REDEFINIG ADR IN INDIA: TRANSITION FROM ‘ALTERNATIVE’ TO ‘APPROPRIATE’ DISPUTE RESOLUTION MECHANISMS

  
Author: Tanya Mathur, Gujarat National Law University


ABSTRACT

This paper delves into the challenges faced by the formal judicial system while emphasizing the growing significance of ADR mechanisms in shaping the future of dispute resolution. Although the concept of Alternative Dispute Resolution (ADR) is not entirely new, it has existed in various forms throughout history. ADR offers a flexible approach to resolving disputes without involving lengthy court proceedings. It operates as a parallel mechanism to the formal judicial system, striving to amicably resolve conflicts with the mutual consent of the parties involved. The paper also explores the historical evolution of ADR in India, tracing its roots through ancient times, the Mughal era, the British colonial period, and post-independence developments. Given the excessive backlog in formal courts, delivering timely justice has become a significant global concern, as delayed justice often equates to justice denied. In this context, ADR emerges as more than just an “alternative”; it is better regarded as an “appropriate” mechanism for dispute resolution.
This study also highlights potential solutions and suggests ways to implement them effectively. With the Chief Justice of India envisioning India as a global hub for ADR, the mechanism has evolved into a nationwide movement, pivotal in alleviating the judiciary’s workload. However, for ADR to be seamlessly integrated into society, certain modifications are essential to enhance its flexibility and accessibility.

INTRODUCTION

Alternative dispute resolution (ADR) is a flexible method through which conflicts can be resolved without interference with the court proceedings. The main objective of the ADR is to establish less costly, easy, speedy, and reachable justice. ADR techniques are mainly nonjudicial bodies in nature, which are used to deal with most of the issues that can be settled ou by law with conformity among the parties, and this method is inspired by most approved faith, which talks about justice delayed justice denied.ADR is significant to the corporate sectors and economically poor people who need speedy and transparent methods to attain justice and resolve their problems flexibly. That is why it is an alternative to litigation, and it should be considered an essential part of the company’s policy. It has been shown that arbitration and mediation are very manageable compared to litigation, and it makes good business sense that adding an arbitration and mediation clause in the legal agreement will help ensure that the dispute will be resolved in a timely and flexible way.

MEANING OF ALTERNATIVE DISPUTE RESOLUTION

The phenomena alternative dispute resolution has been defined as a dispute settlement method that is very effective and alternative to costly and time-consuming justice delivery system. The ADR refers to the whole thing that promotes settlement negotiation in which parties agree to discuss without deviation from each other. This method came into existence to tackle most of the problems, address possible societal development issues within the ambit of ADR, and reduce the burden from our judicial system. It is an alternative that shows that the parties have the freedom to choose this method and accept it as an alternative to litigation. Disputes should be settled at the minimum possible expenses in terms of money so that the government can easily engage more resources for some constructive and positive outcomes for the development of society. There is a legal system in each society to settle conflicts, and whenever any person gets injured, he can go to the door of that legal system for justice. Almost all the legal systems are trying their best to execute the legal idea whenever there is wrong in that society because there must be a remedy for almost all the conflicts so that no one shall have to take the law into their own hands. The Court has become overburdened with the large number of pending cases in the court, which ultimately results in dissatisfaction in society regarding the justice delivery system, and its capability to dispense justice comes into question. It is important that this dissatisfaction can be settled. At the same time, the alternative mechanism should be accepted, which does not have less complexities but is as flexible, reasonable, and binding on the people adopting it.

LAWS IN OTHER COUNTRIES REGARDING ADR

The growth of Alternative Dispute Resolution (ADR) in the USA originated during the British and Dutch colonial era, expanding significantly after independence. The Patent Act of 1970 introduced arbitration for patent disputes, while mediation became integral to collective bargaining and employment disputes in the 19th century. Institutions like the BMC and FMCS further facilitated ADR, and the establishment of the American Arbitration Association in 1926 formalized its rules and practices. By the 21st century, ADR became ingrained in legal education, supported by the American Bar Association. In Japan, judges often mediate disputes, with 40% of cases resolved through this mechanism. The judge’s role as a mediator is pivotal in promoting settlements. In China, ADR integrates with judicial or arbitration processes, emphasizing mediation through the People’s Mediation System, which preserves relationships and expedites resolutions. France introduced mediation in response to high divorce costs in the 1980s, formally recognizing it in the 1990s through its civil code. Judges appoint mediators for short-term resolutions, and arbitration handles civil and commercial matters with procedural flexibility. In Russia, public demand and legislative efforts have advanced ADR, with arbitration being the dominant method, supplemented by mediation and conciliatory practices for out-of-court settlements.


