UNIT 1

TOPIC 1

Introduction

Indian judiciary is one of the oldest judicial system, a world-renowned fact but
nowadays it is also well-known fact that Indian judiciary is becoming inefficient to
deal with pending cases, Indian courts are clogged with long unsettled cases. The
scenario is that even after setting up more than a thousand fast track Courts that
already settled millions of cases the problem is far from being solved as pending
cases are still piling up.

To deal with such a situation Alternative Dispute Resolution (ADR) can be helpful
mechanism, it resolves conflict in a peaceful manner where the outcome is
accepted by both the parties.

ONE OF THE MOST IMPORTANT FEATURE OF ADR IS IT RESOLVES

DISPUTE IN COST EFFECTIVE MANNER, LESS TIME CONSUMING AND

PRODUCES DESIRED RESULT.

Alternative Dispute Resolution

The concept of Alternative Dispute Resolution (ADR) mechanism is capable of

providing a substitute to the conventional methods of resolving disputes. ADR
offers to resolve all type of matters including civil, commercial, industrial and
family etc., where people are not being able to start any type of negotiation and
reach the settlement. Generally, ADR uses neutral third party who helps the parties
to communicate, discuss the differences and resolve the dispute. It is a method
which enables individuals and group to maintain co-operation, social order and
provides opportunity to reduce hostility.
Importance of ADR in India

To deal with the situation of pendency of cases in courts of India, ADR plays a
significant role in India by its diverse techniques. Alternative Dispute Resolution
mechanism provides scientifically developed techniques to Indian judiciary which
helps in reducing the burden on the courts. ADR provides various modes of
settlement including, arbitration, conciliation, mediation, negotiation and lok
Adalat. Here, negotiation means self-counseling between the parties to resolve
their dispute but it doesn’t have any statutory recognition in India.

ADR is also founded on such fundamental rights, article 14 and 21 which deals
with equality before law and right to life and personal liberty respectively. ADR’s
motive is to provide social-economic and political justice and maintain integrity in
the society enshrined in the preamble. ADR also strive to achieve equal justice and
free legal aid provided under article 39-A relating to Directive Principle of State
Policy(DPSP).

Few important provisions related to ADR

 Section 89 of the Civil Procedure Code, 1908 provides that opportunity to

the people, if it appears to court there exist elements of settlement outside
the court then court formulate the terms of the possible settlement and
refer the same for: Arbitration, Conciliation, Mediation or Lok Adalat.
 The Acts which deals with Alternative Dispute Resolution are Arbitration
and Conciliation Act, 1996 and,
 The Legal Services Authority Act, 1987

Advantages of Alternative Dispute Resolution

 Less time consuming: people resolve their dispute in short period as

compared to courts
  Cost effective method: it saves lot of money if one undergoes in litigation
process.
 It is free from technicalities of courts, here informal ways are applied in
resolving dispute.
 People are free to express themselves without any fear of court of law.
They can reveal the true facts without disclosing it to any court.
 Efficient way: there are always chances of restoring relationship back as
parties discuss their issues together on the same platform.
 It prevents further conflict and maintains good relationship between the
parties.
 It preserves the best interest of the parties.

Various modes of Alternative Dispute Resolution

Arbitration

The process of Arbitration cannot exist without valid arbitration agreement prior to
the emergence of dispute. In this technique of resolution parties refer their dispute
to one or more persons called arbitrators. Decision of arbitrator is bound on parties
and their decision is called ‘Award’. The object of Arbitration is to obtain fair
settlement of dispute outside of court without necessary delay and expense.

Any party to a contract where arbitration clause is there, can invoke arbitration
clause either himself or through their authorized agent which refer the dispute
directly to the arbitration as per the Arbitration clause. Here, arbitration clause
means a clause that mention the course of actions, language, number of arbitrators,
seat or legal place of the arbitration to be taken place in the event of dispute arising
out between the parties.

What is the procedure to be followed once the arbitration clause is invoked?

 Initially, applicant initiates an arbitration by filing a statement of claim

that specifies the relevant facts and remedies. The application must
include the certified copy of arbitration agreement.
  Statement of claim is a written document filed in the court or tribunal for
judicial determination and a copy also send to the defendant in which
claimant described the facts in support of his case and the relief he seeks
from the defendant.
 The respondent reply to the arbitration by filing an answer against the
arbitration claim of claimant that specifies the relevant facts and available
defenses to the statement of claim.
 Arbitrators selection is the process in which the parties receive lists of
potential arbitrators and select the panel to hear their case.
 Then there is the exchange of documents and information in preparation
for the hearing called ‘Discovery’.
 The parties meet in persons to conduct the hearing in which the parties
present the arguments and evidences in support of their respective cases.
 After the witnesses examined and evidences are presented, then there in
conclusion arbitrator gives an ‘Award’ which is binding on the parties.
Now the intricacies of the proceedings vary with the arbitration agreement. For
example, there could be a timeline which must be followed. This timeline would be
stipulated in the agreement.

Section 8 of Arbitration and Conciliation Act, 1996 provides if any party

disrespects the arbitral agreement and instead of moving to arbitration, moves that
suit to civil court, other party can apply the court for referring the matter to
arbitration tribunal as per the agreement but not later the submission of the first
statement. The application must include a certified copy of arbitration agreement
and if courts satisfy with it, the matter will be referred to arbitration.

Mediation

Mediation is an Alternative Dispute resolution where a third neutral party aims to

assist two or more disputants in reaching agreement. It is an easy and
uncomplicated party centered negotiation process where third party acts as a
mediator to resolve dispute amicably by using appropriate communication and
negotiation techniques. This process is totally controlled by the parties. Mediator’s
work is just to facilitate the parties to reach settlement of their dispute. Mediator
doesn’t impose his views and make no decision about what a fair settlement should
be.
 THE PROCESS OF MEDIATION WORKS IN VARIOUS STAGES. THESE ARE,

 Opening statement
 Joint session
 Separate session and,
 Closing
At the commencement of mediation process, the mediator shall ensure the parties
and their counsels should be present.

 Initially in the opening statement he furnishes all the information about

his appointment and declares he does not have any connection with either
of parties and has no interest in the dispute.
 In the joint session, he gathers all the information, understand the fact and
issues about the dispute by inviting both the parties to present their case
and put forward their perspective without any interruption. In this session,
mediator tries to encourage and promote communication and manage
interruption and outbursts by the parties.
 Next is separate session, where he tries to understand the dispute at a
deeper level, gathers specific information by taking both the parties in
confidence separately.
 Mediator asks frequent questions on facts and discusses strengths and
weaknesses to the parties of their respective cases.
 After hearing both the sides, mediator starts formulating issues for
resolution and creating options for settlement.
 In the case of failure to reach any agreement through negotiation in
mediation, mediator uses different Reality check technique like:
Best Alternative to Negotiated Agreement (BATNA)

It is the best possible outcome both the party come up with or has in mind. Its
suitable situation as each party thinks about their most favorable scenario looks
like.

