JAMIA MILLIA ISLAMIA

ALTERNATE DISPUTE
RESOLUTION- INTRODUCTION
AND VARIOUS MODES

SUBMITTED TO: - SUBMITTED BY: -

Mr. Sukesh Mishra Mohammad Arish
Semester-VII
Roll No.: - 16BLW051
 Table of Contents

1. Introduction………………………………………………….02

2. Brief History…………………………………………………06

3. Legal Recognition of ADR system in India………………...09

4. Contemporary Features Of Alternate Dispute Resolution..10

5. Suggestion by Law Commission of India…………………...13

6. Legislation of Alternate Dispute Resolution in India……...15

6.1. Code of Civil Procedure……………………………….15

6.2. Indian Arbitration Act,1899…………………………..15
6.3. Arbitration (Protocol and Convention) Act 1937……………..15
6.4. The Arbitration Act of 1940……………………………………16
6.5. Arbitration and Conciliation Act, 1996………………………..16

7. Modes of Alternate modes of Alternate Dispute Resolution………...19

7.1. Arbitration………………………………………………………23
7.2. Conciliation……………………………………………………...25
7.3. Mediation………………………………………………………..30
7.4. Judicial Settlement……………………………………………...33
7.5. Lok Adalats……………………………………………………...35

8. Difference between Mediation and other Dispute

Resolutions……………………………………………………39
9. Difference between Conciliation and Mediation…………...42
10. Why Should We Resort To Alternate Dispute Resolution.. 45
11. Conclusion……………………………………………………55

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 INTRODUCTION

“I realized that the true function of a lawyer was to unite parties... The lesson was so indelibly
burnt into me that a large part of my time during the twenty years of my practice as a lawyer
was occupied in bringing about private compromise of hundreds of cases. I lost nothing thereby
not even money; certainly not my soul”.
--- Mahatma Gandhi

Dispute is indispensable part of societal interaction since the inception of human settlement. If
it is not well taken and resolved early, dispute between two individuals will grow up and
become treat to national security, peace and stability, which are the basic parameter to measure
the development of a nation. With the objective of settling dispute in a more justifiable manner,
national governments and the constitutions of most nations establish institutions; judiciary
organs of the government. It is the natural mandate of courts of law to entertain disputes. Other
than judiciary arm of the government, the necessity of establishing other tribunals with judicial
power has been felt long ago. Within the executive arm of the government, quasi-judicial
tribunals named otherwise as administrative tribunals have been establish to settle disputes.
Courts and administrative tribunals are public institutions established to resolve disputes.

But before the establishment of courts and administrative tribunals, and even after their
establishment, there have been other private tribunals by which the society is trying to settle
disputes. These are called Alternative Dispute Resolution (ADR) mechanisms. ADR does not
refer a single kind of mechanism, but it is a generic name to refer dispute settlement
mechanisms other than court and administrative tribunals. Arbitration, Conciliation,
Mediation, Negotiation and Mini- Trial are some of them which are referred as ADR.

ADR is composed of different words: Alternative, dispute and resolution. Thus, to clearly
understand or define the phrase it is paramount important to understand each word separately
thereof. And then what “Alternative” connotes to you? What about dispute? Is a dispute
synonymous with conflict? What about resolution?

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The word ‗Alternative ‗, as to the definition given in 6th edition of Oxford Advanced
Learners Dictionary, refers ―a thing that you can choose to or have out of two or more
possibilities.
Therefore the word in this context is used as an adjective and refers to all permitted dispute
resolution mechanisms other than litigation, be it in court or administrative tribunal. Whereas,
the phrase dispute resolution, in the absence of alternative as prefix, is simply a collection of
procedures intended to prevent, manage or resolve disputes and refers procedures ranges from
self-help in the form of negotiation through to state sanctioned mechanisms called litigation. It
is to mean that, “Alternative” connotes the existence of dispute settling mechanisms other than
formal litigation. Though the word “Alternative” in ADR seems to connote the normal or
standard nature of dispute resolution by litigation and aberrant or deviant nature of other means
of dispute resolution mechanisms, it is not really the case. ADR is not an alternative to the court
system but only meant to supplement the same aiming on less lawyering.

The National Alternative Dispute Resolution Advisory Council (“NADRAC”) of Australia has
defined ADR as “an umbrella term for processes, other than judicial determination, in which
an impartial person assists those in a dispute to resolve the issues between them.” In fact, ADR
is increasingly referred to as ‘appropriate dispute resolution’, in recognition of the fact that
such approaches are often not just an alternative to litigation, but may be the most optimum
way to resolve a dispute.1

As the name suggest, it simply refers to an alternate way to settle conflicts which a person or
corporate entity might encounter. The formal justice system was a comparatively latter
development in a legal landscape where dispute resolution, was an age-old method to resolve
conflicts routinely practised world-over across various societies and communities. What is
newly emerging today however is the extensive preferment and proliferation of Alternative
Dispute Resolution models in the domestic and international market over traditionally
redressing it to a court of law.

There are numerous reasons for the advent of Alternative Dispute Resolution; primarily, the
lay man is daunted by the court and its formal procedure. He would rather live with his
problems by reaching a compromise than approach a court of law to seek justice especially
when the path to achieve the same is littered with various obstacles including overburdened
1
National Alternative Dispute Resolution Advisory Council, Dispute Resolution Terms (2003)

3
judges, complex legal procedure which is time-consuming and the sky high expenses that come
with bringing a matter before the court.

The great Abraham Lincoln, 16th President of the United States of India had himself said –

“Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out
to them how the nominal winner is often a real loser— in fees and waster of time. As a
peacemaker, the lawyer has a superior opportunity of being a good man. There will still be
business enough.”

The ‘Alternative Dispute Resolution Timeline’ in the early pages of the book begins in 1800
BC when dispute resolution was practiced by the Phoenicians, the Greeks, the Indians and the
Irish. The rich traditions of Chinese mediation and Muslim Tahkim, different as they are from
modern conceptions of Alternative Dispute Resolution, necessarily receive shorter shrift than
they deserve. Among the intriguing historical illustrations of ‘Alternative Dispute Resolution’
phenomena are the role of Mohammed in averting war over the reconstruction of Kaabah, and
the use of symbolic contests to resolve land disputes in West Francis in the middle ages.

Thus, as pointed out above, the Alternative Dispute Resolution system is not a new experience
for the people of this country also. It has been prevalent in India since time immemorial. Legal
history indicates that down the ages man has been experimenting with procedure for making it
easy, cheap, unfailing and convenient to obtain justice. Procedure for justice is indicative of
the social consciousness of the people.

The term "alternative dispute resolution" or "ADR" is often used to describe a wide variety of
dispute resolution mechanisms that are short of, or alternative to, full-scale court processes.
The term can refer to everything from facilitated settlement negotiations in which disputants
are encouraged to negotiate directly with each other prior to some other legal process, to
arbitration systems or mini trials that look and feel very much like a courtroom process.
Processes designed to manage community tension or facilitate community development issues
can also be included within the rubric of ADR.

It is normally thought to encompass mediation, arbitration, and a variety of “hybrid” processes

by which a neutral facilitates the resolution of legal disputes without formal adjudication.

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These alternatives to adjudication are advocated on a variety of grounds. Potential benefits are
said to include the reduction of the transaction costs of dispute resolution because ADR
processes may be cheaper and faster than ordinary judicial proceedings; the creation of
resolutions that are better suited to the parties’ underlying interests and needs; and improved
ex post compliance with the terms of the resolution.

ADR procedures are usually less costly and more expeditious. They are increasingly being
utilized in disputes that would otherwise result in litigation, including high-profile labour
disputes, divorce actions, and personal injury claims.

One of the primary reasons parties may prefer ADR proceedings is that, unlike adversarial
litigation, ADR procedures are often collaborative and allow the parties to understand each
other's positions. ADR also allows the parties to come up with more creative solutions that a
court may not be legally allowed to impose. 2

ADR systems may be generally categorized as negotiation, conciliation/mediation, or

arbitration systems ADR is touted as more efficient and effective than the courts in providing
justice, especially in countries in which the judiciary has lost the trust and respect of the
citizens. Moreover, ADR is seen as a means to increase access to justice for populations that
cannot or will not use the court system, to address conflicts in culturally appropriate ways, and
to maintain social peace.

Negotiation systems create a structure to encourage and facilitate direct negotiation between
parties to a dispute, without the intervention of a third party. Mediation and conciliation
systems are very similar in that they interject a third party between the disputants, either to
mediate a specific dispute or to reconcile their relationship. Mediators and conciliators may
simply facilitate communication, or may help direct and structure a settlement, but they do not
have the authority to decide or rule on a settlement. Arbitration systems authorize a third party
to decide how a dispute should be resolved.

It is important to distinguish between binding and non-binding forms of ADR. Negotiation,

mediation, and conciliation programs are non-binding, and depend on the willingness of the

2
Article on What Is Alternate Dispute Resolution available on, https://hirealawyer.findlaw.com/choosing-the-
right-lawyer/alternative-dispute-resolution.html

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parties to reach a voluntary agreement. Arbitration programs may be either binding or non-
binding. Binding arbitration produces a third-party decision that the disputants must follow
even if they disagree with the result, much like a judicial decision.

Non-binding arbitration produces a third-party decision that the parties may reject. It is also
important to distinguish between mandatory processes and voluntary processes. Some judicial
systems require litigants to negotiate, conciliate, mediate, or arbitrate prior to court action.
ADR processes may also be required as part of a prior contractual agreement between parties.
In voluntary processes, submission of a dispute to an ADR process depends entirely on the will of the
parties.

A BRIEF HISTORY

Dispute resolution outside of courts is not new; societies world-over have long used non-
judicial, indigenous methods to resolve conflicts. What is new is the extensive promotion and
proliferation of ADR models, wider use of court-connected ADR, and the increasing use of
ADR as a tool to realize goals broader than the settlement of specific disputes.

The ADR movement in the United States was launched in the 1970s, beginning as a social
movement to resolve community-wide civil rights disputes through mediation, and as a legal
movement to address increased delay and expense in litigation arising from an overcrowded
court system. Ever since, the legal ADR movement in the United States has grown rapidly, and
has evolved from experimentation to institutionalization with the support of the American Bar
Association, academics, courts, the U.S. Congress and state governments. For example, in
response to the 1990 Civil Justice Reform Act requiring all U.S. federal district courts to
develop a plan to reduce cost and delay in civil litigation, most district courts have authorized
or established some form of ADR.

Innovations in ADR models, expansion of government-mandated, court-based ADR in state

and federal systems, and increased interest in ADR by disputants has made the United States
the richest source of experience in court connected ADR.

While the court-connected ADR movement flourished in the U.S. legal community, other ADR
advocates saw the use of ADR methods outside the court system as a means to generate

6
solutions to complex problems that would better meet the needs of disputants and their
communities, reduce reliance on the legal system, strengthen local civic institutions, preserve
disputants' relationships, and teach alternatives to violence or litigation for dispute settlement.
In 1976, the San Francisco Community Boards program was established to further such goals.
This experiment has spawned a variety of community-based ADR projects, such as school-
based peer mediation programs and neighbourhood justice centres.

