The Role of ADR & Judiciary

24 NOV,2022 | CS Pramod Shah and Mr. Shubham Parab, M/s Pramod S. Shah & Associates

Introduction:

ADR is very essential to reduce the burden of rising cases on various courts in India. The number sums into crores. It is astonishing to note that one lakh cases are pending even in lower courts for more then Thirty years up. Maharashtra, Bihar, Bengal constitute over ninety percent. These include over 67,000 criminal cases & 33,000 related to civil matters.

While over one lakh cases are pending in the lower courts of India for more than thirty years, there are nearly five lakh cases pending for more than 20 to 30 years & another 28.7 Lakhs that are pending for 10-20 years. This takes the total of cases pending for over a decade to 34.6 Lakhs reflected in the analysis of data compiled by National Judicial Data Grid. State wise table prepare by the said agency is provided hereunder for information & reference:

 

State/UT

10-20 years

20-30 years

Above 30 years

Above 10 years

Uttar Pradesh

11,71,384

2,26,482

41,210

14,39,076

Maharashtra

2,56,595

58,404

23,483

3,38,482

West Bengal

4,04,399

52,108

14,345

4,70,852

Bihar

4,79,936

76,860

11,713

5,68,509

Odisha

1,85,791

33,822

4,248

2,23,861

Gujarat

99,489

26,129

2,826

1,28,444

Rajasthan

74,259

4,371

559

79,189

Jharkhand

21,291

1,597

337

23,225

Tamil Nadu

46,393

2,702

334

49,429

Karnataka

41,119

1,415

143

42,677

Kerala

11,797

658

109

12,564

Madhya Pradesh

15,103

598

104

15,805

Telangana

9,091

955

102

10,148

Andhra Pradesh

7,534

371

68

7,973

Delhi

11,925

517

52

12,494

Punjab

1,976

95

39

2,110

Chhattisgarh

1,016

129

28

1,173

Assam

4,890

290

24

5,204

Jammu & Kashmir

8,588

288

22

8,898

Haryana

2,872

40

14

2,926

Himachal Pradesh

2,978

46

5

3,029

Uttkarakhand

4,885

112

1

4,998

Total

28,70,776

4,89,255

1,00,267

34,60,298

 

 

Alternative dispute resolution (ADR) refers to the different ways people can resolve disputes without a trial. Common ADR processes include arbitration, mediation and conciliation. These processes are generally confidential, less formal, and less stressful than traditional court proceedings.

ADR often saves money and speeds settlement. In mediation, parties play an important role in resolving their own disputes. This often results in creative solutions, longer-lasting outcomes, greater satisfaction, and improved relationships.

ADR is a collection of processes used for the purpose of resolving conflict or disputes informally and confidentially and without going to courts.

India is growing as a major player in the global economy. Its economic strength and human resources have been recognized worldwide. The laws and courts in India support ADR Services. India is a signatory to the New York Convention.

Although the Indian legal system is among the oldest in the world, it is also widely acknowledged that it is becoming less effective at handling open cases. Indian courts are overburdened with protracted unresolved issues. The situation is that despite the establishment of more than a thousand fast track courts that have previously resolved millions of cases, the issue is still far from being resolved as backlogs of unresolved cases continue to grow.

 

Alternative Dispute Resolution (ADR), which settles disputes in a way that is acceptable to all parties, might be a useful tool in dealing with such a circumstance.

 

ONE OF THE MOST IMPORTANT FEATURES OF ADR IS IT RESOLVES DISPUTE IN COST EFFECTIVE MANNER, LESS TIME CONSUMING AND PRODUCES DESIRED RESULT.