Most Likely Alternative to Negotiated Agreement (MLATNA)

For a successful negotiation the result always lies in the middle, mediator after
considering both the parties comes up with most likely outcome. Here result is not
always in the middle but little left or right of the center depending on negotiation
situation.

Worst Alternative to Negotiated Agreement (WATNA)

It the worst possible outcome a party has in their mind for what could happen
during negotiation.

It may be helpful to the parties and mediator to examine the alternative outside the
mediation(specifically litigation) and discusses the consequences of failing to reach
agreement like: effect on the relationship of the parties or effect on the business of
the parties. It is always important to consider and discuss the worst and most
probable outcomes, it’s not always people get the best outcome.

Mediator discusses the perspective of the parties about the possible outcome at
litigation. It is also helpful for the mediator to work with parties and their
advocates to come to a proper understanding of the best, worst and most probable
outcome to the dispute through litigation as that would help the parties to
acknowledge the reality and prepare realistic, logical and workable proposals.

Conciliation

Conciliation is a form of arbitration but it is less formal in nature. It is the process

of facilitating an amicable resolution between the parties, whereby the parties to
the dispute use conciliator who meets with the parties separately to settle their
dispute. Conciliator meet separately to lower the tension between parties,
improving communication, interpreting issue to bring about a negotiated settlement
There is no need of prior agreement and cannot be forced on party who is not
intending for conciliation. It is different from arbitration in that way.

Actually, it is not possible for the parties to enter into conciliation agreement
before the dispute has arisen. It is clear in Section 62 of The Arbitration and
Conciliation Act, 1996 which provides,
  The party initiating conciliation shall send to the other party a written
invitation to conciliate under this part, briefly identifying the subject of
the dispute.
 Conciliation proceedings shall commence when the other party accepts in
writing the invitation to conciliate.
 If the other rejects the invitation, there will be no conciliation
proceedings.
Above provision clearly states conciliation agreement should be an extemporary
agreement entered into after the dispute has but not before. Parties are also
permitted to engage in conciliation process even while the arbitral proceedings are
on(section 30).

Lok Adalat

Lok Adalat is called ‘People’s Court’ presided over by a sitting or retired judicial
officer, social activists or members of Legal profession as the chairman. National
Legal Service Authority(NALSA) along with other Legal Services Institutions
conducts Lok Adalats on regular intervals for exercising such jurisdiction. Any
case pending in regular court or any dispute which has not been brought before any
court of law can be referred to Lok Adalat. There is no court fees and rigid
procedure followed, which makes the process fast. If any matter pending in court
of referred to the Lok Adalat and is settled subsequently, the court fee originally
paid in the court when the petition filed is also refunded back to the parties.

Parties are in direct interaction with the judge, which is not possible in regular
courts. It depends on the parties if both the parties agree on case long pending in
regular court can be transferred to Lok Adalat. The persons deciding the cases have
the role of statutory conciliators only, they can only persuade the parties to come to
a conclusion for settling the dispute outside the regular court in the Lok Adalat.
Legal Services Authorities (State or District) as the case may be on receipt of an
application from one of the parties at a pre-litigation stage may refer such matter to
the Lok Adalat for which notice would then be issued to the other party. Lok
Adalats do not have any jurisdiction to deal with cases of non-compoundable
offenses.

TOPIOC 2

Arbitration
Introduction
In today’s world where time is precious for a common man it is also very precious
for the companies however big or small they are. The problem with regular courts
is that they are overburdened with a truckload of cases so it is practically not
feasible to resort to courts for cases where time is a crucial factor. In order to
remedy this situation, the Alternative Dispute Resolution (ADR) method is adopted
internationally as well as domestically. Arbitration is a type of ADR method where
the parties to a private dispute choose a neutral person as an arbitrator who decides
the dispute by passing an arbitral award which is binding on the parties. Parties can
specifically mention in their agreement a dispute resolution clause which is a
boilerplate clause in the agreement or they can separately sign an arbitration
agreement under Section 7 of Arbitration and Conciliation Act,1996. Arbitral
Tribunals are quite effective compared to the regular courts as they can effectively
decide the dispute between the parties within a very less time and are very cost
effective.

What is the need for arbitration

The question which normally arises in our mind is why we choose arbitration when
we already have a well organised system of courts which are entrusted with a task
of delivering justice to everybody. The answer to this question is that the procedure
followed by Indian courts is highly technical and formal thereby making room for
a speedy and less formal mechanism to resolve the private disputes between the
parties. Some of the main characteristics of the arbitration are–

Arbitration is the mutual agreement between the parties

When the parties make an agreement then they mention that in case of any future
dispute they will resort to the arbitration. Arbitration happens only when both the
parties to the agreement agree to it. No one party cannot withdraw unilaterally
from the arbitration agreement.

The parties can choose their arbitrators

Both the parties can choose either a sole arbitrator or they can choose their own
arbitrator, these arbitrators then choose a third arbitrator who will act as a presiding
arbitrator. The number of arbitrators cannot be even. These arbitrators are highly
specialised practitioners in the legal field.

The arbitrators are neutral

The parties can choose arbitrators of any nationality. This is to ensure the
impartiality of the arbitration proceedings. In addition to this, parties can also
choose the place of conduction of arbitral proceedings, the language to be followed
in the proceedings and the law which will be applicable to the parties.

Arbitration proceedings are confidential

Unlike courts where the case proceedings happen in the open court, arbitration
proceedings happen in secrecy. The disclosure of trade secrets between the parties,
the venue of arbitration as well as the arbitral award all factors are kept secret.

Arbitral awards are final

Since the parties themselves consented to move to the arbitral tribunals, the award
passed by it is final and binding on the parties. According to the New York
Convention,1958 the award passed by the International arbitral award is enforced
by the domestic courts with certain exceptions.

UNCITRAL model of arbitration

UNCITRAL Model law on International Commercial Arbitration (1985) is formed
to assist states to reform and modernise their arbitration laws to take into account
the need of international arbitration laws. Model law consists of thirty six (36)
articles covered in eight (8) chapters covering the entire range of arbitration
agreement, composition and jurisdiction of the arbitral tribunal, duties and
obligations of the arbitrators to the court’s intervention on recognition and
enforcement of arbitral awards. This model law signifies the willingness between
the majority of the nations to follow the international arbitration procedure to
amicably settle their disputes.