In the 1980s, demand for ADR in the commercial sector began to grow as part of an effort to
find more efficient and effective alternatives to litigation. Since this time, the use of private
arbitration, mediation and other forms of ADR in the business setting has risen dramatically,
accompanied by an explosion in the number of private firms offering ADR services.
The move from experimentation to institutionalization in the ADR field has also affected U.S.
administrative rule-making and federal litigation practice. Laws now in place authorize and
encourage agencies to use negotiation and other forms of ADR in rulemaking, public
consultation, and administrative dispute resolution.

Internationally, the ADR movement has also taken off in both developed and developing
countries. ADR models may be straight-forward imports of processes found in the United
States or hybrid experiments mixing ADR models with elements of traditional dispute
resolution. ADR processes are being implemented to meet a wide range of social, legal,
commercial, and political goals. In the developing world, a number of countries are engaging
in the ADR experiment, including Argentina, Bangladesh, Bolivia, Colombia, Ecuador, the
Philippines, South Africa, Sri Lanka, Ukraine, and Uruguay3.

INDIA
The Gupta Empire had a separate and distinct judicial system. At the lowest level of the judicial
system was the village assembly or trade guild. These were the councils appointed to settle the
disputes between the parties that appear before them. There were separate councils appointed

3
Article on Alternate Dispute Resolution available on
https://www.researchgate.net/publication/30504345_Alternative_Dispute_Resolution

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to decide various matters that came before them. Thus, if people could not reach to any
amicable settlement, it was resolved by the councils.

During the Mughal Dynasty, most villagers resolved their cases in the village courts itself and
appeal to the caste courts, the arbitration of an impartial umpire (“Salis”), or by a resort to
force.

The Maratha Empire established Panchayats; they were the first instrument of the civil
administration of justice under the Marathas to adjudicate cases of simple and minor nature.
The disputing parties were to sign an agreement regarding the abiding of the rules and
regulations of the Panchayat. It was up to the Panchayat to study the case and pass its judgement
impartially or without any bias to any party. A “Mamlatdar”, the higher officer in the
succession of judicial administration was to confirm the judgement. Generally, the
Mamlatdarand the Panchayat used to adjudicate the cases, which were upheld by the Maratha
Government.

With the advent of the British Raj these traditional institutions of dispute resolution somehow
started withering and the formal legal system introduced by the British began to rule. Alternate
Dispute Resolution in the present form picked up pace in the country, with its creation by the
Bengal Regulations. The Bengal Regulations were designed to encourage arbitration. After
several Regulations containing provisions relating to arbitration Act VIII of 1857 codified the
procedure of Civil Courts except those established by the Royal Charter, which contained
Sections dealing with arbitration in suits as well as sections which provided for arbitration
without the intervention of the court. Thereafter, the Indian Arbitration Act, 1899 was passed
which was based on the English act by the same name. It was the first substantive law on the
subject of arbitration but its application was limited to the Presidency – towns of Calcutta,
Bombay and Madras.

In 1908 the Code of Civil Procedure was re-enacted. The Code made no substantial changes in
the law of arbitration. The Arbitration Act of 1940 was enacted replacing the Indian Arbitration
Act of 1899 and certain parts of the Civil Procedure Code, 1908. It amended and consolidated
the law relating to arbitration in British India and remained a comprehensive law on Arbitration
even in the Republican India until 1996.

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Further, bodies such as the Village Panchayat; a group of elders and influential persons in a
village deciding the dispute between villagers are not uncommon even today. The Panchayat
has, in the recent past, also been involved in caste disputes. In 1982, settlement of disputes out
of courts started through Lok Adalats. The first Lok Adalat was held on March 14, 1982 at
Junagarh in Gujarat and now it has been extended throughout the country. Initially, Lok Adalats
functioned as a voluntary and conciliatory agency without any statutory backing for its
decisions. By the enactment of the Legal Services Authorities Act, 1987, the institution of Lok
Adalats received statutory status.

To keep pace with the globalization of commerce the old Arbitration Act of 1940 is replaced
by the new Arbitration and Conciliation Act, 1996. Settlement of matters concerning the family
has been provided under the amendment of the Code of Civil Procedure in 1976. Provisions
are made under the Special Marriage Act, 1954 and the Hindu Marriage Act, 1955 for making
efforts for reconciliation. Under Family Courts Act, 1984 it is the duty of family court to make
efforts for settlement between the parties. Introduction of Section 89 by way of the 1999
Amendment in the Code of Civil Procedure, 1908 is a radical advancement made by the Indian
Legislature in embracing the system of “Court Referred Alternative Disputes Resolution”.

The Arbitration and Conciliation Act, 1996 also contains provision relating to conciliation in
contractual matters arising out the legal relationship, the arbitral proceedings being informal,
less expansive and relatively speedier, have proved to be an efficient alternative means for the
redressal of disputes and differences between the parties. 4

The former Chief Justice of India Mr. Justice A.M. Ahmadi observed, –

“While we encourage Alternative Dispute Resolution mechanisms, we must create a culture

for settlement of disputes through these mechanisms, unless the members of the Bar encourage
their clients to settle their disputes through negotiations, such mechanisms cannot succeed.”

4
Article on Alternate Dispute Resolution available on, https://astrealegal.com/alternative-dispute-resolution-in-
india

9
 LEGAL RECOGNITION OF ADR SYSTEM IN INDIA

The Indian parliament enacted the Arbitration and Conciliation Act in 1996, making elaborate
provisions for conciliation of disputes arising out of a legal relationship, whether contractual
or not. The Act provided for the commencement of conciliation proceedings, appointment of
conciliators and assistance of suitable institution for the purpose of recommending the names
of the conciliators or even appointment of the conciliators by such institution, submission of
statements to the conciliator and the role of conciliator in assisting the parties in negotiating
settlement of disputes between the parties. In 1999, the Indian Parliament passed the CPC
Amendment Act of 1999 inserting Sec.89 in the Code of Civil Procedure 1908, providing for
reference of cases pending in the Courts to ADR which included mediation. The Amendment
was brought into force with effect from 1st July 2002.

With the global acceptance of the Alternative Dispute Resolution Methods, the Code of Civil
Procedure, 1908 in India, introduced the ADR procedures which include arbitration,
conciliation, mediation, judicial settlement and settlement through Lok Adalat. The arbitration
is more or less adversarial and the arbitrator is required to give an award which is like a court
giving a judgement. The judicial settlement has not been aggressively pursued

because the judges are not left with enough time from the routine work. The Lok Adalat has
proved to be successful in a few types of cases such as motor accident cases. Now that law has
made ADR methods a part of our legal system it is necessary that while exercising judicial
control a judge at the earliest stage decides if a case is having an element of settlement which
can be further explored by referring the case, inter alia, to mediation. Therefore before referring
a case to mediation, a judicial mind must decide whether it is capable of being resolved through
any of the ADR mechanisms.

CONTEMPRORY FEATURES OF
ALTERNATE DISPUTE RESOLUTION

After taking a comprehensive look at the progression of Alternative Dispute Resolution from
ancient times up until contemporary times, it will be helpful to critically identify contemporary
features of ADR which not only serve to differentiate it from the ADR methods practiced in
ancient times but other methods of dispute resolution such as litigation and all such others

10
which do not fall under the forms of ADR. Although the characteristics of negotiated
settlement, conciliation, mediation, arbitration, and other form of community justice vary, all
share a few common elements of distinction from the formal judicial structure.

1. Informality

Most fundamentally, ADR processes are less formal than judicial processes. In most cases, the
rules of procedure are flexible, without formal pleadings, extensive written documentation, or
rules of evidence. This informality is important for various reasons. It is appealing and
important for increasing access to dispute resolution for parts of the population who may be
intimidated by or unable to participate in more formal systems. It is also important for reducing
the delay and cost of dispute resolution. Most systems operate without formal representation.
ADR processes are less formal than the traditional court process.

Simpson suggests that while litigation can be expensive, formal and lengthy, ADR is relatively
cheap, and flexibility may be better suited to a person who is intimidated by the courtroom
experience.

2. Application of Equity

ADR programs are advantageous because they are instruments for the application of equity
rather than the rule of law. In taking decisions concerning each case, it is decided by a third
party or negotiated between disputants themselves, based on principles and terms that seem
equitable in the particular case, rather than on uniformly applied legal standards. ADR systems
tend to achieve efficient settlements at the expense of consistent and uniform justice. In
societies where large parts of the population do not receive any real measure of justice under
the formal legal system, the drawbacks of an informal approach to justice may not cause
significant concern. If the informal justice system seems unrealistic, people can alternatively
also take resort to the formal justice system. But they must also have to bear with the rigors of
the formal justice system. The system of ADR stands in this breach created by the merger of
Law and Equity. ADR offers an alternative system for relief from the hardship created by the
substantive and procedural law of formal adjudication. Moreover, the freedom, elasticity, and
luminance of ADR bear a striking resemblance to traditional Equity, offering relaxed rules of
evidence and procedure, tailored remedies, a simpler and less legalistic structure, improved
access to justice, and a casual relationship with the substantive law.

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3. Direct Participation and Communication between Disputants

Some other characteristics of ADR systems include more direct participation by the disputants
in the process and in designing settlements, more direct dialogue and opportunity for
reconciliation between disputants, potentially higher levels of confidentiality since public
records are not typically kept, more flexibility in designing creative settlements, less power to
subpoena information, and less direct power of enforcement. The impact of these
characteristics is not clear, even in the United States where ADR systems have been used and
studied more extensively than in most developing countries. Some are of the opinion that still
the compliance rate of informally settled disputes is much higher. This is one of the most salient
features of ADR. It relies less on legal representation and more on the parties meeting face-to-
face with each other in the presence of a professional mediator or conciliator.

4. ADR is Voluntary

Disputants decide voluntarily to use ADR to resolve their differences. Here the principle of
self-determination is being used by the parties to determine the form they desire their dispute
settlement to take. No one is coerced to enter into ADR. It is a voluntary process unlike
litigation where respondents can be subpoenaed to respond to charges or provide evidence in a
public court of law. Mediation as a typical ADR process invites the parties to engage in a
potentially creative and collaborative method of problem solving, without forcing a decision
on any of the parties. In a mediation process the final decision rests in the bosom of the parties
and not a third party deciding for them. ADR processes are typically constituted of parties,
being those who decide to resolve their conflicts through appropriate resolution method. It is
enough for one party to say no to an ADR process like mediation and the process may not start
or continue.

5. ADR is Confidential

Often there is much public interest when a case is under litigation and with the media
sometimes giving details of court proceedings. However, ADR is private and confidential. Its
practitioners are bound by their code of ethics to preserve the privacy of their clients.ADR
proceedings are most often done behind closed doors. In many cases, the parties involved in
the process have to sign an agreement, to keep the proceedings confidential and private unless
permitted by law to do otherwise.

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 SUGGESTIONS BY THE LAW COMMISSION OF INDIA

India now has the wholehearted legislative approval for beneficial law reforms contained in the
Code of Civil Procedure, 1908, The Arbitration and Conciliation Act, 1996 and the Legal
Services Authorities Act, 1987. It is, therefore, necessary to provide guidelines and promote
the reforms extensively by utilising the provisions made in the last-mentioned Act.

