CERTIFICATE

This is to certify that RAUNIQUA BISHT a bonafide student of

B.A.LL.B(H) (4th yr) course, Faculty of Law, Jamia Millia Islamia,
New Delhi has satisfactorily prepared the Dissertation under the
title “ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN INDIA”
under my supervision. To the best of my knowledge and belief this
work is original. I am satisfied that dissertation is worthy of
consideration for the award of degree of Law.
Place:
Date:

SIGNED BY SUPERVISOR:
Adv. MADHU SAINI
Faculty of Law
Jamia Millia Islamia

COUNTERSIGNED BY:
DR. NUZHAT PARVEEN KHAN
Dean Faculty of Law
Jamia Millia Islamia

1
DECLARATION
I hereby declare that the entire work embodied in the present work
titled ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN INDIA is
written by me and submitted to FACULTY OF LAW, JAMIA MILLIA
ISLAMIA, NEW DELHI. The present work is of original nature and
the conclusions are based on the data collected by me. To the best
of my knowledge this work has not been submitted previously, for
the award of any degree or diploma, to this or any other university.
Date:
Place:

(Signature of the candidate)

RAUNIQUA BISHT
IV YEAR
ROLLNO-15BLW0016
ACKNOWLEDGEMENT

The work owes much to the interest and guidance of Adv. Madhu
Saini, Faculty of Law, Jamia Millia Islamia, without her support
and advice, which I received in my ADR Class, developing this
framework and foundation for analyzing the entire ADR mechanism
would not have been possible. I had the opportunity of discussing
the topic from various point of views with her which helped me
immensely.

I would like to extend my warm appreciation and heartfelt thanks to

my father Mr. Devender Bisht, my mother Mrs. Deepa Bisht and my
friends Almas Fatima, Navya Sharma and Arham Tanvir for being
sunshine throughout this work and keep giving me suggestions. I
would also like to thank all my classmates for showing interest in
completion of my dissertation.

(Signature of the candidate)

RAUNIQUA BISHT
IV YEAR
ROLLNO-15BLW0016
ABBREVIATIONS
ADR: ALTERNATIVE DISPUTE RESOLTION
UNCITRAL: UNITED NATIONS COMMISSIONS ON
INTERNATIONAL TRADE LAW
UN: UNITED NATIONS
SCC: SUPREME COURT CASES
ONGC: OIL AND NATURAL GAS CORPORATION
ICC: INTERNATIONAL CHAMBER OF COMMERCE
IP: INTELLECTUAL PROPERTY
ICA: INTERNATIONAL COMMERCIAL ARBITRATION
ISDS: INTERNATIONAL STATE DISPUTE SETTLEMENT
BALCO: BHARAT ALUMINIUM COMPANY LTD.
ODR: ONLINE-DISPUTE RESOLUTION
AIR: ALL INDIA REPORT
ICDR: INTERNATIONAL COURT OF DISPUTE
RESOLUTION
TABLE OF CASES

Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.,

JT 2010 (7) SC 616

Atiabari Tea Co. Ltd v State of Assam 1989) 4 SCC 259

B.P. Moideen Sevamandir v. A.M. Kutty Hassan 2009 (2) S.C.C.

198 Bharat Aluminium v Kaiser Aluminium 2012) 9 SCC 552
Bharat Aluminum and Co. vs. Kaiser Aluminium and Co.3 (BALCO)

Bhatia International v Bulk Trading S.A 2002) 4 SCC 105

Brij Mohan Lal vs. Union of India & Other (2002-4-scale-433), May 6,
2002

Dinkarrai Lakshmiprasad vs. Yeshwantrai Hariprasad AIR 1930

Bom 98
Gajendra Singh vs. Durga Kunwar 1925)ILR 47All637
Haresh Dayaram Thakur v. State of Maharashtra and Ors. AIR 2000
SC 228
In Mysore Cements Ltd. v. Svedala Barmac Ltd AIR 2003 SC 3493
Koch Navigation Inc v Hindustan Petroleum Corp Ltd1989) 4 SCC
259 Nusserwanjee Pestonjee andOrs.v. Meer Mynoodeen Khan
Wullud Meer Sudroodeen Khan Bahadoor 1855) 6 MIA 134

Rajasthan State Road Transport Corporation v. Krishna Kant

Salem Advocate Bar Association v. Union of India (II) AIR 2005 SC
3353.
Salem Advocate Bar Association v. Union of India 2005) 6 SCC 344
Salem Advocate Bar Association, Tamil Nadu v. U.O.I, 2005) SCC 6
(344)
Salem Advocates Bar Association v. Union of India (II), AIR 2005 SC
3353

Salem Bar Association (I) AIR 2003 SC

189 Sitanna v. Viranna AIR 1934 SC 105
Sitanna v. Viranna, AIR 1934 PC 105

State of Punjab v. Phulan Rani, AIR 2004 SC 4105; See also Union of
India v. Ananto, AIR 2007 SC 1561
Sundaram Finance Ltd vs Nepc India Ltd
TDM Infrastructure Pvt. Ltd. v. UE Development India Pvt. Ltd 2008
(2) UJ SC 0721
Trimex International FZE Ltd. v. Vedanta Aluminum Ltd (2010) 3 SCC
1.
TABLE OF CONTENT

TOPIC PAGE NO.

1. INTRODUCTION 10
2. OBJECTIVES OF THE STUDY 12
3. RESEARCH METHODOLOGY 12
4. DEVELOPMENT OF ADR IN INDIA 13
5. REASONS FOR GROWTH OF ADR 16
6. GENERAL OVERVIEW OF ADR 18
7. WHAT IS ADDITIONAL DISPUTE RESOLUTION 21
8. DIFFETRENT TYPES OF ADR 25
9. ARBITRATION 29
i. CONCEPT 29
ii. HISTORICAL BACKGROUND 29
iii. ARBITRATION ACT, 1940 30
iv. ENFORCEMENT OF ARBITRATION ACT, 1996 31
v. THE ARBITRATION ACT: CONTRASTING SCENARIOS 32
vi. SECOND ROUND OF AMENDMENT 34
vii. THIRD ROUND OF AMENDMENT 35
viii. TYPES OF ARBITRATION 37
 INSTITUTIONAL AD-HOC ARBITRATION 37
 STATUTORY CONTRACTUAL ARBITRATION 38
 AD- HOC 39
ix. THE ARBITRATION PROCEDURE 41
x. ADVANTAGES 46
xi. DISADVANTAGES 48
10. CONCILIATION 50
i. CONCEPT 50
ii. DEFINITION AND MEANING 50
iii. HISTORY 52
 iv. APPLICATION AND SCOPE 53
v. ROLE OF CONCILIATOR 55
vi. APPOINTMENT OF CONCILIATOR 58
vii. PROCEDURE 59
viii. PRINCIPLES OF PROCEDURE 59
ix. PROCEDURE OF CONCILIATION 60
x. CASE LAWS RELATING TO CONCILIATION 63
xi. ADVANTAGES 66
11. MEDIATION 67
i. CONCEPT 67
ii. THE MEDIATION PROCESS 68
iii. TYPES OF MEDIATION 72
 STATUTORY 72
 COURT- ORDERED 72
 CONTRACTUAL 72
 VOLUNTARY 72
iv. QUALIFICATION OF MEDIATION 73
v. ROLE OF MEDIATOR 75
vi. FUNCTION OF MEDIATOR 75
vii. ANALYSIS 76
viii. JUDICIAL SETTLEMENT 77
ix. JUDICIAL SETTLEMENT IN INDIA 78
12. LOK ADALAT 80
i. CONCEPT 80
ii. LEVELS AND COMPOSITION OF LOK ADALAT 83
iii. PERMANENT LOK ADALAT 84
iv. ADVANTAGES 85
13. E- ARBITRATION 88
i. ARBITRATION AGREEMENT 89
ii. ARBITRAL PROCEEDINGS 90
 iii. AWARD AND ENFORCEMENT 91
iv. ADVANTAGES OF ODR 91
v. DISADVANTAGES OF ODR 93
14. WHY RESORT TO ADR 95
15. ADVANTAGES OF ADR 103
16. LEGISLATIVE RECOGNITION OF ADR 108
17. INTERNATIONAL COMMERCIAL ARBITRATION 115
i. ANALYSIS 120
18. COURT PROCEEDINGS 122
19. PERSONAL OBSERVATION 123
20. NATIONAL SEMINAR ON EMERGING TRENDS OF ADR 124
21. CONCLUSION 128
INTRODUCTION
Alternative Dispute Resolution or ADR refers to an assortment of
dispute resolution procedures that primarily serve as alternatives to
litigation and are generally conducted with the assistance of a
neutral and independent third party. Mediation, Conciliation,
Arbitration, Lok Adalats, are some of the examples of ADR
procedures. ADR is essentially based on the philosophy that a
dispute is a problem to be solved together rather that a combat to
be won and it visualizes a participative and collaborative effort of
the disputant parties, facilitated by the ADR neutral, to arrive at an
acceptable resolution of the dispute outside the litigative process.
The primary objective of every legal system is to render justice and
access to justice is one of the cherished goals, which is the sine qua
non for the existence of a democratic and civilized state. It is,
therefore, one of the prime functions of a welfare state to provide
adequate dispute-resolution mechanisms and indeed in a
democratic society people must have effective access to such
dispute resolution mechanisms as the maxim ‘ubi jus ibi remedium’
cannot be permitted to be reduced to an empty promise.
Characterized by a huge and continuously increasing population
and limited resources, ‘access to justice for all’ in India is still a
distant dream even after six decades of independence. The judicial
system in India, laden with insurmountable arrears, marred by a
poor judge to population ratio and attended with procedural
complexities, inherent delays and soaring expenses, in the recent
past, had entered into a phase where its credibility and efficacy was
getting eroded to a considerable extent. This propelled the search
for new alternatives and the result was the advent of the ADR in its
contemporary modern incarnation and undoubtedly over these
years ADR has proved to be one of the most promising remedies
which have been advocated to counter the problems faced by the
justice delivery system.
The enactment of the Legal Services Authorities Act, 1987 1 and the
Arbitration and Conciliation Act, 1996 unequivocally demonstrates
the legislative consciousness and concern towards the necessity
and importance of ADR in India. However, the turning point in the
ADR movement was the legislative mandate articulated in the
enactment of section 89 CPC 2 followed by an extraordinary,
committed and concerted judicial endeavor, which triggered an ADR
revolution in India of a stature which was unprecedented and
preeminently unmatchable.

1
The Legal Services Authorities Act, 1987.
22
Section 89 was introduced into the Code of Civil Procedure, 1908 by the Code of Civil Procedure (Amendment)
Act, 2002 with effect from 01.07.2002.
OBJECTIVES OF THE STUDY
The concise objectives of this research are to ascertain, examine
and analyze the concept and law relating to ADR, to further
ascertain, examine and analyze the framework, avenues, practices
and procedures relating to ADR and more specifically relating to
four individual ADR processes namely Mediation, Conciliation, Lok
Adalats & Permanent Lok Adalats and Arbitration and to further
ascertain and analyze their necessity, advantages and shortcomings
and further to evaluate their efficacy, accomplishments and to
further formulate plausible remedial measures for overcoming the
shortcomings and propose suggestions for their better and more
effective implementation and progress.
RESEARCH METHODOLOGY
This study has been a combination of doctrinal as well as empirical
research. Extensive doctrinal research has been done on the subject
and both primary and secondary sources, from India as well as
from foreign jurisdictions have been analyzed. The empirical
research was conducted through observation as well through
interviews (both structured and unstructured) inter alia using the
questionnaire method. Individual cases were also examined and
analyzed so as to further understand the practical aspects in a
better manner. This research work is also based on my personal
observations and the experiences and opinions of the other
members of the legal fraternity. I also attended various conferences,
refresher courses and trainings on ADR which enabled me to
ascertain the viewpoints of other members of the legal fraternity
and understand the nuances and practicalities concerning the
subject in a broader perspective.

DEVELOPMENT OF ADR IN INDIA

The contemporary ADR mechanism which is prevalent in India is
primarily based on the western model and is inspired by the
experiences of the western countries. The basic ADR methods,
however, are not new to India and have been in existence in some
form or the other in the days before the modern justice delivery
system was introduced by the colonial British rulers. 3 In fact, the
Panchayat 4 , in its original conception was, primarily, an
instrument of law and order, a means of conciliation and arbitration
within the community. 5 The awards were known as decisions of
Panchayats, commonly known as Panchats. In ancient India
Disputes were peacefully decided by the intervention of Kulas
(family assemblies), Srenis (guilds of men of similar occupation),
Parishad, etc.6
ADR is therefore by no means a recent phenomenon, though it has
been organized and systematized, expressed in clearer terms,
employed more widely in dispute resolution in recent years than
before. 7 The Arbitration Act, 1940 was an early step towards
recognizing and providing an alternative mode of dispute resolution

3
4
Law Commission of India, 222nd Report on Need for Justice-dispensation through ADR etc.,2009.
In Sitanna v. Viranna, AIR 1934 PC 105
5
Ashwanie Kumar Bansal, Arbitration and ADR 44 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005).
6
S.B. Sinha, “ADR and Access to Justice: Issues and Perspectives”, available at: www.hcmadras.tn.nic.in/jacademy
(last visited on 15th November 2018).
7
5 P.C. Rao, “Alternatives to Litigation in India”, in P.C. Rao and William Sheffield (Eds.), Alternative Dispute
Resolution 24 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997).
outside the courts, although the entire process under the Act
turned out to be court oriented.
Article 39A8 was inserted into the Constitution of India 9 and within
few years the Constitutional mandate of Article 39A manifested
itself in the enactment of the Legal Services Authorities Act, 1987
which inter alia provides was organizing Lok Adalats which are
important ADR fora.10
In 1989, the Government of India, constituted a committee,
popularly known as the Malimath Committee to inter alia propose
remedial measures to manage and ease out the judicial dockets.
The Malimath Committee submitted its comprehensive report in
August, 1990 inter alia identifying various causes of accumulation
of arrears and endorsed the recommendations made by the Law
Commission of India in its 124th and 129th reports to the effect
that the legal void resulting in the inability of the courts to cause
the litigating parties to resort to arbitration or mediation requires to
be remedied by necessary legislative action. The committee also
advocated the introduction of conciliation as a dispute resolution
process.
A joint conference of Chief Ministers of the States and Chief
Justices of High Courts was held on 4th December, 1993 at New
Delhi wherein also the inadequacies of the traditional justice

8
Article 39 A of the Constitution of India directs that “The State shall secure that the operation of the legal system
promotes justice on a basis of equal opportunity, and shall in particular, provide free legal aid, by suitable legislation
or schemes or in any other way, to ensure that opportunities for securing justice are not denied to any citizen by
reason
9
of economic or other disability.”
Vide the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).
10
8 The Legal Services Authorities Act, 1987 was amended in the year 2002 and Chapter VI-A pertaining to
Permanent Lok Adalats was introduced with the title “Pre-litigation Conciliation and Settlement”.
delivery system were discussed and acknowledged and the need for
recourse to ADR was underlined.11
During this period, all over the world, there was a movement aimed
at streamlining and standardizing the law governing arbitration and
conciliation under the auspices of the United Nations Commission
on International Trade Law (UNCITRAL). In this backdrop the
Arbitration and Conciliation Act, 1996 was enacted by the Indian
Parliament, which unequivocally demonstrates the legislative
consciousness and concern towards the necessity and importance
of ADR in India.
The turning point in the ADR movement was, however, the
legislative mandate articulated in the enactment of section 89 of the
Code of Civil Procedure, 1908 12 followed by an extraordinary,
committed and concerted judicial endeavour, which triggered an
ADR revolution in India of a stature which was unprecedented and
preeminently unmatchable. The legislature gave statutory
recognition to the importance of ADR, in respect of sub judice
matters, by empowering the courts to refer the parties to ADR for
resolution of pending lawsuits. The Supreme Court of India
reiterated the importance of ADR while meticulously analyzing and
expounding the provisions of section 89 of the Code of Civil
Procedure, 1908.13 The Supreme Court and the High Courts have
vociferously advocated the pervasive use of ADR and have

11
Legal and Judicial Reforms in Indi, available at: http://icadr.ap.nic.in /articles/article_1 (last visited on
15.11.2018).
12
The Code of Civil Procedure, 1908, s.89
13
Salem Advocates Bar Association v. Union of India (II), AIR 2005 SC 3353; Afcons Infrastructure Ltd. v.
Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.
themselves taken myriad initiatives for popularizing and promoting
ADR in India. Since then there has been no looking back and ADR
flourishes in India and continues to attain greater echelons day by
day.