Arbitral agreement

Before explaining the powers and functions of Arbitral Tribunal let us first explain
in which sections of Arbitration and Conciliation Act,1996. The Arbitral
agreement between the parties is defined under Section 7 of the Act of 1996.
Parties according to the Section 7 of the Act can either make a mention of the
arbitration agreement in the contract as a separate agreement or a clause in the
agreement in case of any future dispute. This agreement shall be in writing if it is
contained in documents signed by the parties or any other mode of communication
between the parties.

If parties approach before any judicial authority regarding their disputes a judicial
authority under Section 8 of the Act can refer the parties to an arbitral tribunal if
parties have specifically mentioned in their agreement about arbitration. Party
before, at the time or after passing of arbitral award but before its enforcement can
approach the court under Section 9 of the Act for interim measures regarding
custody of minor or persons of unsound mind by a guardian, the detention,
preservation and inspection of the any property or things which are the subject
matter of the arbitration agreement, receiving the amount in dispute in arbitration,
interim injunction, appointment of receiver or any other matter as the court thinks
proper.

Composition of Arbitral Tribunal

What is an Arbitral Tribunal

Arbitral Tribunal is a panel of judges called arbitrators which are responsible for
adjudicating disputes between the parties in contract. Chapter 03 of the Act deals
with the composition of the arbitral tribunal.

Appointment, Number and Termination of the Arbitrator

Section 10 of the Act says that parties are free to determine the number of
arbitrators provided that number shall not be even failing which arbitral tribunal
consists of sole arbitrator. Section 11 of the Act says that a person of any
nationality can be an arbitrator, unless otherwise agreed by the parties. The parties
are free to agree on a procedure of appointing arbitrator or arbitrators failing which
in an arbitration consisting three arbitrators each party shall appoint one arbitrator
and these appointed arbitrators shall appoint the third arbitrator who shall be the
presiding arbitrator. The appointment of an arbitrator can be challenged if there are
justifiable doubts about his independence or impartiality or he does not possess the
qualifications agreed to by the parties. Section 15 of the Act says that arbitrator can
be terminated if–

(a) He withdraws from office for any reason

(b) By or pursuant to agreement of the parties and

(c) Where his mandate terminates and a substitute arbitrator shall be appointed
according to the rules that were applicable to the appointment of the arbitrator
being replaced.

Powers and Functions of Arbitral Tribunal

Power to rule on its own jurisdiction

The authority of an arbitral tribunal to adjudicate on any challenge to the existence
and legality of the arbitration agreement is addressed in Section 16 of the Act. The
arbitration clause, which is to be regarded as a separate agreement from the other
conditions of the contract, is unaffected by the arbitral tribunal’s ruling that the
contract is void and unenforceable.

In Wellington Associates Ltd. vs Mr. Kirit Mehta (2000), the Supreme Court ruled
that Section 33 of the Arbitration Act, 1996 makes it clear that any dispute
regarding the “existence” of the arbitration agreement may only be resolved by
application to the Court and not by the arbitrator. Section 16 of the Arbitration and
Conciliation Act of 1996 has since eliminated the arbitrator’s incapacity. A
decision about the “existence” of an arbitration clause in a contract can now be
therefore made by the arbitral tribunal under Section 16.

Power to make interim measures

Section 17 states the power of the arbitral tribunal to order interim measures if–

(a) a party during the arbitral proceedings apply to the arbitral tribunal for the
appointment of guardian for minor and person of unsound mind for arbitration
proceedings; or

(b) interim measures for preservation, interim custody or sale of any goods which
are the subject matter of the arbitration agreement; or

(c) securing the amount in dispute or appointment of receiver and interim

injunction.

Power to hold oral hearing

According to Section 24 of the Act, the arbitral tribunal may determine whether to
conduct the proceedings solely on the basis of papers and other material or whether
to have oral hearings for the presenting of evidence or for oral argument. The
parties must be informed in advance of the hearing, and any comments or materials
submitted to the arbitral tribunal by one side must be shared with the other party.

Power to proceed ex-parte

Where without stating sufficient cause, under Section 25 of the Act, the claimant or
respondent fails to communicate his statement of claim or defence under sub-
section (1) of Section 23 of the Act the arbitral tribunal shall proceed ex-parte.

Power to appoint an expert

Section 26 of the Act says that the arbitral tribunal may appoint one or more
experts to report to it on specific issues to be determined by the arbitral tribunal.
The expert shall, after submitting his oral or written report, participate in an oral
hearing where parties will put questions to him. The expert also on the request of a
party presents all documents, goods or other property, which are in his possession,
placed before that party for examination.

Power to make Arbitral Award

Sections 28 to 33 in Chapter 06 of the Arbitration and Conciliation Act, 1996 deals
specifically about the arbitral awards. Which regulations apply in the event of a
dispute between the parties is a crucial point to make here. The answer to this
question is that if the arbitration takes place in India, the arbitral tribunal will
decide the dispute in accordance with Indian substantive law in all other
arbitrations other than international commercial arbitrations, but it will decide the
dispute in accordance with the rules established by the parties in international
commercial arbitrations.

The majority of the arbitrator’s members must agree on the decision in an arbitral
process. In cases other than those involving international commercial arbitration,
the arbitral tribunal must issue the award within a year of the filing date of the
initial complaint. If parties reach a settlement during the arbitration process, the
arbitral tribunal must end the proceedings and record the agreement in the form of
an arbitration award.

The arbitral tribunal’s members must all sign an arbitral award before it may be
considered final. The basis for the arbitral award must be stated in the award itself.
A signed copy of the arbitral award must be given to each party after it is made.

In relation to the arbitration proceeding the arbitral tribunal shall have a discretion
to determine whether the costs are payable by one party to another, the amount of
such costs and when such costs are to be paid. The arbitral proceedings shall be
terminated by the pronouncement of final arbitral award or by the order of the
arbitral tribunal when the claimant withdraws his claim, parties agree on the
termination of the proceedings or tribunal finds that continuation of the
proceedings become unnecessary or impossible.

Duties of Arbitral Tribunal

Apart from powers given to the arbitral tribunals under Arbitration and
Conciliation Act, 1996 these tribunals also have certain obligations to perform
towards the parties. These duties are enumerated below:

Duty to be impartial
Section 18 of the arbitration and conciliation act says that it is the duty of an
arbitral tribunal to be impartial, that means the arbitral tribunal shall treat each
party equally and each party shall be given full opportunity to present his case.

