ALTERNATIVE DISPUTE RESOLUTION

ASSIGNMENT

FUTURE OF ADR IN INDIA

Submitted to – Submitted by –

Mr. Shobhitabh Srivastava Ishita

Pradhan(A21511120030)

Faculty B.A., LL. B (Hons.)

ALS-AUR Semester – VII

 Research Article

ADR 2.O: THE NEW LITIGATION

Ishita Pradhan1

ABSTRACT
“Justice too long delayed is justice denied.”

- Martin Luther King Jr.2

In the recent times, where even slow-paced internet is unimaginable, slow-paced cases are on
the verge of becoming unacceptable. Hence the world has come up with the concept of
Arbitration also referred to as Alternative Dispute Resolution. The concept of ADR is not too
new, it is in our society from time immemorial. For centuries in our country, we have
practiced this resolution practice at the village level by panchayat where the parties appeared
and disputes were settled by the heads of the villages so it is basically nothing but
homecoming for India. This research article explores the "Future of ADR in India" and its
role as a viable Alternative to Appropriate Dispute Resolution. It delves into the historical
roots of ADR in the Indian legal system, the existing legal framework, and
recent developments. The article underscores the importance of ADR in India's legal
landscape and its potential to reshape the future of dispute resolution. It gives highlight to
primitive methods of dispute resolution and advent of ADR in India. This research is focused
on Indian legality and suggests the loopholes in adversarial method of dispute resolution.
Further, it also suggests how the burden on the courts can be reduced through different
methods of ADR system in the age of technology boom and make suggestions to build up an
effective and efficient ADR mechanism in India.

Keywords: ADR, Arbitration, Dispute Resolution, Alternative, Appropriate.

1
Author is a student of B.A., LL. B (Hons.), 4th year, at Amity University, Rajasthan.
2
“Letter from Birmingham Jail”, 1963.
INTRODUCTION

The right of ‘access to justice’ stands meaningless if an individual merely do acquire such
right without any mechanism for the discharge of the same. Clogging in courts, need of
ample manpower, the assets and the subsequent procedural postponement at every step of the
hierarchy of the court are some of the foremost factors which are below par the formal legal
system of the conventional court room litigation. On the other hand, the globalization of
market and the complexities of present commercial operation stipulate quick and efficient
mechanism for the speedy rectify of the connected disputes. To cope up with the
overwhelming confront of arrears, the exercise of confidential and comfortable dispute
resolution mechanism which is known as Alternative Dispute Resolution (ADR) hails as one
of the most imperative attributes to the said exploration of various reforms. Within the
stretches of ADR mechanism enhanced and speedy conduct are being developed to settle
disputes at every ticking of the clock. One such approach making its acceleration in the world
of dispute resolution it the highly developed and technical method of Online Dispute
Resolution (ODR). From gadgets to artificial intelligence technology is reaching for
progressive ways of communication and as disputes arises in course of these exchanges what
can be an improved way of resolving them than using a diverse algorithm, a diverse view of
the similar technology.

MEANING OF ARBITRATION

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














 '(








 

 !

 






)
 

*






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



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
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













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










































*
















 '(








 

 !

 






)
 

*




























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










































*











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



 '(



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



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
 !

 


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
)
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
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
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
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
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


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

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

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
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


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




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
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

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



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

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
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

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
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 

 !

 
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
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
)
 

*






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
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
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
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
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

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
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
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
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
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

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

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*
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
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
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


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
In today’s context, ADR can be elucidated as a well-suited panacea to costly and time-
consuming litigation where almost all disputes can be settled outside the court in the most
amicable form. It is used since ages and through histories by innumerable countries and its
people in an informal manner to address any conflict. It is a technique through which the
disputes can be settled without intervention of court proceeding. In general, a third or
independent person such as an arbitrator, 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. 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. ADR has a great importance to the corporate
community which needs speedy and transparent method to litigation because it does not have
time, patience, resources to waste on time taking justice delivery system. So, an alternative
for the cumbersome and needless litigation is provided by ADR.

WHY ADR IS CONSIDERED AS NEED OF THE HOUR?

Alternative Dispute Resolution encompasses a range of methods for resolving disputes

outside of traditional court litigation. It is necessary for various reasons. Firstly, ADR offers
efficiency by providing a faster resolution compared to court proceedings, which can be time-
consuming and prone to backlogs. ADR processes are designed to be streamlined, enabling
parties to reach a resolution more expeditiously. Secondly, it is cost-effective. Litigation
involves significant expenses such as legal fees and court-related expenditures, whereas ADR
methods often entail lower cost, making it a more economical option. Thirdly, ADR provides
flexibility and informality. Parties have greater control over neutral facilitators’ procedures,
timing, and choice, fostering a more adaptable and customized approach to dispute
resolution. Fourthly, ADR ensures confidentiality. Processes like mediation and negotiation
maintain the privacy of discussions, allowing parties to openly address issues without public
exposure. Lastly, ADR focuses on finding mutually acceptable solutions, preserving
relationships between parties instead of exacerbating conflicts. It empowers and engages
parties in decision-making, resulting in higher satisfaction and compliance.
SCOPE AND MODES OF ADR
The scope of ADR in India has witnessed significant growth in recent years, presenting a
transformative opportunity for the country’s legal landscape. ADR methods, such as
mediation, arbitration, negotiation, and conciliation, provide parties with alternatives to
traditional court litigation for resolving disputes. By offering a more efficient, cost-effective,
and collaborative approach to dispute resolution, ADR is poised to play a crucial role in
promoting access to justice and reducing the burden on the Indian judicial system.