 The provisions made in the Arbitration and Conciliation Act, 1996 regarding the process
of conciliation are required to be made applicable to mediation also because there is no
real difference between the two. The High Courts can frame rules under Section 89 (2) (d)
read with Section 122 of the Code of Civil Procedure to make mediation procedures
effective immediately.
 In order to establish ADR as a viable alternative, it is crucial to provide education about
benefits of the process to the community, the members of the Bar and the Courts. It will
be necessary to familiarise the potential consumers of mediation services with the nature
of the process, the ways mediation can benefit them and ways it differs from arbitration
and trial. Equally important is to promote and encourage the managerial qualities of a
judge. Coordinated efforts will have to be promptly started to effectively use the ADR
provisions incorporated in the Code of Civil Procedure, 1908.
 Brochures explaining the availability of mediation and other ADR methods must be
published and handed over to the plaintiffs at the time of filing of the suits and to the
defendants along with the summons of the suit. Directions to the Principal Judges of all
courts in any acceptable modes are required to be issued to all the courts in their
jurisdictions to assign the cases to specific courts and keep the track thereof from the
beginning and enforce the case management techniques.
 To achieve the success in reforms’ implementation, pilot projects in some selected cities
can be introduced so as to utilise the experience later in other courts. A few courts can be
selected to follow mediation and case management procedures on experimental basis and
judges who are allotted such work can be specially selected on the basis of their aptitude
and they can be specially trained for the assignments.

13
 Cases for the reference to mediation can be categorised initially to include cases having
minimum discovery requirements and maximum settlement elements, such as cases
relating to money recovery, loan default, family disputes, etc.
 A panel of mediators should be immediately formed and for the purpose, programmes for
imparting basic training and orientation to the intending mediators should be organised.
Community leaders, experienced and respected businessmen, retired judges, experts in
different fields, retired bureaucrats and lawyers can be persuaded to serve as mediators.
Bar Councils, Bar Associations and Judicial Academies can join hands to organise
workshops and conferences on the subjects.
 Retired judges, desiring to act as mediators can be persuaded to consciously address a
general concern over the difference between the mindset of a Judge and of a Mediator.
Appointment of retired Judges as mediators can inspire great confidence in the mediation
process amongst the participants with a familiarisation programme with mediation process
to avoid any role confusion.
 International organisations like Asian Development Bank and World Bank, which have
large funds for the developmental purposes, should be approached to provide and promote
international training facilities, to set up pilot projects and specialised infrastructural
facilities for exchange of knowledge and experience and also organise regional
conferences and training the trainers programmes. Formation of joint Bench-Bar
Committees to implement the reformative provisions of law may prove very useful.
 The courts in which the pilot projects are to work, are to be provided with computers and
case tracking facilities and there shall be effective supervision of the pilot projects. Apart
from that, in courts, there shall be intensive training imparted about the basic ideas to the
persons who are going to be in-charge, so that the case management principles and the
schedules and the ADR processes are well-administered.
 State, Municipal Corporations and Government Corporations, who are the largest litigants,
should be drawn into the process of Mediation by framing appropriate schemes.
 Till Court annexed mediation programmes and proper infrastructural facilities are
established it would be appropriate at least to provide mediation facilities through private
reliable mediation centres run by the Bar Associations and/or non-Governmental
organisations and appropriate funds or grants can be provided to them. It is advisable to
provide such mediation facilities at the doorsteps of the courthouses.

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 LEGISLATIONS OF ALTERNATE DISPUTE
RESOLUTION IN INDIA

Code of Civil Procedure

The Code of Civil Procedure, 1859 in its sections 312 to 325 dealt with arbitration in suits
while sections 326 and 327 provided for arbitration without court intervention. The Code of
Civil Procedure (Act 5 of 1908) repealed the Act of 1882. The Code of Civil Procedure, 1908
has laid down that cases must be encouraged to go in for ADR under section 89(1). Under the
First Schedule, Order XXXII A, Rule 3 a duty is cast upon the courts that it shall make an
endeavour to assist the parties in the first instance, in arriving at a settlement in respect of the
subject matter of the suit. The second schedule related to arbitration in suits while briefly
providing arbitration without intervention of a court. Order I, Rule 1 of the schedule says that
where in any suit, all the parties agree that any matter in difference between them shall be
referred to arbitration, they may, at any time before judgment is pronounced; apply to the court
for an order of reference. This schedule, in a way supplemented the provisions of the
Arbitration Act of 1899.

Indian Arbitration Act, 1899:

This Act was substantially based on the British Arbitration Act of 1889. It expanded the area
of arbitration by defining the expression ‘submission’ to mean “a written agreement to submit
present and future differences to arbitration whether an arbitrator is named therein or not”.

Arbitration (Protocol and Convention) Act 1937:

The Geneva Protocol on Arbitration Clauses 1923 and the Geneva Convention on the
Execution of Foreign Arbitral Awards 1927 were implemented in India by the Arbitration

15
(Protocol and Convention) Act, 1937. This Act was enacted with the object of giving effect to
the Protocol and enabling the Convention to become operative in India.

The Arbitration Act of 1940:

The Arbitration Act, 1940, dealt with only domestic arbitration. Under the 1940 Act,
intervention of the court was required in all the three stages of arbitration in the tribunal, i.e.
prior to the reference of the dispute, in the duration of the proceedings, and after the award was
passed.

This Act made provision for-

a) Arbitration without court intervention;

b) Arbitration in suits i.e. arbitration with court intervention in pending suits and

c) Arbitration with court intervention, in cases where no suit was pending before the court.

Before an arbitral tribunal took cognizance of a dispute, court intervention was required to set
the arbitration proceedings in motion. The existence of an agreement and of a dispute was
required to be proved. During the course of the proceedings, the intervention of the court was
necessary for the extension of time for making an award.

Finally, before the award could be enforced, it was required to be made the rule of the court.
This Act did not fulfil the essential functions of ADR. The extent of Judicial Interference under
the Act defeated its very purpose.5 It did not provide a speedy, effective and transparent
mechanism to address disputes arising out of foreign trade and investment transactions.

Arbitration and Conciliation Act, 1996:

The government enacted the Arbitration and Conciliation Act, 1996 in an effort to modernize
the 1940 Act. In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative
Committee (AALCC), the International Council for Commercial Arbitration (ICCA) and the

5
Hon’ble Thiru Justice S.B.Sinha, Judge Supreme Court of India, ‘ADR and Access to Justice: Issues
and Perspectives’.

16
International Chamber of Commerce (ICC) met for a consultative meeting, where the
participants were of the unanimous view that it would be in the interest of International
Commercial Arbitration if UNCITRAL would initiate steps leading to the establishment of
uniform standards of arbitral procedure. The preparation of a Model Law on arbitration was
considered the most appropriate way to achieve the desired uniformity.

The full text of this Model Law was adopted on 21st June 1985 by UNCITRAL. This is a
remarkable legacy given by the United Nations to International Commercial Arbitration, which
has influenced Indian Law. In India, the Model Law has been adopted almost in its entirety in
the 1996 Act. This Act repealed all the three previous statutes. Its primary purpose was to
encourage arbitration as a cost-effective and quick mechanism for the settlement of commercial
disputes. It covers both domestic arbitration and international commercial arbitration. It
marked an epoch in the struggle to find an alternative to the traditional adversarial system of
litigation in India.

The changes brought about by the 1996 Act were so drastic that the entire case law built up
over the previous fifty-six years on arbitration was rendered superfluous. Unfortunately, there
was no widespread debate and understanding of the changes before such an important
legislative change was enacted. The Government of India enacted the 1996 Act by an
ordinance, and then extended its life by another ordinance, before Parliament eventually passed
it without reference to Parliamentary Committee.

This Act provides certain powers to the judiciary as well as concerned authorities to make a
settlement of the case at the option of the parties involved. Section 30 of the Act deals with
provisions wherein the arbitrator, with the consent of the parties, undergo mediation,
conciliation or other such proceedings at any time of arbitration to encourage settlement of the
dispute. 6

But the Act also states that for enforcement of any such provisions of the Act, there must be an
‘arbitration agreement’ between both the parties in writing. In fact, the process of arbitration is
being done mainly for civil cases which involve monetary settlement among the parties. While
referring the term conciliation, it will be clear that this system of resolving disputes is much
informal than arbitration. There is no need for agreements between the parties of a dispute.

6
Article on Alternate Dispute Resolution available at, “ http://www.gktoday.in/alternative-dispute-resolution/”

17
During any time of judicial proceedings, a party can request for conciliation to the other party
and then a conciliator may be appointed. After going through the facts of the case, the
conciliator calls up for a meeting between two parties jointly or individually. Then if the dispute
is resolved, a settlement document is prepared by enclosing the details regarding the settlement.

Apart from these two machineries, there are certain other prominent systems under the head of
ADR, which involves Lok adalath as well as Mediation. Lok adalath is generally known as
‘people’s court’. This is a non-adversarial system wherein mock courts are held by State
authority, District Legal Services authority, Taluk legal service committee as well as Supreme
Court and High Court legal services committees. It has no jurisdiction over any non-
compoundable offences. One of the merits of this system is that the parties can directly contact
with the judges which is not possible in regular courts. The focus of adalath is on compromise
and if not, the case will be returned to the courts and if compromised, it will be a decree equal
to the civil court and no appeal is applicable even under Article 226 as the decree made is upon
the consent of both the parties.

On the other hand, mediation plays yet another role in the field of ADR wherein a negotiation
is done between the parties with the help of a mediator who is a third party to them. The main
object of undergoing mediation proceeding is to protect the best interest of the parties. It does
not cover any legal provisions so that the parties will be not held inside certain limitations of
such legal matters. It provides a friendly talk between the parties and a means of counselling
so that the real issue faced by them will be found out and the dispute among them will be
resolved easily. There are certain types of mediation which are termed as court referred
mediation and private mediation. Same theory which is applicable to Lok adalath is applied
here also, i.e., if the parties arrive at a settlement, no person can file an appeal to a higher court
in any manner.7

7
Article available at, http://mediationbhc.gov.in/PDF/concept_and_process.pdf

18
 MODES OF ALTERNATE DISPUTE RESOLUTION

Dispute resolution is an indispensable process for making social life peaceful. Dispute
resolution process tries to resolve and check conflicts, which enables persons and group to
maintain co-operation. It can thus be alleged that it is the sin qua non of social life and security
of the social order, without which it may be difficult for the individuals to carry on the life
together.

Alternative Dispute Resolution (ADR) is a term used to describe several different modes of
resolving legal disputes. It is experienced by the business world as well as common men that
it is impracticable for many individuals to file law suits and get timely justice. The Courts are
backlogged with dockets resulting in delay of year or more for the parties to have their cases
heard and decided. To solve this problem of delayed justice ADR Mechanism has been
developed in response thereof. 8

Alternative dispute redressal method is being increasingly acknowledged in field of law and
commercial sectors both at National and International levels. Its diverse methods can helps the
parties to resolve their disputes at their own terms cheaply and expeditiously.

Alternative dispute redressal techniques are in addition to the Courts in character. Alternative
dispute redressal techniques can be used in almost all contentious matters, which are capable
of being resolved, under law, by agreement between the parties. Alternative dispute redressal
techniques can be employed in several categories of disputes, especially civil, commercial,
industrial and family disputes.9

Form the study of the different alternative dispute redressal techniques in the proceedings
chapters it is found that, alternative dispute redressal methods offers the best solution in respect
of commercial disputes where the economic growth of the Country rests.

8
Park and Burger, Introduction to the Science of Sociology p. 735
9
Hindu Marriage Act 1955, Industrial Dispute Act, 1947, The Code of Civil Procedure

19
The most common types of ADR for civil cases are Arbitration, Conciliation, Mediation,
Judicial Settlement and Lok Adalat.

