Explaining the importance of an alternate dispute resolution system Abraham Lincoln once said “Discourage litigation, persuade your neighbours to compromise whenever you can point out to them how the normal winner is often a loser in fees, cost, and time. As a peacemaker, the lawyer has a superior opportunity of being a good man”.

There is a famous proverb “where there are two minds there will be three opinions”. Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods which can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System.

Justice Warren Burger the former Chief Justice of the American Supreme Court while discussing the importance of alternate dispute resolution had observed: “The harsh truth is that we may be on our way to a society overrun by hordes of lawyers, hungry as locusts, and bridges of judges in numbers never before contemplated. The notion that ordinary people want black-robed judges, well-dressed lawyers, fine paneled courtrooms as the setting to resolve their disputes, is not correct. People with legal problems like people with pain want relief and they want it as quickly and inexpensively as possible……..The obligation of the legal profession is to serve as healers of human conflict and we should provide mechanisms that can produce an acceptable result in the shortest possible time, with the least possible expense, and with a minimum of stress on the participants. That is what justice is all about.”

Constitutional Provisions for ADR:

Article 39-A of the Constitution of India provides that the State shall secure that the operation of the legal system promotes justice, on the basis of equal opportunity and shall, in particular, provide free legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities. Article 14 also makes it obligatory for the State to ensure equality before the law and a legal system which promotes justice on the basis of equal opportunity to all. Thus, access to justice, provision of legal aid for the poor and needy, and dissemination of equal and speedy justice are the cherished goals of our Constitutional Republic. However access to justice, in its true sense postulates effective and judicious resolution of disputes and that is vital for the realization of the fundamental rights of individuals in a welfare state

Statutory Provisions for ADR:

The Industrial Disputes Act, 1947:

Industrial Disputes Act, 1947 was the first legislation in India to introduce the concept of ADR in labour disputes. Conciliation has been statutorily recognized as an effective method of dispute resolution in relation to disputes between workers and the management. The provision in the Act makes it attractive for disputing parties to settle disputes by negotiation and failing that through conciliation by an officer of the Government, before resorting to litigation.

• Section 4 Conciliation Officers: This section grants authority to “appropriate govt.” to appoint conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.
• Section 5 Boards of Conciliation: Section 5 on the line of section 4, also grants authority to ”appropriate govt.” to constitute a Board of conciliation, for promoting the settlement of an industrial dispute.
• Section 12 Duties of Conciliation Officers: Subsection 2 of this section casts a duty on the conciliation officer, to investigate the dispute and matters affecting the settlement of such disputes. It also grants authority to the conciliation officer, to do all necessary things that are necessary for the amicable settlement of the dispute. The section further lays down the procedure in case of settlement as well as non- settlement of the disputes. The award arrived at in the course of conciliation proceedings under this Act, is a binding instrument and has same value as the decree of court, by virtue of section 18 of the Act. The award binds all the parties to the disputes as well as their successors.

The Bombay Industrial Relations Act, 1946:

The Bombay Industrial Relations Act, 1946, has also recognized conciliation for settlement of labour disputes. The Act defines the term conciliation proceedings and Conciliator.

• Section 6 authorizes the state government to appoint a chief conciliator and additional conciliators for the resolution of the labour disputes.
• Section 7 (1) authorizes the establishment of a Board of Conciliation for the resolution of the industrial disputes.

The Hindu Marriage Act, 1955:

• Section 23(2) of the Act lays down that before proceeding to grant any relief under this Act, it shall be the duty of the court in the first instance, in every case where it is possible so to do consistently with the nature and circumstances of the case, to make every endeavour to bring about a reconciliation between the parties.

The Family Courts Act, 1984:

• Section 9 of the Act mandates the family court to assist and persuade the parties at the first instance, to arrive at a settlement.

The Code of Civil Procedure, 1908:

• Order 23, Rule 3, of the Code of Civil Procedure mandates the courts to record a full adjustment or compromise and pass a decree in terms of such compromise or adjustment. But the compromise decree has to be recorded as a whole so as to gather the intention of the parties. The court must apply its judicial mind while examining the terms of the settlement. The compromise shall not be recorded in a casual manner. The court is under the responsibility to satisfy itself about the lawfulness and genuineness of the compromise. The Government of India and State Governments are the largest litigants in India. The government or statutory authorities are defendants in a large number of suits pending in various courts in the country.
• Order 27 Rule 5B (dealing suits against the Government or a public officer) and Order 32A Rule B (dealing with subject matter related with a family) enforce the duty on the Court to make, in the first instance, every endeavour, where it is possible to do so consistently with the nature and circumstances of the case, to assist the parties in arriving at a settlement in respect of the subject-matter of the suit.
• Section 80 and some other statutes require service of notice as a condition precedent for filing of a suit or other proceedings against the government or authority. The object of notice under section 80, CPC is to give the government sufficient warning of the case which is going to be filed against it and an opportunity to it to settle the claim without litigation. It gives the government an opportunity to consider its legal position and accordingly settle the claim out of court. The notice under section 80, CPC intends to alert the state to negotiate a just settlement or at least have the courtesy to tell the potential outsiders why the claim is being resisted. The underlying object of section 80 and other similar provisions is to curtail litigation and area of dispute.
• Section 89(1) Settlement of disputes outside the Court: 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 the 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.
• S. 107(2) of the Code of Civil Procedure provides that subject to such conditions and limitations as may be prescribed, “………. The appellate court shall have the same powers and shall perform as nearly as may be the same duties as are conferred and imposed by this Code on courts of original jurisdiction in respect of suits instituted therein.” Thus, it is inferred that the provisions regarding Alternative Disputes Resolutions are applicable to appellate courts also.

Alternate Dispute Resolution:

Alternative Dispute Resolution or ADR refers to an assortment of dispute resolution procedures that primarily serve as alternatives to litigation and are generally conducted with the assistance of a neutral and independent third party. In this article, we shall introduce ourselves with Arbitration. ADR processes are conducted with the assistance of an ADR neutral, who is an unbiased, independent, and impartial third party not connected with the dispute, and helps the disputant parties to resolve their disputes by the use of the well-established dispute resolution processes.

Classification of ADR:

Alternate dispute resolution processes can broadly be divided into two categories: a) non adjudicatory and b) adjudicatory processes.

Non-Adjudicatory (Non-Adversarial) ADR:

These processes do not involve any final and binding determination of factual or legal issues of the dispute by the alternate dispute resolution neutral but involve the exploration of a mutually acceptable solution with the cooperation of the parties. The non-adjudicatory alternate dispute resolution processes are the true exponents of the philosophy of alternate dispute resolution that a dispute is a problem to be solved together by cooperation rather than combat to be won. Avoidance, Negotiation, Mediation, Conciliation, and Lok-Adalat, etc. are the Non-Adversarial mechanism for conflict resolution. These are informal in nature. It is a purely voluntary process and the parties are free to opt-out of the same at any point of time as per their own volition. If a party does not accede to the settlement or to the continuance of alternate dispute resolution proceedings, It is open to him to unilaterally terminate the alternate dispute resolution process and initiate the formal legal process. Even if alternate dispute resolution is unsuccessful, the time and expense spent in alternate dispute resolution is put to good use as trial preparation is advanced, issues are narrowed and thoughts are clarified.

Adjudicatory (Adversarial) ADR:

These processes involve a final and binding determination of factual and legal issues of the dispute, by the alternate dispute resolution neutral. The adjudicatory processes derive their sanctity from the will of the parties to get their rights adjudicated by an alternate dispute resolution neutral outside the conventional litigative process. Arbitration and binding expert determination are examples of adjudicatory alternate dispute resolution processes. These are formal in nature.

Distinguishing Adjudicatory ADR and Non-Adjudicatory ADR

Adjudicatory ADR	Non-Adjudicatory ADR
It is an adjudicatory system	It is non-adjudicatory system
It involves due process is involved (formal)	It involves no due process (informal)
It is coercive system	It is non-coercive system
It is evaluative process	It is facilitative process
It is controlled by the third party	It is controlled by themselves
It looks at the past	It looks at the future
It focusses on facts of matter	It focusses on relationship
It establishes liability and guilt	It Seeks to reconstruct or maintain relationship
There are winner and Looser I win you lose)	Parties are accommodated (win-win situation)
In this process Lawyers play dominant role	In this process parties play important role

Need of Alternative Dispute Resolution (ADR):

• The legal procedures are very much technical and complex;
• Many labours in India are economically weak and cannot afford traditional judicial machinery which has become costly because of the huge amount of fees charged by the lawyers.
• Delays in the disposal of cases and dispensing justice, procedural wrangles, the multiplicity of appeals, revisions, and reviews are some factors that make litigants frustrated. Especially in disputes like strikes and lock-outs, the amount of economic interest is very high and delay in justice leads to higher economic damage.

Matters Those Can Be Solved Through ADR:

Here is a list of some disputes those can be solved through alternate dispute resolution.