Duty to choose time, place and language of arbitration

Section 20 of the Act says that parties are free to choose the place of arbitration
according to their convenience but if they fail to do so then it is the duty of the
arbitral tribunal to determine such place regarding circumstances of the case.
In Sanshin Chemicals Industry vs Orientals Carbons And Chemicals ( 2001), the
Supreme Court ruled that a joint reading of Section 2(6) and Section 20 leads to the
conclusion that, even though the parties were free to choose the location of the
arbitration, they had the right to authorise anyone, including an institution, to make
that decision. In the case at hand, the Joint Committee is such an institution, and its
decision will not be subject to appeal. According to Section 22, the arbitral tribunal
will choose the language or languages to be utilised in the arbitration if the parties
are unable to agree on one or more of them.

Duty to disclose relevant facts required to be known by the parties

When an arbitrator is appointed in such a manner then it is his duty that he shall
disclose, under Section 12 of the Act, in writing all past and present connections
whether direct or indirect with the parties or the subject matter in dispute which
shall affect his ability to devote sufficient time to the arbitration proceedings.

In Steel Authority Of India Ltd vs British Marine Plc (2016), the Delhi High Court
evaluated whether the AT members’ argument that they were not obligated to
make a disclosure other than the one they had already made was valid or not. In
other words, the Court decided whether the arbitrators were required to follow the
Fifth Schedule’s criteria, namely Item 24 of that Schedule or not. The Court had
taken into account Explanation 2 to Section 12 (1), which allows for potential
exceptions in situations where parties typically choose the same arbitrators for
various instances.

Duty to correct the award

Section 33 says that if the a party within thirty (30) days from the receipt of the
arbitral award, with a notice to other party, request the arbitral tribunal to correct
any computational, clerical or typographical error in the award or request the
arbitral tribunal to give an interpretation of a specific point of the award then it is
the duty of the arbitral tribunal to make the correction or give the interpretation
which shall form the part of the arbitral award.

Duty to avoid misconduct

It is the duty of the arbitral tribunal to avoid passing any award which is opposed
to public policy. It must not engage in bribery and corruption also it must not break
the rule of natural justice.

Conclusion
In the modern times where disputes between the parties are complex the arbitral
tribunals are helping regular courts in its task of dispensation of justice. Arbitral
tribunals are vested with powers in order to achieve the desired outcome of the
parties besides these tribunals have duties also that have to be complied with.
Various international laws and conventions made between various countries make
this area evolving from the past to the present and it will keep on evolving.

Topic III

What are foreign awards and how can they be enforced in India?
It is very important to know about arbitration before beginning with Foreign
awards.

Arbitration is an alternate dispute mechanism where their contractual relationship

between two parties and they want to solve disputes without going to Court due to
Cost and Time factors. In such cases, they can add an Arbitration Clause in the
Contract, which proves to be very helpful in times of dispute.

To understand Foreign Arbitral Awards, one should be able to distinguish between

International Commercial Arbitration and Foreign Arbitration Award.

Arbitration in India is governed by The Arbitration and Conciliation Act, 1996 and
section 2(1)(f) defines international commercial arbitration. In summary, it can be
understood as any arbitration between two parties where at least one of the parties
is a foreign national company or government, it will be known as international
commercial arbitration.

Arbitration has the concept of ‘seat’, which means, the palace of Jurisdiction
whose law applies to the arbitration proceeding. For example, if the arbitration is
between a foreign company and an Indian company, but the seat is Indian, then it is
international commercial arbitration, but if the Seat is outside India, i.e. Foreign
Laws of Arbitration, then it will be a foreign arbitration.

Indian National Parties can choose a foreign seat. Mr. Somdutta himself has been
Part of Foreign Arbitration in Singapore with two Indian parties.

Part II of The Arbitration and Conciliation Act talks about requirement valid
foreign arbitrations awards, to be capable and enforceable. Not every foreign
arbitration award has valid jurisdiction in India. India is significatory to two
conventions- the New York Convention and Geneva Convention. One of the
conditions for foreign arbitration to be enforceable is for them to be significatory
of those conventions and it has to be recognized through publication in official
Gazette as convention territory by India. Currently, 54 countries are recognized as
Convention Territory.

Can foreign awards be enforced straightaway in India or the award-holder

has to wait for legal challenges to the award in the country of the seat before
its execution?

In the case of domestic arbitration, one cannot file for enforcement for the award
until a period of 90 days is achieved, under section 36 of the Act. If you’re the
deter i.e. if the award is not in your favour, you can challenge the arbitration in
section 34 of the Act. Before the 2015 amendment Application for Enforcement
and Challenge of Award could not be parallel, But after the 2015 amendment that
has changed.

For the foreign award, there is no definition per se but, section 48 (3) of the Act,
says ‘if an application for the setting aside or suspension of the award has been
made to a competent authority referred to in clause (e) of sub-section (1) the Court
may, if it considers it proper, adjourn the decision on the enforcement of the award
and may also, on the application of the party claiming enforcement of the award,
order the other party to give suitable security’.

If any foreign award has to be challenged, it is to be made sure that the seat (as
discussed above) should be exhausted. For example, the Award is of UK
convention, the waiting period of UK arbitration will apply, Courts and Parties
both have to ensure that Foreign Seat is not infringed.

How and when can enforcement of a foreign award be refused in India? What is

the fundamental policy of Indian law and how is it to be determined whether an

award violates the same or not?

Under section 47 of the Arbitration and Conciliation Act, to enforce a domestic
award one has to approach the civil court having original Jurisdiction, and for the
enforcement of Foreign award, one has to approach the High Court or the Supreme
court. Depending on where the assets of award lie.

The court cannot go into the merits of the case at all, hence, the scope of
interference in foreign Arbitral Award is very limited,

The grounds where it can be enforced would be better explained and answered
through a story. There were arbitration proceedings between an Australian
company called white industries and an Indian company called Coal India (which
also had a monopoly over coal mining in India, before the present government).

White industries had awarded in their favour and they came to India to enforce it.
Indian lawyers are infamous for delaying the proceedings and White Industries
case was not spared. The case went on to 10-11 years. After being frustrated and
testing all waters, Australia approached UN central Arbitration against the Indian
Government, claiming that by unnecessarily delaying the enforcement, India
infringing Australias Status of the most favoured nation.

The government of India responded as it cannot be responsible for the decision

regarding the arbitral award.

However, the arbitral tribunal did slam a 4 million Dollar penalty on India,
justifying it for delay in the justice system as a reason for the violation of the status
of Australia being the most favoured nation.

The discussed incident was highly criticized by the economist, as such incidents
put India in a very bad light when it is trying to attract foreign fundings.

This incident led to the amendment for the 2015 Judgement.

The scope of Section 48 (1) has narrowed a lot and left only 5 conditions to refuse
a Foreign Award.

Section 48 (2) talks about refusal on the ground of Subject Matter or Public Policy.
Earlier, public policy has been used as a tool for striking any award at one’s will,
but after the Amendment in 2015, the explanation has become more specific
regarding, what it means by ‘Public Policy’. In the new explanation, it talks about
that in no way, an award can be refused solely based on the merits of the Case.
Because it has been already decided.