In India, the Parliament has amended the Civil Procedure Code by inserting Section 89 as well
as Order 10 Rule 1-A to 1-C. Section 89 of the Civil Procedure Code provides for the settlement
of disputes outside the Court. It is based on the recommendations made by the Law
Commission of India and Malimath Committee. It was suggested by the Law Commission of
India that the Court may require attendance of any party to the suit or proceedings to appear in
person with a view to arriving at an amicable settlement of dispute between the parties and
make an attempts to settle the dispute between the parties amicably. Malimath Committee
recommended making it obligatory for the Court to refer the dispute, after issues are framed,
for settlement either by way of Arbitration, Conciliation, Mediation, and Judicial Settlement
through Lok Adalat. It is only when the parties fail to get their disputes settled through any of
the alternate disputes resolution method that the suit could proceed further. In view of the
above, new Section 89 has been inserted in the Code in order to provide for alternative dispute
resolution.

It is worthwhile to refer Section 89 of the Civil Procedure Code, which runs as follows: -

Sec. 89. Settlement of disputes outside the court. –

1. Where it appears to the Court that there exist elements of a settlement which may be
acceptable to the parties, the Court shall formulate the terms of settlement and give
them to the parties for their observations and after receiving the observations of the
parties, the Court may reformulate the terms of a possible settlement and refer the same
for –
a. arbitration;
b. conciliation;
c. judicial settlement including settlement through Lok Adalat; or
d. mediation.

2. where a dispute has been referred –

a. for arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for

20
 arbitration or conciliation were referred for settlement under the provisions of
that Act;
b. to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance
with the provisions of sub-section (1) of section 20 of the Legal Services
Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall apply
in respect of the dispute so referred to the Lok Adalat;
c. for judicial settlement, the Court shall refer the same to a suitable institution
or person and such institution or person shall be deemed to be a Lok Adalat and
all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall
apply as if the dispute were referred to a Lok Adalat under the provisions of
that Act;
d. for mediation, the Court shall effect a compromise between the parties and
shall follow such procedure as may be prescribed."

On perusal of the aforesaid provisions of Section 89, it transpires that it refers to five types of
ADR procedures, made up of one adjudicatory process i.e. arbitration and four negotiatory i.e.
non adjudicatory processes such as Conciliation, Mediation, Judicial Settlement and Lok
Adalat. The object behind Section 89 is laudable and sound. Resort to ADR process is
necessary to give speedy and effective relief to the litigants and to reduce the pendency in and
burden upon the Courts.

Of course, Section 89 has to be read with Rule 1-A of Order 10, which runs as follows: -

Order 10 Rule 1-A. Direction of the Court to opt for any one mode of alternative dispute
resolution.
--After recording the admissions and denials, the Court shall direct the parties to the suit to
opt either mode of the settlement outside the Court as specified in sub- section (1) of section
89. On the option of the parties, the Court shall fix the date of appearance before such forum
or authority as may be opted by the parties.

Order 10 Rule 1-B. Appearance before the conciliatory forum or authority.

--Where a suit is referred under rule 1A, the parties shall appear before such forum or authority
for conciliation of the suit.

21
Order 10 Rule 1-C. Appearance before the Court consequent to the failure of efforts of
conciliation
.--Where a suit is referred under rule 1A and the presiding officer of conciliation forum or
authority is satisfied that it would not be proper in the interest of justice to proceed with the
matter further, then, it shall refer the matter again to the Court and direct the parties to appear
before the Court on the date fixed by it.

On joint reading of Section 89 read with Rule 1-A of Order 10 of Civil Procedure Code, it
transpires that the Court to direct the parties to opt for any of the five modes of the

Alternative Dispute Resolution and on their option refer the matter.

Thus, the five different methods of ADR can be summarized as follows: -

 Arbitration
 Conciliation
 Mediation
 Judicial Settlement &
 Lok Adalat

22
  ARBITRATION:
Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of
disputes outside the courts, where the parties to a dispute refer it to one or more persons –
arbitrators, by whose decision they agree to be bound. It is a resolution technique in which a
third party reviews the evidence in the case and imposes a decision that is legally binding for
both sides and enforceable. There are limited rights of review and appeal of Arbitration awards.
Arbitration is not the same as judicial proceedings and Mediation.

Arbitration can be either voluntary or mandatory. Of course, mandatory Arbitration can only
come from s statute or from a contract that is voluntarily entered into, where the parties agree
to hold all existing or future disputes to arbitration, without necessarily knowing, specifically,
what disputes will ever occur.

The advantages of Arbitration can be summarized as follows: -

 It is often faster than litigation in Court.

 It can be cheaper and more flexible for businesses.
 Arbitral proceedings and an arbitral award are generally non public, and can be
made confidential.
 In arbitral proceedings the language of arbitration may be chosen, whereas in
judicial proceedings the official language of the competent Court will be
automatically applied.
 There are very limited avenues for appeal of an arbitral award.
 When the subject matter of the dispute is highly technical, arbitrators with an
appropriate degree of expertise can be appointed as one cannot choose judge in
litigation.

However, there are some disadvantages of the Arbitration, which may be summarized as
follows: -

 Arbitrator may be subject to pressures from the powerful parties.

 If the Arbitration is mandatory and binding, the parties waive their rights to access the
Courts.

23
  In some arbitration agreements, the parties are required to pay for the arbitrators, which
add an additional cost, especially in small consumer disputes.
 There are very limited avenues for appeal, which means that an erroneous decision
cannot be easily overturned.
 Although usually thought to be speedier, when there are multiple arbitrators on the
penal, juggling their schedules for hearing dates in long cases can lead to delays.
 Arbitration awards themselves are not directly enforceable. A party seeking to enforce
arbitration award must resort to judicial remedies.

In view of provisions of Section 89 of the Civil Procedure Code, if the matter is referred to the
Arbitration then the provisions of the Arbitration and Conciliation Act, 1996 will govern the
case.

24
  CONCILIATION:

Conciliation is an alternative dispute resolution process whereby the parties to a dispute use a
conciliator, who meets with the parties separately in order to resolve their differences. They do
this by lowering tensions, improving communications, interpreting issues, providing technical
assistance, exploring potential solutions and bring about a negotiated settlement. It differs from
Arbitration in that. Conciliation is a voluntary proceeding, where the parties involved are free
to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing
parties to define the time, structure and content of the conciliation proceedings. These
proceedings are rarely public. They are interest-based, as the conciliator will when proposing
a settlement, not only take into account the parties' legal positions, but also their; commercial,
financial and /or personal interests.10

The terms conciliation and mediation are interchangeable in the Indian context. Conciliation
is a voluntary process whereby the conciliator, a trained and qualified neutral, facilitates
negotiations between disputing parties and assists them in understanding their conflicts at issue
and their interests in order to arrive at a mutually acceptable agreement. Conciliation involves
discussions among the parties and the conciliator with an aim to explore sustainable and
equitable resolutions by targeting the existent issues involved in the dispute and creating
options for a settlement that are acceptable to all parties. The conciliator does not decide for
the parties, but strives to support them in generating options in order to find a solution that is
compatible to both parties. The process is risk free and not binding on the parties till they arrive
at and sign the agreement. Once a solution is reached between the disputing parties before a
conciliator, the agreement had the effect of an arbitration award and is legally tenable in any
court in the country.11

Most commercial disputes, in which it is not essential that there should be a binding and
enforceable decision, are amenable to conciliation. Conciliation may be particularly suitable
where the parties in dispute wish to safeguard and maintain their commercial relationships.

10
Article on “Alternate Dispute Resolution” available at, http://www.dispute-resolution-
hamburg.com/conciliation/what-is-conciliation/
11
Article on “Arbitration” available at, http://www.ficci-arbitration.com/htm/whatisconcialation.htm

25
The following types of disputes are usually conducive for conciliation:

 commercial,
 financial,
 family,
 real estate,
 employment, intellectual property,
 insolvency,
 insurance,
 service,
 partnerships,
 environmental and product liability.
 Apart from commercial transactions, the mechanism of Conciliation is also adopted for
settling various types of disputes such as labour disputes, service matters, antitrust
matters, consumer protection, taxation, excise etc

Conciliation proceedings12:
Either party to the dispute can commence the conciliation process. When one party invites the
other party for resolution of their dispute through conciliation, the conciliation proceedings are
said to have been initiated. When the other party accepts the invitation, the conciliation
proceedings commence. If the other party rejects the invitation, there are no conciliation
proceedings for the resolution of that dispute. Generally, only one conciliator is appointed to
resolve the dispute between the parties. The parties can appoint the sole conciliator by mutual
consent. If the parties fail to arrive at a mutual agreement, they can enlist the support of any
international or national institution for the appointment of a conciliator. There is no bar to the
appointment of two or more conciliators. In conciliation proceedings with three conciliators,
each party appoints one conciliator. The third conciliator is appointed by the parties by mutual
consent. Unlike arbitration where the third arbitrator is called the Presiding Arbitrator, the third
conciliator is not termed as Presiding conciliator. He is just the third conciliator. The conciliator

12
Conciliation as an Effective Mode of Alternative Dispute Resolving System, Dr. Ujwala Shinde Principal I/C
Shri. Shivaji Maratha Society’s Law College Pune University Maharashtra. India

26
is supposed to be impartial and conduct the conciliation proceedings in an impartial manner.
He is guided by the principles of objectivity, fairness and justice, and by the usage of the trade
concerned and the circumstances surrounding the dispute, including any previous business
practices between the parties. The conciliator is not bound by the rules of procedure and
evidence. The conciliator does not give any award or order. He tries to bring an acceptable
agreement as to the dispute between the parties by mutual consent. The agreement so arrived
at is signed by the parties and authenticated by the conciliator. In some legal systems, the
agreement so arrived at between the parties resolving their dispute has been given the status of
an arbitral award. If no consensus could be arrived at between the parties and the conciliation
proceedings fail, the parties can resort to arbitration.

A conciliator is not expected to act, after the conciliation proceedings are over, as an arbitrator
unless the parties expressly agree that the conciliator can act as arbitrator. Similarly, the
conciliation proceedings are confidential in nature. Rules of Conciliation of most of the
international institutions provide that the parties shall not rely on or introduce as evidence in
arbitral or judicial proceedings,

A. the views expressed or suggestions made for a possible settlement during the
conciliation proceedings;
B. admissions made by any party during the course of the conciliation
proceedings;
C. proposals made by the conciliator for the consideration of the parties;
D. the fact that any party had indicated its willingness to accept a proposal for
settlement made by the conciliator; and that the conciliator shall not be produced
or presented as a witness in any such arbitral or judicial proceedings.

Conciliation has received statutory recognition as it has been proved useful that before referring
the dispute to the civil court or industrial court or family court etc, efforts to concile between
the parties should be made. It is similar to the American concept of court-annexed mediation.
However without structured procedure & statutory sanction, it was not possible for conciliation
to achieve popularity in the countries like USA & also in other economically advanced
countries.

