Link 1 Alternate Dispute Resolution Mechanism The Concept & its efficacy: It is the spirit and not the

form of law that keeps the justice alive. LJ Earl Warren The concept of Conflict Management through Alternative Dispute Resolution (ADR) has introduced a new mechanism of dispute resolution that is non adversarial. A dispute is basically lis inter partes and the justice dispensation system in India has found an alternative to Adversarial litigation in the form of ADR Mechanism. New methods of dispute resolution such as ADR facilitate parties to deal with the underlying issues in dispute in a more cost-effective manner and with increased efficacy. In addition, these processes have the advantage of providing parties with the opportunity to reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict in a peaceful manner, and achieve a greater sense of justice in each individual case. The resolution of disputes takes place usually in private and is more viable, economic, and efficient. ADR is generally classified into at least four types: negotiation, mediation, collaborative law, and arbitration. (Sometimes a fifth type, conciliation, is included as well, but for present purposes it can be regarded as a form of mediation Need of ADR in India: The system of dispensing justice in India has come under great stress for several reasons mainly because of the huge pendency of cases in courts. In India, the number of cases filed in the courts has shown a tremendous increase in recent years resulting in pendency and delays underlining the need for alternative dispute resolution methods. It is in this context that a Resolution was adopted by the Chief Ministers and the Chief Justices of States in a conference held in New Delhi on 4th December 1993 under the chairmanship of the then Prime Minister and presided over by the Chief Justice of India. It said: "The Chief Ministers and Chief Justices were of the opinion that Courts were not in a position to bear the entire burden of justice system and that a number of disputes lent themselves to resolution by alternative modes such as arbitration, mediation and negotiation. They emphasized the desirability of disputants taking advantage of alternative dispute resolution which provided procedural flexibility, saved valuable time and money and avoided the stress of a conventional trial". In a developing country like India with major economic reforms under way within the framework of the rule of law, strategies for swifter resolution of disputes for lessening the burden on [1]the courts and to provide means for expeditious resolution of disputes, there is no better option but to strive to develop alternative modes of dispute resolution (ADR) by establishing facilities for providing settlement of disputes through arbitration, conciliation, mediation and negotiation.2

Impact/resulting acts of ADR: The technique of ADR is an effort to design a workable and fair alternative to our traditional judicial system. It is a fast track system of dispensing justice. There are various ADR techniques viz. arbitration, mediation, conciliation, mediation-arbitration, mini-trial, private judging, final offer arbitration, court-annexed ADR and summary jury trial. These techniques have been developed on scientific lines in USA, UK, France, Canada, China, Japan, South Africa, Australia and Singapore. ADR has emerged as a significant movement in these countries and has not only helped reduce cost and time taken for resolution of disputes, but also in providing a congenial atmosphere and a less formal and less complicated forum for various types of disputes. The Arbitration Act, 1940 was not meeting the requirements of either the international or domestic standards of resolving disputes. Enormous delays and court intervention frustrated the very purpose of arbitration as a means for expeditious resolution of disputes. The Supreme Court in several cases repeatedly pointed out the need to change the law. The Public Accounts Committee too deprecated the Arbitration Act of 1940. In the conferences of Chief Justices, Chief Ministers and Law Ministers of all the States, it was decided that since the entire burden of justice system cannot be borne by the courts alone, an Alternative Dispute Resolution system should be adopted. Trade and industry also demanded drastic changes in the 1940 Act. The Government of India thought it necessary to provide a new forum and procedure for resolving international and domestic disputes quickly. Thus "The Arbitration and Conciliation Act, 1996"came into being. The law relating to Arbitration and Conciliation is almost the same as in the advanced countries. Conciliation has been given statutory recognition as a means for settlement of the disputes in terms of this Act. In addition to this, the new Act also guarantees independence and impartiality of the arbitrators irrespective of their nationality. The new Act of 1996 brought in several changes to expedite the process of arbitration. This legislation has developed confidence among foreign parties interested to invest in India or to go for joint ventures, foreign investment, transfer of technology and foreign collaborations. The advantage of ADR is that it is more flexible and avoids seeking recourse to the courts. In conciliation/mediation, parties are free to withdraw at any stage of time. It has been seen that resolution of disputes is quicker and cheaper through ADR. The parties involved in ADR do not develop strained relations; rather they maintain the continued relationship between themselves. Arbitration and Conciliation Act, 1996 Part I of this act formalizes the process of Arbitration and Part III formalizes the process of Conciliation. (Part II is about Enforcement of Foreign Awards under New York and Geneva Conventions.) Arbitration: The process of arbitration can start only if there exists a valid Arbitration Agreement between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in writing. The contract, regarding which the dispute exists, must either contain an arbitration