Under section 48, a foreign Award cannot be set aside by Indian Courts.

Section 48(2) carries the provision regarding the dispute of subject matter, in 48(2)
(a) its says that the subject-matter of the difference is not capable of settlement by
arbitration under the law of India; it is very important to know what are the
subjects of difference.

The answer can be explained by two cases in India, that discuss what is the subject
that cannot be resolved by arbitration in India or arbitration cannot be an effective
dispute Mechanism.
The case of Booz Allen Hamilton vs. SBI Home Finance, 2011 and the case of A.
Ayyasamy vs A. Paramasivam, 2016, from both cases the following subjects were
drawn to be outside the Ambit of Arbitration:

 Criminal Cases
 Matrimonial Cases
 Insolvency, Winding Up
 Testamentary Matters
 Eviction, Tenancy
 Mortgage
 Trusts
 Patents, Trademarks, Copyright
 Competition, Bribery, Etc.
The above list is not exhaustive, but a general list of subjects that cannot be settled
by Arbitration in India.

Section 48(2)(b) discusses Public Policy, which is the pandora’s box due to its
Plethora of Interpretations.

We all must have studied the landmark case of Renusagar. This age-old case still
stood to be relevant in recent amendments of Arbitration Act,

The Renusagar Judgment lays down three conditions for the non-enforcement of an
award, due to Public Policy, those are as follows:

 If it is contrary to Fundamental Policy.

 If it violates the interest of India.
 If it is against the basic notion of Justice and Morality.
The new explanation of Section 48(2)(b) is very similar to the Judgement of
Renusagar.

Even in Shri Lal Mahal Ltd vs Progetto Grano Spa, the Renusahar case was
referred.
Another case which proved to be beneficial for the 2015 amendment was the case
of ONGC v Western GECO, 2014. The Wednesbury principle was implied, i.e. the
test of reasonableness. The principle says that if the reasonable man with
reasonable foresight would not have done something, then such action if it violates
reasonableness or an award that violates the reasonableness cannot be enforced in
India.

Through the 2015 amendment and its scope, the Wednesbury principle was set
aside and later on occasions, it was admitted that the GECO case Judgment was
erroneous.

Mr. Somdutta holds the opinion that even though we are not where we should be in
terms of making an Arbitration Act, that isn’t incorrectly advantageous to the
defeating party but with the above judgements and amendments, we can conclude
that slowly and steadily we’re making progress in the right direction because we
want to uphold our economy by bringing foreign fundings and for that, the setup of
error-free Arbitration award enforcement is extremely important.

The proof of the progress we’re making as a country can be seen in the case
of Vijay Karia. v. Prysmian Cavi E Sistemi SRL, 2020, where the Bombay High
Court had held that the award passed is not reasonable as it felt that the arbitrator
had not interpreted the contract correctly. However, the Supreme Court overruled
the Bombay High Court Judgement and held that award is enforceable.

The Supreme Court passed the judgement that the award is to be enforced in India.
In its judgement, the Court said that the award is to be read as a whole, fairly and
without nitpicking. This Judgement has proven to be progressive.

But again we took step back, in the case of NAFED and the Alimenta S.A., April
2020, NAFED was in the contractual obligation of exporting 5000 metric tons for
food grain to the other party in question, however, due to flood, they were not able
to do so. Later when the arbitration proceedings began and the matter came to the
Supreme Court, it refused the enforcement as NAFED is a government
organization and it has to abide by Governments order. Mr. Somdutta personally
agrees with it despite the ‘controversies’ because if there are crises in your own
country for food, one cannot be held liable for not exporting it.
What is the appropriate court for enforcement of a foreign award and what are the

appeal procedures?
Section 2(1)(e) defines Court, but after 2015, it has been very clear that one has to
approach the High Court. Under Section 47, party applying for the enforcement of
the foreign award shall at the time of application has to provide Original Award,
Agreement, etc.

In the recent case of P.E.C. Limited v. Austbulk Shipping, the Court said that the
‘shall’ in section 47 (1) should be replaced with ‘may’ and such opinions sport a
pro-arbitration notion.

For appeal, Section 50 applies which only allows one appeal but as their
exceptions always, one can approach the Supreme Court too after the first appeal.

Does a foreign award need to be stamped and registered to be enforced?

No, it does not. Supreme Court categorically stated so in M/S Shriram
EPC Limited v. Rioglass Solar. Several judgements are supporting the notion that
registration is not necessary.

What would the limitation period be for enforcement of foreign awards?

The Judgement in Fuerst Day Lawson Ltd vs Jindal Exports Ltd cleared the air that
the foreign award comes as a decree itself and hence is capable for enforcement. In
the Limitation Act, the enforcement of Decree, Article 136 schedule to the
Limitation Act is applicable that would be 12 years from the date of the decree.

In the recent Judgement of March 2020, in the case of Bank of Baroda v. Kotak
Mahindra Bank, which says that for foreigns decrees (they are not awards, decrees
are made by Foreign Courts) to be Enforced, Article 136 will not apply Article 137
(it is the residuary provision which says that when no other limitation is prescribed
limitation of 3 years will apply).

The above-discussed judgment has created confusion because foreign awards are
considered to be decree, hence, there are opinions that since a foreign award is
considered to be a decree even that should have limitation Period of 3 years.
In Mr. Somdutta’s opinion, the limitation should not be reduced, because the above
judgement is based on section 44a CPC, which talks about enforcement of foreign
decrees, are Decrees passed by Court and not any awards, decision or order, even if
it is considered to be Decree.

UNIT III

MEDIATION

INTRODUCTION
Mediation, also known as conciliation in many parts of the world, has a long
history in the diplomatic arena. In the commercial world, interest in it has
increased sharply in recent years. In part, this growth of interest is attributable to
dissatisfaction with the cost, delays and length of litigation in certain jurisdictions.
The growth of interest results also, however, from the advantages of mediation,
particularly its appeal as a procedure that offers parties full control over both the
process to which their dispute will be submitted and the outcome of the process.

Where mediation has been used, it has enjoyed very high rates of success in
achieving a result acceptable to both sides to a dispute. Because it is a relatively
unstructured procedure, however, some hesitate to use it for fear of not knowing
what to expect. This document seeks to allay such fears by explaining simply the
main features and advantages of mediation and how mediation under the WIPO
Mediation Rules works in practice.