27
Justice M. Jagannadha Rao has, in the article “CONCEPTS OF CONCILIATION AND
MEDIATION AND THEIR DIFFERENCES”, stated as under: 13

“In order to understand what Parliament meant by ‘Conciliation’, we have necessarily to refer
to the functions of a ‘Conciliator’ as visualized by Part III of the 1996 Act. It is true, section
62 of the said Act deals with reference to ‘Conciliation’ by agreement of parties but sec. 89
permits the Court to refer a dispute for conciliation even where parties do not consent, provided
the Court thinks that the case is one fit for conciliation. This makes no difference as to the
meaning of ‘conciliation’ under sec. 89 because; it says that once a reference is made to a
‘conciliator’, the 1996 Act would apply.

Thus the meaning of ‘conciliation’ as can be gathered from the 1996 Act has to be read into
sec. 89 of the Code of Civil Procedure. The 1996 Act is, it may be noted, based on the
UNCITRAL Rules for conciliation.

Now under section 65 of the 1996 Act, the ‘conciliator’ may request each party to submit to
him a brief written statement describing the “general nature of the dispute and the points at
issue”. He can ask for supplementary statements and documents.

Section 67 describes the role of a conciliator.

Sub-section (1) states that he shall assist parties in an independent and impartial manner.

Subsection (2) states that he shall be guided by principles of objectivity, fairness and justice,
giving consideration, among other things, to the rights and obligations of the parties, the usages
of the trade concerned and the circumstances surrounding the dispute, including any previous
business practices between the parties.

Subsection (3) states that he shall take into account “the circumstances of the case, the wishes
the parties may express, including a request for oral statements”.

13
Judge, Supreme Court of India. See http://lawcommissionofindia.nic.in/

28
Subsection (4) is important and permits the ‘conciliator’ to make proposals for a settlement. It
states as follows:

“Section 67(4) - The conciliator may, at any stage of the conciliation proceeding, make
proposals for a settlement of the dispute. Such proposals need not be in writing and need not
be accompanied by a statement of the reasons therefore.”

Section 69 states that the conciliator may invite parties to meet him.

Sec. 70 deals with disclosure by the conciliator of information given to him by one party, to
the other party.

Sec. 71 deals with cooperation of parties with the conciliator, sec. 72 deals with suggestions
being submitted to the conciliator by each party for the purpose of settlement.

Finally, Sec. 73, which is important, states that the conciliator can formulate terms of a possible
settlement if he feels there exist elements of a settlement.
He is also entitled to ‘reformulate the terms’ after receiving the observations of the parties.

Subsection (1) of sec. 73 reads thus:

“Sec. 73(1) settlement agreement (1) When it appears to the Conciliator that there exist
elements of a settlement which may be acceptable to the parties, he shall formulate the terms
of a possible settlement and submit them to the parties for their observations.

After receiving the observations of the parties, the Conciliator may reformulate the terms of a
possible settlement in the light of such observations.”

The above provisions in the 1996 Act, make it clear that the ‘Conciliator’ under the said Act,
apart from assisting the parties to reach a settlement, is also permitted to make “proposals for
a settlement” and “formulate the terms of a possible settlement” or “reformulate the terms”.
This is indeed the UNCITRAL concept.”

29
  MEDIATION:

Now, worldwide mediation settlement is a voluntary and informal process of resolution of

disputes. It is a simple, voluntary, party cantered and structured negotiation process, where a
neutral third party assists the parties in amicably resolving their disputes by using specified
communication and negotiation techniques. Mediation is a process where it is controlled by the
parties themselves. The mediator only acts as a facilitator in helping the parties to reach a
negotiated settlement of their dispute. The mediator makes no decisions and does not impose
his view of what a fair settlement should be. 14

In the mediation process, each side meets with a experienced neutral mediator. The session
begins with each side describing the problem and the resolution they desire – from their point
of view. Once each sides’ respective positions are aired, the mediator then separates them into
private rooms, beginning a process of “Caucus Meeting” and thereafter “joint meetings with
the parties”. The end product is the agreement of both the sides. The mediator has no power to
dictate his decision over the party.
There is a win – win situation in the mediation.

The chief advantages of the mediation are: -

i. The agreement which is that of the parties themselves;

ii. The dispute is quickly resolved without great stress and expenditure;
iii. The relationship between the parties are preserved; and
iv. The confidentiality is maintained.

14
An Article “Disputes among Business Partners should be Mediated or Arbitrated, Not Litigated” by William
Sheffield, Judge, Supreme Court of California (Ret.) published in book “Alternative Dispute Resolution – What
it is and how it works” Edited by P. C. Rao and William Sheffield, page No.291

30
EVOLUTION OF MEDIATION IN INDIA

The first elaborate training for mediators was conducted in Ahmedabad in the year 2000 by
American trainers sent by Institute for the Study and Development of Legal Systems (ISDLS).
On 27th July 2002, the Chief Justice of India, formally inaugurated the Ahmedabad Mediation
Centre, reportedly the first lawyer-managed mediation centre in India. The Chief Justice of
India called a meeting of the Chief Justices of all the High Courts of the Indian States in
November 2002 at New Delhi to impress upon them the importance of mediation and the need
to implement Sec. 89 of Civil Procedure Code. Institute for Arbitration Mediation Legal
Education and Development (AMLEAD) and the Gujarat Law Society introduced, in January
2003, a thirty-two hours Certificate Course. The Chennai Mediation Centre was inaugurated
on 9th April 2005 and it started functioning in the premises of the Madras High Court. This
became the first Court-Annexed Mediation centre in India. MCPC has been taking the lead in
evolving policy matters relating to the mediation. The committee has decided that 40 hours
training and 10 actual mediation was essential for a mediator. The committee was sanctioned
a grant-in-aid by the department of Legal Affairs for undertaking mediation training
programme, referral judges training programme, awareness programme and training of trainers
programme. With the above grant-in-aid, the committee has conducted till March 2010, 52
awareness programmes/ referral judges training programmes and 52 Mediation training
programmes in various parts of the country. About 869 persons have undergone 40 hours
training. The committee is in the process of finalising a National Mediation Programme. Efforts
are also made to institutionalise its functions and to convert it as the apex body of all the training
programmes in the country. The Law Commission prepared consultation papers on Mediation
and Case Management and framed and circulated model Rules. The Supreme Court approved
the model rules and directed every High Court to frame them.The Law Commission of India
organised an International conference on Case Management, Conciliation and Mediation at
New Delhi on 3rd and 4th May 2003, which was a great success. Delhi District Courts invited
ISDLS to train their Judges as mediators and help in establishing court-annexed mediation
centre. Delhi High Court started its own lawyers managed mediation and conciliation
centre. Karnataka High Court also started a court-annexed mediation and conciliation centre
and trained their mediators with the help of ISDLS. Mandatory mediation through courts has
now a legal sanction. Court-Annexed Mediation and Conciliation Centres are now established
at several courts in India and the courts have started referring cases to such centres. In Court-
Annexed Mediation the mediation services are provided by the court as a part and parcel of the
31
same judicial system as against Court-Referred Mediation, wherein the court merely refers the
matter to a mediator. One feature of court-annexed mediation is that the judges, lawyers and
litigants become participants therein, thereby giving them a feeling that negotiated settlement
is achieved by all the three participants in the justice delivery system. When a judge refers a
case to the court-annexed mediation service, keeping overall supervision on the process, no
one feels that the system abandons the case. The Judge refers the case to a mediator within the
system. The same lawyers who appear in a case retain their briefs and continue to represent
their clients before the mediators within the same set-up. The litigants are given an opportunity
to play their own participatory role in the resolution of disputes. This also creates public
acceptance for the process as the same time-tested court system, which has acquired public
confidence because of integrity and impartiality, retains its control and provides an additional
service. In court-annexed mediation, the court is the central institution for resolution of
disputes. Where ADR procedures are overseen by the court, at least in those cases which are
referred through courts, the effort of dispensing justice can become well-coordinated. ADR
services, under the control, guidance and supervision of the court would have more authenticity
and smooth acceptance. It would ensure the feeling that mediation is complementary and not
competitive with the court system. The system will get a positive and willing support from the
judges who will accept mediators as an integral part of the system. If the reference to mediation
is made by the judge to the court annexed mediation services, the mediation process will
become more expeditious and harmonised. It will also facilitate the movement of the case
between the court and the mediator faster and purposeful. Again, it will facilitate reference of
some issues to mediation leaving others for trial in appropriate cases. Court annexed mediation
will give a feeling that court’s own interest in reducing its caseload to a manageable level is
furthered by mediation and therefore reference to mediation will be a willing reference. Court
annexed mediation will thus provide an additional tool to the same system providing continuity
to the process, and above all, the court will remain a central institution for the system. This will
also establish a public-private partnership between the court and the community. A popular
feeling that the court works hand-in-hand with mediation facility will produce satisfactory and
faster settlements.

32
  JUDICIAL SETTLEMENT:

Section 89 of the Civil Procedure Code also refers to the Judicial Settlement as one of the mode
of alternative dispute resolution. Of course, there are no specified rules framed so far for such
settlement. However, the term Judicial Settlement is defined in Section 89 of the Code. Of
course, it has been provided therein that when there is a Judicial Settlement the provisions of
the Legal Services Authorities Act, 1987 will apply. It means that in a Judicial Settlement the
concerned Judge tries to settle the dispute between the parties amicably.

If at the instance of judiciary any amicable settlement is resorted to and arrived at in the given
case then such settlement will be deemed to be decree within the meaning of the Legal Services
Authorities Act, 1987.

Section 21 of the Legal Services Authorities Act, 1987 provides that every award of the Lok
Adalat shall be deemed to be a decree of the Civil Court.

There are no written guidelines prescribed in India as to judicial settlement. But in America,
ethics requiring judicial settlement has been enumerated by Goldschmidt and Milford which
are as under:

JUDICIAL SETTLEMENT GUIDELINES15

The following are guidelines for judicial settlement ethics:

1. Separation of Functions: Where feasible, the judicial functions in the settlement and trial
phase of a case should be performed by separate judges.

2. Impartiality and Disqualification: A judge presiding over a settlement conference is

performing judicial functions and, as such, the applicable provisions of the code of judicial
conduct, particularly the disqualification rules, should apply in the settlement context.

15
Goldschmidt and Milford, Judicial Settlement Ethics, American Judicature Society,1996, grant SJI-95-03C
082 from the State Justice Institute; see http://www.judiciary.state.nj.us/ civil/Judicial SettlementGuidelines.pdf

33
3. Conference Management: Judges should encourage and seek to facilitate settlement in a
prompt, efficient, and fair manner. They should not, however, take unreasonable measures that
are likely under normal circumstances to cause parties, attorneys, or other representatives of
litigants to feel coerced in the process. The judge should take responsibility in settlement
conferences.

4. Setting Ground Rules on Issues Such as Confidentiality, Disclosure and Ex Parte

Communications: In settlement conferences, judges should establish ground rules at the onset,
either orallyor in writing, informing parties and their attorneys of the procedures that will be
followed. The rules should include ground rules governing issues such as confidentiality,
disclosure of facts and positions during and after conferences, and ex parte communications.

5. Focusing the Discussions: A judge should use settlement techniques that are both effective
and fair, and be mindful of the need to maintain impartiality in appearance and in fact.

6. Guiding or Influencing the Settlement: The judge should guide and supervise the settlement
process to ensure its fundamental fairness. In seeking to resolve disputes, a judge in settlement
discussions should not sacrifice justice for expediency.

7. Sanctions or Other Penalties Against Settlement Conference Participants:

A judge should not arbitrarily impose sanction or other punitive measures to coerce or penalize
litigants and their attorneys in the settlement process.