REASONS FOR GROWTH OF ADR

The advent of ADR in India, in its modern setup, may be said to be
primarily attributable to the inadequacies of the justice delivery
system to deliver expeditious and effective justice and cope up with
the swelling judicial dockets. There can also be no denial of the fact
that the process of underlining the need for ADR inevitably involves
an invariable rhetoric aimed at highlighting these lacunae and
inadequacies of the judicial system. This, however, is not peculiar to
India alone as throughout the world, ADR is perceived as a method
for channelizing disputes outside the formal justice system and is
promoted as an alternative route to the wearisome path of litigation.
This is, however only one side of the coin. The pitfalls of the
traditional justice delivery system may have been one of the prime
propellants for the advent of the ADR 14 but the ADR revolution has
gained momentum on account of its own virtues. ADR offers an
effective alternative to the disputants bereft of the rigors,
complexities and flaws of formal adjudication. It offers an additional
remedy for resolution of disputes outside the conventional litigative

14
Chandana Jayalath, “Courts and ADR - For a Harmonious Co-habitation”, 3 (10) The Indian Arbitrator 5 (October
2011).
process and enables the parties to choose a remedy which is most
appropriate in the given circumstances.
GENERAL OVERVIEW OF ADR
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 none of social
life and security of the social order, without which it may be
difficult for the individuals to carry on the life together.15
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. Alternative dispute resolution
methods are 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
resolution techniques are in addition to the Courts in character.
Alternative dispute resolution techniques can be used in almost all
contentious matters, which are capable of being resolved, under
law, by agreement between the parties. Alternative dispute
resolution techniques can be employed in several categories of
disputes, especially civil, commercial, industrial and family

15
Park and Burger, Introduction to the Science of Sociology p. 735
disputes. 16 Form the study of the different alternative dispute
resolution techniques in the proceedings chapters it is found that,
alternative dispute resolution methods offers the best solution in
respect of commercial disputes where the economic growth of the
Country rests.
The goal of Alternative dispute resolution is enshrined in the Indian
Constitution’s preamble itself, which enjoins the state: “to secure to
all the citizens of India, justice-social, economic and political-
liberty, equality and fraternity”.17
The Law Commission of India has maintained that, the reason
judicial delay is not a lack of clear procedural laws, but rather the
imperfect execution, or even utter non-observance, thereof. 18 The
Law Commission of India in its 14th Report categorically stated
that, the delay results not from the procedure laid down by the
legislations but by reason of the non-observance of many of its
important provisions particularly those intended to expedite the
disposal of proceedings. Given the huge number of pending cases,
the governance and administrative control over judicial institutions
through manual processes has become extremely difficult. 19 The
Supreme Court made it clear that this stage of affair must be
addressed: ‘An independent and efficient judicial system in one of
16
Hindu Marriage Act 1955, Industrial Dispute Act, 1947, The Code of Civil Procedure, The Family Court Act,
1984
17
The Preamble of Indian Constitution
18
Law Commission of India, 77th Report, pr. 4.1
19
In all, 33,79,033 cases are pending before the High Courts. As on December 31, 2004, the total number of civil
cases are pending before the subordinate judiciary is 82,36,254 and criminal cases pending are 1,95,85,776. The
total pendency thus is 2,78,22,030. This shows that out of the total national pendency at the subordinate Courts
level, 70% is criminal cases and the remaining is civil cases. The total number of district and subordinate Courts
are12,401. These Courts are located in 2,066 towns.
the basic structures of our constitution… It is our Constitutional
obligation to ensure that the backlog of cases is declared and efforts
are made to increase the disposal of cases.” 20Wide 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. 21 The alternative disputes resolution mechanism by the
very methodology used, it can preserve and enhance personal and
business relationships that might otherwise be damages by the
adversarial process. It is also flexible because it allows the
contestants to choose procedures, which fir the nature of the
dispute and the business context in which it occurs. The term
“Alternative Disputes Resolution” takes in its fold, various modes of
settlement including, Lok Adalats, arbitration, conciliation and
Mediation. This technique of Alternative Disputes Resolution has
been used by many countries for effective disputes resolution. The
most common type of Alternative Disputes Resolution is Mediation.
In, fact mediation had been described by some as the most
Appropriate Dispute Resolution method. Mediation as a tool for
dispute resolution is not a new concept. To put it in simple terms,
mediation is an amicable settlement of disputes with the

20
Brij Mohan Lal vs. Union of India & Other (2002-4-scale-433), May 6, 2002
21
Tania Sourdin, Alternative Dispute Resolution. p. 4
involvement of a neutral third party who acts as a facilitator and is
called a ‘Mediator”. ADR is usually less formal, less expensive and
less time-consuming then regular trial. ADR can also give people
more opportunity to determine when and how their dispute will be
resolved.

WHAT IS ALTERNATIVE DISPUTE RESOLUTION

ADR is composed o f different words: Alternative, dispute and
resolution. Thus to clearly understand or define the phrase it is
paramount important to understand each words separately thereof.
And then what ‘Alternative‘ connotes to you? What about dispute?
Is a dispute synonymous with conflict? What about resolution?
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.
Now days there are arguments that ADR does not include
arbitration and the proponent of this position say that alternative
Dispute resolution encompasses various amicable dispute
resolutions other than Litigation in court and arbitration. Indeed
ADR Rules of The international Chamber of Commerce follows this
approach. The preamble of the same rule reads as:
Amicable settlement is a desirable solution for business disputes and
differences. It can occur before or during the litigation or arbitration of
a dispute and can often be facilitated through the aid of third party
(the neutral) acting in accordance with these rules.
Needless to say most literatures and laws consider alternative
dispute resolution as methods of dispute resolution which
accommodates all the traditional dispute settling mechanisms other
than court litigation. As arbitration shares many characteristics
with other dispute resolution mechanisms than court litigation ADR
in this material connotes all dispute resolutions out of litigation.
The other important word to define ADR is Dispute/ Conflict. There
is debate about whether a conflict and a dispute are synonymous.
Apart this debate psychologist, Lawyers, Diplomats, and Public
Servants all deal in their work with conflict/ dispute. Concerning
the distinction between Conflict and Dispute, different people
suggested the difference in meaning between these words. Some
people, for instance, define ‘Conflict‘as a form of competitive
behavior, like competition for scarce resource. Some see it as mere
reflection of differences and an opportunity for personal growth.
Still others only recognize conflict as armed conflict or war.
The nouns ‘Conflict‘ and ‘Dispute‘ are used interchangeably all time
and indeed, are synonymous for each other in English Language,
however. Still scholars, including Chornenki, draw slight distinction
among the two words. According to the named scholar here,
‘Conflict‘is the parent and disputes are the children and frequently,
intervention is more important at parental level. He further states
that conflict is a phenomenon or condition with three aspects. It
manifests itself through attitudes, behavior and situations. This
triangular image opens the prospect that conflict can be internal
state of mind, an external act or an environmental situation. By
contrast, Dispute is an issue – specific manifestation of conflict as
to the same person. It usually has identifiable parties and
articulated or defined /delineated points of difference between those
parties. A dispute is the subset of conflict: conflict gives rise to and
sustains dispute. This distinction, as to the above proponent, is
very important because if a dispute is addressed in only superficial
way without regard for the underlying conflict, it may recur or
replaced by other similar or related disputes.
Similarly, Folberg and Taylor also give the same definition for
dispute as of Chornenki. To them a ‘Dispute‘is an interpersonal
conflict that is communicated or manifested. A conflict may not
become a dispute if it is not communicated to someone in the form
of perceived incompatibility or contested claim as to them.
Abebe Semagne in his unpublished senior thesis also quoted the
meaning of dispute as;
“a conflict or controversy; conflict of claims or right; an assertion of
right, claim or demand on one side met by the contrary claims or
allegations on the other; the subject of litigation; the matter for which
a suit is brought and which issue in joined; and in relation to which
jurors are called and witness examined”
Apart the above difference in meaning between two words the
writers of this teaching material use the two words interchangeably
for convenience sake.
The other element of ADR is Resolution. The oxford Advanced
Learner‘s Dictionary defines ‘Resolution‘as the act of resolving or
settling a problem, dispute, etc.
Thus , even if the phrase ,i.e. ADR, defy precise definition ,as to the
above illustrations and different literatures, it is a generic term
used to describe rang of procedure designed to provide a way of
resolving a dispute as an alternative to court or administrative
Tribunal procedure. For instance, Kerley, Hames and Sukys in their
book entitled ‘Civil Litigation’ shortly define the phrase as methods
to resolve legal problems other than court judgment.
ADR is sometimes referred as Appropriate Dispute resolution as the
preferred option should be the process most appropriate to the
case, the parties and the issue involved.
DIFFERENT TYPES OF ALTERNATIVE DISPUTE RESOLUTIONS:
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 attempt 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 precede 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 LokAdalat; 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 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 negotiator 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 X,
which runs as follows: -
Order X 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 X 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.
Order X Rule 1-C. Appearance before the Court consequent to
the failure of efforts of conciliation.-Where a suit is referred
under rule1A 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: -
1. Arbitration
2. Conciliation
3. Mediation
4. Judicial Settlement &
5. Lok Adalat
 1. ARBITRATION
Concept of Arbitration
Arbitration is a legal technique for resolution of all types disputes
outside the national courts, when in the parties to a dispute refer it
to one or more neutral third party (the “arbiter” or “arbitral
tribunal”), by whose final decision (the arbitral award) they agree to
be bound. The parties to an arbitration agreement usually choose
experts who are familiar with law and the actual or potential
disputes between them. The agreement to arbitrate is usually
included in the contract and is known as an arbitration clause. By
this method, parties agree that in the event of a dispute, such
dispute will be submitted to arbiters for determination. Arbiters are
preferred because they are better placed than national Courts to
deal with the several legal problems that arise frame transnational
relations. Arbiters employ procedures that are more flexible, and
readily apply international merchants, than national laws that may
not cater for their needs.
Arbiter should, on the one hand, know the nature of the disputes,
in order to be able to arbitrate. On the other hand, they should
know the applicable national and international law, in order to
conduct arbitration and make an arbitral award that satisfies legal
principles, and is enforceable
Historical Background
Birth of India's 1st Legislative Council
The 1st Legislative Council for India was formed in 1834, followed
by the First Indian Arbitration Act on 1st July, 1899. It came into
force and said act was fundamentally based on British Arbitration
Act, 1889 but the application of the Indian Arbitration Act was
confined only to the presidency towns' i.e. Calcutta, Bombay and
Madras. A unique feature in the Act was that the names of the
arbitrators were to be mentioned in the agreement; the arbitrator at
that point can also be a sitting judge, as was in
Nusserwanjee Pestonjee andOrs.v. Meer Mynoodeen Khan
Wullud Meer Sudroodeen Khan Bahadoor 22 . In the case of
Gajendra Singh vs. Durga Kunwar 23 it was observed that the
Award as passed in arbitration is nothing but a compromise
between the parties. In Dinkarrai Lakshmiprasad vs.
Yeshwantrai Hariprasad24, the Hon'ble High Court observed that
the said Indian Arbitration Act, 1889 was very complex, bulky and
needed reforms.
Arbitration Act 1940 – Unveiling Controversies
Under the British Regime a more specific arbitration act was
enacted on 11th March 1940, which came into force on 1st July
1940. Termedas ‘The Arbitration Act, 1940'. It was applied to the
whole of India (including Pakistan, Baluchistan) 25. The same was
modified vide an ordinance, post-Independence.
The Act of 1940 was referred to many disputes but the same was
also under many criticisms. In some of the cases, it was observed
that the Arbitration Act, 1940, distinguishes between an application

22
23
(1855) 6 MIA 134
(1925)ILR 47All637
24
AIR 1930 Bom 98
25
http://www.wipo.int/edocs/lexdocs/laws/en/pk/pk066en.pdf
for setting aside an award and one for a decision that the award is a
nullity. This implies that it does not legally exist and contemplates
that an application for setting aside an award may be made under
Section 30 and an application of that award is a nullity under
Section 33. Further, it was also observed that the said act fails in
recognizing that the arbitration will fail in-case of non-existence and
invalidity of an arbitration agreement.
The Act was silent about the shortcomings inherent in individual
private contracts. The rules providing for filing awards differed from
one High Court to another. The lack of provisions prohibiting an
arbitrator or umpire from resigning at any time in the course of the
arbitration proceedings, exposed the parties to heavy losses
particularly where the arbitrators or umpire acted mala fide. It was
also seen that if an arbitrator appointed by the Court dies during
the arbitration proceedings, there was no other provision in the said
act for appointment of a new arbitrator, which was also seen as a
major flaw in the 1940 Act26. Another concern in the act was that
the Marginal Notes were not regarded as part of an Act27.
Enforcement of the Arbitration Act, 1996
The Arbitration Act of 1940 had been facing a lot of criticisms and
lacked in quite a lot of areas when it came to implementation in the
real sense. Although it brought uniformity in law across the nation,
it needed to be replaced by The Arbitration and Conciliation Act
1996, which came into force from 22nd August 1996. The basic

26
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27
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intent of the legislation was to provide for a speedy solution to
disputes between the parties and also to limit the judicial
intervention. The main intention of the Legislation was primarily to
cover the international and domestic commercial arbitration and
conciliation. It was also to make the arbitral tribunal fail, provide
them reasons to pass awards, minimize the role of courts, enforce
the arbitral award as the decree of the court.
In certain cases, there arose a dispute between the parties and
applications were filed before the enactment of the 1996 Act but the
arbitrators were appointed after the enactment. In such a given
scenario, the arbitrators and the parties also agreed that the
proceedings for the said dispute will be governed by the New Law.
The Act of 1996 consolidated and amended laws relating to
Arbitration, International Commercial Arbitration and also for
enforcement of the Foreign Arbitral Awards. Initially, in the Act of
1996, it was held that the Court can pass interim orders under
Section 9 of the Act, where Section 9 contemplates two stages,
firstly, court can pass order during arbitral proceedings and
secondly, that court can pass order before commencement of
arbitral proceedings28.
The Arbitration Act, 1940 vs.1996 – Contrasting Scenarios
The basic difference in 1940 and 1996 Act was that in the former
one a party could commence proceedings in court by moving an
application under Section 20 for appointment of an arbitrator and
simultaneously could also move an application for interim relief

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under the Schedule read with Section 41(b) of the 1940 Act. The
later one does not contain any provision similar to Section 20 of the
1940 Act but the court can pass orders even before the
commencement of the arbitration proceedings. Another difference
was that in the former act, there was no requirement to give
reasons for an award until and unless agreed by the parties to
arbitration. However, in the later Act, the award has to be given
with reasons, which minimized the Court's interpretation on its
own. There were changes with respect to the award passed by the
arbitral tribunal in the 1940 and 1996 Act.
The 1996 Act since its enactment faced many challenges and the
Courts brought out what was actually intended by the Legislation;
the Courts clarified the said Act and the intention by various
landmark judgments. In particular, the landmark case of Bharat
Aluminium Co. saw at least three phases before the Hon'ble
Supreme Court of India since the year 2001 till now i.e. 2016
carrying from two Hon'ble Judges to the Constitution Bench.
In the first case, the Hon'ble Supreme Court was of the view that
Part I is to apply also to international commercial arbitrations
which take place out of India, unless the parties by agreement,
express or implied exclude it or any of its provisions, it was also
held that the Arbitration Act of 1996 was not a well drafted act and
had some lacunas29.

