Understanding Alternative Dispute Resolution

Mitali Chaurasia
March 16, 2021

The expeditiously growing era of Globalisation led toseveral disputes between the people. The Indian Courts have been quite slow andinefficient to dispose of these disputes. This inefficiency, delay, andendlessly long adjudication by the Indian Judicial System elicited the peopleto realize the importance of a simpler, efficient, and more speedy way toresolve the dispute. By virtue of Section 89 of The Code of CivilProcedure,1948, the courts have the power to refer a dispute for AlternativeDispute Resolution (ADR) if there appears to be a chance of settlement outsidethe court.

Alternative Dispute Resolution (ADR) refers tosettling a dispute without litigation. In simpler words, ADR refers to aprocess by which disputes are settled between the parties outside theCourtroom. ADR uses a neutral third party to bring about an amicable solutionwithout judicial interference and any trials by the judiciary. ADR process isless expensive, more fast-paced and it resolves all types of matter includingcivil, commercial, family, industrial, etc.

An ADR mechanism is mainly concerned with deliveringjustice in minimum time without any delay like litigation, through mutualconsent of the parties. ADR mechanism recognizes five methods that are widelyaccepted to resolve any dispute in India. These are:

A.          Arbitration

B.           Conciliation

C.           Mediation

D.          Negotiation

E.           Lok Adalat


A.  Arbitration:An arbitrator or arbitral tribunal (neutral person) makes a decision (award) onthe dispute after hearing the arguments and evidence from each party. Thedecision is mostly binding on the parties and there is very limited ground forappeal. Arbitration is less formal than trial as many rules of evidence arerelaxed.


B.  Conciliation:In Conciliation, the settlement between disputing parties arrives with the helpof a conciliator. The Conciliator meets the disputing parties and helps them toenter into an agreement. Conciliation is a private and informal process. TheConciliator is often an expert in the disputed field and he/she may investigatethe dispute and draft a report stating the most favorable method for settlementof the dispute. The decision of the Conciliator is not legally binding upon theparties.


C.     Mediation:A neutral third party known as 'Mediator' helps to settle the dispute byarriving at an amicable decision that is acceptable by all the parties.Mediation is a voluntary process and hence the disputing party is not obligedto agree to the settlement. A mediator acts as a facilitator to achievecooperation between the disputing parties. The mediator may influence thedisputing parties to cut down on demands to reach a mutually acceptablesolution but the mediator cannot interfere in the decision of the dispute. Themediator does not decide the outcome of the dispute instead the outcome lies inthe hands of disputing parties. A successful mediation leads to an agreement ofsettlement.


D.    Negotiation:In Negotiation, there is no neutral third party to assist the parties insettling the dispute. The parties work together to come to a compromise bythemselves. The main advantage of negotiation is that the parties retaincontrol over the process and solution of the dispute. The negotiation processprovides the disputing parties an opportunity to hear each other and find theirdifferences, exchange ideas, find a solution, and get a commitment to reach anagreement.


E.     LokAdalat: 'Lok Adalat' literally means 'People's Court'. National Legal ServiceAuthority (NALSA) along with other legal institutions conduct Lok Adalat. LokAdalat is a platform where cases pending in court or any dispute whose lawsuitis not filed are referred. The persons who decide the case referred to LokAdalat are called Members of Lok Adalat. They only coax parties to settle thedispute in Lok Adalat. Lok Adalat does not charge any fee to settle the matter.If disputing parties are not satisfied by the decision of Lok Adalat then theycan take the recourse of litigation and approach the court of suitablejurisdiction. The decision of Lok Adalat is considered to be a decree of aCivil Court and is final and binding.

Out of these five methods of ADR, Arbitration andMediation are the most common method for settling disputes.  However, Mediation can be said to be the bestmethod for settling a dispute and this can be ascertained by the followingpoints:

1.            Mediation allows a speedyresolution in matters which are easy to resolve. If the matter is complex thenresolution takes time but still, it is relatively faster than other methods.

2.            The costs incurred tosettle the matter by mediation are inexpensive as the fee of the mediator ispre-decided by the parties and since mediation is an informal process, andwithout any formalities like that of litigation, it results in reducing thecosts incurred by parties.

3.            Mediation is the bestmethod for settlement in cases where disputing parties want to preserve theirrelationship with each other. It is most effective in the case where disputingparties do not hold each other responsible for what has happened instead theyjust want to settle the dispute and preserve their bond. The objective ofMediation is not to judge anyone as guilty or innocent but to encouragecompassion, empathy, and finally help the parties to reach an agreement bythemselves.

4.            Mediation is aconfidential and organized process wherein full privacy is given to parties tocome to a settlement. The proceedings are not a matter of public concern andhence the proceeding are held in private and kept confidential.

5.            In Mediation parties havecommand over their contribution in the proceeding. The parties have the powerto decide on the mediator of their choice mutually. It is less stressful ascompared to litigation and arbitration.

6.            Mediation is an informalprocess where neither the rules of court or legal precedents are involved. Themediator can only help the parties to come to a settlement but ultimately thedecision to agree to the settlement lies in the hand of the parties themselvesand not with the mediator. The mediator can only act as a facilitator to solvethe dispute but he cannot impose his decision on parties.

7.            The settlement arrived atby the process of Mediation is non-binding on the disputing parties. Therefore,if the parties are still not satisfied with the settlement then they can takethe recourse of litigation. However, the settlement which is agreed by theparty is final and there is no chance of appeal.

Alternative Dispute Resolution is a cost andtime-saving mechanism wherein disputes are settled informally. ADR has beenquite effective in providing a replacement to the traditional method ofsettling a dispute. ADR methods have played an important role in reducing theburden of litigation on Courts. ADR methods are slowly and steadily becomingthe favored choice for settling a dispute by the parties.

'Resolve' is the world's first integrated OnlineDispute Resolution platform which enables the organization to resolve a disputeand minimize their business risk. 'Resolve' provides resolution to make disputeresolution faster and more efficient. 'Resolve' is the most effective platformto settle a dispute as it settles the disputes through mediation, negotiation,or arbitration.

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