34
  LOK ADALAT:

The concept that is gaining popularity is that of Lok Adalats or people’s courts as established
by the government to settle disputes through conciliation and compromise. It is a judicial
institution and a dispute settlement agency developed by the people themselves for social
justice based on settlement or compromise reached through systematic negotiations. The first
Lok Adalats was held in Una aim the Junagadh district of Gujarat State as far back as 1982.
Lok Adalats accept even cases pending in the regular courts within their jurisdiction.

Section 89 of the Civil Procedure Code also provides as to referring the pending Civil disputes
to the Lok Adalat. When the matter is referred to the Lok Adalat then the provisions of the
Legal Services Authorities Act, 1987 will apply.

So far as the holding of Lok Adalat is concerned, Section 19 of the Legal Services Authorities
Act, 1987 provides as under: -

Section 19 Organization of Lok Adalats:

1) Every State Authority or District Authority or the Supreme Court Legal Services
Committee or every High Court Legal Services Committee or, as the case may
be, Taluka Legal Services Committee may organise Lok Adalats at such
intervals and places and for exercising such jurisdiction and for such areas as
it thinks fit.
2) Every Lok Adalat organised for an area shall consist of such number of:-
a. serving or retired judicial officers; and
b. other persons, of the area as may be specified by the State Authority or the
District Authority or the Supreme Court LegalServices Committee or the High
Court Legal Services Committee,or as the case may be, the Taluka Legal
Services Committee, organising such Lok Adalat.
3. The experience and qualifications of other persons referred to in clause (b) of sub-
section (2) for Lok Adalats organised by the Supreme Court Legal Services Committee
shall be such as may be prescribed by the Central Government in consultation with the
Chief Justice of India.

35
 4. The experience and qualifications of other persons referred to in clause (b) of sub-
section (2) for Lok Adalats other than referred to in subsection (3) shall be such as may
be prescribed by the State Government in consultation with the Chief Justice of the
High Court.
5. 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 -
i. any case pending before it; or
ii. 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 any case or matter relating
to an offence not compoundable under any law.

The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with
two other members, usually a lawyer and a social worker. There is no court fee, thus making it
available to those who are the financially vulnerable section of society. In case the fee is already
paid, the same is refunded if the dispute is settled at the Lok Adalat. The Lok Adalat are not as
strictly bound by rules of procedure like ordinary courts and thus the process is more easily
understood even by the uneducated or less educated. The parties to a dispute can interact
directly with the presiding officer, which is not possible in the case of normal
court proceedings.

Section 21 of the Legal Services Authorities Act, 1987 is also required to be referred to here
which runs as follows: -

Section 21 Award of Lok Adalat.

(1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the
case may be, an order of any other court and where a compromise or settlement has been
arrived at, by a Lok Adalat in a case referred to it under subsection (1) of section 20, the court-
fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870
(7 of 1870).

(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the
dispute, and no appeal shall lie to any court against the award.

36
In view of the aforesaid provisions of the Legal Services Authorities Act, 1987 if any matter is
referred to the Lok Adalat and the members of the Lok Adalat will try to settle the dispute
between the parties amicably, if the dispute is resolved then the same will be referred to the
concerned Court, which will pass necessary decree therein. The decree passed therein will be
final and binding to the parties and no appeal will lie against that decree.

On the flip side, the main condition of the Lok Adalat is that both parties in dispute have to be
agreeable to a settlement. Also, the decision of the Lok Adalat is binding on the parties to the
dispute and its order is capable of execution through legal process. No appeal lies against the
order of finality attached to such a determination is sometimes a retarding factor for however
be passed by Lok Adalat, only after obtaining the assent of all the parties to dispute. In certain
situations, permanent Lok Adalat can pass an award on merits, even without the consent of
parties.

Such an award is final and binding. From that, no appeal is possible. 16 This is not to the say
that Lok Adalat don’t have many advantages.

Lok Adalat are especially effective in settlement of money claims. Disputes like partition suits,
damages and even matrimonial cases can also be easily settled before a Lok Adalat as the scope
for compromise is higher in these cases. Lok Adalat is a definite boon to the litigant public,
where they can get their disputes settled fast and free of cost.

The appearance of lawyers on behalf of the parties, at the Lok Adalats in not barred. Lok Adalat
are not necessarily alternatives to the existing courts but rather only supplementary to them.
They are essentially win-win systems, an alternative to ‘Judicial Justice’, where all the parties
to the dispute have something to gain.

There are certain hybrids of Alternative Dispute Resolution that also deserve a mention. These
processes have evolved in combination of various Alternative Dispute Resolution mechanisms
with the ultimate objective of achieving a voluntary settlement. The purpose of many of these

16
ADR – Its Facets, by Snajay Kishan Kaul. J. Chairman, Overseeing Committee Delhi High
Court Mediation and conciliation centre written in SAMADHAN –Reflections – 2006 – 10 page.97.

37
hybrids is that the principle objective of achieving a settlement is kept in mind and all
permutations and combinations should be utilized towards that objective to reduce the burden
of the adjudicatory process in courts. The different Alternative Dispute Resolution processes
and their hybrids have found solutions to different nature of disputes and thus the
knowledge of these processes can be a significant aid. Appearance of lawyers on behalf of the
parties, at the Lok Adalats in not barred. Lok Adalat are not necessarily alternatives to the
existing courts but rather only supplementary to them. They are essentially win-win systems,
an alternative to ‘Judicial Justice’, where all the parties to the dispute have something to gain.

There are certain hybrids of Alternative Dispute Resolution that also deserve a mention. These
processes have evolved in combination of various Alternative Dispute Resolution mechanisms
with the ultimate objective of achieving a voluntary settlement. The purpose of many of these
hybrids is that the principle objective of achieving a settlement is kept in mind and all
permutations and combinations should be utilized towards that objective to reduce the burden
of the adjudicatory process in courts. The different Alternative Dispute Resolution processes
and their hybrids have found solutions to different nature of disputes and thus the
knowledge of these processes can be a significant aid.

38
 DIFFERENCES BETWEEN THE MEDIATION AND OTHER DISPUTE
RESOLUTION PROCESS:

The alternative dispute resolution procedures can be broadly classified into two groups, first
those that are adjudicative and adversarial, and second those, which are consensual and non-
adversarial. The latter group includes mediation. 17

Sir Robert A. Baruch Bush and Joseph P. Folger, in, “The promise of mediation” say that, in
any conflict, the principal objective ought to be to find a way of being neither victims nor
victimizers, but partners in an ongoing human interaction that is always going to involve
instability and conflict.18 There are several types of different dispute redressal methods that
have evolved owing to the different needs and circumstances of the society. The study of the
differences between them will help the disputant in choosing the best and the apt method of
resolving their disputes according to their needs.

The dominant form of dispute redressal method that is broadly adopted for the resolution of a
dispute is, by filing of case before the Court of law. With the bird eye view, it can be said that,
in the process of adjudication through Court of law, someone has to lose among the disputing
party. The litigation route has now become slow, expensive, and uncertain in its outcome. The
Courts and Tribunals do not 'resolve' a dispute, but they only “decide” a dispute or “adjudicate”
on them.

Whereas, in the case of mediation, the parties can try to agree with one another, were a mediator
acts as a facilitator. Mediation has the advantage as it can lead to finality because, it allows for
informed and un-coerced decisions to be taken by everyone involved. Disputes are resolved in
the process of mediation through consensual interaction between the disputants. 19

The mediator in promoting or in other words, facilitating resolution of the dispute by the parties
themselves does not purport to decide the issue between them. Mediation is more flexible,
quick and less expensive than the process of adjudication through Court of Law. Thus, the

17
Manka, ADR: What Is It And Why Do You Need To Know? 47 J Mo Bar 623, 625.
18
Robert A. Baruch Bush and Joseph P. Folger, The promise of mediation (1994) at 229-59.
19
Tania Sourdin, Alternative Dispute Resolution,(2002) p 2,3.

39
study reveals that, litigation produces provides for fair and just results, but it is procedurally
disadvantages as compared to mediation.

Mediation affords a far greater degree of flexibility, relative informality, confidentiality and
control over its resolution. Comparative study of the process of ‘mediation’ and ‘arbitration’
shows that, mediation is a form of expedited negotiation. The parties control the outcome.

Mediator has no power to decide. Settlement in the dispute is done only with party approval.
Exchange of information is voluntary and is often limited. Parties exchange information that
will assist in reaching a resolution. Mediator helps the parties define and understand the issues
and each side's interests. Parties vent feelings, tell story, and engage in creative problem
solving. Mediation process is informal and the parties are the active participants.

Joint and private meetings between individual parties and their counsel are held in this
process. Outcome based on needs of parties. Result is mutually satisfactory and finally a
relationship may be maintained or created.

Mediation when compared with arbitration is of low cost. It is private and confidential.
Facilitated negotiation is an art. Mediator is not the decision maker. Mediator is a catalyst. He
avoids or breaks an impasse, diffuse controversy, encourages generating viable options. He has
more control over the process. The process of mediation gives the parties many settlement
options. Relationship of parties is not strained in the process of mediation.

There is a high degree of commitment to settlement. Parties’ participation is there in the

decision making process. Thus, there is no winner and no loser in this process, only the
problems are resolved. In this process the disputed parties maintains the confidentiality of
proceedings.20

The Arbitration and Conciliation Act, 1996 has provided for the legislative framework of the
processes of arbitration and conciliation in India. The process of ‘arbitration’ is adjudicative in
nature as the arbitrators control the outcome. Arbitrator is given power to decide.

20
L, Boulle, Mediation: Principles, process, practice (Butterworths, Sydney,1996) p10-14.

40
Arbitration award is final and is a binding decision. Often extensive discovery is required in
this process. Arbitrator listens to facts and evidence and renders an award. The parties present
the case, and testify under oath. The process of arbitration is formal. The attorneys can control
the party participation. Evidentiary hearing is given in this process. No private communication
with the arbitrator is possible. Decision is in the form of award based on the facts, evidence,
and law. The process of arbitration is more expensive than mediation, but less expensive than
traditional litigation. It is a private process between the arbitrator and the disputed parties but
in some cases, decisions are publicly available.

Thus, it is an informal procedure, which involves decision-maker impasse when it is submitted

to an Arbitrator. The parties have less control in the proceedings and the final award, as the
decision making process is with the arbitrator.

The ‘Conciliator’ under the Arbitration and Conciliation Act, 1996, apart from assisting the
parties to reach a settlement, is also permitted to make “proposals for a settlement” and
“formulate the terms of a possible settlement” or “reformulate the terms”.

‘Conciliation’, is a procedure like mediation but the third party called the conciliator, takes a
more interventionist role in bringing the two parties together and in suggesting possible
solutions to help the disputed parties to reach a settlement. The difference between the process
of mediation and conciliation lies in the fact that, the ‘conciliator’ can make proposals for
settlement, ‘formulate’ or ‘reformulate’ the terms of a possible settlement, while a ‘mediator’
would not do so but would merely facilitate a settlement between the
parties.

Under Section 30 and Section 64(1) and Section 73(1) of the Arbitration and Conciliation Act,
1996, the conciliator has a greater or a pro-active role in making proposals for a settlement or
formulating and reformulating the terms of a settlement. A mediator is a mere facilitator.