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The Second Round of Amendments in 2005
The second round 30 started around 2005, when there was a
difference of opinion between the two Hon'ble Judges of the Hon'ble
Supreme Court of India and the said matter was thereafter, placed
before a three Judge Bench, which by its order directed the matters
to be placed before the Constitution Bench. The Constitution Bench
was of the view that Section 2(2) makes it clear that Part I is limited
in its application to arbitrations which take place in India and that
the Parliament by limiting the applicability of Part I to arbitrations
which take place in India has expressed a legislative declaration.
The Bench further went ahead with a distinction between the
arbitration in India and outside India. It held that Section 2(2)
merely reinforces the limits of operation of the Arbitration Act, 1996
to India and it was further held that if Part I of the Act were
applicable to arbitrations seated in foreign countries, certain words
would have to be added to Section 2(2). The section would have to
provide that "this part shall apply where the place of arbitration is
in India and to arbitrations having its place out of India."
Another interesting question which was considered was whether
Section 2(2) is in conflict with Sections 2(4) and 2(5). It was held
that the language as used by the legislature in Sections 2(4) and
2(5) of the 1996 Act means the arbitration, that take place in India.
It was further clarified that the provision does not admit an
interpretation that any of the provisions of Part I, would have any
application to arbitration which takes place outside India. The 1996

30
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Act, was basically designed to give different treatments to the
awards made in India and those made outside India. The distinction
is necessarily to be made between the terms "domestic awards" and
"foreign awards". It was also clarified that Part I and Part II are
exclusive of each other and the same is also evident from the
definitions. The issues relating to the interim reliefs in an Inter-
Parte Suit filed by the parties pending arbitration was held to be
non-maintainable, as the pendency of the arbitration proceedings
outside India would not provide any cause of action for a suit where
the main prayer is for injunction.
Third Round of Amendments in 2015
The question as to whether part I of the Arbitration and Conciliation
Act, 1996 would apply to foreign arbitrations was first examined by
the Hon'ble Supreme Court of India in a celebrated judgment by a
three Judge bench in the year 2002 titled Bhatia International
vs. Bulk Trading SA1 ("Bhatia International"). The core issue
before Hon'ble Supreme Court was the interpretation of Section 2(2)
of the un-amended Act which stated that, "This Part shall apply
where the place of arbitration is in India." The
Hon'ble Apex Court had compared the said provision
with the UNCITRAL Model Law2, which clearly stated in its
preamble that, "the provisions of this Law... apply only if the place
of arbitration is in the territory of this State." The Hon'bleSupreme
Court of India in the caseof Bharat Aluminum
and Co. vs. Kaiser Aluminium and Co.3 (BALCO) had
reconsidered the law laid down in Bhatia International and
overruled the same. In the landmark judgment pronounced by the
Constitution Bench of Hon'ble Supreme Court of India on
September 06, 2012 it was concluded that "Part I of the Arbitration
& Conciliation Act, 1996 is applicable only to the arbitrations which
take place within the territory of India".
The Hon'ble Apex Court had observed as under:
"In our opinion, the provision contained in Section 2 (2) of the
Arbitration & Conciliation Act, 1996 is not in conflict with any of
the provisions either in Part I or in Part II of the Arbitration Act,
1996. In a foreign seated international commercial arbitration, no
application for interim relief would be maintainable under Section 9
or any other provision, as applicability of Part I of the Arbitration &
Conciliation Act, 1996 is limited to all arbitrations which take place
in India".
Only those cases in which agreements stipulate that the seat of the
arbitration is in India or on whose facts a judgment cannot be
reached on the seat of the arbitration as being outside India would
continue to be governed by the said principle.
Even the world's two most prominent countries (India and Pakistan)
also agreed to refer the dispute to Arbitration and had referred the
dispute relating to the Indus Water Treaty 196031 to The Permanent
Court of Arbitration. This move clarified and supported the
importance of arbitration globally.
With the economic growth of the nation, the foreign entities started
business through their 100% subsidiaries. Eventually, an exciting
question of law came for consideration before the Hon'ble Apex

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Court32 which was whether it is permissible under the Arbitration
Act, 1996 for two Indian Companies to agree to refer their
commercial disputes to a place of arbitration outside India with
governing law being English law. It was observed that as one of the
entities indirectly involved in the matter is a foreign entity,
therefore, there is some foreign element and secondly, as Section
28(1) (b) of the 1996 Act expressly recognizes such autonomy to
choose the governing law, therefore the said clause is valid.
The 2015 Act can be looked as a boon for the party who succeeded
before the arbitral tribunal, as in the earlier act of 1996 if the award
passed by the arbitral tribunal was challenged before the court,
even on issuance of notice by the court would tantamount as a stay
but by virtue of the amendment in the 2015 Act, a specific stay has
to be granted.
It is to be noted that not all matters/disputes can be referred to
arbitration even if the agreement/contracts etc. contain an
arbitration clause, its being noted that the disputes relating to
Trust, trustees and beneficiaries arising out of the Trust Deed and
the Trust Act are not capable of being decided by the arbitrator 33
Types of Arbitration
1.) Institutional or Ad-hoc Arbitration
This refers to a type of arbitration where the procedures or all
aspects related to the arbitration like seat of arbitration, number of
arbitrators, governing law, language of arbitration, etc. are

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determined by the parties themselves. Ad-hoc arbitration unlike the
institutional arbitration is not administered by institutions like
FICCI, ICC, etc, but are agreed to and arranged by parties to the
dispute themselves without resorting to any help from arbitral
institutions. In this type of arbitration, if the parties to the dispute
are unable to choose arbitrator(s) by ‘consensus ad idem’ or mutual
consent, then the appointment of the arbitrator can be made by the
Chief Justice of a High Court (if it involves domestic arbitration) and
by the Hon’ble Apex Court (if it is an international arbitration). And,
the charges/fees to be paid to the arbitrator are decided by the
parties and the arbitrator. Here, the parties don’t have to resign
themselves to or abide by the rules of the arbitral institutions, but
they can stipulate their own arbitral clauses and be bound by them.
However, the parties to the dispute are not barred from adopting
the rules of any particular arbitral institution even without
submitting or referring their disputes to the said arbitral
institution.34
2.) Statutory or Contractual Arbitration
In institutional arbitration, an arbitral institute is appointed to
administer the arbitration. Parties to the dispute refer their
disputes to the arbitral institution and the parties are governed by
the rules and procedures of the arbitral institute. Not all institutes
provide arbitral services, they have a set of rules and procedures
which they offer to the parties who submit their disputes to them.
The arbitral institutes administer the arbitral process. Individual

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arbitral institutes have their own set of procedures and they provide
a framework to the parties for the arbitration process.
Some common institutions are the ICC, FICCI, DIFC, etc. most
often than not, the arbitration clause contained in an arbitration
agreement assign or designate a particular arbitral institute to
administer the process of arbitration.
Often the contract between two parties will contain an arbitration
clause which will designate a particular institution as the
arbitration administrator.
3.) AD-HOC
An ad hoc arbitration is one which is not administered by an
institution such as the ICC, LCIA, DIAC or DIFC. The parties will
therefore have to determine all aspects of the arbitration themselves
- for example, the number of arbitrators, appointing those
arbitrators, the applicable law and the procedure for conducting the
arbitration.
Provided the parties approach the arbitration with cooperation, ad
hoc proceedings have the potential to be more flexible, faster and
cheaper than institutional proceedings. The absence of
administrative fees alone provides an excellent incentive to use the
ad hoc procedure.
The arbitration agreement, whether reached before or after a
dispute has arisen, may simply state that 'disputes between parties
will be arbitrated'. It is infinitely preferable at least to specify the
place or 'seat' of the arbitration as well since this will have a
significant impact on several vital issues such as the procedural
laws governing the arbitration and the enforceability of the award. If
the parties cannot agree on the detail all unresolved problems and
questions relating to the implementation of the arbitration - for
example, how the tribunal will be appointed or how the proceedings
will be conducted – will be determined by the 'seat' or location of the
arbitration. However, this approach will only work if the seat of the
arbitration has an established arbitration law.
Ad hoc proceedings need not be kept entirely separate from
institutional arbitration. Often, appointing a qualified arbitrator can
lead to the parties agreeing to designate an institutional provider as
the appointing authority. Additionally, the parties may decide to
engage an institutional provider to administer the arbitration at any
time.
THE ARBITRATION PROCEDURE
Arbitration proceedings are not in complex in nature unlike in
regular courts, it’s pretty simple and easy. A party commences an
arbitration proceeding by issuing a notice in written to the other
party of its intention to refer the matter to arbitration. The
respondent replies to the arbitration by filing answer against the
arbitration claim within stipulated time period specifying relevant
facts and available defenses against the claim. Unless otherwise
agreed by the parties, Arbitration proceedings are deemed to be
commenced on the date on which the respondent receives such
notice from the claimant. After the selection of Arbitrators, parties
meet in persons for the conduct of the hearing in front of
arbitrators. Lastly, after the examination of witnesses and
evidences, the arbitrator, in concluding stage, gives ‘award’ which is
binding in nature. Conduct of Arbitral proceedings are provided in
Chapter V of Arbitration and Conciliation Act, 1996.
Limitation on commencement of arbitral proceedings
The Limitation Act, 1963 applies to all proceedings under
Arbitration and Conciliation Act, 1996 as it applies to proceedings
in Indian courts, except to the extent clearly keep out by the
Arbitration and Conciliation Act. Any proceeding under arbitration
commenced after the limitation period (three years from the date on
which the cause of action arose) will be time barred.
Equal treatment of Parties
Both the parties should be treated equally and equal opportunities
should be given to them to be heard and to present their case.
Rules of procedure in arbitration
There are no such rules on the procedure for conducting the
arbitration proceedings. The parties are free to agree on the
procedure to be followed by the arbitral tribunals in conducting its
proceedings. If no such procedure agreed by the parties, the
tribunal is authorized to conduct the proceedings in such a manner
it considers appropriate.
The arbitral tribunal is expressly not bound to apply any provisions
of the Civil Procedure Code 1908 and the Evidence Act, 1872. If
under arbitration agreement it is mentioned, the arbitration is to be
administered by arbitral institute, the rules of that institution
become part of the arbitration clause by implication. The rules of
arbitral tribunal include power to determine the admissibility,
relevance, materiality and weight of any evidence.
Place of arbitration
The parties are free to agree on the place of arbitration as per their
convenience. In case failed to agree upon place of arbitration, the
arbitral tribunal shall determine the place of arbitration considering
the circumstances of case including convenience of the parties.
Language of proceedings
Parties are free to agree upon the language to be used in the
arbitral proceedings. If the parties fail to agree on any language
then arbitral tribunal decides which language to be used in the
arbitral proceedings.
Statement of claim and defense
The claimant have to state the facts supporting their claim, raise
the points at issues and relief or remedy sought to the respondent
within the time period stipulated by the parties or determined by
the arbitral tribunal and the respondent replies filing an answer
against the arbitration claim of claimant that specifies the relevant
facts and available defences to the statement of claim.
A party can amend or supplement his claim and defence
throughout arbitral proceedings, unless the tribunal considers it
unsuitable to allow the amendment or supplement in respect of the
delay in making it.
Hearings
The parties shall be given sufficient prior notice before any hearing
and of any meeting of arbitral tribunal for the inspection and
verification of documents, goods and property. The arbitral tribunal
shall decide whether to hold oral hearings for the presentation of
evidence or for oral argument, or whether the proceedings shall be
conducted on the basis of documents and other materials:
Arbitration and Conciliation (Amendment) Act, 2015 requires the
arbitral tribunal at least, hold oral hearings for the presentation of
evidences or for oral arguments on a day-to-day basis, and not
grant adjournments unless reasonable cause is given.
All documents, statements and required information supplied, and
application made to the arbitral tribunal by the one party shall be
communicated to the other party and any evidentiary document or
expert report on which an arbitral tribunal can rely in making it
decision shall also be communicated to the parties.
Default of a party
If claimant without providing sufficient cause fails to communicate
his statement of claim to the tribunal, the arbitral tribunal can
terminate the proceedings with immediate effects. But it is not the
same in case of respondent if he fails to communicate his statement
of defense, the arbitral can continue the proceedings without
treating that failure in itself as an admission of alienations by the
claimant.
Evidences
The parties are free to agree on the rules of gathering and
submitting evidences. If they are not agreeing on these matters, the
tribunal has the discretionary power to determine how evidence
may be gathered and submitted to it. The arbitral tribunal can take
both documentary and oral evidence on record. While considering
evidence tribunal required to observe the fundamental principle of
natural justice.

Court Assistance
Local courts can assist tribunals in arbitration proceedings. This
includes the power of providing interim order and appointment of
arbitrator if the parties are unable to agree on the appointment of
arbitrator.
If a party makes any default, refuses to give evidence or guilty of
contempt of arbitral proceedings shall be subject to penalties or
punishment by the order of the court on the representation of
arbitral tribunal.
Third party
In India, the question is yet to be answered whether the non-
signatory party bound by arbitration agreement or not. Arbitral
tribunals and courts take different methods to bound non signatory
parties to an arbitration agreement like “group of companies”
doctrine where a clear intent to bind such non signatory parties.
However, in Indowind Energy Ltd V. Wescare (India) Ltd (2010)
the Supreme Court of India held a “third party not a signatory to an
arbitration agreement would not be bound by such agreement, even
if some sort of nexus exists between third party and transactions of
questions.”
ADVANTAGES
There are numerous advantages to arbitration as a way to resolve a
case.35
1. The parties to the dispute usually agree on the arbitrator,
so the arbitrator will be someone that both sides have confidence
will be impartial and fair.
2. The dispute will normally be resolved much sooner, as a date
for the arbitration can usually be obtained a lot faster than a court
date. In Virginia, a trial date is normally about twelve months from
the date the lawsuit is filed.
3. Arbitration is usually a lot less expensive. Partly that is
because the fee paid the arbitrator is a lot less than the expense of
paying expert witnesses to come and testify at trial. (Most of the
time the parties to arbitration split the arbitrator’s fee equally).
There are also lower costs in preparing for the arbitration than
there are in for preparing for a trial. Partly this is due to the fact
that the rules of evidence are often more relaxed than in a trial, so
that documents can be submitted in lieu of having a witness come
to trial and testify. For instance, if a claimant has several doctors
who are out-of-state, the cost of bringing them to trial or going out-
of-state to take their depositions may be prohibitive for trial, but in
arbitration you can usually use just their records and reports.
4. Unlike a trial, arbitration is essentially a private procedure,
so that if the parties desire privacy then the dispute and the
resolution can be kept confidential.

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5. If arbitration is binding, there are very limited
opportunities for either side to appeal, so the arbitration will be
the end of the dispute. That gives finality to the arbitration award
that is not often present with a trial decision.
DISADVANTAGE36
• arbitration agreements are sometimes contained in ancillary
agreements, or in small print in other agreements, and consumers
and employees sometimes do not know in advance that they have
agreed to mandatory binding pre-dispute arbitration by purchasing
a product or taking a job
• If the arbitration is mandatory and binding, the parties waive their
rights to access the courts and have a judge decide the case
• in most arbitration agreements, the parties are required to pay for
the arbitrators, which adds an additional layer of legal cost that can
be prohibitive, especially in small consumer disputes
• in some arbitration agreements and systems, the recovery of legal
costs is unavailable, making it difficult or impossible for consumers
or employees to get legal representation; however most arbitration
codes and agreements provide for the same relief that could be
granted in court
• If the arbitrator or the arbitration forum depends on the bigger
party for repeat business, there may be an inherent incentive to
rule against the consumer or employee
• 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 panel, juggling their schedules for hearing dates
in long cases can lead to delays

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• in some legal systems, arbitral awards have fewer enforcement
remedies than judgments; although in the United States,
arbitration awards are enforced in the same manner as court
judgments and have the same effect
• Arbitrators are generally unable to enforce interlocutory measures
against a party, making it easier for a party to take steps to avoid
enforcement of an award, such as the relocation of assets offshore
• Rule of applicable law is not necessarily binding on the
arbitrators, although they cannot disregard the law.
• Disclosure of documents may be more limited in arbitration
• Unlike court judgments, arbitration awards themselves are not
directly enforceable; a party seeking to enforce an arbitration award
must resort to judicial remedies
• although grounds for attacking an arbitration award in court are
limited, efforts to enforce the award can be fiercely fought, thus
necessitating legal costs that negate the perceived economic
incentive to arbitrate the dispute in the first place.
 1. CONCILIATION
THE CONCEPT OF CONCILIATION
The Arbitration and Conciliation Act, 1996 (“the Act”) is based on
the UNCITRAL Model Law on international commercial arbitration
and conciliation. While the Act was not intended to displace the
judicial system, the new law ushered in an era of private arbitration
and conciliation. It was also the first time that a comprehensive
legislation was made on the subject of conciliation in India.49
Conciliation is one of the non binding procedures where an
impartial third party, known as the conciliator, assist the parties to
a dispute in reaching a mutually agreed settlement of the dispute.
As per the Halsbury Laws of England, conciliation is a process of
persuading parties to each an agreement. Because of its non
judicial character, conciliation is considered to be fundamentally
different from that of litigation. Generally Judges and Arbitrators
decide the case in the form of a judgment or an award which is
binding on the parties while in the procedure of the conciliation ,the
conciliator who is often a government official gives its report in the
form of recommendations which is made public. 37

Definition and Meaning of conciliation-

The simplest meaning of conciliation is the settlement of the
disputes outside the court .It is a process by which the discussion
between the parties are kept going through the participation of a
conciliator. Conciliation is one of the non-binding procedures where

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&Conciliation-Act-1996.html
an impartial third party, known as the conciliator, assists the
parties to a dispute in reaching a mutually agreed settlement of the
dispute. As per the Halsbury Laws of England, conciliation is a
process of persuading parties to reach an agreement. Because of its
non-judicial character, conciliation is considered to be
fundamentally different from that of litigation. Generally Judges
and Arbitrators decide the case in the form of a judgment or an
award which is binding on the parties while in the procedure of the
conciliation, the conciliator who is often a government official gives
its report in the form of recommendations which is made public.
The term conciliation is not defined in the Act.
However, simply put conciliation is a confidential, voluntary and
private dispute resolution process in which a neutral person helps
the parties to reach a negotiated settlement. This method provides
the disputing parties with an opportunity to explore options aided
by an objective third party to exhaustively determine if a settlement
is possible. Like arbitration, the Act covers both domestic and
international disputes in the context of conciliation. International
conciliation is confined only to disputes of “commercial” nature. As
per the Act, the definition of international commercial conciliation is
exactly similar to that of international commercial arbitration. 38

Accordingly, the Act defines international commercial conciliation

as conciliation proceedings relating to a dispute between two or

38
Explanation to section 1(2) of the Act states that “the expression “international commercial conciliation” shall
have the same meaning as the expression “international commercial arbitration” in clause (f) of sub-section (1) of
section 2”.
more parties where at least one of them is a foreign party. 39 The
foreign party may be (1) an individual who is foreign national, (2) a
company incorporated outside India, or (3) the government of a
foreign country.
HISTORY
History and Evolution-
The history and evolution of ADR is visible from 12th century in
China , England and America. And in the Indian perspective it has
been seen that the practice of amicable resolution of the disputes
can be caught from the historic times , when in the villages
disputes were resolved between members of a particular relations or
occupations or between members of the same family was in practice
in the ancient times. In the villages still the panchayat decides
approximately all the disputes between the people as in earlier
times the disputes were resolved by the elders. The concept of
Conciliation was introduced in the statute of Industrial Disputes
Act, 1947. The Conciliation is generally conducted by an officer
appointed by Government under Industrial Disputes Act, 1947.
Industrial Disputes Act, 1947 provides provisions for the parties to
settle disputes through Negotiation, Mediation and Conciliation, for
example Section 12, Section 18, etc. Alternate Dispute Resolution
plays a major role in the family disputes settlement. Section 5 of the
Family Court Act, 1984 provides provisions for the association of
social welfare organizations to hold Family Courts under control of
government. Section 6 of the Act provide for appointment of

