Understanding Alternative Dispute Resolution

The expeditiously growing era of Globalisation led to several disputes between the people. The Indian Courts have been quite slow and inefficient to dispose of these disputes. This inefficiency, delay, and endlessly long adjudication by the Indian Judicial System elicited the people to realize the importance of a simpler, more efficient, and more speedy way to resolve the dispute. By virtue of Section 89 of The Code of Civil Procedure,1948, the courts have the power to refer a dispute for Alternative Dispute Resolution (ADR) if there appears to be a chance of settlement outside the court.

Alternative Dispute Resolution

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

An ADR mechanism is mainly concerned with delivering justice in minimum time without any delay like litigation, through mutual consent of the parties. ADR mechanism recognizes five methods that are widely accepted 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) on the dispute after hearing the arguments and evidence from each party. The decision is mostly binding on the parties and there is very limited ground for appeal. Arbitration is less formal than trial as many rules of evidence are relaxed.

B. Conciliation:

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

C. Mediation:

A neutral third party known as a ‘Mediator’ helps to settle the dispute by arriving at an amicable decision that is acceptable to all the parties. Mediation is a voluntary process and hence the disputing party is not obliged to agree to the settlement. A mediator acts as a facilitator to achieve cooperation between the disputing parties. The mediator may influence the disputing parties to cut down on demands to reach a mutually acceptable solution but the mediator cannot interfere in the decision of the dispute. The mediator does not decide the outcome of the dispute instead the outcome lies in the hands of the disputing parties. A successful mediation leads to an agreement of settlement.

D. Negotiation:

In Negotiation, there is no neutral third party to assist the parties in settling the dispute. The parties work together to come to a compromise by themselves. The main advantage of negotiation is that the parties retain control over the process and solution of the dispute. The negotiation process provides the disputing parties an opportunity to hear each other and find their differences, exchange ideas, find a solution, and get a commitment to reach an agreement.

E. LokAdalat:

‘Lok Adalat’ literally means ‘People’s Court’. National Legal Service Authority (NALSA) along with other legal institutions conducts Lok Adalat. LokAdalat is a platform where cases pending in court or any dispute whose lawsuit is 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 the dispute 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 they can take the recourse of litigation and approach the court of suitable jurisdiction. The decision of Lok Adalat is considered a decree of a civil Court and is final and binding.

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

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

2.            The costs incurred to settle the matter by mediation are inexpensive as the fee of the mediator is pre-decided by the parties and since mediation is an informal process, and without any formalities like that of litigation, it results in reducing the costs incurred by parties.

3.            Mediation is the best method for settlement in cases where disputing parties want to preserve their relationship with each other. It is most effective in the case where disputing parties do not hold each other responsible for what has happened instead they just want to settle the dispute and preserve their bond. The objective of mediation is not to judge anyone as guilty or innocent but to encourage compassion, and empathy, and finally help the parties to reach an agreement by themselves.

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

5.            In Mediation parties have command over their contribution to the proceeding. The parties have the power to decide on the mediator of their choice mutually. It is less stressful as compared to litigation and arbitration.

6.            Mediation is an informal process where neither the rules of the court nor legal precedents are involved. The mediator can only help the parties to come to a settlement but ultimately the decision to agree to the settlement lies in the hand of the parties themselves, not with the mediator. The mediator can only act as a facilitator to solve the dispute but he cannot impose his decision on the parties.

7.            The settlement arrived at by 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 take the recourse of litigation. However, the settlement which is agreed upon by the party is final and there is no chance of appeal.

Alternative Dispute Resolution is a cost and time-saving mechanism wherein disputes are settled informally. ADR has been quite effective in providing a replacement for the traditional method of settling a dispute. ADR methods have played an important role in reducing the burden of litigation on Courts. ADR methods are slowly and steadily becoming the favored choice for settling an argument by the parties.

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

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