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Alternative Dispute resolution: An alternative to avoid lengthy court proceedings

ABSTRACT

The Indian judiciary, which is one of the oldest in the world, faces a substantial backlog of cases that remain unresolved even with the fast track courts that have been established. ADR, or alternative dispute resolution, provides workable ways to lessen this load by using strategies including Lok Adalat, arbitration, mediation, negotiation, and conciliation. The article deals with each approach, which is subject to different rules, enables the settlement of disputes outside of formal court processes and offers advantages including speedier settlements, control over the process, and confidentiality. ADR does not, however, come without disadvantages, such as a potential lack of resolution and limited enforceability. Important legal frameworks in India facilitate ADR and improve its application. This article examines the importance, advantages, disadvantages, and many forms of alternative dispute resolution (ADR). It also highlights the government’s initiatives to establish India as a major global centre for arbitration and conflict settlement and provides case law examples of how ADR has changed in India. ADR offers equitable and effective outcomes; ultimately, the choice of ADR method depends on the particulars of the dispute and the preferences of the parties.

Key words: Alternative Dispute Resolution, Arbitration, Mediation, Conciliation, Lok Adalat.

INTRODUCTION

It is a well-known fact that the Indian judiciary is among the oldest in the world, but it is also getting less effective at handling cases that are still pending since Indian courts are overflowing with lengthy cases that have not been resolved. The problem is far from being resolved because there are still a large number of ongoing cases, despite the establishment of more than a thousand fast track courts that have already resolved millions of cases. All methods and procedures for resolving disputes that don’t involve the government are gathered under ADR. The most well-known alternative dispute resolution (ADR) techniques include transaction, negotiation, arbitration, conciliation, and mediation.  Although they are subject to various regulations, all alternative dispute resolution (ADR) techniques share the ability to help parties resolve their disputes in a way that is acceptable outside of formal legal or court processes. In contrast to mediation and conciliation, where a third party serves to encourage an acceptable arrangement between the parties, negotiation does not involve a third party intervening to help the parties reach an agreement. The third party, which might be one or more arbitrators, will be crucial to the arbitration process since it will produce an arbitration award that the parties must abide by. In contrast, no legally-binding conclusion is imposed by the third party in conciliation or mediation. In practice, the parties combine the use of these many ADRs, so if they are all different, they shouldn’t be compared and faced. In their contracts, for example, the parties may state that, in the event of a dispute, they will first attempt an amicable settlement (conciliation or mediation) and will only turn to a judicial method of settlement, which may include arbitration or recourse to the State justice system, if that approach fails.

SIGNIFICANCE

ADR uses a variety of strategies to address the backlog of cases in Indian courts, which is a big concern in India. The Indian judiciary receives scientifically established approaches from the Alternative Dispute Resolution mechanism, which lessens the workload on the courts. ADR offers several ways to settle disputes, including as negotiation, mediation, conciliation, arbitration, and lok Adalat. In this context, negotiation refers to the parties’ self-counseling to settle their disagreement, nevertheless, In India, negotiation is not legally recognized.  Articles 14 and 21, which address equality before the law and the right to life and personal liberty, respectively, are also the foundations of alternative dispute resolution (ADR). The preamble’s stated goals of social, economic, and political justice as well as upholding societal integrity are the driving forces of ADR.

REASONS FOR OPTING ADR

Through alternative dispute resolution (ADR), parties can agree to settle a dispute involving intellectual property that is protected in multiple jurisdictions in a single procedure, avoiding the cost and complexity of multi-jurisdictional litigation as well as the possibility of contradictory outcomes. Compared to court action, alternative dispute resolution (ADR) gives parties more influence over the resolution of their disagreement because it is a private process. The parties themselves may choose the best arbitrators for their dispute, in contrast to court proceedings. They can also decide on the venue, language, and applicable law for the proceedings. In court-based litigation, when familiarity with the relevant law and local processes can offer major strategic benefits, one party may benefit from a home court advantage. However, ADR can be neutral to the law, language, and institutional culture of the parties. The ADR process is confidential. As a result, the parties may decide to maintain the confidentiality of the proceedings and any conclusions. This frees them up to concentrate on the merits of the disagreement without worrying about how it will be received by the public. This may be especially crucial in cases involving trade secrets and commercial reputations. In contrast to court rulings, which are typically susceptible to challenge through one or more stages of litigation, arbitral awards are typically not appealable. In general, arbitral verdicts are recognized on par with domestic court judgements under the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral verdicts of 1958, also referred to as the New York Convention, without merit review. This makes it much easier to enforce prizes internationally.

DRAWBACKS OF ADR

There is not always a resolution through the alternate resolution procedure.
This implies that even after spending time and resources attempting to settle the disagreement outside of court, the parties may still need to go through with a trial by jury and litigation in order to pursue arbitration and other kinds of conflict resolution. An appeal is not possible against a neutral arbitration’s ruling, with a few notable exceptions like fraud. Conversely, a court’s rulings are typically appealable for a number of reasons. ADR awards cannot be enforced as if they were court judgements because there is no equivalent to section 66 of the Arbitration Act 1996, which states that an award made by the tribunal in accordance with an arbitration agreement may be enforced in the same manner as a judgement or order of the court to the same effect. The awards are not as readily enforceable, though. The majority of conflicts resolved through arbitrations involve money. They are unable to give injunctions because they are unable to impose instructions requiring one party to do something or refrain from doing something. Due to the lack of a disclosure requirement in arbitration that exists in litigation, there is a chance that parties will settle a dispute without fully understanding the circumstances, which could result in an incorrect conclusion. However, the majority of businessmen held the opinion that reaching a resolution quickly is preferable to squandering time and resources on a disagreement in order to reach the right conclusion. When a client requires an injunction, when there is no issue to be resolved, or when the client needs a legal decision made, alternative dispute resolution is not appropriate.