39
Section 2(f) read with the explanation to section 1(2) of the Act
permanent counselors to enforce settlement decisions in the family
matters. Further Section 9 of the Act imposes an obligation on the
court to make effort for the settlement before taking evidence in the
case. In addition to all provisions referred above, Indian Contract
Act, 1872 most importantly gives a mention about Arbitration
Agreement as an exception to Section 28 that renders an agreement
void if it restrains a legal proceeding. Alternate Dispute Resolution
whether sorted for or not can be easily inferred from presence or
absence of the ‘Arbitration clause.
Application and Scope-
The UNCITRAL Rules on Conciliation, 1980 recognized “the value of
conciliation as a method of amicably settling disputes arising in the
context of international commercial relations” and that adoption of
uniform conciliation rules by “countries with different legal, social
and economic systems would significantly contribute to the
development of harmonious international economic relations.” 40

Accordingly, these rules were closely followed by the Indian

legislators to formulate conciliation rules under Part III of the Act.
Section 61 of the Arbitration and Conciliation Act of 1996 provides
for the Application and Scope of Conciliation. Section 61 points out
that the process of conciliation extends, in the first place, to
disputes, whether contractual or not. But the disputes must arise
out of the legal relationship. It means that the dispute must be
such as to give one party the right to sue and to the other party the
liability to be sued. The process of conciliation extends, in the
40
Resolution 35/52 (Conciliation Rules of the UN Commission on International Trade Law) adopted by the General
Assembly on December 4, 1980
second place, to all proceedings relating to it. But Part III of the Act
does not apply to such disputes as cannot be submitted to
conciliation by the virtue of any law for the time being in force.
Number and qualification of conciliators-Section 63 fixes the
number of conciliators. There shall be one conciliator. But the
parties may by their agreement provide for two or three conciliators.
Where the number of conciliator is more than one, they should as
general rule act jointly.
Section 61 of the Arbitration and Conciliation Act of 1996 provides
for the Application and Scope of Conciliation. Section 61 points out
that the process of conciliation extends, in the first place, to
disputes, whether contractual or not. But the disputes must arise
out of the legal relationship. It means that the dispute must be
such as to give one party the right to sue and to the other party the
liability to be sued. The process of conciliation extends, in the
second place, to all proceedings relating to it. But Part III of the Act
does not apply to such disputes as cannot be submitted to
conciliation by the virtue of any law for the time being in force.
Number and qualification of conciliators-Section 63 fixes the
number of conciliators. There shall be one conciliator. But the
parties may by their agreement provide for two or three conciliators.
Where the number of conciliator is more than one, they should as
general rule act jointly.
ROLE OF CONCILIATOR
Per section 80 of the Act, 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 for both of them, thereby
fulfilling the mandate of section 67 of the Act under which the main
function of the conciliator is to assist the parties to reach an
amicable settlement.41 For achieving this, a conciliator is obliged to
(1) act in an independent and impartial manner, and (2) abide by
the principles of objectivity, fairness and justice. 42 Section 67(4)
specifically enables the conciliator to “make proposals for
settlement of the dispute … at any stage of the conciliation
proceedings.” The above provisions make it clear that the
conciliator, apart from assisting the parties to reach a settlement, is
also permitted and empowered to make proposals for a settlement
and formulate/reformulate the terms of a possible settlement.
Conciliation vis-à-vis Arbitration
While arbitration is considered private when compared with the
court system, conciliation is even more private than arbitration. As
litigation and arbitration are both means of adjudication, the judge
and the arbitrator render their verdicts and impose them on the
parties. While the parties to an arbitration proceeding are given
considerable freedom in terms of deciding the venue, date,
arbitrator, etc., they have no control over the decision making

41
Under section 73 of the Act, a conciliator can formulate terms of a possible settlement and can also reformulate the
terms
42
of settlement after receiving the observations of the parties.
Sub-sections 1 and 2 of section 67 of the Act
process except in the case of award on agreed terms. 43 In contrast,
parties to a conciliation proceeding have the privilege to negotiate
and arrive at an amicable settlement with the assistance of a
conciliator in a less formal setting. Secondly, while section 7(2)
requires that an arbitration agreement be in writing, there is no
such express provision regarding conciliation in the Act. However,
this does not hold much relevance as the process of conciliation
commences with the written offer and acceptance to conciliate by
the parties.44 Conversely, in arbitration, even in the absence of a
prior written agreement, if the parties appoint the arbitrator and
proceed with arbitration, the requirement of section 7(2) is taken as
complied with.
Thirdly, section 30 of the Act permits the parties to engage in
conciliation process even during the course of arbitral proceedings.
They may do so suo motu or under the directions of the arbitrator.
In case the conciliation concludes successfully, the arbitrator is to
record the settlement in the form of an arbitral award. Such an
award, which is prepared on agreed terms, is given similar status to
that of any other award.45 However, section 77 of the Act bars any
arbitral or court proceedings in respect of a dispute which is the
subject matter of conciliation proceedings. 46 This essentially means
that during arbitral or court proceedings, the parties are

43
Section 30 of the Act
44
Section 62 of the Act stipulates that a conciliation proceeding shall commence only when a written invitation
issued by one party to commence conciliation is accepted by the other party
45
Section 30 of the Act
46
Section 77 of the Act states that “the parties shall not initiate, during the conciliation proceedings, any arbitral or
judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings.” The only
exception to this if such proceedings are necessary to preserve the rights of the party, such as restraining the
opposite party through an injunction from doing an act
encouraged to initiate conciliation proceedings, but once
conciliation proceedings commence, they are barred from initiating
arbitration or approaching the court. Clearly, the purpose of
sections 30 and 77 of the Act is to encourage parties to resort to
non-formal conciliation proceedings in preference to the formal
court and arbitral proceedings.
Appointment of conciliators-
Section 6447 deals with the appointment of the conciliators. When
the invitation to the conciliation is accepted by the other party, the
parties have to agree on the composition of the conciliation
tribunal. In the absence of any agreement to the contrary, there
shall be only one conciliator. The conciliation proceeding may be
conducted by a sole conciliator to be appointed with the consent of
both the parties, failing to which the same may be conducted by
two conciliators (maximum limit is three), then each party appoints
own conciliator ,and the third conciliator is appointed unanimously
by both the parties. The third conciliator so appointed shall be the
presiding conciliator. The parties to the arbitration agreement
instead of appointing the conciliator themselves may enlist the
assistance of an institution or person of their choice for
appointment of conciliators. But the institution or the person
should keep in view during appointment that, the conciliator is
independent and impartial.48

47
Appointment of conciliators. (1) subject to sub- section (2),- (a) in conciliation proceedings with one conciliator,
the parties may agree on the name of a sole conciliator; (b) in conciliation proceedings with two conciliators, each
party may appoint one conciliator; (c) in conciliation proceedings with three conciliators, each party may appoint
one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding
conciliator. (2) Parties may enlist the assistance of a suitable institution or person in connection with the
appointment of conciliators, and in particular,- (a) a party may respect such an institution or person to recommend
the names of suitable individuals to act as conciliator, or (b) the parties may agree that the appointment of one or
mom conciliators be made directly by such an institution or person: Provided that in recommending or appointing
individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to
secure the appointment of an independent and impartial conciliator and, with respect to a sole or third conciliator,
shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the
parties.
48
M. K. Sharma, “Conciliation and Mediation”, available at: www.delhimediation centre.gov.in (last visited on
05.10.2018).
PROCEDURE
It is the short study of the principles and procedures of conciliation
under Arbitration and conciliation act 1996.
A critical study of Principles and Procedure of conciliation
under Arbitration and Conciliation Act 1996.
Conciliation is one of the non-binding procedures where an
impartial third party, known as the conciliator, assists the parties
to a dispute in reaching a mutually agreed settlement of the
dispute. As per the Halsbury Laws of England, conciliation is a
process of persuading parties to reach an agreement. Because of its
non-judicial character, conciliation is considered to be
fundamentally different from that of litigation. Generally Judges
and Arbitrators decide the case in the form of a judgment or an
award which is binding on the parties while in the procedure of the
conciliation, the conciliator who is often a government official gives
its report in the form of recommendations which is made public.
Principles of Procedure
1) Independence and impartiality [Section 67(1)]-
The conciliator should be independent and impartial. He should
assist the parties in an independent and impartial manner while he
is attempting to reach an amicable settlement of their dispute.
2) Fairness and justice [Section 67(2)]-
The conciliator should be guided by the principles of fairness and
justice. He should take into consideration, among other things , 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.
3) Confidentiality [Section 70]-
The conciliator and the parties are duly bound to keep confidential
all matters relating to conciliation proceedings. Similarly when a
party gives a information to the conciliator on the condition that it
be kept confidential, the conciliator should not disclose that
information to the other party.
4) Disclosure of the information [Section 70]-
When the conciliator receives a information about any fact relating
to the dispute from a party, he should disclose the substance of
that information to the other party. The purpose of this provision is
to enable the other party to present an explanation which he might
consider appropriate.
5) Co-operation of the parties with Conciliator [S. 71]-
The parties should in good faith cooperate with the conciliator. They
should submit the written materials, provide evidence and attend
meetings when the conciliator requests them for this purpose.
Procedure of conciliation
1) Commencement of the conciliation proceedings [Section 62] 49-
The conciliation proceeding are initiated by one party sending
a written invitation to the other party to conciliate. The

49
Commencement of conciliation proceedings (1) The party initiating conciliation shall send to the other party a
written invitation to conciliate under this Part, briefly identifying the subject of the dispute. (2) Conciliation
proceedings shall commence when the other party accepts in writing the invitation to conciliate. (3) If the other
party rejects the invitation, there will be no conciliation proceedings. (4) If the party initiating conciliation does not
receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time
as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects,
he shall inform in writing the other party accordingly
 invitation should identify the subject of the dispute.
Conciliation proceedings are commenced when the other party
accepts the invitation to conciliate in writing. If the other party
rejects the invitation, there will be no conciliation proceedings.
If the party inviting conciliation does not receive a reply within
thirty days of the date he sends the invitation or within such
period of time as is specified in the invitation, he may elect to
treat this as rejection of the invitation to conciliate. If he so
elects he should inform the other party in writing accordingly.
2) Submission of Statement to Conciliator [Section 65] 50 –
The conciliator may request each party to submit to him a
brief written statement. The statement should describe the
general nature of the dispute and the points at issue. Each
party should send a copy of such statement to the other party.
The conciliator may require each party to submit to hima
further written statement of his position and the facts and
grounds in its support. It may be supplemented by appropriate
documents and evidence. The party should send the copy of
such statements, documents and evidence to the other party.
At any stage of the conciliation proceedings, the conciliator

50
Submission of statements to conciliator. (1) The conciliator, upon his appointment, may request each party to
submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each
party shall send a copy of such statement to the other party. (2) The conciliator may request each party to submit to
him a further written statement of his position mid the facts and grounds in support thereof, supplemented by any
documents and other evidence that such puny deems appropriate. The party shall send a copy of such statement,
documents and other evidence to the other party. (3) At any stage of the conciliation proceedings, the conciliator
may request a party to submit to him such additional information as he deems appropriate. Explanation.- In this
section and all the following sections of this Part, the term conciliator" applies to a sole conciliator, two or, three
conciliators, as the case may be.
 may request a party to submit to him any additional
information which he may deem appropriate.

3) Conduct of Conciliation Proceedings[Section 69(1),67(3)]-

The conciliator may invite the parties to meet him. He may
communicate with the parties orally or in writing. He may
meet or communicate with the parties together or separately.
In the conduct of the conciliation proceedings, the conciliator
has some freedom. He may conduct them in such manner as
he may consider appropriate. But he should take in account
the circumstances of the case, the express wishes of the
parties, a party’s request to be heard orally and the need of
speedy settlement of the dispute.

4) Administrative assistance [S. 68]-

Section 68 facilitates administrative assistance for the conduct
of conciliation proceedings. Accordingly, the parties and the
conciliator may seek administrative assistance by a suitable
institution or the person with the consent of the parties.
Case laws relating to Conciliation-
1. Haresh Dayaram Thakur v. State of Maharashtra and
Ors.51While dealing with the provisions of Sections 73 and 74
of the Arbitration and Conciliation Act of 1996 in paragraph
19 of the judgment as expressed thus the court held that- "19.
From the statutory provisions noted above the position is
manifest that a conciliator is a person who is to assist the
parties to settle the disputes between them amicably. For this
purpose the conciliator is vested with wide powers to decide
the procedure to be followed by him untrammelled by the
procedural law like the Code of Civil Procedure or the Indian
Evidence Act, 1872. When the parties are able to resolve the
dispute between them by mutual agreement and it appears to
the conciliator that their exists an element of settlement which
may be acceptable to the parties he is to proceed in
accordance with the procedure laid down in Section 73,
formulate the terms of a settlement and make it over to the
parties for their observations; and the ultimate step to be
taken by a conciliator is to draw up a settlement in the light of
the observations made by the parties to the terms formulated
by him. The settlement takes shape only when the parties
draw up the settlement agreement or request the conciliator to
prepare the same and affix their signatures to it. Under Sub-
section (3) of Section 73 the settlement agreement signed by
the parties is final and binding on the parties and persons

51 AIR 2000 SC

63
 claiming under them. It follows therefore that a successful
conciliation proceedings comes to end only when the
settlement agreement signed by the parties comes into
existence. It is such an agreement which has the status and
effect of legal sanctity of an arbitral award under Section 74”.

2. In Mysore Cements Ltd. v. Svedala Barmac Ltd 52it was said

that Section 73 of the Act speaks of Settlement Agreement.
Sub-section (1) says that when it appears to the Conciliator
that there exist elements of 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
observation. After receiving the observations of the parties, the
Conciliator may reformulate the terms of a possible settlement
in the light of such observations. In the present case, we do
not find there any such formulation and reformulation by the
Conciliator, under Sub- section (2), if the parties reach a
settlement agreement of the dispute on the possible terms of
settlement formulated, they may draw up and sign a written
settlement agreement. As per Sub-section (3) when the parties
sign the Settlement Agreement, it shall be final and binding on
the parties and persons claiming under them respectively.
Under Sub-section (4), the Conciliator shall authenticate the
Settlement Agreement and furnish a copy thereof to each of
the parties.

52AIR 2003 SC

64
6
5
Advantages of Conciliation
There are a number of advantages to the conciliation process. These
include:53
• The presence of an experienced neutral (also an attorney) who will
actively suggest possible solutions to the problems at hand and
evaluate the risks and costs associated with continuing the dispute.
• The ability to select the conciliator, allowing parties to choose
their conciliator based on such criteria as expertise, availability,
and knowledge of the subject area.
• Time and cost-efficiency due to the flexible nature of proceedings.
• Total confidentiality agreed upon by both parties as well as the
conciliator, which means both parties can be assured of discretion
no matter what the outcome of the process.