WHY ADR IS CONSIDERED AS NEED OF THE HOUR

There is a growing trend that ADR is becoming more popular as it is less time-consuming, more effective & efficient than the traditional or formal redressal mechanism. There are several reasons why people opt for ADR for their peaceful dispute settlement. Firstly, it is more cost-effective. Mediators usually claim that mediation is cheaper than moving their issues through court. It can be reasonably much cheaper than taking legal action against anyone. But this is not always the case when mediation ends in a settlement people think that it is cheaper as compared to full court hearings but if mediation fails then people just thought that it is nothing but a waste of money. the ideal difference comes when that if one is unable to afford the court fee then there may be certain legal provision by which the individual may be entitled in the reduction of the fee or even sometimes there will full waiver of the fee but unlike the traditional courts, most of the mediators won’t reduce their fee and this may make ADR inappropriate dispute redressal system. Secondly, many forms of ADR are quicker than the traditional court method. If an individual has a small claim, then the mediation process is more beneficial for him but if the matter has some urgency like an injunction, then going by the traditional court could be beneficial for the individual. Thirdly, it is not adversarial in nature as in court hearing the bad matter may become worse as it simply puts one party against the other and at the end of the day there will be one winner and a loser. Using the mechanism of ADR, where both the parties discuss with each other and come to a conclusion as it allows hearing the one party’s point of view and having them hear the other party’s point of view and, at last, both agreeing on the same pedestal.

Fourthly, there is multiple way of seeking justice under ADR than compare with courts. Arbitration or Mediation is well suited if the individual is only seeking an apology, change in the rules of an organization, change in the policy or any explanation means a person is getting what he wants which may not be visible in the traditional court settlement. Fifthly, ADR provides more flexibility as compare to moving to courts. If individual is preferring the settling of the dispute by phone, through letters, via mail or face to face discussion then ADR mechanism is best suited for him. As even today, many ombudsmen system have been established by the government to investigate the complaints through letters and documents without being having a formal hearing. Arbitrators also usually bring both the conflicting parties together for a one-on-one discussion to come to a agrees solution. And sixthly, ADR provides a solution that satisfies both the parties as arbitrators or mediators always encourage people in a conflict to have a discussion where they provide them an ample of options to settle their differences. Instead of just coming for a unreasonable compromise they will try to settle the dispute with an agreement that is accepted for both the parties and which led this solution long lasting.

HISTORICAL BACKGROUND OF THE CONCEPT OF ADR IN INDIAN CONTEXT

The concept of Alternative Dispute Resolution (ADR) in India has evolved significantly through various historical eras, demonstrating its long-standing presence as a flexible mechanism for dispute resolution.

Ancient India: ADR mechanisms were deeply rooted in traditional societal structures, involving entities like Kulas (assemblies of elders handling civil and minor criminal disputes), Srenis (professional guilds addressing disputes among members), and Parishads (assemblies of learned individuals well-versed in religious and legal norms). Kings held the highest authority, overseeing and maintaining a hierarchical system of appeals.

Mughal Period: Disputes were resolved through three main systems: religious courts led by Quazis, secular courts managed by officials like governors and Brahmins (for Hindu matters), and political courts under the supervision of higher administrative officers. Villages largely relied on panchayats and caste courts for local dispute resolution, with the emperor as the final appellate authority.

British Era: The advent of formal arbitration in India was marked by the Bengal Regulations of the late 18th century, followed by the Indian Arbitration Act of 1899, modeled after the English Arbitration Act, 1889. The system was initially limited to Presidency towns, but the Arbitration Act of 1940 extended the framework to wider applicability, shaping the legal foundation for arbitration until post-independence reforms.

Post-Independence: ADR evolved further with the establishment of Lok Adalats under the Panchayati Raj system, aimed at providing swift and cost-effective justice. Significant progress came with the Legal Services Authorities Act of 1987, emphasizing the constitutional mandate for speedy justice. The Trade Dispute Act of 1929 and subsequent industrial dispute regulations further institutionalized conciliation and arbitration mechanisms, addressing industrial conflicts. The Arbitration and Conciliation Act of 1996 modernized arbitration in India, aligning with global standards and focusing on efficient civil dispute resolution.

Despite these developments, ADR in India still faces challenges, such as the absence of a comprehensive legal framework addressing all forms of ADR. Continued reforms and adoption of best practices are necessary to enhance its effectiveness and integration into the justice delivery system.