MODES OF ADR

Arbitration

The arbitration process cannot proceed if there is not a valid arbitration agreement in effect prior to a dispute developing. Parties submit their disagreement to one or more arbitrators in this way of resolving disputes.  Parties must abide by the arbitrator’s ruling, which is referred to as the “Award.” The goal of arbitration is to resolve disputes fairly and quickly, out of court, without incurring further costs or delays. Any party to a contract that has an arbitration clause may invoke it on their own behalf or through an authorised agent, in which case the dispute will be submitted to arbitration under the terms of the arbitration agreement. An arbitration clause in this context refers to a clause that specifies the procedures, language, number of arbitrators, and seat or authorised location of the arbitration.

According to Section 8 of the Arbitration and Conciliation Act of 1996, a party may petition the court to have the matter referred to an arbitration tribunal in accordance with the agreement if the other party disregards the arbitral agreement and takes the suit to civil court rather than arbitration, but not after the first statement has been submitted. The dispute will be referred to arbitration if the courts are satisfied with the application, which must contain a certified copy of the arbitration agreement.

Mediation

Through the alternative dispute resolution process of mediation, two or more disputants might work with a third, impartial person to help them reach a resolution. A third party serves as a mediator in this simple and straightforward party-centered negotiation process, employing effective communication and negotiating strategies to help parties settle their differences amicably. The parties have complete control over this process. The mediator’s role is limited to assisting the parties in resolving their disagreement. The mediator does not impose his opinions or decide what constitutes a just settlement.

Conciliation

Although less formal in nature, conciliation is nonetheless a type of arbitration. It is the process of helping the parties to a disagreement reach a peaceful conclusion through the use of a conciliator who meets with each party separately to resolve the conflict. Conciliators meet separately in order to improve communication, reduce tension between the parties, and interpret the situation in order to facilitate a negotiated conclusion. Prior consent is not required, and it cannot be imposed onto a party that does not choose to participate in conciliation. That is how it differs from arbitration.

Negotiation

It is the most regularly employed alternate method of resolving disputes. A non-binding process whereby the parties start talks with each other without the help of a third party in an effort to reach a mutually agreeable settlement. Businesses, non-profits, government agencies, court cases, international relations, and private affairs like marriage, divorce, parenthood, and daily living all involve negotiation.

Lok Adalat

The Lok Adalat, often known as the “People’s Court,” is chaired by a member of the legal profession, social activists, or a serving or retired judge. In order to exercise this authority, the National Legal Service Authority (NALSA) and other Legal Services Institutions regularly hold Lok Adalats. Lok Adalat may be consulted over any matter that is still pending in a regular court or any disagreement that hasn’t been presented before a court of law. The process is quick since there are no court costs and certain procedures are followed. The court money that was initially paid in the court when the petition was filed is also returned to the parties in the event that a matter that is pending in court or referred to the Lok Adalat is settled afterwards.

PIVOTAL CASE LAWS

Case name- Renusagar Power Co Ltd vs. General Electric

According to the Supreme Court, the goal of this Act was to expedite and advance international trade by establishing an arbitration process for the prompt resolution of trade-related disputes. It was declared that unless the parties specifically granted him such authority, an arbitrator generally lacked the capacity to clothe himself with the authority to decide the matter within his own jurisdiction. The Court further decided that the court, not the arbitrator, should make the decision regarding the contract’s validity under Section 33. The entire process would lack jurisdiction if there had been no arbitration clause in place when the arbitrators began their duties.

Case name- Bhatia International Vs Bulk Trading

The Supreme Court of India adopted Section 9 to support arbitrations seated outside of India after interpreting Part I of the Act to extend to arbitrations held outside of India. The aforementioned Act makes no mention of its provisions not applying to international commercial arbitrations held in nations that have not ratified conventions. The Act’s Part II is exclusively applicable to arbitrations conducted in nations that have signed conventions.  The court decided that Part I’s rules would automatically apply in any case where the arbitration took place in India. Nonetheless, unless the Parties have expressly or implicitly rejected all or any of Part I’s provisions, the requirements of Part I shall apply in cases of international commercial arbitrations conducted outside of India. In that instance, the Parties’ selected laws or regulations would take precedence. Any part of Part I that is expressly prohibited will not be applicable. The aggrieved parties in foreign arbitrations are now able to get interim remedy in India.

CONCLUSION

The establishment of arbitration rules, which have undergone substantial evolution over time, is where ADR techniques got their start. Over time, more alternative dispute resolution (ADR) techniques made their way to the Indian Parliament, which was astute enough to incorporate these novel approaches to conflict resolution. For example, the Micro, Small and Medium Enterprises Development Act of 2006 and the Commercial Courts Act of 2015 make sure that these processes are used case-by-case in particular industries. In order to position India as a leading worldwide hub for arbitration and other kinds of conflict resolution, the Indian government is currently undertaking further measures to establish alternative dispute resolution (ADR) procedures. Effective substitutes for traditional litigation are Alternative Dispute Resolution (ADR) techniques such arbitration, neutral review, mediation, and settlement conferences. They provide parties the ability to settle conflicts quickly, amicably, and possibly at a considerable financial savings. Selecting the best ADR strategy will eventually support equitable and successful conflict resolution and depend on the particulars of the dispute as well as the preferences of the parties.

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Written by- Shreyasi Ghatak