WHAT IS MEDIATION?
Mediation is first and foremost a non-binding procedure. This means that, even
though parties have agreed to submit a dispute to mediation, they are not obliged to
continue with the mediation process after the first meeting. In this sense, the parties
remain always in control of a mediation. The continuation of the process depends
on their continuing acceptance of it.
 The non-binding nature of mediation means also that a decision cannot be imposed
on the parties. In order for any settlement to be concluded, the parties must
voluntarily agree to accept it.

Unlike a judge or an arbitrator, therefore, the mediator is not a decision-maker. The

role of the mediator is rather to assist the parties in reaching their own decision on
a settlement of the dispute.

There are two main ways in which mediators assist parties in reaching their own
decision, which correspond to two types or models of mediation practiced
throughout the world. Under the first model, facilitative mediation, the mediator
endeavors to facilitate communication between the parties and to help each side to
understand the other's perspective, position and interests in relation to the dispute.
Under the second model, evaluative mediation, the mediator provides a non-
binding assessment or evaluation of the dispute, which the parties are then free to
accept or reject as the settlement of the dispute. It is up to the parties to decide
which of these two models of mediation they wish to follow. The WIPO
Arbitration and Mediation Center ("the Center") will assist them in identifying a
mediator appropriate for the model that they wish to adopt.

Mediation is a confidential procedure. Confidentiality serves to encourage

frankness and openness in the process by assuring the parties that any admissions,
proposals or offers for settlement will not have any consequences beyond the
mediation process. They cannot, as a general rule, be used in subsequent litigation
or arbitration. The WIPO Mediation Rules contain detailed provisions directed also
at preserving confidentiality in relation to the existence and outcome of the
mediation.

HOW DOES MEDIATION DIFFER FROM ARBITRATION?

The differences between mediation and arbitration all stem from the fact that, in a
mediation, the parties retain responsibility for and control over the dispute and do
not transfer decision-making power to the mediator. In concrete terms, this means
two things principally:

 In an arbitration, the outcome is determined in accordance with an objective

standard, the applicable law. In a mediation, any outcome is determined by the
will of the parties. Thus, in deciding upon an outcome, the parties can take into
account a broader range of standards, most notably their respective business
 interests. Thus, it is often said that mediation is an interest-based procedure,
whereas arbitration is a rights-based procedure. Taking into account business
interests also means that the parties can decide the outcome by reference to their
future relationship, rather than the result being determined only by reference to
their past conduct.
 In an arbitration, a party's task is to convince the arbitral tribunal of its case. It
addresses its arguments to the tribunal and not to the other side. In a mediation,
since the outcome must be accepted by both parties and is not decided by the
mediator, a party's task is to convince, or to negotiate with, the other side. It
addresses the other side and not the mediator, even though the mediator may be
the conduit for communications from one side to the other.
Naturally, in view of these differences, mediation is a more informal procedure
than arbitration.

It is possible to combine mediation with arbitration. In such a case, the dispute is

submitted first to mediation under the WIPO Mediation Rules. Then, if a
settlement is not reached within a defined period of time (it is recommended that
the parties provide for either 60 or 90 days), or if a party refuses to participate or to
continue to participate in the mediation, the dispute is referred for a binding
decision through arbitration under the WIPO Arbitration Rules (or, if the parties so
agree, through expedited arbitration). The advantage of the combined procedure is
the incentive that it offers for a good faith commitment by both parties to the
mediation process, since the consequence of a failure to reach an agreed settlement
will be more tangibly measurable in terms of the financial and management
commitment that would need to be incurred in the subsequent arbitration
procedure.

In the recent monsoon session of Parliament, both Houses passed the Mediation
Bill, 2023, and upon receiving the assent of the President of India, is referred to as
the Mediation Act, 2023. This Act seeks to promote mediation, particularly
institutional mediation, and provide a mechanism for enforcing mediated
settlement agreements.