RECOGNITION OF ADR AS AN APPROPRIATE MECHANISM

There is a need to increase the use of ADR in the Indian system also, as this mechanism helps to identify the true issues of the dispute without increasing any further dispute, and it resolves few or all such identified issues. Under the ADR mechanism, agreement can be reached between the parties on the disputed issues. All the needs and interests of both parties are met by peaceful dispute settlement. Sometimes, under court hearing, parties may not be able to reach the true cause of the dispute, but the procedure of arbitration and conciliation provides ample opportunities for both conflicting parties to reach an understanding of each other’s needs and interests. There is always a chance that under court procedure, the relationship between the parties may be diminished, but under the ADR system, it provides the possibility of preserving the relationship, and the result may also improve the relationship by settling both parties’ concerns. In India also, the mechanism of ADR has been used on multiple occasions as even our Indian judicial system recognizes the mediation system, which is a fruitful process to solve disputes, and the very prevalent example of such is the Ayodhya Temple-Masjid dispute. For a very long time, this matter has been pending in the Supreme Court, which first referred the matter to a three-member panel consisting of Sri Sri Ravishankar, Sri Ram Panchu, and Kulifijullah to come to a conclusion in the long dispute Ram Janambhoomi- Babri Masjid case. The history cannot be repealed, but this matter at that time involved the emotions of almost all the people of the country, so there was public interest at large. The honorable Apex Court itself realized the need to settle the issue by peaceful mechanism first, as there should be at least a last-ditch effort should be made to settle this dispute through mediation. The process of mediation allows both parties to focus on their need & interests and come to a conclusion that is best for both of them. Settling any public concern issue via mediation always provides an opportunity for both parties to understand each other concerns and come to a win-win situation where both parties walk away from conflict by putting their heads high. The procedure of mediation as an alternative dispute resolution is quite professional in nature, and ideally, by choosing the process of mediation, the Apex Court has given a chance to both parties not to fight perpetually over such matters, and both parties accept the best outcome. By opting for alternative dispute resolution in such a grave issue, the Supreme Court has given an array of hope that the procedure of mediation and arbitration can be used in serious matters, too, as for this court, it has felt that now ADR can be workable as an appropriate dispute red. So, the use of ADR allows both parties to create their own process, and the arbitrator or the mediator can be selected based on substantive knowledge. The parties can maintain confidentiality in the proceedings which may compel proper behavior from both the parties and minimize the bad faith against each other. There is always less backlog than in the traditional court system as it is tailored by the rules of procedure. The proceedings as compared to court hearings is shorter, which means parties’ legal expenses will also be shorter and this may make ADR an appropriate dispute redressal mechanism in terms of less expensive, less complex proceedings, peaceful mechanism, and growth in the cordial relation between the conflicting parties after coming to the conclusion as per their need and interest.

CONCLUSION & SUGGESTIONS

So, in order to make effective use of the mechanism of alternative dispute redressal, the government needs to prioritize such mechanisms as arbitration, mediation, and conciliation. Though in the past it has been used in multiple instances by people yet, it is required to reach its optimum use. This method came into existence to tackle most of the problems and try to do possible societal development issues within the ambit of ADR and reduce the burden from our judicial system. It is an alternative that shows that the parties have the freedom to choose this method and accept it as an alternative to litigation of their own choice. To make such a mechanism fruitful, the government needs to come up with legislation that promotes this in a cost-effective manner, as even today, many people have to face the issue of the high cost of appointing an arbitrator or a mediator because one may get free of cost litigation, but it is very difficult to get pro bono mediation. It is important that this dissatisfaction can be settled, and at the same time, the alternative mechanism should be accepted, which does not have less complexities but is as flexible, reasonable, and binding on the people adopting it. Hence, we can say that till today, the alternative dispute redressal mechanism is not an appropriate mechanism as one may have to face financial shortage to settle their dispute, for which the government may have to come up with appropriate legislation.


FAQS

Why is ADR important in the modern judicial system?
ADR helps alleviate the excessive backlog in formal courts, ensuring timely justice. It provides an efficient and transparent method of resolving disputes, particularly beneficial for corporate sectors and economically disadvantaged groups.

What are the key challenges faced by the formal judicial system?
The formal judicial system is burdened with:
Excessive backlog of cases.
Delayed delivery of justice, often equated with justice denied.
Lack of accessibility and flexibility for economically weaker sections.

How can ADR be integrated more effectively into society?
To enhance ADR’s role, the following steps are suggested:
Promote awareness and education about ADR.
Simplify procedures to increase accessibility.
Amend laws to support a more flexible ADR framework.
Incorporate ADR in company policies and legal agreements.

Why is ADR considered an “appropriate” mechanism rather than just an “alternative”?
Given its flexibility, cost-effectiveness, and efficiency, ADR is no longer seen merely as an alternative to litigation but as an essential and appropriate means of resolving disputes.

What is the vision for India as a global hub for ADR?
With support from the judiciary and policymakers, ADR is being promoted as a movement to reduce the judiciary’s workload and position India as a global leader in dispute resolution services.

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