• Business disputes- contracts, partnerships, ownership
• Property / Land use disputes- property transfers, boundaries, easements
• Family disputes- divorce, property, custody, visitation, support issues
• Consumer / Collection disputes- repairs, services, warranties, debts, loans
• Employment disputes- employment contracts, terminations, non-compete
• Landlord/tenant disputes- evictions, rent, repairs, security deposits
• Neighborhood disputes / Relational disputes or other civil or personal conflicts
• Personal Injury disputes / Insurance disputes- accidents, coverage, liability issues

Matters Those Cannot Be Solved by ADR:

• Proceedings that involve prosecution for criminal offences.
• Suits mentioned under Order I, Rule 8 CPC which involve the interest of the public or the interest of several persons who are not parties before the court.
• Election disputes as to public offices.
• Cases which are related to serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion under the Indian Penal Code.
• Special cases which involve the protection of courts, for instance, claims against minors, deities, and mentally challenged and suits for declaration of title against the government.

Advantages of ADR:

• Less Formal and Highly Flexible: There are lesser formalities in ADR than in the traditional judicial system.  The process of ADR is not as technical and complex as it is in the traditional court system. Parties have the freedom to choose the manner of proceedings, time, and place for resolution of disputes. Parties are also free to choose the rules and procedures to be applied for the resolution of disputes. It gives flexibility to the process of ADR, which raises its importance in labour disputes and family disputes. It saves time and money.
• Faster: As the parties have been given the freedom to determine the procedure, time, and place for the settlement of the dispute, it saves a lot of time compared to traditional courts, wherein years of time is consumed for the settlement of disputes. In ADR disputes can be settled even within a week. The biggest advantage in ADR is finality since the dispute is finally resolved, thereby obviating the possibility of successive appeals.
• Cost-Saving: The court fees and mounting charges of lawyers, adds to the cost factor in normal judicial proceedings. Similarly, there may be economic losses due to dispute, particularly in labour-related disputes.  This can be avoided through the application of ADR. A dispute can be settled in times other than working hours. ADR is finality since the dispute is finally resolved, thereby obviating the possibility of successive appeals. It saves a lot of money and cost.
• Win-Win Situation: ADR system brings about a win-win situation for the parties whereas in the court procedure there is a win-lose situation.  In ADR, unlike court system, parties discuss and co-operate each other with the help of a third expert neutral person who is neutral and does not have any interest in the subject matter of the dispute. Due to expertise in the field of the dispute he can understand both the sides. There is no winner and loser. It, therefore, maintains the good relationship between the parties, which is the key to run efficiently any business, industry or factory or maintain peace in the family.
• Privacy and Prestige Maintained: When a dispute particularly labour dispute goes in court, it becomes public and hampers the reputation of the industry in public. In ADR the process of dispute resolution is within four walls and only in presence of parties and expert. It, therefore, maintains the privacy and preserves the reputation of the industry. Due to privacy, reliable information regarding the case can be gathered and amicable settlement of the case can be arrived at. In the judicial system, parties are reluctant to part with such inconvenient information.  The final outcome of the process can also be made private if the parties so stipulate and agree. 
• Party autonomy: ADR is completely based on the concept of party autonomy. It puts parties in control by giving them an opportunity to tell their side of the story and have a say in the final decision.

Disadvantages of ADR:

• With the exception of arbitration, where the arbitrator makes a binding decision, the ADR process may not always yield a resolution. This means that money and time could be invested in a process that does the guaranteed resolution. Thus after long mediations, conciliations, parties may proceed to litigation and trial before the court.
• One of the main disadvantages of using ADR is that there is no legal expertise from the parties unless they bring a lawyer. 
• There is a possibility that one party has legal expertise or has resources to arrange legal expertise, but the other party doesn’t. It creates a power imbalance.
• There is no strict hierarchy or system, there are no precedents made or followed. This makes it very difficult to know how an issue will be decided before it is actually heard.
• The finality and binding nature of an arbitrator’s decision can sometimes be viewed as a disadvantage because it may not always please the parties and courts will often refuse to review it.
• An arbitration clause in a contract is usually binding and courts will not waive it unless both parties request litigation.
• Alternate Dispute Resolution system can only resolve matters which are civil in nature or which concern money. So, they cannot make authoritative injunctive orders
• The neutral party – arbitrator, mediator, conciliator, will charge a fee for their time and expertise, and depending on their popularity, these fees may be substantial.

Different Methods of ADR:

Arbitration:

Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award.