What is Mediation?
 Mediation is a voluntary, binding process in which an impartial and neutral
mediator facilitates disputing parties in reaching a settlement.
 A mediator does not impose a solution but creates a conducive environment
in which disputing parties can resolve all their disputes.
 Mediation is a tried and tested alternative method of dispute resolution. It
has proved to be a great success in the cities of Delhi, Ranchi, Jamshedpur,
Nagpur, Chandigarh and Aurangabad.
 Mediation is a structured process where a neutral person uses specialized
communication and negotiation techniques. Litigants participating in the
mediation process have unequivocally endorsed it.
 Other than mediation there are some other dispute resolution methods such
as Arbitration, Negotiation and Conciliation.
What are the Key Features of the Act ?
 Pre-litigation Mediation:
o Parties must attempt to settle civil or commercial disputes by mediation
before approaching any court or certain tribunals.
o Even if they fail to reach a settlement through pre-litigation mediation,
the court or tribunal may at any stage refer the parties to mediation.
 Disputes not Fit for Mediation:
o The Act contains a list of disputes which are not fit for mediation. These
include disputes:
 relating to claims against minors or persons of unsound mind,
 involving criminal prosecution, and
 affecting the rights of third parties.
o The central government may amend this list.
 Applicability:
o The Act will apply to mediations conducted in India:
 involving only domestic parties,
 involving at least one foreign party and relating to a commercial
dispute,
 if the mediation agreement states that mediation will be as per this
Act.
 Mediation Process:
o Mediation proceedings will be confidential, and must be completed
within 180 days (may be extended by 180 days by the parties).
 o A party may withdraw from mediation after two sessions.
 Mediators:
o Mediators may be appointed by:
 the parties by agreement, or
 a mediation service provider.
o Mediators must disclose any conflict of interest that may raise doubts on
their independence.
 Mediation Council of India:
o The central government will establish the Mediation Council of India.
o The Council will consist of
 a chairperson,
 two full-time members (with experience in mediation or ADR),
 three ex-officio members (including the Law Secretary, and the
Expenditure Secretary), and
 a part-time member from an industry body.
o Functions of the Council include: (i) registration of mediators, and (ii)
recognising mediation service providers and mediation institutes.
 Mediated Settlement Agreement:
o Agreements resulting from mediation (other than community mediation)
will be final, binding, and enforceable in the same manner as court
judgments.
o They may be challenged on grounds of:
 fraud
 corruption
 impersonation
 relating to disputes not fit for mediation.
 Community Mediation:
o Community mediation may be attempted to resolve disputes likely to
affect the peace and harmony amongst residents of a locality.
 o It will be conducted by a panel of three mediators.
Why does India Need to Promote Mediation?
 To Tackle Case Pendency:
o As of May 2022, over 4.7 crore cases are pending in courts across
different levels of the judiciary. Of them, 87.4% are pending in
subordinate courts, 12.4% in High Courts.
o Thus to reduce the case pendency,the Mediation and Conciliation
Project Committee of the Supreme Court of India describes mediation as
a tried and tested alternative for conflict resolution
 Absence of Standalone Laws on Mediation :
o There are several statutes containing mediation provisions, such as
 the Code of Civil Procedure, 1908,
 the Arbitration and Conciliation Act, 1996,
 the Companies Act, 2013, the Commercial Courts Act, 2015, and
 the Consumer Protection Act, 2019
o Despite the presence of above statutes, there is no dedicated standalone
mediation legislation In India.
o Various countries including Australia, Singapore, and Italy already have
standalone laws on mediation.
 Mediation as Tool for True Justice and Social Change :
o Mediation simplifies the delivery of justice through plain language and
proves to be a cost-effective alternative to traditional methods.
o The resolution arrived during mediation secures true justice for
individuals where social norms are brought in consonance with
Constitutional values through the exchange of ideas and flow of
information.
 Aspirations to Become an International Mediation Hub :
o The Singapore Convention on Mediation is a uniform and efficient
framework for international settlement agreements resulting from
mediation.
 o As India is a signatory to the Singapore Convention on
Mediation (since 2019), it is appropriate to enact a law governing
domestic and international mediation.
o It will boost India’s credential to become an International Mediation Hub.
What are the Key Issues and Concerns with the Act ?
 Mandating Pre-litigation Mediation:
o According to the Act, pre-litigation mediation is mandatory for both
parties before filing any suit or proceeding in a court, whether or not there
is a mediation agreement between them.
o However, as per Article 21 of the Constitution, access to justice is a
fundamental right which cannot be fettered or restricted.
 Limited Relevant Experience of Mediators:
o While the full-time members of the Council must possess knowledge or
experience pertaining to mediation or ADR laws and mechanisms, they
may not necessarily be practicing mediators with significant experience.
o For instance, the Act would permit an arbitrator to be appointed as a full-
time member of the Council. An arbitrator may not be best suited to
perform functions such as prescribing standards of professional conduct
of mediators.
 Requiring Central Government Approval before issuing Regulations:
o Under the Act, the Council will discharge its major functions by issuing
regulations. It must take approval from the central government before
issuing such regulations.
o Thus, Council's effectiveness could be limited if it requires central
government approval for its core functions. Similar organizations don’t
require prior approval before issuing regulations. e.g. National Medical
Commission and the Bar Council of India.
 Challenges in Enforcing International Settlements:
o The Act considers international mediation to be domestic when it is
conducted in India with the settlement being recognised as a judgment or
decree of a court.
o The Singapore Convention does not apply to settlements that already
have the status of judgments or decrees. As a result, conducting cross-
 border mediation in India will exclude the tremendous benefits of
worldwide enforceability.
 Multiple registration needed for Mediators:
o Mediators must be registered registered/ empanelled at all four places:
 Mediation Council of India,
 Empanelled by a court annexed mediation center,
 A recognised mediation service provider, and
 A Legal Services Authority .
o It is unclear why satisfying any one of these conditions is not sufficient
for such mediators.
 Undefined Terminology:
o Clause 8 of the Act entitles a party to move the Court, before the
commencement or during mediation, for interim relief, only
in “exceptional circumstances”.
o The term “exceptional circumstances” is undefined in the Act.
 Issues with Online Mediation:
o A recent NITI Aayog report reveals that only 55%of India have access to
the internet and only 27 % possess compatible devices.
o This poses an accessibility problem for a significant portion of the
population.
 Issues with Community Mediation :
o As for community mediation, the Act makes it mandatory to have a panel
of three mediators.
 Community Mediation is a powerful tool that offers an opportunity
for people to resolve disputes through managed communication.
o This requirement seems unnecessary and impinges on the flexibility that
mediation brings.
What are the Steps Ahead ?
 Phased Introduction of Mandatory Pre-litigation :
 o Rolling out mandatory pre-litigation mediation in a phased manner, first
for certain categories of disputes and then eventually to cover a wide
range of disputes.
 Reduce Time Frame:
o The Parliamentary Standing Committee Report on Mediation Bill,
2021 recommended reduction in the time for concluding a mediation
from 180 to 90 days.
 Capacity Building :
o NITI Aayog noted that a framework for mandatory pre-litigation
mediation in India must be planned keeping in mind the number of
mediators available and the ecosystem’s ability to provide a large number
of mediators.
o The Mediation and Conciliation Project Committee, Supreme Court of
India, has recommended steps to lay down model mediation codes,
facilitate training of mediators across the country and regulate the process
across all districts.
 Scaling Accessibility:
o For online mediation to be a success, we will have to scale our bandwidth
accessibility to remote parts of the country.
o Setting up legal aid or access to justice clinics with adequate IT
infrastructure could address this issue.
 Use of Disruptive Technologies :
o International Arbitration (IA) and Artificial Intelligence (AI) are leading
alternatives to conventional practices. IA replaces conventional dispute
resolution methods, while AI replaces traditional performance
approaches.
o Artificial Intelligence could provide immense benefits for the arbitration
process and its users. By augmenting human cognitive abilities, AI
powered services could assist lawyers in drafting, identification of better
authorities, reviewing of documents, etc.
Conclusion:
The future of mediation in India lies in its ability to impact social change in a
manner that law does not. The Act should be implemented more in spirit than in
form as a famous jurist rightly held that,“it is the spirit and not the form which
keeps justice alive.”

UNIT IV

LOK ADALAT

NALSA along with other Legal Services Institutions conducts Lok Adalats. Lok
Adalat is one of the alternative dispute redressal mechanisms, it is a forum where
disputes/cases pending in the court of law or at pre-litigation stage are settled/
compromised amicably. Lok Adalats have been given statutory status under the
Legal Services Authorities Act, 1987. Under the said Act, the award (decision)
made by the Lok Adalats is deemed to be a decree of a civil court and is final and
binding on all parties and no appeal against such an award lies before any court of
law. If the parties are not satisfied with the award of the Lok Adalat though there is
no provision for an appeal against such an award, but they are free to initiate
litigation by approaching the court of appropriate jurisdiction by filing a case by
following the required procedure, in exercise of their right to litigate.

There is no court fee payable when a matter is filed in a Lok Adalat. If a matter
pending in the court of law is referred to the Lok Adalat and is settled
subsequently, the court fee originally paid in the court on the complaints/petition is
also refunded back to the parties. The persons deciding the cases in the Lok
Adalats are called the Members of the Lok Adalats, they have the role of statutory
conciliators only and do not have any judicial role; therefore they can only
persuade the parties to come to a conclusion for settling the dispute outside the
court in the Lok Adalat and shall not pressurize or coerce any of the parties to
compromise or settle cases or matters either directly or indirectly. The Lok Adalat
shall not decide the matter so referred at its own instance, instead the same would
be decided on the basis of the compromise or settlement between the parties. The
members shall assist the parties in an independent and impartial manner in their
attempt to reach amicable settlement of their dispute.