The meaning of these words in India is the same in the UNCITRAL21and Conciliation Rules
and in UK and Japan. Conciliation and Mediation process is distinguishable from Arbitration
as the parties’ willing-ness to submit to mediation or conciliation does not bind them to accept

21
UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW

41
the recommendation of the conciliation or mediator but an arbitrator’s award, by contrast, is
binding on the parties.

DIFFERENCE BETWEEN CONCILIATION AND MEDIATION:

Under our law and the UNCITRAL model, the role of the mediator is not pro-active and is
somewhat less than the role of a ‘conciliator’. We have seen that under Part III of the
Arbitration and Conciliation Act, the ‘Conciliator’s powers are larger than those of a ‘mediator’
as he can suggest proposals for settlement.

Hence the above meaning of the role of ‘mediator’ in India is quite clear and can be accepted,
in relation to sec. 89 of the Code of Civil Procedure also. The difference lies in the fact that the
‘conciliator’ can make proposals for settlement, ‘formulate’ or ‘reformulate’ the terms of a
possible settlement while a ‘mediator’ would not do so but would merely facilitate a settlement
between the parties.

Brown quotes22, which offers a range of dispute resolution processes, facilitative, evaluative
and adjudicative. It is there stated that conciliation “is a process in which the Conciliator plays
a proactive role to bring about a settlement” and mediator is “a more passive process”.
This is the position in India, UK and under the UNCITRAL model.

However, in the USA, the person having the pro-active role is called a ‘mediator’ rather than a
‘conciliator’. Brown says that the term ‘Conciliation’ which was more widely used in the 1970s
has, in the 1970s, in many other fields given way to the term ‘mediation’.

These terms are elsewhere often used interchangeably. Where both terms survived, some
organizations use ‘conciliation’ to refer to a more proactive and evaluative form of process.
However, reverse usage is sometimes employed; and even in UK, ‘Advisory, Conciliation and
Arbitration Service’ (ACAS) (UK) applies a different meaning. In fact, the meanings are
reversed. In relation to ‘employment’, the term ‘conciliation’ is used to refer to a mediatory
process that is wholly facilitative and non-evaluative.

22
1997 Handbook of the City Disputes Panel, UK

42
The definition of ‘conciliation’ formulated by the ILO (1983) is as follows:

“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 differences and to arrive at an
amicable settlement or agreed solution. It is a process of orderly or rational discussion under
the guidance of the conciliator.”

However, according to the ACAS, ‘mediation’ in this context involves a process in which the
neutral “mediator takes a more pro-active role than a conciliator for the resolution of the
dispute, which the parties are free to accept or reject. (The ACAS role in Arbitration,
Conciliation and Mediation, 1989). It will be seen that here, the definitions, even in UK, run
contrary to the meanings of these words in UK, India and the UNCITRAL model.

The National Alternative Dispute Resolution Advisory Council, (NADRAC), Barton Act 2600,
Australia in its recent publication (ADR terminology, a discussion Paper, at p 15) states that
the terms “conciliation” and “mediation” are used in diverse ways. ( The ‘New”
Mediation: Flower of the East in Harvard Bouquet: Asia Pacific Law
Review Vol. 9, No.1, p 63-82 by Jagtenbury R and de Roo A, 2001). It points out that the words
‘conciliation’ and ‘counselling’ have disappeared in USA. In USA, the word ‘conciliation’ has
disappeared and ‘mediation’ is used for the neutral who takes a pro-active role.

For example:

“Whereas the terms ‘conciliation’ and ‘counselling’ have long since disappeared from the
literature in reference to dispute resolution services in the United States and elsewhere, these
terms have remained enshrined in Australian family laws, with ‘mediation’ grafted on as a
separate dispute resolution service in 1991.”

Conversely, policy papers in countries such as Japan still use the term ‘conciliation’ rather than
‘mediation’ for this pro-active process23report of Justice System Reform Council, 2001,
Recommendations for a Justice System to support Japan in the 21st Century).

23
www.kantei.go.jp/foreign/judiciary/2001/0612.

43
NADRAC refers, on the other hand, to the view of the OECD (The Organisation for Economic
Co-operation and Development) Working Party on Information, Security and Privacy and the
Committee on Consumer Policy where ‘conciliation’ is treated as being at the less formal end
of the spectrum while ‘mediation’ is at the more formal end. Mediation is described there as
more or less active guidance by the neutrals. This definition is just contrary to the UNCITRAL
Conciliation Rules which in Art 7(4) states

“Article 7(4) The conciliator may, at any stage of the conciliation proceedings, make proposals
for a settlement of the dispute….” In an article from US entitled “Can you explain the
difference between conciliation and mediation” 24, a number of conciliators Mr. Wally
Warfield, Mr. Manuel Salivas and others treat ‘conciliation’ as less formal and ‘mediation’ as
pro-active where there is an agenda and there are ground rules. In US from the informal
conciliation process, if it fails, the neutral person moves on to a greater role as a ‘conciliator’.

The above article shows that in US the word ‘mediator’ reflects a role which is attributed to a
pro-active conciliator in the UNCITRAL Model. In fact, in West Virginia, ‘Conciliation’ is an
early stage of the process where parties are just brought together and thereafter, if conciliation
has not resulted in a solution, the Mediation programme is applied which permits
a more active role. 25

The position in USA, in terms of definitions, is therefore just the otherway than what it is in
the UNCITRAL Conciliation Rules or our Arbitration and Conciliation Act, 1996 where, the
conciliator has a greater role on the same lines as the ‘mediator’ in US.

I have thus attempted to clear some of the doubts raised as to the meaning of the words
‘conciliation’ and ‘mediation’. Under our law, in the context of sec. 30 and sec. 64(1) and sec.
73(1) of the 1996 Act, the conciliator has a greater or a pro-active role in making proposals for
a settlement or formulating and reformulating the terms of a settlement. A mediator is a mere
facilitator. The meaning of these words in India is the same in the UNCITRAL and Conciliation
Rules and in UK and Japan.

24
http://www.colorodo.edu/conflict/civil-rights/topics/1950.html
25
Article from “ http://www.state.wv.us/wvhic/Pre-Determination/20comc.htm”

44
But, in USA and in regard to certain institutions abroad, the meaning is just the reverse; a
‘conciliator’ is a mere ‘facilitator’ whereas a ‘mediator’ has a greater pro-active role. While
examining the rules made in US in regard to ‘mediation’, if we substitute the word
‘conciliation’ wherever the word ‘mediation’ is used and use the word ‘conciliator’ wherever
the word ‘mediator’ is used, we shall be understanding the said rules as we understand them in
connection with ‘conciliation’ in India.

WHY SHOULD WE RESORT TO ATERNATE DISPUTE

RESOLUTION

The age-old complaints lodged against lawyers and the legal process has gained an amplified
resonance in the cotemporary world community. The common conception is that judges and
lawyers, the procedural rigor of justice and substantive incantation of legality, lay Jury and
technical experts hurt more than they help. The recourse to legal actors and proceedings is cost
, emotionally debilitating, and potentially counterproductive .It is to meant that now it is a
common knowledge that existing justice system is not able to cope up with the ever increasing
burden of civil and criminal litigation . The problem is not of a load alone. The deficiency lies
in the adversarial nature of judicial process which is time consuming and more often procedure
oriented. There is growing awareness that in the bulk of cases court action is not appropriate
recourse for seeking justice.

Judicial process is set in motion by the action of an aggrieved party. Each party‘s case is
presented before the judge by the advocators, who are expert in court craft, in straight jacket of
rules of procedure and substantive law. The Judge perceived the dispute (or the issue involved
) in the backdrop of known legal concepts , sifts evidence to arrive at the truth, hears arguments
to determine as to how logically the parties stand in terms of applicable legal concepts and
pronounce his verdict accordingly. The parties are bound by the verdict, at the peril of legal
sanctions, if disobeyed. Represented by lawyers (especially in developed countries) the parties
are kept at a distance not only from the judge but also) from each other. The end result is a
win–lose litigation .Thus, the dispute is liquidated and justice done or that is what is professed.
But the difference between the parties continue to subsist, the competing interest of the parties

45
remain unsolved, inter-personal relationship of the parties becomes more hardened. The
adversarial court does not aim at resolution of competing claims of member of the society. It
aims at upholding the one and rejecting the other , leaving the conflict between the parties un
solved .Thus, apart from the fact that recourse to justice through the court system is time
consuming

There are a wide variety of reasons due to which the people going through a dispute are inclined
towards resorting to Alternate Dispute Resolution rather than going for thetraditional judiciary
system of courts. ADR methods can offer several advantages over traditional litigation. In
many cases, using ADR can cost people significantly less money in attorney's fees and court
costs.

ADR often takes far less time to resolve issues than a trial does, so people do not need to pay
attorneys for the multiple preliminary court appearances, motion practice, discovery and other
critical work that attorneys do when preparing for trial. Many people report that they feel like
they have more control of the outcome of the matter when using ADR. Because of the
discussion-oriented nature of many forms of ADR, many feel like they have an opportunity to
be heard when using ADR more so than if they had gone to trial. ADR also allows people to
maintain privacy, as these proceedings are not public the way that trials and records of trials
are.26

The benefits or advantages that can be accomplished by the alternative dispute resolution
system are summed up here briefly:

 The concept of Alternative Dispute Resolution is usually thought of as a voluntary

means of dispute resolution chosen by the parties because of its greater efficacy and
economy.

 Reduction of Cost and Time

26
Article on Alternate Dispute Resolution may be a better option than litigation available at, https://www.rms-
law.com/Articles/Alternative-Dispute-Resolution-may-be-a-better-option-than-litigation.shtml

46
 One of motivations for ADR system is to reduce the cost and time involved in solving
disputes. If a new dispute resolution system can reduce costs and achieve out comes
that are just as good as those under previous system, it make the new system desirable.
Law suits are expensive, some times the cost goes even the extent of making the victory
of a party insignificant or exceeding of the amount of judgment .There are court fees,
filling fees, lawyers‘fees, and other costs. There would also be loses to be incurred by
both litigants because of spending longer time in litigation that may not be covered by
the courts awards. On the other hand, an ADR system can make it possible to use
process that cost small fraction of the litigation, and yet produce as good or even better
results. Mediation is usually designed to start and finish in one day. The disputants
usually share the cost of the mediator. In this circumstance, therefore, the total cost of
mediation is minimal as compared to the cost of litigation

 Improve or Maintain the Relationship

In situations where the disputants have an ongoing relation , ADR system allows them
to work through their difficulties in a productive way that does not destroy their
relationship. After acrimonious litigation, disputants rarely want to put the past behind
them and work cooperatively. The dispute resolution system may provide process that
will not leave people to work together angry and frustrated with either the result or the
process itself. In the ADR process the disputants could rather learn information that
will allow them to work more effectively in the future.

 Satisfactory Outcome

Regardless of the process used, the solution must solve the problem that exists. ADR
procedures tend involve the parties with the view to achieving settlement. ADR
procedures create a formal setting to bring parties together for serious attempt at
resolving a problem .A dispute resolution process must move parties towards workable,
durable and easily implement able out come. ADR procedures help to afford chance
that the parties can make real progress on the case and that the parties can communicate
more fully and frankly through a third party.

47
 Deal with Emotion

The ADR process will give disputants an out let to discuss their frustrations. They will
get the chance of venting emotions in non-threatening environment. This will help the
disputants be satisfied with the outcome. ADR provides for effective and neutral
methods or factors for achieving maximum impact on the process, strategy, and tactics
to words resolution. A disputant will be ready to deal with the issues when he or she is
satisfied that other person has listened to his or her point of view.