53
https://www.nextphaselegal.com/blog/conciliation-what-is-the-advantage/
 1. MEDIATION
THE CONCEPT OF MEDIATION
The United Nations (UN) Guidance for Effective Mediation describes
mediation as a voluntary process “whereby a third party assists two
or more parties, with their consent, to prevent, manage or resolve a
conflict by helping them to develop mutually acceptable
agreements”. 54 The term peace mediation comprises the entire
structured process of supporting negotiations, from initial contact
between mediators and conflict parties to ceasefire negotiations and
the implementation of peace agreements. Mediation is thus an
instrument that can be used throughout the whole conflict cycle. 55
Mediation in its contemporary incarnation is an ADR process where
a specially trained mediator facilitates the parties in arriving at an
amicable settlement through a structured process involving
different stages viz. introduction, joint session, caucus and
agreement.56
Mediation is in fact a successful management technique for
resolving complex disputes. The object of the process is to reduce
acrimony and posturing, enable the parties to realize and
understand their priorities and interests and steer them towards a
self-determined and mutually acceptable resolution. The mediator
induces and facilitates the parties to enter into a positive dialogue,

54
In fact party-acceptability of outcomes is, and should be, the defining feature of justice in mediation and in this
context the process of mediation serves as an instrument for securing justice. See Joseph B. Stulberg, “Mediation
and Justice: What standards Govern?” 6 Cardozo J. Conflict Resol. 213 (2005); Mediation presents the opportunity
to express differences and improve relationships and mutual understanding, whether or not an agreement is reached.
See
55
Anil Xavier, “Mediation is here to Stay”, 2 (3) The Indian Arbitrator 2 (March 2010).
See http://www.delhimediationcentre.gov.in (last visited on 20.08.2018
56
https://core.ac.uk/download/pdf/43165628.pdf
attempts to break the impasse and enables them to visualize their
own solutions in a pragmatic manner. The idea is to assist people to
communicate in a rational and problem solving manner, clarify
issues and to help negotiations by bringing realism and objectivity
to a dispute.57 Mediation is therefore in a sense empowering the
parties to think for themselves and choosing what is right for them
so that they own the responsibility ofarriving at their own
decisions.58 In short it is a professionally and scientifically managed
negotiation process.59
THE MEDIATION PROCESS
The idea of specifying a pre-fabricated structured process is
avoidance of hit and trial methods and unnecessary
experimentation so as to introduce consistency and efficacy in the
process and reap benefits of the best practices, experiences and
research of professionals and intellectuals. The fact of the matter is
that the structure of mediation process creates an efficient
convention for mediators and parties to follow in multiple iterations;
however, adjustments may be desirable, indeed even necessary in
many cases60 and such adjustments are quite permissible.
The functional stages of the mediation process are:

57
S.B. Sinha, “Mediation – Need of the Hour” available at: http://bombayhighcourt.nic.in/
mediation/index_articles.htm (last visited on 11.04.2012).
58
Rajiv Chelani, “Promoting Mediation as a Conflict Resolution Tool”, 1(4) The Indian Arbitrator 9 (May 2009)
59
R.V. Raveendran, “Mediation – An Introduction”, available at: http://bombayhighcourt.nic.in
/mediation/index_articles.htm (last visited on 11.04.2012); It has been said that MEDIATION stands for M:
Managing and Maneuvering Dispute resolution; E: Empathetic listening; D: Dedicated efforts; I: Ingenuity; A:
Attitude, the right one; T: Tactful handling; I : Intense involvement ; O: Optimistic and open approach; N :
Negotiated settlement. See Rashmi Desai, “Mediation as a form of ADR”, XLI (3) ICA Arbitration Quarterly 1
(October – December 2006).
60
Hiram E. Chodosh, “Mediating Mediation in India”, available at: http://lawcommissionofindia. nic.in (last visited
on 01.10.2018).
1) Introduction and Opening Statement
2) Joint Session
3) Separate Session(s)
4) Closing61
Mediation is a voluntary, party-centered and structured negotiation
process where a neutral third party assists the parties in amicably
resolving their dispute by using specialized communication and
negotiation techniques. In mediation, the parties retain the right to
decide for themselves whether to settle a dispute and the terms of
any settlement. Even though the mediator facilitates their
communications and negotiations, the parties always retain control
over the outcome of the dispute. Mediation is also voluntary. The
parties retain the right to decide for themselves whether to settle a
dispute and the terms of settlement of the dispute. Even if the court
has referred the case for the mediation or if mediation is required
under a contract or a statute, the decision to settle and the terms of
settlement always rest with the parties. This right of self-
determination is an essential element of the mediation process. It
results in a settlement created by the parties themselves and is,
therefore, acceptable to them. The parties have ultimate control
over the outcome of mediation. Any party may withdraw from the
mediation proceedings at any stage before its termination and
without assigning any reason.62

61
https://www.sci.gov.in/pdf/mediation/MT%20MANUAL%20OF%20INDIA.pdf
62
R.V. Raveendran,“Mediation – An Introduction”, available at: http://bombayhighcourt.nic.in
/mediation/index_articles.htm (last visited on 11.04.2012
Mediation is a party-centered negotiation process. The parties and
not the neutral mediator are the key point of the mediation process.
Mediation encourages the active and direct participation of the
parties in the resolution of their dispute. Though the mediator,
advocates, and other participants also have active roles in
mediation, the parties play the key role in the mediation process.
They are actively encouraged to explain the factual background of
the dispute, identify issues and underlying interests, generate
options for agreement and make a final decision regarding the
settlement. Though the mediation process is informal, which means
that it is not governed by the rules of evidence and formal rules of
procedure it is not an extemporaneous or casual process. The
mediation process itself is structured and formalized, with clearly
identifiable stages. However, there is a degree of flexibility in
following these stages. 63 Mediation, in essence, is an assisted
negotiation process. Mediation addresses both the factual/ legal
issues and the underlying causes of a dispute. Thus, mediation is
broadly focused on the facts, law, and underlying interests of the
parties, such as personal, business/commercial, family, social and
community interests. The goal of mediation is to find a mutually
acceptable solution that adequately and legitimately satisfies the
needs, desires and interests of the parties. 64

63
Ashwanie Kumar Bansal, Arbitration and ADR 20 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005);
Mediators are responsible for managing conflict in such a way as to create the conditions that enable individuals to
manage the responsibility they have for their own behaviour. See Tony Whatling, “Conflict Matters - Managing
Conflict and High Emotion in Mediation”, 1(10) The Indian Arbitrator 2 (November 2009).
64
Dhananjaya Y. Chandrachud, “Mediation – Realizing the Potential and Designing Implementation Strategies”,
available at: http://lawcommissionofindia.nic.in (last visited on 01.10.2018).
Mediation provides an efficient, effective, speedy, convenient and
less expensive process to resolve a dispute with dignity, mutual
respect and civility. Mediation is conducted by a neutral third
party- the mediator. The mediator remains impartial, independent,
detached and objective throughout the mediation process. In
mediation, the mediator assists the parties in resolving their
dispute. The mediator is a guide who helps the parties to find their
own solution to the dispute. The mediator’s personal preferences or
perceptions do not have any bearing on the dispute resolution
process.
TYPES OF MEDIATION
A.) Statutory.
There are some types of cases that are required by law to go
through the mediation process. Labor disputes and domestic (family
law) disputes are two prime examples. In India, however, this type
of mandatory mediation is rare.
B.) Court ordered.
Most jurisdictions in India require some form of alternative dispute
resolution before a case may be resolved through the traditional
judicial process. As soon as a case is filed, the parties are provided
a number of ADR options. They must, unless exempted by the
Court, select and pursue one of these options, included, as an
option is mediation. The Court maintains a list of mediators—
skilled and experienced attorneys selected by the Court—who are
available to the parties.
C.) Contractual.
The parties to a contract, as part of the terms of their agreement,
may include a mediation clause as a mechanism to resolve
disputes. Although binding arbitration is a much more common
contractual term since it will always result in a resolution,
mediation can be an effective tool to resolve contractual disputes
before they blossom into a protracted battle.
D.) Voluntary.
The parties to a dispute may decide to seek mediation without being
compelled by law, court order, or contract. They may choose to
mediate their dispute at any time: as the dispute is developing,
before initiating legal action, or even while legal action is pending.
The conditions of the mediation—e.g., who will be the mediator,
when the mediation will occur, the rules of the mediation—are
controlled by the parties

QUALIFICATIONS OF MEDIATORS
The Supreme Court of India in Salem Advocate Bar Association
v. Union of India65approved the Model Civil Procedure Mediation
Rules prepared by the Committee headed by Hon'ble Mr. Justice
M.J. Rao, the then Chairman, Law Commission of India. These
Rules have already been adopted by most of the High Courts with
modifications according to the requirements of the State concerned.
As per the Model Rules the following persons are qualified and
eligible for being enlisted in the panel of mediators: - (a)
(i) Retired Judges of the Supreme Court of India;
(ii) Retired Judges of the High Court;
(iii) Retired District and Sessions Judges or retired Judges of the
City Civil Court or Courts of equivalent status;
(b) Legal practitioners with at least fifteen years standing at the
Bar at the level of the Supreme Court or the High Court or the
District Courts of equivalent status;
(c) Experts or other professionals with at least fifteen years
standing; or retired senior bureaucrats or retired senior executives;
(d) Institutions which are themselves experts in mediation and have
been recognized as such by the High Court, provided the names of

65
(2005) 6 SCC 344
 its members are approved by the High Court initially or whenever
there is change in membership. 66

66
https://blog.ipleaders.in/adr-alternative-dispute-resolution/
ROLE OF THE MEDIATOR
Mediation is a process in which an impartial and neutral third
person, the mediator, facilitates the resolution of a dispute without
suggesting what should be the solution. It is an informal and no
adversarial process intended to help disputing parties to reach a
mutually acceptable solution. The role of the mediator is to remove
obstacles in communication, assist in the identification of issues
and the exploration of options and facilitate mutually acceptable
agreements to resolve the dispute. However, the ultimate decision
rests solely with the parties. A mediator cannot force or compel a
party to make a particular decision or in any other way impair or
interfere with the party's right of self-determination.
(A)FUNCTIONS OF A MEDIATOR
The functions of a mediator are to -:
(i) facilitate the process of mediation; and
(ii) assist the parties to evaluate the case to arrive at a
settlement
ANALYSIS
Of late, mediation has proved to be a much-favored method of
alternate dispute resolution, specifically amongst various foreign
entities, inter alia, due to its informal methods and reduced costs
(compared to other forms of dispute resolution). More often than
not, a trusted third party is appointed as a mediator between the
disputing parties. Mediation is often used as the first step to resolve
any dispute and failing any resolution under mediation, parties
agree that disputes will be referred to arbitration. Thus, most
commercial contracts now provide for mediation as a mechanism
for dispute resolution, prior to proceeding for arbitration.
Contractually, parties may agree to maintain confidentiality of the
said mediation proceedings. However, unlike in conciliation and
arbitration proceedings, there is no statutory provision in India that
mandates maintaining confidentiality of such proceedings in
relation to mediation proceedings. A significant concern that,
therefore, typically arises in such circumstances is the
confidentiality that is accorded to the various discussions and
proposals made in such mediation proceedings.
The instant judgment should help assuage concerns on the
confidentiality surrounding the process of court-directed mediation.
By the said judgment, the Court has specifically acknowledged that
any discussions and proposals made during the course of mediation
proceedings are confidential in nature. The said judgment should
provide a fillip to mediation proceedings.
 1. JUDICIAL SETTLEMENT:
The expression Judicial Settlement suggests that it is some sort of a
judge mediated settlement of a dispute. Judicial Settlement is a
term which is in vogue in the west – particularly the United States
of America. There we have what are known as judicial settlement
conferences. A judicial settlement conference is an informal process
in which a judge, trained in mediation and settlement conference
skills, actively facilitates a process whereby parties in conflict may
reach a mutually satisfactory resolution. 67 The term judicial
settlement therefore refers to a settlement of a civil case with the
help of a judge who has not been not assigned the duty to
adjudicate upon the dispute68.
Thus judicial settlement conference is presided over by a judge who
uses fair settlement techniques to enable the parties to arrive at an
amicable settlement. The archetypal role of the settlement
conference judge is to roughly evaluate the case on the merits and
to assist the bargaining of settlement proposals. Some settlement
judges also use mediation techniques in the judicial settlement
conferences to improve communication among the parties, probe
barriers to settlement, and help formulate resolutions. 69 A
settlement judge has however no power to force the parties to arrive
at a settlement. An important feature of judicial settlement
conference is that the judge who presides over the judicial
settlement conference does not conduct the trial of the case on

67
68See http://www.courts.state.va.us
Afcons (last visitedConstruction
Infrastructure Ltd. v. CherianVarkey on 01.04.2012).
Co. (P) Ltd., JT 2010 (7) SC 616
69
Elizabeth Plapinger& Donna Stienstra, ADR and Settlement in the Federal District Courts: A Sourcebook for
Judges and Lawyers, available at: http://www.fjc.gov (last visited on 01.04.2012).
merits. 70 Either the case is marked to a different judge for a
settlement conference or the trial judge after conducting a
settlement conference does not proceed with the trial. The intent is
that a judge who conducts trial is not prejudiced by the conduct of
a party during judicial settlement proceedings.
In B.P. Moideen Sevamandir v. A.M. Kutty Hassan 71 , the
Supreme Court held that when deciding a matter on merits of a
case, if a court carries any prejudice against a party on account of
his conduct before an ADR forum, it will violate the inviolable
guarantee against prejudice or bias in the decision making process.
JUDICIAL SETTLEMENT IN INDIA
As far as Indian Law is concerned the expression judicial settlement
was introduced in to the Code of Civil Procedure, 1908 through
Section 89 CPC. 6.5.2 Judicial Settlement in India Section 89 CPC
provides judicial settlement as a mode of ADR. The court can refer a
dispute to judicial settlement in terms of section 89 CPC to a
suitable institution or person and such institution or person is to
be deemed to be a Lok Adalat and all the provisions of the Legal
Services Authority Act, 1987 are applicable.
To implement the objectives of section 89 CPC under the directions
of the Supreme Court in the Salem Bar Association (I) Case72 a
committee headed by Justice M. Jagannadha Rao was formed and

70
Goldschmidt and Milford, Judicial Settlement Ethics (American Judicature Society, 1996), available at:
http://www.judiciary.state.nj.us (last visited on 01.04.2012); See also Justice Sunil Ambwani, “Alternative Dispute
Resolution: National Judicial Excellence Enhancement Programme (JEEP) First Visit”, Speech at National Judicial
Academy, Bhopal on September 11th, 2011, available at: www.allahabadhighcourt.in/event/speech_on_ADR (last
visited
71
on 15.04.2012).
2009 (2) S.C.C. 198
72
AIR 2003 SC 189
the committee placed before the Supreme Court the Draft Civil
Procedure - ADR and Mediation Rules, 2003 which were considered
by the Supreme Court in the Salem Advocate Bar Association v.
Union of India (II)73. The Supreme Court thereafter directed the
respective High Courts to examine and finalize the said rules.
Under the said draft Civil Procedure - ADR and Mediation Rules,
2003 Judicial settlement was defined as : 'Judicial settlement'
means a final settlement by way of compromise entered into before
a suitable institution or person to which the Court has referred the
dispute and which institution or person are deemed to be the Lok
Adalats under the provisions of the Legal Service Authority Act,
1987 (39 of 1987) and where after such reference, the provisions of
the said Act apply as if the dispute was referred to a Lok Adalat
under the provisions of that Act.74
Where all the parties to the suit decide to exercise their option and
to agree for judicial settlement the court has to refer the matter to a
suitable institution or person which shall be deemed to be a Lok
Adalat.75
Thus for judicial settlement as provided under section 89 CPC the
court is supposed to refer the dispute to a suitable institution or
person. However there is no indication in the statute, that to which
institution or person the matter is to be referred to. That person
may be a judge or may not be a judge. He may be a person of legal
background or may not be a person of legal background. The

73
74
AIR 2005 SC 3353.
Rule 4, ADR and Mediation Rules, 2003 (Draft).
75
Rule 5, ADR and Mediation Rules, 2003 (Draft).
dispute may also be referred to some external private institution
offering institutionalized conciliation or mediation services. There is
no indication as to what are the guidelines/ practice directions for
referring the matter. Thus section 89 CPC is silent on these aspects.
This renders judicial settlement a sui generis settlement procedure.
This is because the term judicial settlement per se gives as
indication that it is a judge mediated settlement and this is also the
plain meaning of judicial settlement as is understood in the west.
However in India by virtue of section 89 CPC any person or
institution may conduct judicial settlement and such institution or
person is deemed to be a Lok Adalat and all the provisions of the
Legal Services Authority Act, 1987 apply to such proceedings as if
the dispute were referred to a Lok Adalat under the provisions of
that Act.
3. LOK ADALAT
THE CONCEPT OF LOK ADALAT
NALSA along with other Legal Services Institutions conducts Lok
Adalats. Lok Adalat is one of the alternative dispute redressal
mechanisms, it is a forum where disputes/cases pending in the
court of law or at pre-litigation stage are settled/ compromised
amicably. Lok Adalats have been given statutory status under the
Legal Services Authorities Act, 1987. Under the said Act, the award
(decision) made by the Lok Adalats is deemed to be a decree of a
civil court and is final and binding on all parties and no appeal
against such an award lies before any court of law. If the parties are
not satisfied with the award of the Lok Adalat though there is no
provision for an appeal against such an award, but they are free to
initiate litigation by approaching the court of appropriate
jurisdiction by filing a case by following the required procedure, in
exercise of their right to litigate.76
There is no court fee payable when a matter is filed in a Lok Adalat.
If a matter pending in the court of law is referred to the Lok Adalat
and is settled subsequently, the court fee originally paid in the
court on the complaints/petition is also refunded back to the
parties. The persons deciding the cases in the Lok Adalats are
called the Members of the Lok Adalats, they have the role of
statutory conciliators only and do not have any judicial role;
therefore they can only persuade the parties to come to a
conclusion for settling the dispute outside the court in the Lok
Adalat and shall not pressurize or coerce any of the parties to
compromise or settle cases or matters either directly or indirectly.
The Lok Adalat shall not decide the matter so referred at its own
instance, instead the same would be decided on the basis of the
compromise or settlement between the parties. The members shall
assist the parties in an independent and impartial manner in their
attempt to reach amicable settlement of their dispute.77
Nature of Cases to be referred to Lok Adalat
1. Any case pending before any court.