 

Objectives:

Earlier, the law on arbitration was dealt with under 3 acts which eventually became outdated. As a result of which the bodies of trade and industry and experts of arbitration demanded and proposed amendments to make the Act responsive and at par with the needs of the society. It was felt that the economic reforms in the country can only be dealt with if domestic and international commercial disputes and their settlement are not outside the purview of such reforms. The United Nations in 1985 adopted the Model Law on International Arbitration and Conciliation and asked all the countries to give due importance to it. This resulted in the enforcement of the said Act. The various objectives of the Act are:

  • Cover international and domestic commercial arbitration and conciliation comprehensively.
  • Make a procedure which is fair, efficient and capable of meeting the needs of the society for arbitration and conciliation. 
  • Provides reasons by the tribunal for granting any arbitral award.
  • Ensure that the tribunal does not exercise its jurisdiction beyond the limits. 
  • Minimise the role of courts and reduce the burden on the judiciary. 
  • It permits the tribunal to opt for arbitration and conciliation as a method of dispute settlement. 
  • It makes sure that every award is enforced in the same manner as the decree of the court. 
  • It provides that the conciliation agreement reached by the parties has the same effect as the award granted by an arbitral tribunal. 
  • It also works on the enforcement of foreign awards. 

 

Alternate Dispute Resolution:

Alternative Dispute Resolution (ADR) mechanisms have the potential to replace more traditional approaches to conflict resolution. ADR provides to resolve any form of dispute, including civil, commercial, industrial, and familial disputes, in which parties are unable to initiate negotiations and come to a resolution. A neutral third person is typically used in ADR to facilitate communication, conflict resolution, and discussion between the parties. It is a technique that enables individuals and groups to uphold social order, cooperation, and offers the chance to lessen conflict.

 

There is a growing awareness that courts will not be in a position to bear the entire burden of justice system. A very large number of disputes lend themselves to resolution by alternative modes such as arbitration, mediation, conciliation, negotiation, etc. The ADR processes provide procedural flexibility save valuable time and money and avoid the stress of a conventional trial. There is, therefore, an urgent need to establish and promote ADR services for resolution of both domestic and international disputes in India. Theseservicesneedtobenourishedonsoundconceptions,expertise in their implementation and comprehensive and modern facilities. The International Centre for Alternative Dispute Resolution (ICADR) is a unique centre in this part of the world that makes provision for promoting teaching and research in the field of ADR as also for offering ADR services to parties not only in India but also to parties all over the world. The ICADR is a Society registered under Societies Registration Act, 1860, it is an independent non-profit making organisation. It maintains panels of independent experts in the implementation of ADR processes.

 

Areas in which ADR Works :

Almost all disputes including commercial, civil, labour and family disputes, in respect of which the parties are entitled to conclude a settlement, can be settled by an ADR procedure. ADR techniques have been proven to work in the business environment, especially in respect of disputes involving joint ventures, construction projects, partnership differences, intellectual property, personal injury, product liability, professional liability, real estate, securities, contract interpretation and performance and insurance coverage.

 

Importance OF ADR In India:

ADR, with its variety of methodologies, plays a vital role in India in dealing with the problem of cases that are pending in Indian courts. Alternative Dispute Resolution mechanisms give the Indian judiciary scientifically established tools that aid in lightening the load on the courts. Arbitration, conciliation, mediation, negotiation, and lok Adalat are just a few of the different techniques of dispute resolution offered by ADR. Negotiation in this context refers to self-counseling between the parties to settle their issue; nevertheless, there is no legal definition of negotiation in India.

 

Articles 14 and 21, which deal with equality before the law and the right to life and personal liberty respectively, are also the foundations of ADR. The goal of ADR is to uphold the preamble-guaranteed social, economic, and political justice as well as the integrity of the society. Equal justice and free legal assistance are further goals pursued by ADR in accordance with Article 39-A of the Directive Principle of State Policy (DPSP).

  • Section 89 of the Civil Procedure Code, 1908 provides that opportunity to the people, if it appears to court there exist elements of settlement outside the court then court formulate the terms of the possible settlement and refer the same for: Arbitration, Conciliation, Mediation or Lok Adalat.
  • The Acts which deals with Alternative Dispute Resolution are Arbitration and Conciliation Act, 1996 and,
  • The Legal Services Authority Act, 1987

 

Various of Modes of Alternate Dispute Resolution:

  1. Arbitration
  2. Mediation
  3. Conciliation

 

  • Arbitration:

It is defined under Section 2 (1)(a) of the Act. It is an alternative to litigation in courts and is advantageous as it provides flexibility and confidentiality. According to Black Law Dictionary, it means a method of resolving disputes which includes two parties and a neutral third party whose decision is binding on both parties. 

