The concept of Alternative Dispute Resolution (‘ADR’) mechanism is a concept that is neither alien nor new to the system of settling disputes in India. The mechanism of speedy and amicable settlement of disputes through the said mechanism has been part of our legal history through the Vedic times which was further taken forward in form of Village Panchayats. The term Alternative Dispute Resolution is the process of settling disputes between individuals/ organizations using all such mechanisms that do not encompass adjudication by a formal body. They can be broadly classified to be i. Negotiation ii. Conciliation iii. Mediation and iv. Arbitration. At this juncture it is pertinent to lay down a few of the most significant aspects of each of the methods stated above.
Negotiation is a process where parties directly engage in finding a solution to a dispute, it is a bipartite process, where there is no involvement of a third party in ironing out the differences sought to be solved. Negotiation enables parties to solve their differences and disputes by direct face to face interaction, thereby eliminating any communication gap, which saves time and expedites the process. Negotiation is considered superior to other modes of ADRs especially in cases of settling commercial disputes as it is the parties itself, who are in the best position to know the strengths and weaknesses of their cases. Of late negotiation clauses are now becoming a part of the contract/agreement between the parties which acts as a precursor to initiation of further proceedings either under Arbitration Laws or Civil proceedings. The said negotiation clause has been held to be legally binding and mandatory to be followed by the parties by Courts in India. The expertise of lawyers, accountants or other experts can always be sought but it is the parties that indulge directly in negotiation thereby making it a very convenient mode.
In conciliatory proceedings, the need for strict adherence to the statutory provisions is not warranted thereby making the procedure less formal. The term ‘conciliation’ can be defined as the practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their difference to arrive at an amicable settlement or solution. Part III of the Arbitration and Conciliation Act, 1996 provides for the functions of a conciliator, who in essence is an individual who encourages the process to arrive at a settlement. His role cannot be associated to that of an arbitrator or a Judge. The role of a conciliator is purely advisory and not adjudicatory. Once the conciliator has facilitated a settlement between the parties, an agreement to this effect is signed which shall bind the parties to the disputes. The informal nature of this form of settlement can often be construed to be preferable as it puts parties to the dispute at ease and encourages them to works towards a settlement that would be suitable for them.
Mediation aims to assist two or more parties in reaching an agreement over a dispute that may have occurred between the parties. It is for the parties themselves to determine the conditions of the agreement so arrived rather than accepting terms imposed upon them by a third party acting as an adjudicator. In the present scenario, mediation can only be entered into when a matter or a dispute has first gone to court and thereafter when the court and parties agree to mediation, is the matter referred to mediation under Section 89(2)(d) of the Code of Civil Procedure, 1908. A dispute must necessarily originate from a court for it to be referred to mediation. In mediation, the role of a mediator is a very pivotal one as the mediator must use appropriate techniques, skills, etc to help the parties to engage in dialogue and communicate with each other, in this context it is essential that the parties consider the Mediator as impartial as it is only then will the parties openly and freely engage in dialogue. However, as a matter of practice, Mediators are associated with various courts including the High Courts and the Supreme Court of India, to whom the matters are referred by the Court for amicable settlement of the dispute. Thus the choice of the parties in selecting a Mediator is restricted in as much as the matters are assigned to the Mediators associated with the respective Courts. It is pertinent to note that the process of mediation can always be revoked at the instance of a single party. The Settlement entered into by way of mediation has to be signed by both parties and the mediator concerned and will have the binding force of a decree.
This method of ADR has been in existence since times immemorial. Arbitration means the process through which parties to the procedure submit their dispute to person/ persons who shall decide the dispute by applying all the relevant legal provisions as may be involved. The decision of such arbitrator shall bind the parties. The Arbitration and Conciliation Act, 1996 which is the law apropos arbitration in India finds its roots to the Model Law on International and Commercial Arbitration adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985. The Act aims to provide for a suitable and effective mode of dispute resolution. There is no denying that parties to disputes have discovered the advantages of resorting to arbitration as opposed to court based adjudication which, in turn, has led to the growth in Indian arbitration. However, in view of the fact that India as on date has not emerged as a preferred location for Arbitration for the world at large, the Government is proposing to introduce certain amendments in the Act to bring India on the Global map and meet the need of the hour.
The ADR mechanism avoids litigation and also ensures cost effective and speedy settlement of disputes by involving a neutral evaluation by a third party.In our experience over a period of time we have ourselves been involved adjudication of disputes through ADR between the parties wherein we have experienced success rate as high as 75- 80%. Though the procedure under each of these heads might differ in approach, they unequivocally encourage parties to resolve their disputes without taking recourse to the more traditional form of dispute settlement.
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