• Arbitration proceedings are flexible and more economically feasible compared to litigation.
• Arbitration proceedings occur at an expeditious rate as compared to Litigation; therefore, it saves time for both parties.
• The arbitrator chosen is an expert in the subject under arbitration.
• The disputes which are subject to arbitration are treated with privacy and are not released to the public.
• The parties have the liberty to choose an arbitrator to handle their dispute.
• Arbitration awards are generally easier to enforce as compared to court verdicts.

Conciliation:

Conciliation is a process of persuading parties to reach a settlement in existing and ongoing conflict with the help of a third impartial party called a conciliator with the intention to preserve the relationship they have with each other. There is no need for pre-agreement for starting the process of conciliation but acceptance to the process by both parties is necessary.

• It offers a more flexible alternative, for a wide variety of disputes, small as well as large;
• It obviates the parties from seeking recourse to the court system;
• No prior agreement is required.
• It reserves the freedom of the parties to withdraw from conciliation without prejudice to their legal position inter se at any stage of the proceedings;
• It is committed to the maintenance of confidentiality throughout the proceedings and thereafter, of the dispute, the information exchanged, the offers and counter-offers of solutions made, and the settlement arrived at.
• It is cost-effective and produces a quicker resolution of disputes.
• f) It facilitates the maintenance of the continued relationship between the parties even after the settlement.
• There is no scope for corruption or bias.

Mediation:

Mediation is a mode of dispute resolution, where an amicable decision arises with the help of a third party known as a ‘mediator,’ without recourse to the court of law.

• Parties have complete control over the settlement.
• Less stress as compared to litigation and arbitration.
• The relationship between the parties isn’t overly damaged.
• Mediation proceedings are confidential.
• The process resolves the dispute quickly.

Negotiation:

Negotiation is a method of dispute resolution whereby a dispute between two individuals or groups is settled amicably by an impartial third person called as a negotiator, using different techniques. The negotiator, in this form of resolution, uses various communication methods to bring the parties of the dispute to a settlement.

• Flexibility: since negotiation is an informal process, it is relatively flexible.
• Quick resolutions as compared to litigation.
• It facilitates in maintaining a healthy relationship between the disputing parties.
• Takes place in a private environment

Distinguishing Between Arbitration and Conciliation:

Arbitration	Conciliation
Arbitration is a dispute settlement process in which a impartial third party is appointed to study the dispute and hear both the party to arrive at a decision binding on both the parties.	Conciliation is a method of resolving dispute, wherein an independent person helps the parties to arrive at negotiated settlement.
Arbitration process is done by arbitrator or arbitration tribunal	Conciliation process is facilitated by conciliator.
An arbitrator has the power to enforce his decision.	A conciliator do not have the power to enforce his decision.
Prior agreement for arbitration is required	Prior agreement for conciliation is not required.
It is available existing and future disputes	It is available for existing disputes.
It is governed by the Arbitration and Conciliation Act, 1996.	Process is not governed by the Act.

Distinguishing Between Mediation and Conciliation:

Mediation	Conciliation
Mediation is a process of resolving issues between parties wherein a third party assist them in arriving at an agreement.	Conciliation is an alternate dispute resolution method in which an expert is appointed to settle the dispute by persuading parties to reach agreement.
It is regulated by Code of Civil Procedure, 1908	It is regulated by Arbitration and Conciliation Act, 1996
In mediation the confidentiality depends on trust.	In conciliation the extent of confidentiality is fixed by law.
The third party performing process of mediation is called mediator.	Third party performing process of conciliation is called conciliator.
The mediator acts as facilitator.	The conciliator acts as facilitator, evaluator and intervener.
At the end of successful mediation there is an agreement between the parties in the dispute.	At the end of successful conciliation there is a settlement agreement between the parties in the dispute.
The agreement is enforceable by law.	The settlement agreement is executable as decree of civil court.

Conclusion:

ADR has distinct advantages and it offers a comparatively speedier and inexpensive mode of dispute resolution than conventional litigation. It offers a system with procedural flexibility, a broad range of remedial options, and a focus on individualized justice. The flexibility is available not only in terms of the procedure but also in terms of the solutions to the dispute. ADR, in contradistinction to a judicial adjudication, can provide creative solutions – novel ways of resolving disputes. ADR may not produce the result in each case but it will definitely be helpful in reducing the disputes. Therefore in a country like India, wherein, courts are overburdened with thousands of cases there is a strong case for enhanced use of ADR mechanism for resolution of some disputes.