Without a legally binding arbitration agreement in place before a disagreement arises, the arbitration procedure is impossible. In this method of dispute resolution, the parties designate one or more arbitrators to hear their case. The arbitrator's ruling, known as the "Award," is binding on the parties. Getting a fair settlement of a dispute outside of court without needless expenditure or delay is the goal of arbitration.

Type of Arbitration:

  1. Domestic Arbitration
  2. International and commercial arbitration
  3. Institutional arbitration
  4. Statutory arbitration
  5. Ad hoc arbitration 
  6. Fast track arbitration

Advantages of arbitration 

  • A person appointed as arbitrator is based on the whims of the parties.
  • If parties agree only then an arbitral tribunal is taken into matter. 
  • It is inexpensive and saves time. 
  • It ensures a fair trial. 
  • Gives freedom to the parties from judicial intervention. 
  • Parties choose the place of arbitration themselves (Section 20).
  • The proceedings are kept private and confidentiality is maintained. 
  • The arbitral award is enforced in the same way a decree of the court is enforced. 

Disadvantages of arbitration

  • It does not always guarantee an expeditious resolution. 
  • The procedure is at times uncertain. 
  • It cannot give remedies like punishment, imprisonment, injunction, etc. which are given in courts. 
  • Due to flexibility, it is ineffective. 
  • The method cannot be easily used in disputes involving multiple parties. 

Composition of tribunals

It is the creation of an agreement which conforms with the law. Section 10 of the Act enables the parties to determine freely the number of arbitrators to settle their dispute. The only restriction is that the number of such arbitrators must not be even. If the parties are not able to decide then there will be only 1 arbitrator. But if there are even number of arbitrators then the agreement cannot be held invalid merely on this ground. (Narayan Prasad Lohia v. Nikunj Kumar Lohia, 2002

Jurisdiction:

Section 16 of the Act provides that the tribunal will act in its jurisdiction. If the arbitral tribunal has no jurisdiction then a plea will be raised but not later than when the statement of defence is submitted. It also provides that in case a party is not satisfied with the arbitral award, it can make an application to set it aside according to Section 34 of the Act. The Supreme Court in the case of Centrotrade Minerals and Metals v. Hindustan Copper Ltd. (2006), held that any issue related to the jurisdiction can be raised by people in the proceedings or anyone from outside. But if it is made by the party then it must be done during the proceedings or at the initial stage.  

Arbitral award 

It is a final determination of a claim or a part of it or a counter-claim awarded by the arbitral tribunal. It must be written and duly signed by the members of the arbitral tribunal as given under Section 31 of the Act. The Section further gives the power to the tribunal to make interim awards for any matter. In case of payment of money, it can award the interest which seems reasonable, just and fair to the tribunal. 

Foreign awards (Part II)

Foreign awards are given in the disputes arising out of some legal relations which can either be contractual or not and are considered under any commercial law of the country. In simple terms, it means the awards given in International commercial arbitration.  Foreign awards are granted in foreign countries and are enforceable in India under the Act. It is divided into two chapters:

The foreign award related to the New York Convention is given under Section 44 of the Act and that related to the Geneva Convention under Section 53 of the Act. The conditions to enforce these awards in the country are given under Section 48 and Section 57 of the Act respectively. 

 

Case Law:

13.11.2019 The Oriental Insurance Company Limited (Appellants) vs. Dicitex Furnishing Limited (Respondents) The Supreme Court of India

For deciding the application under Section 11(6) of Arbitration Act, 1996, the court is required to ensure that an arbitrable dispute exists and has to be prima facie convinced about the genuineness or credibility of the plea and not be too particular about the nature of the plea, which necessarily has to be made and established in the substantive proceeding.