76
Compromise is an agreement reached by adjustment of conflicting or opposing claims by reciprocal modification
of demands. A compromise is always bilateral and means mutual adjustment. On the other hand Settlement is
termination of legal proceedings by mutual consent. See State of Punjab v. Phulan Rani, AIR 2004 SC 4105; See
also
77
Union of India v. Ananto, AIR 2007 SC 1561
https://www.srdlawnotes.com/2017/01/what-are-benefits-of-lok-adalat.html
2. Any dispute which has not been brought before any court and is
likely to be filed before the court.
Provided that any matter relating to an offence not compoundable
under the law shall not be settled in Lok Adalat.
Which Lok Adalat to be Approached
As per section 18(1)78 of the Act, a Lok Adalat shall have jurisdiction
to determine and to arrive at a compromise or settlement between
the parties to a dispute in respect of -
(1) Any case pending before; or
(2) Any matter which is falling within the jurisdiction of, and is not
brought before, any court for which the Lok Adalat is organised.
Provided that the Lok Adalat shall have no jurisdiction in respect of
matters relating to divorce or matters relating to an offence not
compoundable under any law.
How to Get the Case Referred to the Lok Adalat for Settlement
(A) Case pending before the court.
(B) Any dispute at pre-litigate stage.
The State Legal Services Authority or District Legal Services
Authority as the case may be on receipt of an application from any
one of the parties at a pre-litigation stage may refer such matter to
the Lok Adalat for amicable settlement of the dispute for which
notice would then be issued to the other party.

78
The Legal Services Authority Act, 1987.
Levels and Composition of Lok Adalats:
At the State Authority Level -
The Member Secretary of the State Legal Services Authority
organizing the Lok Adalat would constitute benches of the Lok
Adalat, each bench comprising of a sitting or retired judge of the
High Court or a sitting or retired judicial officer and any one or both
of- a member from the legal profession; a social worker engaged in
the upliftment of the weaker sections and interested in the
implementation of legal services schemes or programmes.
At High Court Level -
The Secretary of the High Court Legal Services Committee would
constitute benches of the Lok Adalat, each bench comprising of a
sitting or retired judge of the High Court and any one or both of- a
member from the legal profession; a social worker engaged in the
upliftment of the weaker sections and interested in the
implementation of legal services schemes or programmes.
At District Level -
The Secretary of the District Legal Services Authority organizing the
Lok Adalat would constitute benches of the Lok Adalat, each bench
comprising of a sitting or retired judicial officer and any one or both
of either a member from the legal profession; and/or a social worker
engaged in the upliftment of the weaker sections and interested in
the implementation of legal services schemes or programmes or a
person engaged in para-legal activities of the area, preferably a
woman.
At Taluk Level -
The Secretary of the Taluk Legal Services Committee organizing the
Lok Adalat would constitute benches of the Lok Adalat, each bench
comprising of a sitting or retired judicial officer and any one or both
of either a member from the legal profession; and/or a social worker
engaged in the up-liftment of the weaker sections and interested in
the implementation of legal services schemes or programmes or a
person engaged in para-legal activities of the area, preferably a
woman.79
Permanent Lok Adalat
The other type of Lok Adalat is the Permanent Lok Adalat, organized
under Section 22-B of The Legal Services Authorities Act, 1987.
Permanent Lok Adalats have been set up as permanent bodies with
a Chairman and two members for providing compulsory pre-litigate
mechanism for conciliation and settlement of cases relating to
Public Utility Services like transport, postal, telegraph etc. Here,
even if the parties fail to reach to a settlement, the Permanent Lok
Adalat gets jurisdiction to decide the dispute, provided, the dispute
does not relate to any offence. Further, the Award of the Permanent
Lok Adalat is final and binding on all the parties. The jurisdiction of
the Permanent Lok Adalats is up to Rs. Ten Lakhs. Here if the
parties fail to reach to a settlement, the Permanent Lok Adalat has
the jurisdiction to decide the case. The award of the Permanent Lok
Adalat is final and binding upon the parties. The Lok Adalat may
conduct the proceedings in such a manner as it considers
appropriate, taking into account the circumstances of the case,

79
http://shodhganga.inflibnet.ac.in/bitstream/10603/26666/9/09_chapter%203.pdf
wishes of the parties like requests to hear oral statements, speedy
settlement of dispute etc.80

ADVANTAGES
1. Lok Adalats are meant for conciliated settlement of disputes
outside court which is what most of our people like if the
matter allows for this kind of settlement. There is a fear among
a large number of people about taking disputes to court, not
just about delay in getting justice but also for financial
reasons. In fact, one of the reasons for the formation of Lok
Adalat or people’s court is to provide fair and uncomplicated
justice to the financially deprived section of our society.
Though government provides legal aids to poor, there is a fear
of monetary loss during the time period which is why most
people prefer Lok Adalats.

2. Family disputes like property acquisition and matrimonial

issues are far better and faster solved by these Lok Adalats in
comparison to courts. Though there are family courts for these
matters, people would always prefer settlement outside court
and in a fair and just manner which is delivered well by Lok
Adalats. It saves time and expenses and also is easier for
parties to make their claims which are not the case when the
matter is in court and witnesses are afraid of getting involved
into legal matters.

80
https://nalsa.gov.in/lok-adalat
3. The number of cases that require jurisdiction is increasing at
an alarming rate and let’s face it – we have far inadequate
number of courts and judges in our country than we require
which leads to unnecessary delay even in smaller cases. If
more and more people could understand the significance of
Lok Adalats and resort to them for easy litigations, there
would be lesser pending cases in the files gathering dust since
years in courts.

4. Lok Adalats can be a decent supplement to the work of courts

and could contribute to justice in a good way only if awareness
is increased and people are encouraged to opt for them. For
illiterates and poor there are even more advantages of taking
matters to lok adalats. Proceedings are conducted faster and
in simple arrangements and even in local languages. They are
not strict about procedural laws or Evidence Act and are based
more on merits which makes it “People’s Festival of Justice.”

5. There is no absolute need of advocates by the victim and the

convict, who can either prefer to have their cases pleaded by
the lawyer or simply talk to the judge about the matter
directly. This is not a possibility in courts where a third person
pleads the case and the people involved only get a say when
their turn comes. To explain their stand directly is an
 advantage that makes people’s court very accessible and easy
for people.

6. Even if the case is filed in court, the expenses are refunded to

the party when the case is solved by Lok Adalat which is
another reason why people should be made more aware of this
litigation system where there is no fee involved. According to
justice V V Rao, it will take another 320 years to clear the
pending backlogs in India but if more and more people take
their cases to Lok Adalats, there is a fair chance that this
could be achieved earlier.81

81
https://www.careerride.com/view/lok-adalats-advantages-and-disadvantages-26001.aspx
 E- ARBITRATION
The increasing popularity and dependence on the internet
throughout the world has made the number of disputes
arising from e-commerce, domain names registrations, etc.
even more common. Thus, the internet can also be used in an
effective manner to neutralize such issues by way of online
arbitration.
To differentiate Conventional Arbitration which requires the
applicability of Arbitration and Conciliation Act, 1996, the
Online Arbitration, as the name suggests, besides the
applicability of Arbitration and Conciliation Act, 1996 also
requires the aid of technologically related laws, particularly the
Information Technology Act, 2000. In other words, it can be
said that Online Arbitration is a blend of conventional
Arbitration with the taste of technology in it.82
The Arbitration & Conciliation Act, 1996, if considered from the
point of view of On-line Arbitration, can be divided into three parts.
1. The arbitration agreement,
2. The arbitral proceedings and
3. The arbitral award and its enforcement.
Viewing the provisions of Arbitration & Conciliation Act, 1996 (Act)
in conjunction with Information Technology Act, 2000 we need to
analyze the each of the above three parts.

82
Online Arbitration from Indian perspective, available at
http://www.lexology.com/library/detail.aspx?g=e09b721e-807b-4c8b-8451-da416874f39f : (last visited:29/10/2018)
I) The Arbitration Agreement:
Online arbitration in India follows the Information Technology Act
2000 as well as the Arbitration and Conciliation Act 1996. Under
the Information Technology Act, Sections 4 &5 read with Section
65-B of Evidence Act clearly enumerates that electronic records and
signatures can be introduced as evidence and given legal
recognition under the Indian legal system.
Submitting a dispute to online arbitration can occur when there is
an e-contract containing an online arbitration clause, or when there
is normally written agreement with a clause mentioning reference to
online arbitration or when the dispute arises the parties agree to
resolve the matter via online resolution.
Section 7(3) of the Arbitration and Conciliation Act, 1996 provides
that an arbitration agreement shall be in writing. However, if the
parties agree online to refer the matter to cyber arbitration through
an ODR Service Provider, the question arises as to whether such a
cyber-agreement will be valid in law. Section 4 of Information
Technology Act, 2000 lays down the following provisions on this
point: “Where any law provides that information, or any other
matter shall be in writing or the typewritten or printed form, then,
notwithstanding anything contained in such law, such requirement
shall be deemed to have been satisfied if such information or matter
is-
(a) rendered or made available in an electronic form; and
(b) accessible so as to be usable for a subsequent reference.
 The Hon’ble Supreme Court of India in the matter of Trimex83
Stated that “if the intention of the parties to arbitrate any
dispute has arisen in the offer and acceptance thereof, the
dispute is to be settled by arbitration. The only requirement of
the arbitration agreement is that the parties must clearly spell
out the technology to be used in settlement of disputes, the
place of arbitration, laws governing the contract entered into
between the two parties, the jurisdiction of courts.”

II) Arbitral Proceeding:

Information Technology is already used rampantly in arbitral
proceedings. It is indeed cost effective and convenient but involves
legal questions of vital importance to be settled first.
It is pertinent to analyze the applicable mandatory rules of
procedure as “place” or “seat,‟ of online arbitration, is literally
“virtual.” The principles of Tribunal‟s impartiality and equal
treatment of parties, enshrined in Section 18 read with Section 12
of the Arbitration and Conciliation Act, are relevant. These online
techniques can be used in arbitral proceedings, provided that their
application does not prejudice one party for example “if it had less
access to or know-how of the technology than the other party”
In general, the principles that would govern the arbitration
proceedings are to be explicitly set out and agreed to by the
contracting parties. 84 The fundamental concept underlining

83
84
TrimexInternational FZE Ltd. v. Vedanta Aluminum Ltd (2010) 3 SCC 1.
Arbitration and Conciliation Act 1996, s 7(1).
arbitration laws is ‘party autonomy.85 Therefore, the parties may
agree that the whole or part of the arbitration proceedings is
conducted online, or they may otherwise expressly exclude
electronic means.86
The procedural requirements of having the virtual proceedings have
to be clearly spelled out including the details for the exchange of
pleadings, video conferencing and audio conferencing.
III) Arbitral Award and Enforcement:
The most important aspect post-judgment is the enforceability. At
this stage, the role of the national court comes into play. But due to
limitless boundaries of the internet, the first and foremost thing to
consider will be affirming the location of the award
Section 31 of the Act relates to the form and contents of the arbitral
award. It states that the arbitral award must be in writing, duly
signed by the arbitral tribunal. A signed copy of arbitral award shall
be delivered to each party after making the award under section
31(5).
The award can be issued through email by sending scanned signed
copies in PDF format. The actual signed copies can be sent through
the post.

Advantages of Online Dispute Resolution

 ODR is a generally informal, flexible and creative tool of
dispute resolution which is not governed by strict rules of

85
Lew J, Comparative International Commercial Arbitration (Kluwer Law International 2003).
86
Redfern A and others, Law and Practice of International Commercial Arbitration (4th edn, Sweet & Maxwell
2004) 159.
 procedure and evidence. This may allow the parties to design
or participate in a process which can be molded to suit their
needs and encourages a consensual rather than an adversarial
approach.
 ODR may reduce litigation costs: this is of importance both to
corporate parties who wish to keep costs down and to parties
who otherwise might not be able to afford the cost of litigation.
The costs of the process or compensation given to the neutral
evaluator are generally borne equally by all parties, providing
all parties with an equal stake in the outcome and an equal
sense of ownership.
 ODR may be the appropriate option particularly for low-cost,
high-volume transaction as it often allows for a timely, cost-
efficient and efficient resolution to problems where the
amounts in dispute may not be sufficiently high to justify the
cost of a meeting-based mediation (e.g. consumer disputes).
 ODR also allows for a more cost-efficient resolution of disputes
where there is significant geographic distance between the
parties and the amount in dispute may preclude the cost of
travel.
 ODR may be appropriate where there are sensitivities between
the parties that may be exacerbated by being in the same
room (e.g. matrimonial disputes).
 ODR may allow for the participation of parties who could not
otherwise attend an in-person meeting due to a severe
disability.
  ODR is confidential (unless agreed otherwise by the parties),
subject to the application of the Access to Information Act and
of the Privacy Act when the federal government is a party. The
process is appropriate when confidentiality is considered
important or necessary to the parties, which is often the case:
parties utilizing DR mechanisms usually do so on the basis
that they can discuss matters freely in the expectation that
they will be disclosed, neither publicly, nor to a court.[18]

Disadvantages of Online Dispute Resolution

 All parties would be required to have adequate technology to
participate in an ODR Process. Parties without adequate
technology may be at a disadvantage or unable to fully
participate.
 ODR is a less personal form of dispute resolution as the
parties are not in the same room, and often all of the
discussions are in writing.
 Parties with language and/or difficulties communicating in
writing may be at a disadvantage in an ODR process.
 Where ODR is a non-binding process (i.e. only part of the
negotiation/mediation phase), it cannot produce legal
precedents. However, if the last step of the ODR Process
results in adjudication, a legal precedent may be set
In India, Online Arbitration is still a gray area in the Indian Legal
Arena. Though it is a non-conventional method yet has its legal
validity. For the implementation of Online Arbitration in India,
the courts have to interpret the ambit of crucial aspects such as
the proper law of such arbitration, determination of seat, the
status of the award as between domestic or foreign, application of
sections 34 and 48 of the Act, and enforceability under Part I or
Part II.
WHY RESORT TO ADR
ADR systems may be designed to meet a wide variety of different
goals. Some of these goals are directly related to improving the
administration of justice and the settlement of particular disputes.
Some, however, are related to other development objectives, such as
economic restructuring, or the management of tensions and
conflicts in communities. For instance, developing an efficient,
consensual way to resolve land disputes may be critical to an AID
mission not because of its commitment to strengthening the rule of
law, but because land disputes threaten the social and economic
stability of the country. Likewise, efficient dispute resolution
procedures may be critical to economic development objectives
where court delays or corruption inhibit foreign investment and
economic restructuring.
Within the context of rule of law initiatives, ADR programs can:
 Support and complement court reform
 By-pass ineffective and discredited courts
 Increase popular satisfaction with dispute resolution
 Increase access to justice for disadvantaged groups
 Reduce delay in the resolution of disputes
 Reduce the cost of resolving disputes

In the context of other development objectives, ADR programs can:

 Increase civic engagement and create public processes to
facilitate economic restructuring and other social change
 Help reduce the level of tension and conflict in a community
  Manage disputes and conflicts that may directly impair
development initiatives

Experience suggests that ADR programs can have a positive impact

on each of these development objectives, although the extent of the
impact is very much dependent on other conditions within the
country and the fit of the design and implementation of the program
with the development objectives.

1) ADR can support and complement court reform.