 Avoid Future Disputes

An ADR system can yield us techniques that can resolve disputes effectively and wit
out damaging relationships. The process used for a dispute at hand can provide a frame
work

 To deal with anticipated disputes .In the future or recurring disputes, the system may
help to take advantage of the resolution in the past to avoid guidance for the future, and
to learn from experience.

 Wide range of process are defined as alternative dispute resolution process often,
dispute resolution process that are alternative to the adjudication through Court
proceedings are referred to as alternative dispute resolution methods. These methods
usually involve a third party referred to as neutral, a skilled helper who either assists
the parties in a dispute or conflict to reach at a decision by agreement or facilitates in
arriving at a solution to the problem between the party to the dispute.

 Reliable information is an indispensable tool for adjudicator. Judicial proceedings make

halting progress because of reluctance of parties to part with inconvenient information.
Alternative dispute resolution moves this drawback in the judicial system. The truth
could be difficulty found out by making a person stand in the witness-box and he
pilloried in the public gaze. Information can be gathered more efficiently by an informal
exchange across the table. Therefore, alternative dispute resolution is a step towards
success where judicial system has failed in eliciting facts efficiently.

48
 In Mediation or Conciliation, parties are themselves prodded to take a decision, since
they are themselves decision-makers and they are aware of the truth of their position,
the obstacle does not exist.

 The alternative dispute resolution mechanisms by the very methodology used in it can
preserve and enhance personal and business relationships that might otherwise be
damaged by the adversarial process. The method has strength because it yields
enforceable decisions, and is backed by a judicial framework, which, in the last resort,
can call upon the coercive powers of the State.

It is also flexible because it allows the contestants to choose procedures, which fit the
nature of the dispute and the business context in which it occurs. The process of
alternative dispute resolution mechanisms is facilitative, advisory and determinative in
nature.

 The formality involved in the alternative dispute resolution is lesser than traditional
judicial process and costs incurred are very low in alternative dispute resolution while
the cost procedure results in win-lose situation for the disputants.

 Distinct advantages of Alternate Dispute Resolution methods over traditional Court

proceedings are its procedural flexibility. It can be conducted at any time, and in any
manner to which the parties agree. It may be as casual as a discussion around a
conference table or as structured as a private Court trial. Also unlike the Courts, the
parties have the freedom to choose the applicable law, a neutral party to act as Arbitrator
or as the Conciliator in their dispute, on such days and places convenient to them and
fix the fees payable to the neutral party. Alternative dispute resolution methods being a
private process between the disputed parties and the arbitrator, mediator or the
conciliator it offers confidentiality, which is generally not available in Court
proceedings. While a Court procedure results in a win-lose situation for the disputants,
in the alternative dispute resolution methods such as Mediation or Conciliation, it is a
win-win situation for the disputants because the solution to the dispute emerges with
the consent of the parties.

49
  Alternative dispute resolution systems will help ‘de-congest’ courts.

 If the alternative dispute resolution systems in operation:

1. The parties/ disputants will, more likely than not, realize that there exists no real
dispute between them; and
2. Making attempts operates as a pre-litigation that may ensure.

 Finality of the result, cost involved is less, the time required to be spent is less,
efficiency of the mechanism, possibility of avoiding disruption.

 The Alternative dispute resolution process enables each party to more correctly
understand his case, claim and defence in the backdrop of the admitted facts.

 Further, it enables each to access its 'strength’ – from a combination of three factors;
A. Tenability in law/ or prospects of success;
B. Morality and fairness; and
C. The need to overcome technical issues without stifling fairness.

With a clear understanding of these three factors and a balance between them, each party arrives
at his notional ‘figure’ for settlement. Some of the disadvantages that are found on the methods
of alternative methods of dispute resolution are that, the arbitrators is not subject to overturn
on appeal may be more likely to rule according to their personal ideals. Large corporations may
exert inappropriate influence in consumer disputes, pressuring arbitrators to decide in their
favour or lose future business. The burden of paying remuneration for the arbitrators is upon
the parties to the dispute, which may sometime be felt as a burden by the disputants.

The advantages of alternative dispute resolution methods are so prominent that there is global
need and trend to adopt alternative dispute resolution methods to resolve the dispute as it is
quick as well as cheaper than that of adjudication through Courts of Law. As argued by the
father of our Nation Mahatma Gandhi, the role of law, is to unite the parties and not to riven

50
them.27 As compared to Court procedures, considerable time and money can be saved in
solving the disputes through alternative dispute resolution procedures28, which can help in
reducing the workload of regular Courts and in long run can pave way in solving the problem
of judicial arrears before the Courts of law. 29

DEMERITS OF THE LITIGATION PROCESS

As traditional approach to resolve disputes, the major draw backs may be analyzed in various
aspects. The following are the major ones:

Cost of Litigation

Law suits are expensive. There are legal fees, filling fees and cost that can be imposed against
the losing disputant. There are costs for being away from daily work to attend court hearing
and at this moment the employer increase cost. In some cases, too, the cost of trying the case
may exceed the amount of the judgment.

Time

It takes time from the commencement of the law suit until a judgment at the trail. Even after
the trial, the loosing disputant may appeal and it may take a good deal of time before final
decision is rendered. The is also time that is needed for the implementation of the judgment.

Emotional Cost

Litigation is an emotional process. It increases tension between the parties. Litigants consider,
while they are out of court, what they have said; what they should have said; what they will
say; how unfair the process; what they may come out under cross –examination; and the
consequence of loosing.

27
Mahatma Gandhi, The story of my experiments with truth 258 (1962)
28
Hiram Chodosh, Global Justice Reform: A Comparative Methodology (2005)
29
A study on the role of alternative dispute resolution methods in reducing the crisis of judicial delays and
arrears with special reference to Pondicherry, by D. Umamaheswari

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Litigation is Public

The public has the right to attend court proceeding but in few confidential cases. The press
report and comment on the proceeding might be dispersed through different Medias. On the
other hand, the issues in the dispute may be confidential ones that the disputants do not want
to share with others. Litigants may be embarrassed about the allegations made against them
and may be made public regardless of whether they are true or not.

Absence of creative solutions

Judges are empowered to decide the issue before them according to the law, even if the solution
to the issue is best fit to the other issue. Judges interpret the law relevant to the case and
determine the case based on the legal rights of the parties. They are not permitted to expand
the list of possible options to see if the particular case would be best served by a solution that
was not argued and that application of the law would not allow.

Little Opportunity for the Parties to Vent Frustration

In court litigation the opportunity for the parties to say what is in their minds and to express
their views to each other is very little. Litigants can answer questions when the rules allow
them to answer. There is no opportunity for them to talk about how the litigation has affected
them, or to vent about what has occurred. Although there is discovery, indirect and cross-
examination, there is no opportunity to ask the questions that the parties want to ask each other
and to say what the parties want to say.

Unpredictability

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In litigation, both sides argue the facts that they believe apply to the issue to support their
positions. However, at the end, the judges will decide on the issue each side usually believed
that his arguments and analysis is better than the other side‘s. However, the issue is
unpredictable and is necessary for the judge to make a decision, which is binding. As a result
a risk in going to trial and putting the decision in the hands of the judge. Besides there is no
guarantee that the judge will always find the truth.

Expertise of Decision Maker

In trail, the court selects the judge. Moreover, the judge may or may not understand the unique
attributes of the dispute. Judges may work hard to learn the law relevant to the case before them
and do their best to make informed and reasoned decision. Nevertheless, they may lack the
expertise in all area to properly address the merits of the claim being made.

Control over the Process

In litigation, the process is determined by procedural laws and by the judge, the disputants have
no control over it. They are told when to sit, when to stand, when to speak, etc. they have no
control who presents first and who follows, when the process at a day will finish.

Win/Lose

In court litigation, a judge must, determine the winner and the loser. There must be a loser in
particular litigation. Therefore, litigation ends up in determining the winner and the loser; not
in an agreement or will full disagreement.

Decisions are Imposed

Court decision is imposed on the loser against his /her expectation. People rarely like to have
decision imposed on them. Most of the judgment debtors of the court judgments perceive it as

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extremely imposed and unjust. They consider themselves as loser. And even though judicial
enforcement mechanisms can be used, mostly they attempt to avoid enforcement of this
decision. on the other hand ,ADR mechanisms provides with process and procedures that would
help disputing parties to fix the outcome before the end of the process or to be convinced with
whatever outcome there may be no need of enforcing settlement agreements in negotiation and
mediation.

Damage to Relation

Usually the end of litigation leads disputants to hate each other and their relationship is
destroyed. The disputants may face difficulty to amend their relationship to the point where
they can do business together and enter into future negotiation –they will take it not worth to
enter in to contact with their former adversary

CONCLUSION

Alternative Dispute Resolution, since its introduction in the Indian Judicial system, has come
a long way. Mediation centres all over the country have opened up for fast and effective
resolution of disputes. Delhi is one of the cities whose Mediation centre has seen a lot of success
stories in the last decade. Delhi has become one of the first cities in India to “effectively” reduce
its pendency of cases through mediation. The mediation centres in Delhi’s six district courts
have settled over 1 lakh cases in the past ten years and have contributed significantly in bringing
down the pendency in city courts. A variety of cases such as matrimonial disputes, property
rows, minor criminal cases, civil cases and accident cases, besides old ones and pre-litigation
matters, too, have been settled by the six mediation centres. Apart from Delhi, some other states
where mediation is gaining ground are Karnataka, Kerala and Tamil Nadu.

The conventional Courts use formal system of redressal applying various rules of law, as we
have erstwhile mentioned that our system is adverse. The concept of Conflict Management
through Alternative Dispute Resolution (ADR) has introduced a new mechanism of dispute
resolution that is non adversarial. A dispute is basically ‘lis inter parties’ and the justice

54
dispensation system in India has found an alternative to Adversarial litigation in the form of
ADR Mechanism.
It is win – win situation and no party wins no party looses, today the need of time is that we
resort to non conventional systems as well, we should not forget that its not something new to
us, we had for ages, like panchayats etc, it was self sufficient, every village has panchayat and
it was a powerful authority for redressing the disputes.
To conclude I would like to point out that with the advent of the Alternate Dispute Resolution,
there is new avenue for the people to settle their disputes. The settlement of disputes in Lok
Adalat quickly has acquired good popularity among the public and this has given rise to a new
force to ADR and will no doubt reduce the pendency in law Courts. There is an urgent need
for justice dispensation through ADR mechanisms. The ADR movement needs to be carried
forward with greater speed. This will considerably reduce the load on the courts apart from
providing instant justice at the door-step, without substantial cost being involved. If they are
successfully given effect then it will really achieve the goal of rendering social justice to the
parties to the dispute. We need to be boosting commitment to ADR and avoiding the trap of
litigation-in-disguise are both important steps in the effort to replace confrontation with
negotiation. The essential third step is to create a systematic process that mandates ADR as the
first step in every legal action.
Hence, we can undoubtedly say that ADR as a dispute resolution process has come a long way
and is seeing more and more success stories day by day. It is a boon to the judicial system. It
is expected that in the near future mediation and other ADR systems will play a big role in
fixing the justice delivery system and making it more efficient by solving the arrears of pending
cases which the judiciary is overburdened with at present.

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