Facts of the Case:

Dicitex (Respondent) obtained a Standard Fire and Special Peril Policy from the Oriental Insurance Company Limited (Appellants). A fire broke out which spread to the first floor of the building and completely engulfed all of the appellant’s three godowns. Respondent informed the appellant about the fire and the consequential loss. The appellant appointed M/s. C.P. Mehta & Co. as Surveyors and Assessors to survey the loss suffered. The Surveyor appointed by the insurer filed a FinalSurvey Report recommending that the clai m be settled for a net amount of `12,28,60,369/ be paid over to Respondent. Respondent addressed various letters to the appellant’s chairman, informing him of the financial distress that it was facing, requesting for settlement of the claim on priority basis. Apparently, the appellant appointed a Chartered Accountant (M/s Naveen Jhand & Associates) to carry out a resurvey of the claim made by Respondent. Respondent received an email from the appellant stating that a discharge voucher for the balance amount of the claim payable as described was being enclosed. Respondent placed on record that its total claim was approximately `15 crores and the surveyor had assessed the same at approximately `12.93 crores. Respondent stated that the basis for arriving at the figure of `7.16 crores was not explained by the appellant. Respondent submitted along with the discharge voucher for a full and final settlement of their claim due to urgent need of funds to meet its mounting liabilities. Respondent placed on record their objection that the same was signed due to pressure of the respondents and applied to Bombay High Court under Section 11(6) of Arbitration Act, 1996. Bombay High Court has allowed the application under Section 11(6) of said act. The appellant filled the appeal to the Supreme Court in present case

Judgement:   

The Hon’ble Supreme Court held that an overall reading of respondent’s application under Section 11(6) of Arbitration Act, 1996 clearly shows that its grievance with respect to the involuntary nature of the discharge voucher was articulated. The court is conscious of the fact that an application under Section 11(6)is in the form of a pleading which merely seeks an order of the court, for appointment of an arbitrator. The high court- which is required to ensure that an arbitrable dispute exists, has to be prima facie convinced about the genuineness or credibility of the plea of coercion; it cannot be too particular about the nature of the plea, which necessarily has to be made and established in the substantive proceeding. The Supreme Court opinioned that the reasoning in the impugned judgment cannot be faulted. The appeal was held to be dismissed without order as to costs.

For details: https://main.sci.gov.in/supremecourt/2015/39792/39792_2015_4_1501_18110_Judgement_13- Nov-2019.pdf

 

  • Conciliation:

Conciliation is an informal process in which the conciliator (the third party) tries to bring the disputants to agreement. He does this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement. Mediation is a structured process in which the mediator assists the disputants to reach a negotiated settlement of their differences. Mediation is usually a voluntary process that results in a signed agreement which defines the future behaviour of the parties. The mediator uses a variety of skills and techniques to help the parties reach the settlement, but is not empowered to render a decision. Basically, these processes can be successful only if the personality of the conciliator or the mediator is such that he is able to induce the parties to come to a settlement. The Act gives a formal recognition to conciliation in India. Conciliation forces earlier and greater hold of the case. It can succeed only if the parties are willing to re-adjust. According to current thinking conciliation is not an alternative to arbitration or litigation, but rather complements arbitration or litigation.

Features of conciliation

  • The person assisting the parties to come to a compromise is called a conciliator. 
  • Conciliators give their opinion regarding the dispute. 
  • The process of conciliation is voluntary. 
  • It is a non-binding process.
  • The main difference between arbitration and conciliation is that, unlike arbitration, the parties in this process control the whole procedure and the outcome. 
  • It is a consensual party and the desired outcome is the final settlement between the parties based on their wishes, terms and conditions. 
  • A conciliator can become an arbitrator on the wish of the parties if no compromise could be reached by the process of conciliation. This is known as Hybrid Conciliation. 
  • The settlement agreement will have the same importance and status as the arbitration award. (Section 74)

 Mediation:

Mediation is a key part of the civil litigation system in both state and federal courts, and is an integral dispute resolution tool for disputes involving federal agencies.[1] The most common disputes that lead to mediation are those involving contracts, family law matters, and personal injury or employment disagreements.[2] In a survey of U.S. business leaders, many recognized mediation’s advantages and preferred mediations in commercial transaction disagreements, even over other alternative dispute resolution methods. Specifically, the executives surveyed in the study believed that mediation preserves commercial relationships better than arbitration and that mediation was superior to arbitration in saving time and money.[3]  

Mediation can be an informal meeting that only lasts a couple hours, or can be a scheduled settlement conference that lasts an entire day. This meeting can be held at a neutral location, such as the mediator’s office. Mediation is voluntary to both parties and is nonbinding, meaning that the mediator cannot force either party to follow a certain course of action, or do something that either refuses to do. This distinguishes mediation from an arbitration, where the arbitrator, like a judge, can hand down a decision that binds the parties to follow a course of action.

