon the parties, particularly so because award or decision is based upon the jurisdiction or power vested in Arbitrator or court.

Unlike negotiation, in arbitration gain or success of one party is loss of the losing party.

Case Laws Indicating Instances Where Judiciary Has Ruled In Favor of Alternate Dispute Resolution:

In E.Venkatakrishna Vs Indian Oil Corporation Ltd26

26 AIR 1989,Kant 1989(1)Arb35Lr 270

18

It was held that, when ever there is an arbitration clause in acontract, aggrieved parties must have recourse to the provisions of the arbitration act and that being a complete code in itself, parties cannot approach High Court, with a petition under Art-226.

The Stage for ADR was set up in the early 1930’s, the Privy Council decision in Sitana vs. Viranna, highlights the beginning of the germination of the idea of ADR;

In Sitanna Vs Viranna, the Privy Council affirmed the decision of panchayat, and Sir John Wallis observed that the reference to a village panchayat is the time honored method of deciding disputes. It avoids protracted litigation and is based on the ground realities verified in person by the adjudicators and the award is fair and honest settlement of doubtful claims based on legal and moral grounds.27

In PT Thomas vs. Thomas Job28

It was held, that the experiment of Lok-Adalat as an alternate mode of dispute settlement has come to be accepted in India as a viable, economic, efficient and informal one.

In Oil and Natural Gas Commission vs. CCE29

In one of the orders passed in this judgment it was recorded that the cabinet secretary has issued instructions to all departments of Government of India as well as PSU’s that all disputes “regardless of type, should be resolved amicably by mutual consultation or through good offices of empowered agencies of the government or through arbitration and recourse to litigation should be eliminated.

In Bhasheer vs. Kerala State Housing Board 30

Hon’able Justice K.Padmanabhan Nair.J opined that, it must be ensured that in developing countries most of the cases are resolved by ADR mechanism of Arbitration, Conciliation and Mediation.

In Salem Advocate Bar Association Tamil Nadu vs. UOI 31

It was held that, keeping in mind the laws delays and the limited number of judges ,which are available ,it has now become imperative that resort should be had to ADR, with a view to bring an end to litigation at an early date .In this very case it was

27 AIR 1934 SC 10528 AIR 2005 SC 357529 1995 Supp(4)SCC 54130 AIR 2005 Ker 6431 AIR 2003(1) SCW 4627

19

highlighted ,that ADR mechanism contemplated by Section 85 of CPC32 is arbitration ,conciliation ,judicial settlement including settlement through lok adalat and mediation.

In Deco Mica Ltd Vs UOI 33

Here in it was held that ADR is inevitable in one form or the another form in view of global unquestionable phenomenon because court of law some times becomes suit for life ,litigation in the present set up and mechanism has become expensive and time consuming and dispensation of justice has become slow. It is reported that out of 192 Countries, which are members of UN, 133 Countries have successfully implemented ADR in one form or the other, with encouraging and rewarding success.

Conclusion:

Not even invading armies can stop an idea whose time has come, the time for Alternate Dispute Resolution, as a means to assist regular court litigation has arrived. The Concept of resolution of disputes through modes other than ,those involving time consuming technical procedures ,though initially started on an experimental basis ,has in fact gained immense popularity.

The efficiency of Arbitration, Conciliation, Lok-Adalats, Mediation, Negotiation as a means of providing quicker, faster, cheaper, efficient and some what agreeable settlement, in a private atmosphere, without publicizing the issue has made the Alternate Dispute Resolution system a hot favorite amongst both litigants as well as corporate, The popularity and acceptability of the system is quite evident from the fact that, now even courts of law are seriously encouraging this concept.

The growing spurt in the establishment of a number of mediation and conciliation centers at various High Courts and Lower Courts stands as a testimony to the success of this overtly popular phenomenon.

Thus it would not be wrong to summarize that “In true sense of the term alternate dispute resolution has emerged as a life saving pill for our ailing judicial system, ADR by dealing with simple cases has in fact spared to the regular courts, some extra time to deal with more technical and complex judicial matters, and by doing so it has in fact been quite successful in achieving its desired purpose of relieving the regular courts of their growing backlog of cases.

32 Civil Procedure Code 33 2002(144) ELT 18 (Guj)

20

At this juncture it would not be wrong to conclude by saying that” the system of alternate dispute resolution has emerged as a more humane face of regular litigation, the mere mention of which in fact quite capable of sending a chill down the spine of many a person.

The era of Alternate Dispute Resolution has dawned on our societies, and encouragement of newer forms of Alternate Dispute resolution like MEDOLA, Mini Trial & other such initiatives would be in the best interests of our society.

Aniket Datta. 5th Year Student Army Institute of Law,

Mohali.

21

22