ADR programs can support a mission objective to reform the
court system in several ways. ADR can be used by the
judiciary to test and demonstrate new procedures that might
later be extended to or integrated with existing court
procedures. ADR systems can be created as an option within
the judicial system, either associated with the courts as a way
of managing existing caseloads, or separate from the courts to
provide dispute resolution for conflicts or constituencies not
well served by the courts.
If the main problems with the courts are complex and inappropriate
procedures, rather than institutional corruption or bias, ADR
programs can provide streamlined procedures to accelerate case
disposition. In some cases, these procedures may serve as models
that can later be incorporated into formal court procedures. If so,
court-annexed ADR may turn out to be a catalyst for more extensive
court reform.
ADR programs can also be designed to deal with cases that could
enter the court system but may be resolved more efficiently (and
perhaps with greater satisfaction) through ADR procedures. In
these cases, ADR programs can complement court reform by
reducing caseloads. They can also complement court reform by
increasing access to dispute resolution services for disadvantaged
groups (e.g., urban neighborhood and rural centers), providing legal
advice to members of disadvantaged groups on whether and how to
use the court system, and/or dealing with specialized cases that the
courts are not well-equipped to handle (e.g., complex commercial
disputes, labor-management disputes).
2) ADR can by-pass ineffective or discredited courts.
When the civil court system has so many institutional
weaknesses and failures (inadequate resources, corruption,
systemic bias) that there is no near-term prospect of
successful civil court reform, ADR programs may be an
appropriate way to provide an alternative forum.
In South Africa, India, and Bangladesh, ADR programs were
developed to by-pass corrupt, biased, or otherwise discredited
court systems that could not provide reasonable justice for at
least certain parts of the population (blacks, the poor, or
women). In Sri Lanka, the reputation of the courts is relatively
good, but they were ineffective in resolving many local and
small disputes because of high costs and long delays. The
Mediation Boards there have evolved as a substitute for the
courts, but enjoy the support of the judicial system. Bolivia,
 Haiti, Ecuador, and El Salvador are developing systems
involving government support for independent, local, informal
dispute resolution panels to serve parts of the population for
whom the courts are ineffective.
Some ADR programs function as the primary institutions for
resolving civil disputes, and have effectively replaced or
preempted courts. Taiwan and China have the best examples
of broadly and deeply institutionalized, community-based
ADR. In both countries, local government officials and well-
respected citizens act as conciliators, mediators, and
arbitrators for the vast majority of local disputes. Taiwan's
ADR system appears to be growing more popular over time,
despite social changes that have begun to erode Confucian
norms of deference to local notables.
3) ADR can increase satisfaction of disputants with outcomes.
Although increasing the satisfaction of disputants is one of the
development objectives identified by earlier USAID studies,
user satisfaction is often an indirect proxy for more focused
concerns such as cost, access, and delay. The impact of ADR
programs on these development objectives is addressed in
other sections. Beyond these aspects, disputant satisfaction is
also affected by more subtle factors, such as the creativity of
outcomes, the impact of the ADR process on the ongoing
business or personal relationships, and disputant confidence
that the system is responsive to their needs. ADR programs
can have a positive influence on all of these components of
disputant satisfaction. When evaluations of ADR systems have
included an assessment of overall user satisfaction, the ADR
systems have generally compared favorably to formal legal
structures. In Sri Lanka, for example, satisfaction with the
Mediation Board system is quite high. In addition to the
accessibility of the system, and the low cost, disputants
indicate that the way they are treated, the disputants' control
of the process, and the community-based nature of the system
are all factors leading to high satisfaction. Satisfaction is also
reflected in the settlement and compliance rates. Nearly 65%
of all mediated cases are settled, and compliance rates, while
not accurately measured, are reported to be quite high. The
chairman of one Mediation Board indicated that compliance
with debtor dispute settlements, which constitute a large
proportion of the cases, is nearly 95%. The monthly caseload
of the Boards more than doubled between the first and third
years of operation, indicating high satisfaction. Likewise, in
Bangladesh, almost all users indicate that they prefer
mediation to the formal court system and would use the
mediation process again. In South Africa, users of commercial
labor-management mediation and arbitration cite the positive
impact of ADR, relative to litigation, on ongoing labor
management relations. And throughout Southeast Asia,
disputants cite a general cultural preference for informal
dispute resolution because of its ability to help reconcile and
preserve personal and commercial relationships.
4) ADR programs can increase access to justice for
disadvantaged groups.
Many poor are denied access simply because they cannot
afford to pay the registration and representation fees
necessary to enter the formal legal system. Since cost is
probably the largest barrier to formal dispute resolution for
many people in developing countries.
Several studies indicate that the formality of court systems
intimidates and discourages use. In India and Bangladesh, for
example, the court requirement of legal representation is both
costly and intimidating for people who may not be comfortable
interacting with lawyers from a different caste or class. In
these and other countries, users of ADR programs have
expressed a preference for submitting cases to mediators who
are local residents and understand the local community. In Sri
Lanka, users expressed their satisfaction at having their
"stories" heard in an informal process. All of these factors
contribute to greater usage of and preference for informal
processes.
5) ADR programs can reduce delay in the resolution of disputes.
Delays are endemic in most court systems throughout the
world and affect a number of development objectives. In some
cases, delays are so extreme that they effectively deny justice,
particularly to disadvantaged groups who may not be able to
"grease the wheels" of the justice system. In other cases,
delays in the resolution of commercial disputes impair

10
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 economic development and undermine the efficiency of the
economy. Informal dispute resolution (mediation and
settlement programs), or simplified procedures for dispute
resolution (arbitration systems), can significantly reduce
dispute resolution delay, and indirectly reduce court backlog
by redirecting cases that would otherwise go to court.
Reduction of dispute resolution delays may serve a variety of
USAID strategic objectives outside the rule of law area. For
example, in the Ukraine, support for mediation centers is
founded on the premise that mediation can serve economic
development objectives by accelerating the resolution of
commercial and labor-management disputes, as well as other
civil disputes arising from the privatization process. (See
Ukraine Case Study.) In South Africa, quick resolution of
labor-management disputes serves both economic and social
equity objectives.
6) ADR programs can reduce the cost of resolving disputes.
Many ADR programs are designed with a goal of reducing the
cost of resolving disputes both to the disputants and to the
dispute resolution system. Whether ADR fulfills this goal is
still under discussion even in the United States, where there
have been many studies of the issue. Nevertheless, the
experience of at least some of the ADR systems implemented
in developing countries indicates that cost reduction is a
reasonable goal for ADR systems, and that well-designed
systems can effectively meet this goal. Relatively few
comparative studies have been concluded, in part because of
the lack of data on the true costs of court dispute resolution.
Several studies, however, indicate dramatic differences in cost.
For example, during the 1980s, when the lok adalat system
was operating successfully in India, a comparative study in
Rajasthan indicated that the average cost of a case handled in
a lok adalat court was 38 rupees, compared with an average
litigation cost of 955 rupees. The primary reason for the
difference in cost was the simplicity of the system and the lack
of need for legal representation, compared with the extreme
complexity of the formal court system and the requirement of
expensive representation.
Many other ADR programs seem to be successful in reducing
the cost of dispute resolution and providing access to justice
for the poor. Most programs operate with only a modest fee,
either because they are managed by volunteers or because
they are supported by government or donor funds. In Sri
Lanka, for example, the cost of filing for mediation is only 5
rupees, and the number of cases filed with the Mediation
Boards has increased from 13,280 in 1991 to 101,639 in
1996. Almost all the cases involve disadvantaged and poor
members of the population
ADVANTAGES OF ADR
1. Privacy and Choice in the Tribunal
One of the major significance of arbitration is privacy and
confidentiality of the proceedings. Some people prefer to
settle their dispute out of the public gaze. Particularly in
matrimonial disputes it is very effective. Because people
don’t want that their private disputes to come in the public.
Arbitration also saves matrimonial home and relations
because the dispute is resolved peacefully with the
consensus of the parties. If matters come to the ordinary
civil court in most of the cases the relation become strained
and family shatters. Further, some disputes involve highly
technical issues therefore it would be useful if at least one
member of the tribunal is expert in that field. Since in
arbitration it is the party who select the member of the
tribunal, they select at least one member expertise in that
field. However, in the ordinary court judge may not be
expert in that field and therefore we can’t expect proper
justice in that case.87

2. Flexibility
Arbitration is very much flexible both in time and
procedure. If dispute needs urgent resolution, the parties
can choose a tribunal who will act promptly rather
depending on the luck of the draw from a court list. The

87
Russell on Arbitration, Sweet & Maxwell, twenty-first edition,London, 1997, p.9.
 parties are also free to choose the most suitable procedure.
The parties are also free to be represented by anyone of
their choice and they are not bound by rules limiting
appearance to persons with particular legal qualifications. 88

3. Neutrality and Equality

Where the parties belongs to the different countries they
don’t wishes to litigate in the ordinary court of law rather
they prefer arbitration. Because arbitration offers them
neutrality in the choice of law, procedure and tribunal. They
can choose the law and procedure of the third or they can
appoint an arbitrator which belong to the third country. It
gives them confident of equality and there is parity of power
between them89.

4. Principal of Natural Justice

Arbitrator is not bound by the strict procedure of the Civil
Procedure Code and law of evidence. However, he has to
follow the principle of natural justice. It is one of the
advantages of the alternative dispute resolution that it
avoids technicality and complexity of law and focuses on the
problem of the disputant parties and tries to resolve it with
simple method or procedure.

88
89
Id; p.10
Id;
 5. Enforceability of award
Another advantage of the arbitration is the extensive
enforceability of the award. Today, there are various
conventions which recognise arbitral awards and enforce it
in many countries than English court judgment. 90

6. Control over both the process and the outcome –

An important benefit of using ADR methods is that the
disputant has control over both the process and the
outcome of the resolution.

7. Amicable Settlement –
Alternative disputes method promote amicable settlement of
dispute. It enables the parties to resolve the dispute and
bury the past. Which results in the preservation of the
present relation and at the same time it paves better for
future.

8. Payment of Court fee

In Alternative Dispute Resolution there is no need of payment
of Court fees as it is paid in the ordinary court before the
hearing of civil cases. If court fee is not paid, the court does
not entertain the suit. Sometimes, the parties are not in a
position to pay the court fee. ADR is the best resort for those
kinds of people.

90
Id; .
 9. When a disputant goes to the court,
He knows that he would win or lose all. On the Contrary, if
he gives his consent for the informal settlement, he knows
very well that he might not get all that he wants, but he will
also not lose everything.91

10. Procedural flexibility

ADR provides procedural flexibility which is not found in
the traditional court. It may be as casual as a discussion
around the conference table. The disputant has freedom to
choose the procedure and applicable law.92

11. Win- Win Situation

The Court procedure results in win-lose situation. In other
words, in the ordinary court litigation a party shall either win
the case or lose his claim. On the contrary, in ADR a person
may not get all that he wants, but he will certainly not lose
everything.

12. The most significant feature of ADR

Is that it does not only resolve the dispute but also the
pathology of the dispute. Which hit at the root of the
dispute and it bring normalcy in the relationship of the
disputant.

91
Supra n.1
92
Supra n.1
 13. ADR provides participatory solution
Being participatory solution in nature its implementation becomes
easier.
LEGISLATIVE RECOGNITION OF ALTERNATIVE DISPUTE
REDRESSAL
Alternative Dispute Redressal or Alternative Dispute Resolution has
been an integral part of our historical past. Like the zero, the
concept of Lok Adalat (Peoples’ Court) is an innovative Indian
contribution to the world of Jurisprudence. The institution of
LokAdalat in India, as the very name suggests means, Peoples’
Court. ‘Lok’ stands for ‘people’ and the vernacular meaning of the
term ‘Adalat’ is the Court. India has long tradition and history of
such methods being practiced in the society at grass root level.
These are called panchayat, and in legal terminology these are
called arbitration. These are widely used in India for resolution of
disputes both commercially and non-commercially.
The ancient concept of settlement of disputes through mediation,
negotiation or through arbitral process is known as “Peoples’ Court
Verdict” or “Nyaya-Panch” which is conceptualized and
institutionalized in the philosophy of Lok Adalat. Some people
equate Lok Adalat to conciliation or mediation, whereas some treat
it with negotiation or arbitration. Those who find it different from all
these, call it “Peoples’ Court”. It involves people who are directly and
indirectly involved by dispute resolution.93
The concept of Lok Adalat was pushed back into oblivion in last few
centuries before independence and particularly during the British

93
V. Karthyaeni and Bhatt Vidhi, “LokAdalat and Permanent LokAdalats- A Scope for Judicial Review: A Critical
Study”, viewed at www.legalserviceindia.com (visited on November 28,2018)
regime. Now this concept has once again been rejuvenated. It has
once again become familiar and popular amongst litigants. 94
The movement towards Alternative Dispute Redressal (ADR) has
received Parliamentary recognition and support. The advent of Legal
Services Authorities Act, 1987 gave a statutory status to Lok
Adalats, pursuant to the constitutional mandate in Article- 39A of
the Constitution of India, which contains various provisions for
settlement of disputes through Lok Adalat. It is an Act to constitute
legal service authorities to provide free and competent legal services
to the weaker sections of the society to ensure that opportunities for
securing justice are not denied to any citizen by reason of economic
and other disabilities, and to organise Lok Adalats to secure that
the operation of the legal system promotes justice on a basis of
equal opportunity. Before the enforcement of the Act, the
settlements of disputes were in the hands of the Panchayat head or
the tribal head. But when statutory recognition had been given to
Lok Adalat, it was specifically provided that the award passed by
the Lok Adalat formulating the terms of compromise will have the
force of decree of a court which can be executed as a civil court
decree.95
In India, laws relating to resolution of disputes have been amended
from time to time to facilitate speedy dispute resolution. The
Judiciary has also encouraged out of court settlements to alleviate
the increasing backlog of cases pending in the courts. To effectively

94
Ibid
95
Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems), Eastern Book Company,
Lucknow, 7th Edition(2006), p. 394;
implement the ADR mechanism, organizations like ICA, ICADR were
established, Consumer Redressal forums and Lok Adalats revived.
The Arbitration Act, 1940 was repealed and a new and effective
arbitration system was introduced by the enactment of the
Arbitration and Conciliation Act, 1996.This law is based on the
United Nations Commission on International Trade Law (UNCITRAL)
model law on International Commercial Arbitration. 96
In Sitanna v. Viranna97, the Privy Council affirmed the decision of
the Panchayat and Sir John Wallis observed that the reference to a
village panchayat is the time-honoured method of deciding
disputes. It avoids protracted litigation and is based on the ground
realities verified in person by the adjudicators and the award is fair
and honest settlement of doubtful claims based on legal and moral
grounds.98
The legislative sensitivity towards providing a speedy and
efficacious justice in India is mainly reflected in two enactments.
The first one is the Arbitration and Conciliation Act, 1996 and
the second one is the incorporation of section 89 in the
traditional Civil Procedure Code (CPC).99
The adoption of the liberalized economic policy by India in 1991 has
paved way for integration of Indian economy with global economy.
This resulted in the enactment of the Arbitration and Conciliation
Act, 1996 (new Act) by the legislature as India had to comply with

96
97
Alternative Dispute Resolution,viewed at www.sethassociates.com (visited on November 29,2018)
AIR 1934 SC 105
98
Justice Dispensation through ADR Systems in India, viewed at www.legalindia.in (visited on November 29,2018)
99
Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems), Eastern Book Company,
Lucknow, 7th Edition (2006), pp. 394- 395

11
0
well-accepted International norms. It superseded the obsolete and
cumbersome Arbitration Act, 1940. The new Act has made radical
and uplifting changes in the law of arbitration and has introduced
new concepts like conciliation to curb delays and bring about
speedier settlement of commercial disputes. The new Act has been
codified on the lines of the Model Law on International Commercial
Arbitration as adopted by the United Nations Commission on
International Trade Law (UNCITRAL). One of the most commendable
objects of the new Act is to minimize the role of the courts in the
arbitration process. The Arbitration and Conciliation Act, 1996 laid
down the minimum standards, which are required for an effective
Alternative Dispute Resolution Mechanism. 100
Further, the recent amendments of the Civil Procedure Code will
give a boost to ADR. Section 89 (1) of CPC deals with the settlement
of disputes outside the court. It provides that where it appears to
the court that there exist elements, which may be acceptable to the
parties, the court may formulate the terms of a possible settlement
and refer the same for arbitration, conciliation, mediation or judicial
settlement.101 While upholding the validity of the CPC amendments
in Salem Advocate Bar Association, Tamil Nadu v. U.O.I,102 the
Supreme Court had directed the constitution of an expert
committee to formulate the manner in which section 89 and other
provisions introduced in CPC have to be brought into operation.
The Court also directed to devise a model case management formula

100
101
JusticeDispensation through ADR Systems in India, viewed at www.legalindia.in (visited on November 29,2018)
Ibid
102
(2005) SCC 6 (344)
as well as rules and regulations, which should be followed while
taking recourse to alternative dispute redressal referred to in
Section 89 of CPC. All these efforts are aimed at securing the
valuable right to speedy trial to the litigants.103
ADR was at one point of time considered to be a voluntary act on
the apart of the parties which has obtained statutory recognition in
terms of Civil Procedure Code (Amendment) Act, 1999;
Arbitration and Conciliation Act, 1996; Legal Services
Authorities Act, 1997 and Legal Services Authorities
(Amendment) Act, 2002. The access to justice is a human right
and fair trial is also a human right. In India, it is a Constitutional
obligation in terms of Art.14 and 21. Recourse to ADR as a means
to have access to justice may, therefore, have to be considered as a
human right problem. Considered in that context the judiciary will
have an important role to play.104
The Supreme Court of India has also suggested making ADR as ‘a
part of a package system designed to meet the needs of the
consumers of justice’. The pressure on the judiciary due to large
number of pending cases has always been a matter of concern as
that being an obvious cause of delay. The culture of establishment
of special courts and tribunals has been pointed out by the Hon’ble
Supreme Court of India in number of cases. The rationale for such
an establishment ostensibly was speedy and efficacious disposal of
certain types of offences.105