 

Benefit:

Mediation has numerous advantages over litigation, arbitration and negotiation without use of a mediator.

 First, lawyers, judges, and other decision-makers find that one of the greatest benefits of mediation is that it can foster cooperation and understanding. Mediators examine the causes of conflict and develop solutions. To reach a successful conclusion, the parties must collaborate with one another. Litigation, by contrast, is more likely to breed hostility and mistrust between disputing parties because the parties are competing with one another to “win.”

 

Second, mediation is a cost-effective way of resolving a dispute.[8] It is much less expensive than litigation and it offers a relatively predictive cost, all of which is paid to a mediator. In Arizona, for example, trained mediators typically charge around $250 per hour.[9]  Litigation fees can be exorbitant not only because of attorney’s fees, but also because of fees associated with filing a suit and paying ancillary litigation costs.

 

Third, a mediation can be a much quicker process than litigation. Mediations aren’t cumbersome processes and each mediation session may last two to three hours. This is especially helpful in family law cases, where prolonged law disputes can have psychological and emotional costs for the children involved. Studies have found that trials, which can take months to prepare for and weeks to conduct, have a detrimental effect and cause tension for children.[10]

 

Fourth, mediation provides a confidential forum for resolving disputes. Private information that may have to be revealed to the judge, jury, or public during a trial remains private during mediation since mediation is conducted behind closed doors.[11] Furthermore, while the ultimate decision in a trial becomes part of the public record, an agreement reached by the parties can remain private. Mediation’s privacy can be especially appealing to divorcing spouses or if the facts underlying a dispute are of an intimate nature.

 

Finally, mediations put dispute resolution into the hands of the disputing parties. Since there are no complex rules of procedure and evidence, parties have a great deal of flexibility and can adjust the breadth of the mediation to discuss whatever topics that they think are important.

Mediations, though with many benefits, are not always the best way to resolve a disagreement because parties sometimes need a legally-binding outcome that will create obligations to solve their problems. Despite this, a mediation can often help settle controversies while also decreasing aggression and animosity between parties.  

 

Conclusion:

In conclusion, Alternative Dispute Resolution (ADR) is a great for get the justice. It is because Alternative Dispute Resolution easy to resolve the problem because cost is very cheaper, faster, expertise, accessibility, give conciliation between parties, less formality involved and less adversarial. In Alternative Dispute Resolution each conflict that happens will get resolve with good steps. This is because in Alternative Dispute Resolution have done provide any ways for solve the problems. It is because in Alternative Dispute Resolution allow a both parties asked a third party go to court. But the both parties should ask the person will often be a lawyer or other expert. Besides that, the parties also must agree to be bound by this judgment. So, Alternative Dispute Resolution many giving benefit with their customers because Alternative Dispute Resolution is between small matters for solve all conflict. Alternative Dispute Resolution can resolve outside from court. Each decision who judges make not will give hostility to the parties. It is because, Alternative Dispute Resolution very give pressure especially in conciliation. This is because, Alternative Dispute Resolution takes a more interventionist role and also takes suggest possible solutions. So, exactly not earn gainsay of Alternative Dispute Resolution is a very easy to get justice for resolve each the conflict that come.

 

 

Reference:

https://blog.ipleaders.in/arbitration-and-conciliation-act-1996/

https://ww2.nycourts.gov/ip/adr/What_Is_ADR.shtml#:~:text=Alternative%20dispute%20resolution%20(ADR)%20refers,stressful%20than%20traditional%20court%20proceedings.

https://blog.ipleaders.in/adr-alternative-dispute-resolution/

https://www.icsi.edu/media/webmodules/JI_&_GL_FINAL_01112021.pdf

 

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