Nature of Cases to be Referred to Lok Adalat

1. Any case pending before any court.

2. Any dispute which has not been brought before any court and is likely to be filed
before the court.

Provided that any matter relating to an offence not compoundable under the law
shall not be settled in Lok Adalat.

Which Lok Adalat to be Approached

As per section 18(1) of the Act, a Lok Adalat shall have jurisdiction to determine
and to arrive at a compromise or settlement between the parties to a dispute in
respect of -

(1) Any case pending before; or

(2) Any matter which is falling within the jurisdiction of, and is not brought before,
any court for which the Lok Adalat is organised.

Provided that the Lok Adalat shall have no jurisdiction in respect of matters
relating to divorce or matters relating to an offence not compoundable under any
law.

How to Get the Case Referred to the Lok Adalat for Settlement

(A) Case pending before the court.

(B) Any dispute at pre-litigative stage.

The State Legal Services Authority or District Legal Services Authority as the case
may be on receipt of an application from any one of the parties at a pre-litigation
stage may refer such matter to the Lok Adalat for amicable settlement of the
dispute for which notice would then be issued to the other party.

Levels and Composition of Lok Adalats:

At the State Authority Level -

The Member Secretary of the State Legal Services Authority organizing the Lok
Adalat would constitute benches of the Lok Adalat, each bench comprising of a
sitting or retired judge of the High Court or a sitting or retired judicial officer and
any one or both of- a member from the legal profession; a social worker engaged in
the upliftment of the weaker sections and interested in the implementation of legal
services schemes or programmes.

At High Court Level -

The Secretary of the High Court Legal Services Committee would constitute
benches of the Lok Adalat, each bench comprising of a sitting or retired judge of
the High Court and any one or both of- a member from the legal profession; a
social worker engaged in the upliftment of the weaker sections and interested in the
implementation of legal services schemes or programmes.

At District Level -

The Secretary of the District Legal Services Authority organizing the Lok Adalat
would constitute benches of the Lok Adalat, each bench comprising of a sitting or
retired judicial officer and any one or both of either a member from the legal
profession; and/or a social worker engaged in the upliftment of the weaker sections
and interested in the implementation of legal services schemes or programmes or a
person engaged in para-legal activities of the area, preferably a woman.

At Taluk Level -

The Secretary of the Taluk Legal Services Committee organizing the Lok Adalat
would constitute benches of the Lok Adalat, each bench comprising of a sitting or
retired judicial officer and any one or both of either a member from the legal
profession; and/or a social worker engaged in the upliftment of the weaker sections
and interested in the implementation of legal services schemes or programmes or a
person engaged in para-legal activities of the area, preferably a woman.

National Lok Adalat

National Level Lok Adalats are held for at regular intervals where on a single day
Lok Adalats are held throughout the country, in all the courts right from the
Supreme Court till the Taluk Levels wherein cases are disposed off in huge
numbers. From February 2015, National Lok Adalats are being held on a specific
subject matter every month.

Permanent Lok Adalat

The other type of Lok Adalat is the Permanent Lok Adalat, organized under
Section 22-B of The Legal Services Authorities Act, 1987. Permanent Lok Adalats
have been set up as permanent bodies with a Chairman and two members for
providing compulsory pre-litigative mechanism for conciliation and settlement of
cases relating to Public Utility Services like transport, postal, telegraph etc. Here,
even if the parties fail to reach to a settlement, the Permanent Lok Adalat gets
jurisdiction to decide the dispute, provided, the dispute does not relate to any
offence. Further, the Award of the Permanent Lok Adalat is final and binding on
all the parties. The jurisdiction of the Permanent Lok Adalats is upto Rs. Ten
Lakhs. Here if the parties fail to reach to a settlement, the Permanent Lok Adalat
has the jurisdiction to decide the case. The award of the Permanent Lok Adalat is
final and binding upon the parties. The Lok Adalat may conduct the proceedings in
such a manner as it considers appropriate, taking into account the circumstances of
the case, wishes of the parties like requests to hear oral statements, speedy
settlement of dispute etc.

Mobile Lok Adalats are also organized in various parts of the country which
travel from one location to another to resolve disputes in order to facilitate the
resolution of disputes through this mechanism.

As on 30.09.2015, more than 15.14 lakhs Lok Adalats have been organized in the
country since its inception. More than 8.25 crore cases have been settled by this
mechanism so far.

Jurisdiction of Lok Adalat

o A Lok Adalat shall have jurisdiction to determine and to
arrive at a compromise or settlement between the parties to a
dispute in respect of:
 Any case pending before any court, or
 Any matter which falls within the jurisdiction of any court and
is not brought before such court.
o Any case pending before the court can be referred to the Lok
Adalat for settlement if:
 Parties agree to settle the dispute in the Lok Adalat or one
of the parties applies for referral of the case to the Lok
Adalat or court is satisfied that the matter can be
solved by a Lok Adalat.
  In the case of a pre-litigation dispute, the matter can be
referred to the Lok Adalat on receipt of an application
from any one of the parties to the dispute.
o Matters such as matrimonial/family disputes, criminal
(compoundable offenses) cases, land acquisition cases, labor
disputes, workmen’s compensation cases, bank recovery cases,
etc. are being taken up in Lok Adalats.
o However, the Lok Adalat shall have no jurisdiction in respect of
any case or matter relating to an offense not compoundable
under any law.
 Powers:
o The Lok Adalat shall have the same powers as are vested in a
Civil Court under the Code of Civil Procedure (1908).
o Further, a Lok Adalat shall have the requisite powers to
specify its own procedure for the determination of any
dispute coming before it.
o All proceedings before a Lok Adalat shall be deemed to
be judicial proceedings within the meaning of the Indian
Penal Code (1860) and every Lok Adalat shall be deemed to be
a Civil Court for the purpose of the Code of Criminal Procedure
(1973).
o An award of a Lok Adalat shall be deemed to be a decree of a
Civil Court or an order of any other court.
o Every award made by a Lok Adalat shall be final and binding on
all the parties to the dispute. No appeal shall lie to any court
against the award of the Lok Adalat.
 Benefits:
o There is no court fee and if court fee is already paid the
amount will be refunded if the dispute is settled at Lok Adalat.
o There is procedural flexibility and speedy trial of the disputes.
There is no strict application of procedural laws while assessing
the claim by Lok Adalat.
o The parties to the dispute can directly interact with the
judge through their counsel which is not possible in regular
courts of law.
o The award by the Lok Adalat is binding on the parties and it
has the status of a decree of a civil court and it is non-
appealable, which does not cause the delay in the settlement of
disputes finally.