103
Singh Sunil, Alternative Dispute Resolution in India viewed at www.ijtr.nic.in (visited on November 29,2018)
104
Justice Dispensation through ADR Systems in India, viewed at www.legalindia.in (visited on November 29,2018)
105
Ibid
Industrial Disputes Act, 1947 provides the provision both for
conciliation and arbitration for the purpose of settlement of
disputes. In Rajasthan State Road Transport Corporation v.
Krishna Kant, the Supreme Court observed: “The policy of law
emerging from Industrial Disputes Act and its sister enactments is
to provide an alternative dispute-resolution mechanism to the
workmen, a mechanism which is speedy, inexpensive, informal and
unencumbered by the plethora of procedural laws and appeals
upon appeals and revisions applicable to civil courts. Indeed, the
powers of the courts and tribunals under the Industrial Disputes
Act are far more extensive in the sense that they can grant such
relief as they think appropriate in the circumstances for putting an
end to an industrial dispute.”106
Section 23(2) of the Hindu Marriage Act, 1955 mandates the duty
on the court that before granting relief under this Act, the Court
shall in the first instance; make an endeavour to bring about
reconciliation between the parties, where it is possible according to
nature and circumstances of the case. For the purpose of
reconciliation the Court may adjourn the proceeding for a
reasonable period and refer the matter to person nominated by
court or parties with the direction to report to the court as to the
result of the reconciliation [Section 23(3) of the Act].107
The Family Court Act, 1984 was enacted to provide for the
establishment of Family Courts with a view to promote conciliation
in, and secure speedy settlement of, disputes relating to marriage
106
Ibid
107
Ibid
and family affairs and for matter connected therewith by adopting
an approach radically different from the ordinary civil proceedings.
Section 9 of the Family Courts Act, 1984 lays down the duty of the
family Court to assist and persuade the parties, at first instance, in
arriving at a settlement in respect of subject matter. The Family
Court has also been conferred with the power to adjourn the
proceedings for any reasonable period to enable attempts to be
made to effect settlement if there is a reasonable possibility.108
Shri M.C. Setalvad, former Attorney General of India has observed:
“….equality is the basis of all modern systems of jurisprudence and
administration of justice… in so far as a person is unable to obtain
access to a court of law for having his wrongs redressed or for
defending himself against a criminal charge, justice becomes
unequal, …Unless some provision is made for assisting the poor
men for the payment of Court feesand lawyer’s fees and other
incidental costs of litigation, he is denied equality in the opportunity
to seek justice.”109

108
Ibid
109
Ibid
INTERNATIONAL COMMERCIAL ARBITRATION
With the growth of globalization, liberalization regimes and rapid
advancement in international business relationships, it is
increasingly pertinent to have a flexible and quick method of
resolving disputes. Arbitration is a preferred process of dispute
resolution chosen by parties, wherein parties intentionally agree to
submit their case to a neutral third party and agree to be bound by
his/her decision. Section 2(1)(f) of The Arbitration and Conciliation
Act, 1996, defines an International Commercial Arbitration which
means: an arbitration relating to disputes arising out of legal
relationships, whether contractual or not, considered as commercial
under the law in force in India and where at least one of the parties
is—
(i) An individual who is a national of, or habitually resident in,
any country other than India; or
(ii) A body corporate which is incorporated in any country other
than India;
(iii) A company or an association or a body of individuals whose
central management and control is exercised in any country
other than India;
(iv) The Government of a foreign country

The scope of this section was determined by the Supreme Court in

the case of TDM Infrastructure Pvt. Ltd. v. UE Development
India Pvt. Ltd110where in spite of company having a foreign control,

110
2008 (2) UJ SC 0721
the Supreme Court concluded that, “a company incorporated in
India can only have Indian nationality for the purpose of the Act.”

When Arbitration is deemed to be International

In the United Nation Commission on International Trade Law
(UNCITRAL) Model Law, arbitration is deemed to be international if
any one of four different situations is present:
Article 1 (3)
(a) The parties to the arbitration agreement have, at the time of the
conclusion of the agreement, their places of business in different
States.
(b) One of the following places is situated outside the State in which
the parties have their places of business:
(i) The place of arbitration, if determined in or pursuant to, the
arbitration agreement, is situated outside the State in which the
parties have their places of business
(ii) Any place where a substantial part of the obligations of the
commercial relationship is to be performed or the place with which
the subject-matter of the dispute is most closely connected
(iii)The parties have expressly agreed that the subject-matter of the
arbitration agreement relates to more than one country.
Meaning of Commercial:
The word commercial includes the day to day international
business activities that have become part of the international trade
nowadays. In Koch Navigation Inc v Hindustan Petroleum Corp
Ltd111it was held that “liberal construction is to be given to any
expression or phrase used in the Act”.
In Atiabari Tea Co. Ltd v State of Assam112, it was held that
“trade and commerce in India has a wide meaning.”
Applicability of Part 1 of the Act in International Commercial
Arbitration:
In Bhatia International v Bulk Trading S.A113 , it was held that
Part I of Arbitration and Conciliation Act, 1996 would equally apply
to International Commercial Arbitrations having seat outside India,
unless any or all the provisions have been expressly excluded.
In Bharat Aluminium v Kaiser Aluminium114 , the Court decided
that a constitutional bench of the Court would reconsider the
Court's own ruling in Bhatia International case. The Supreme Court
gave following ruling in the above mentioned case:
1. “Part I not applicable to International Commercial Arbitrations
having seat outside India: Section 2(2) makes a declaration that
Part I of the Arbitration Act, 1996 shall apply to all arbitrations
which take place within India. We are of the considered opinion that

111
112
(1989) 4 SCC 259
(1989) 4 SCC 259
113
(2002) 4 SCC 105
114
(2012) 9 SCC 552
Part I of the Arbitration Act, 1996 would have no application to
International Commercial Arbitration held outside India.
2. No Interim Injunction: No suit for interim injunction simplicitor
would be maintainable in India, on the basis of an international
commercial arbitration with a seat outside India.
3. Section 9 i.e. Interim Relief cannot be granted if seat is outside
India: In our opinion, the provision contained in Section 2(2) of the
Arbitration Act, 1996 is not in conflict with any of the provisions
either in Part I or in Part II of the Arbitration Act, 1996. In a foreign
seated international commercial arbitration, no application for
interim relief would be maintainable under Section 9 or any other
provision, as applicability of Part I of the Arbitration Act, 1996 is
limited to all arbitrations which take place in India.
4. Law to be applied prospectively: In order to do complete justice,
we hereby order, that the law now declared by this Court shallapply
prospectively, to all the arbitration agreements executed hereafter.”
Why Arbitration preferred in solving International Disputes
1. Speedy dispute solving mechanism:
Court process involves extensive procedures and rules, which a
party needs to follow. If parties refer their dispute to arbitration,
they need not follow strict procedures of law. Hence, the dispute
solving becomes speedy.
2. Enforceability of Arbitral Awards:
It is more readily and swiftly enforced as compared to the court
judgements.
3. Arbitrator is impartial:
 Neutral third party is chosen to decide disputes. This third party
is chosen mutually by both the parties to dispute.
4. Arbitrator chosen may be an expert:
Based on the issue of dispute, parties may choose a specific
arbitrator having that particular technical experience and
expertise in the area disputed.
5. Arbitration less expensive:
Since arbitration is a time effective remedy and does not involve
too many procedures, it is less expensive as compared to
litigation procedures.
ANALYSIS
In recent years there has been a significant increase in
international businesses operating out of India. This has led to an
increase in international arbitrations having its seat of arbitration
in India. Both arbitration and litigation perform the same function
i.e. effective delivery of justice but the fact is that arbitration has
few characteristics which makes it a more viable option as
compared to its counterpart. Thus, the degree of protection that it
guarantees is far reaching.
The judicial trend post Bhatia, as far as international arbitrations
held out of India are concerned, showed a preference for
interference on the part of Indian courts. This is amply evident from
the judgment of Indian courts.This clearly had an adverse impact
on the business environment prevailing in the country. It also railed
against the underlying principles of arbitration as a method of
speedy resolution of disputes. The Supreme Court instead of
overruling the Bhatia case used its ratio to devise an implied
exclusion route. The Apex Court also widened the ambit of this
implied exclusion route sufficiently enough to cover all fact
scenarios where an ICA was held out of India. However, the position
soon changed with the Supreme Court judgment in the BALCO
case, where the court expressly overruled its Bhatia decision. The
BALCO decision, however, had only prospective applicability. "The
Bhatia ratio continued to operate for cases where the arbitration
agreement had been executed before 6 September 2012. However,
the judicial trend of following the implied exclusion route

12
0
continued. Even in the post BALCO era, the Apex Court, while
conceding that Bhatia ratio was applicable, followed the judicial
trend of taking the implied exclusion route to exclude the
applicability of Part I. The recent Amendment Act changes
everything, as it makes Sections 9, 27, 37(1)(a), and 37(3) applicable
to international commercial arbitrations held out of India. The
Amendment Act, however, allows the parties to exclude the
applicability of Part I, in general, and these provisions, in
particular, by mutual agreement. There is still some uncertainty
over the applicability of the Amendment Act.
COURT PROCEEDING
CASE DETAILS
DATE: - 02NDNovemeber 2018
PLACE: - M.C. SETALVAD LAWYERS’ CHAMBER
ARBITRATOR: - Shri S.M. Agarwal
CASE NO. 32 of 2017
PARTIES TO ARBITRATION: - M/S Simplex Project Ltd
….……………Claimant
New Delhi Municipal
Council…….Respondent
FACTS OF THE CASE
In the case an arbitration agreement was entered into between the
parties. Later on disputes arose between the parties resulting in the
commencement of arbitral proceedings. Under the terms of the
award, a direction was issued under which the parties were
required to return documents of title and share certificates
contemporaneously with paying an amount of Rs. 3,58,11,000
together with interest at 12% p.a. on a sum of Rs. 2.55 crores. SPL
challenged the award of the arbitral tribunal under Section 34 of
the Arbitration and Conciliation Act, 1996 on the ground that the
arbitral award could not be executed against the appellant who is
admittedly not a signatory to the agreement.
STAGE OF THE MATTER
The proceeding is at the stage of arbitration and was given the next
date of arbitration.
PERSONAL OBSERVATION
During the proceeding, I observed that the parties to the matter
were of the opinion to not file a suit but to resolve the matter
through mutual consent over arbitration.
The arbitrator was well aware of the facts of the case and the plea of
the parties, and keeping that in view he took into consideration all
the necessary requirements from both the parties. He was not
biased to any of the parties, and was giving his best to bring the
matter to a settlement which will be agreed by both the parties.
He took into his consideration that both the parties were
comfortable with his observation and award contrary to the
proceeding which take place in the trail suit.
NATIONAL SEMINAR ON EMERGING TRENDS OF ALTERNATIVE DISPUTE
RESOLUTION IN INDIA

The National Seminar on Emerging Trends of Alternative Dispute

Resolution in India was organized by Faculty of Law, Jamia Millia
Islamia on October 9-10, 2018.
Objective of this Seminar:
Alternative Dispute Resolution is being increasingly acknowledged
in the field of law and commercial sector. The very reasons for
origin of Alternative Dispute Resolution are tiresome processes of
litigation, higher costs and inadequacy of the court system. In the
final quarter of the last century, there was phenomenal growth of
science and technology. It has made a great impact on commercial
life while increasing competition throughout the world. It also
generated a concern for protection of the rights of the parties. The
legal system does not provide adequate response to the new regime
and problems relating to the commercial world which requires
speedy and effective resolution of disputes. In this context, dispute
resolution through ADR techniques are seen as more effective and
viable. Considering its significance, the Faculty of Law, JMI
organised a Seminar on Alternative Dispute Resolution with the
following proposed objective:
 To enhance the knowledge, understanding and scope of ADR;
 To explore and expound the understanding of the emerging trends
of ADR;
 To create awareness of importance of ADR as part of justice
delivery system;
 To strengthen the implementation of ADR effectively;
 To equip the students and professionals with practical aspect of
ADR techniques to promote independent career in the field; &
To look for futuristic assessment of best practicein the area of
ADR.
Alternative Dispute Resolution (ADR) is a collection of techniques
used for the purpose of resolving conflicts informally while avoiding
lengthy and costly legal procedures. The present seminar has been
conceptualized with the objective of taking stock of the progress
made by India in the sphere of law; while creating space for
discussion on matters pertaining to legal issues concerning
Alternative Dispute Resolution. In this background there is an
incessant call to hold seminars, conferences, workshops, symposia
and discussions to elicit valuable inputs from the ground so as to
effectively shed light on the usage of the best practices of dispute
resolution techniques in India. The Seminar aims to enhance the
understanding of the legal issues related to dispute resolution
techniques while providing an updated account of law incorporating
the recent amendments in the Arbitration and Conciliation Act,
1996.
This National Seminar offered an opportunity to experts from
various disciplines comprising of Researchers, Academicians,
Policymakers, Government Organizations, Law Experts,
International Lawyers, Judges, Negotiators, Diplomats, Government
Representatives, National Organizations, Media Representatives,
Non-Governmental Organizations and Students to come together
and share their valuable thoughts on the issues relating to following
majors themes:
(i) Alternative Dispute Resolution System
(ii) Emerging Issues in Arbitration, Conciliation, Mediation and
Negotiation
(iii) Legislation and ADR Practices in India
(iv) Role of Judiciary in ADR
(v) ADR and Criminal Justice System in India
(vi) Scope of Institutional Arbitration in India
(vii) International Commercial Arbitration
(viii) Recognition and Enforcement of Foreign Arbitral Awards
(ix) Mediation in Family and Matrimonial Disputes
(x) Online Dispute Resolution
(xi) Emergency Arbitration
The welcome speech was delivered by Prof. Kahkashan Y.Danyal,
(Officiating Dean, Faculty of Law, JMI) and Mr. P.K. Malhotra,
Former Law Secretary, Ministry of Law & Justice, Govt. of India,
New Delhi was sharing the dais as the chief guest for the event. The
other dignitaries and experts in the field who dwelt upon the
subject of discussion included Mr. Ajay Thomas, Vice Chairman,
ICC India Arbitration Group, New Delhi, Mr. Nikhil Chopra,
Coordinator, Delhi International Arbitration Centre, New Delhi, Dr.
Aman Hingorani, Advocate -on-Record & Accredited Mediator,
Supreme Court of India, New Delhi, Mr. Ratan K. Singh, Fellow of
Chartered Institute of Arbitrators, Advocate & Arbitrator, South
Delhi, Prof.(Dr.) Pradeep Kulshrestha, Dean, School of Law, Sharda
University, Prof. Saleem Akhter, Former Dean & Chairman, Faculty
of Law, Aligarh Muslim University, Aligarh
The event had five technical sessions and 88 papers scheduled for
presentation.
Prof. Nuzhat Parveen Khan, Dean, Faculty of Law, JMI, Dr.
Faizanur Rahman, Assistant Professor, F/L, JMI and the team of
enthusiastic volunteers toiled a lot to make this Seminar a grand
success.
Finally Dr. Faizanur Rahman, Convener of the Seminar delivered
formal vote of thanks extending subtle gratitude to the dignitaries,
academicians, participants and the student volunteers at the
Valedictory Session. The seminar got concluded with lot of positive
energy towards the subject and future prospects.
CONCLUSION
ADRs are an integral part of the policies aimed at improving
access to justice. In effect, they complement judicial
procedures, insofar as the methods used in the context of
ADRs are often better suited to the nature of the disputes
involved. ADR can help the parties to enter into dialogue
where this was not possible before, and to come to their own
assessment of the value of going to court.
While ADR processes, such as mediation and conciliation,
must form an integral part of a modern civil justice system in
providing greater access to justice, these processes should
only be used in appropriate cases. Furthermore, the role of the
legal profession should not be overlooked in relation to
assessing the appropriateness of ADR. Many disputants may
not be aware of the full spectrum of dispute resolution
processes which are available to them and, when assessing a
client case, solicitors should also assess whether ADR is
appropriate because: An effective justice system must be
accessible in all its parts. Without this, the system risks losing
its relevance to, and the respect of, the community it serves.
Accessibility is about more than ease of access to sandstone
buildings or getting legal advice. It involves an appreciation
and understanding of the needs of those who require the
assistance of the legal system.
Because justice is not executed speedily men persuade
themselves that there is no such thing as justice. Sharing the
same sentiments, Chief Justice Bhagwati said in his speech on
Law Day, “I am pained to observe that the judicial system in
the country is on the verge of collapse. These are strong words
I am using but it is with considerable anguish that I say so.
Our judicial system is creeking under the weight of errors.”
Arrears cause delay and delay means negating the
accessibility of justice in true terms to the common man.
Countless rounds to the Courts and the lawyers’ chambers
can turn any person insane. Even then loitering and wasting
time in the corridors of Courts has become a way of life for a
majority of Indians who day by day are becoming litigous.
Some of the main reasons for delay in the disposal of cases are
abnormal increase in the number of cases going to Courts and
Tribunals, mainly due to faulty legislation enacted hurriedly,
arbitrary administrative orders, increased consciousness of
one’s rights and gambler’s instinct in a litigant due to
multiplicity of appeals and revisions provided in law.” The
disputants want a decision, and that too as quickly as
possible. As the problem of overburdened Courts has been
faced all over the world, new solutions were searched. Various
Tribunals were the answer to the search. In India, we have a
number of Tribunals. However, the fact of the matter is that
even after the formation of so many Tribunals, the
administration of justice has not become speedy. Thus, it can
be safely said that the solution lies somewhere else. All over
the globe the recent trend is to shift from litigation towards
Alternative Dispute Resolution. It is a very practical
suggestion, which if implemented, can reduce the workload of
Civil Courts by half. Thus, it becomes the bounden duty of the
Bar to take this onerous task of implementing ADR on itself so
as to get matters settled without going into the labyrinth of
judicial procedures and technicalities. The Bar should be
supported by the Bench in this herculean task so that no one
is denied justice because of delay. It is important here to
mention the statement made by John F. Kennedy in this
respect: “Let us never negotiate out of fear but let us never fear
to negotiate.”

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 really given rise to a
new force to ADR and this 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.

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