Arbitration

Arbitration is a formal process where parties agree to submit their dispute to an impartial
arbitrator or a panel of arbitrators who render a binding decision. The scope of arbitration in
India has been significantly enhanced with the enactment of the Arbitration and Conciliation
Act 1996, which is based on the UNCITRAL Model Law. This legislation provides a robust
legal framework for domestic and international arbitration, making India an attractive
destination for resolving commercial disputes.

Mediation

Mediation is a voluntary process wherein a neutral third party facilitates communication

between the disputing parties to help them reach a mutually acceptable resolution. The scope
of mediation in India has been recognized and encouraged by various statutes, including the
Civil Procedure Code and the Commercial Courts Act. Mediation has proven effective in
resolving a wide range of disputes, including civil, commercial, family, and community
disputes.

Negotiation

Negotiation is an informal and direct form of dispute resolution where the parties involved
discuss and try to reach a settlement without the involvement of a third party. While
negotiation does not have a specific legal framework, it plays a vital role in the early
resolution of disputes. It is often employed in conjunction with other ADR methods to
achieve mutually beneficial outcomes.

Conciliation

Conciliation involves the assistance of a neutral third party who facilitates communication
between the parties to help them find a mutually agreeable solution. Although conciliation is
not as commonly used as mediation or arbitration in India, it can be employed in various
sectors, including labour disputes, commercial contracts, and family matters.

The scope of ADR in India extends to various sectors, such as commercial, consumer, family,
labour, intellectual property, and environmental disputes. The government has recognized the
potential of ADR in reducing the burden on courts and promoting efficient and cost-effective
resolution of disputes. As a result, ADR has gained prominence in recent years, and
specialized institutions and centres have been established to facilitate the effective
implementation of ADR mechanisms.

HISTORICAL ROOTS OF ADR

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

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 English Arbitration Act, 1899 was enacted to give effect to alternate dispute
mechanism in India. 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.

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, 1940.

Post-independence
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
commercial arbitration. 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. The act of 1966 was amended thrice in 2015 , 2019
and 2021.

ADVENT OF ADR IN INDIA

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 ADR procedures.
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 international aspects.
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.
In case of Rajasthan State Road Transport Corporation V. Krishna Kant, the SC stated that
“the policy of law emerging from Industrial Disputes Act, and its sister enactments is to
provide an alternative dispute resolution mechanism to the workmen, a mechanism, which is
speedy, inexpensive, informal and unencumbered by the plethora of procedural Laws and
appeals and revisions applicable to civil courts.”
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.
Delhi High Court has given a landmark decision highlighting the significance of Lok Adalat
movement in the case of Abdul Hasan and National Legal Services Authority vs. Delhi
Vidyut Board and Others, the Court passed the order giving directions for setting up of
permanent Lok Adalats.
FUTURE OF ADR IN INDIA

The pandemic of 2019 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 e-courts 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 hearings and as
a result, 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, in the year 2018.

ODR – FUTURE OF ADR

One of the most celebrated solutions in regard to ADR is Online Dispute Resolution. A
culmination of factors–increased appetite for change, the need to decongest our courts,
the demands for affordable and effective dispute resolution mechanisms, and lastly, the
availability of technology, have prepared India for a potential game-changing
transformation in the justice delivery framework– Online Dispute Resolution (ODR).
ODR is often simplistically understood to mean e-ADR or ADR that is enabled through
technology. However, its potential benefits extend far beyond its genesis parent system,
namely ADR. ODR can help in not just dispute resolution but also in dispute
containment, dispute avoidance and promotion of general legal health of the country.
ODR has already been integrated in several jurisdictions such as US, Canada, Brazil,
and the UAE wherein the government, the judiciary and private institutions are working
together to exploit the benefits of ODR towards enabling greater access to justice. The
reason for ODR’s success can be attributed to its cost effective and convenient nature,
which also broadens the possibilities of remote resolution. It relies on asynchronous
communication, eliminates the requirement for the physical presence of parties and
removes unconscious bias. Now, its high time to mainstream it in India as well, as it is
considered as the future of Dispute Resolution, including ADR.

CONCLUSION
The virtual hearing may not completely stop the physical hearing but this is the right
time to upgrade the existing law and infrastructure to lay down a uniform procedure
towards virtual hearing.
In view of the above, there is a need for having a detailed Guideline for the ODR
System, so that there are uniformities and the difficulties faced by the lawyers or
litigants, be removed.
There is no doubt that all these avenues need recourse to technology and there is a
requirement of technological upgrades and updates. But maybe the time has been ripe
for a while for litigation and ADR to get over the aversion to technology and embrace it.
This can be facilitated by continuously training all players with the necessary software.
It is high time we treat this pandemic as a boon and less as an obstacle – adaptability,
after all, is the simplest secret to the survival of the fittest.

REFERENCES

1. The Arbitration and Conciliation Act 1996.

2. Avtar Singh –―Law of Arbitration and Conciliation‖ PP 397-398, 7 Edition, Eastern
book Company, Lucknow.
3. P.N. Bhagawati on the need to create adequate and effective delivery system of justice
in Chapter VI of ―Social Justice – Equal Justice‖ P.33
4. Evolution of ADR in India- Law and Practices by Shayup Ahmed Shah.