clause or must refer to a separate document signed by the parties containing the arbitration agreement. The existence of an arbitration agreement can also be inferred by written correspondence such as letters, telex, or telegrams which provide a record of the agreement. An exchange of statement of claim and defence in which existence of an arbitration agreement is alleged by one party and not denied by other is also considered as valid written arbitration agreement. Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. There are only two grounds upon which a party can challenge the appointment of an arbitrator reasonable doubt in the impartiality of the arbitrator and the lack of proper qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or panels of arbitrators so appointed constitute the Arbitration Tribunal. Except for some interim measures, there is very little scope for judicial intervention in the arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request, there is little the party can do accept to approach a court after the tribunal makes an award. Section 34 provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award. Once the period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a decree of the court. Conciliation Conciliation is a less formal form of arbitration. This process does not require an existence of any prior agreement. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed. In case of multiple conciliators, all must act jointly. If a party rejects an offer to conciliate, there can be no conciliation. Parties may submit statements to the conciliator describing the general nature of the dispute and the points at issue. Each party sends a copy of the statement to the other. The conciliator may request further details, may ask to meet the parties, or communicate with the parties orally or in writing. Parties may even submit suggestions for the settlement of the dispute to the conciliator. When it appears to the conciliator that elements of settlement exist, he may draw up the terms of settlement and send it to the parties for their acceptance. If both the parties sign the settlement document, it shall be final and binding on both. Note that in USA, this process is similar to Mediation. However, in India, Mediation is different from Conciliation and is a completely informal type of ADR mechanism. Mediation Mediation, a form of alternative dispute resolution (ADR) or "appropriate dispute resolution", aims to assist two (or more) disputants in reaching an agreement. The parties themselves determine the conditions of any settlements reached rather than accepting something imposed

by a third party. The disputes may involve (as parties) states, organizations, communities, individuals or other representatives with a vested interest in the outcome. Mediators use appropriate techniques and/or skills to open and/or improve dialogue between disputants, aiming to help the parties reach an agreement (with concrete effects) on the disputed matter. Normally, all parties must view the mediator as impartial. Disputants may use mediation in a variety of disputes, such as commercial, legal, diplomatic, workplace, community and family matters. A third-party representative may contract and mediate between (say) unions and corporations. When a workers union goes on strike, a dispute takes place, and the corporation hires a third party to intervene in attempt to settle a contract or agreement between the union and the corporation. Negotiation Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution. Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is called negotiation theory. Those who work in negotiation professionally are called negotiators. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers Lok Adalat: While Arbitration and Conciliation Act, 1996 is a fairly standard western approach towards ADR, the Lok Adalat system constituted under National Legal Services Authority Act, 1987 is a uniquely Indian approach. It roughly means "People's court". India has had a long history of resolving disputes through the mediation of village elders. The system of Lok Adalats is an improvement on that and is based on Gandhian principles. This is a non-adversarial system, where by mock courts (called Lok Adalats) are held by the State Authority, District Auth[2]ority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences. There is no court fee and no rigid procedural requirement (i.e. no need to follow process given by Civil Procedure Code or Evidence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts. Cases that are pending in regular courts can be transferred to a Lok Adalat if both the parties

agree. A case can also be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party. The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 because it is a judgement by consent. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. Lok Adalat (peoples courts), established by the government, settles dispute through conciliation and compromise. The First Lok Adalat was held in Chennai in 1986. Lok Adalat accepts the cases which could be settled by conciliation and compromise and pending in the regular courts within their jurisdiction. The Lok Adalat is presided over by a sitting or retired judicial officer as the chairman, with two other members, usually a lawyer and a social worker. There is no court fee. If the case is already filed in the regular court, the fee paid will be refunded if the dispute is settled at the Lok Adalat. The procedural laws and the Evidence Act are not strictly followed while assessing the merits of the claim by the Lok Adalat. Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal process. No appeal lies against the order of the Lok Adalat. Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat as the scope for compromise through an approach of give and take is high in these cases. Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost. http://legalservicesindia.com/article/article/adr-mechanism-in-india-224-1.html Link 2 Dispute Resolution in India An Update Introduction Arbitration is the preferred mode of dispute resolution with regard to India. The main objects of arbitration are speed, economy, convenience and simplicity of procedures. Proceedings under the Arbitration and Conciliation Act, 1996 (the Act) has often failed to meet these objectives. Recent efforts and case law to mitigate inherent problems are described in this news letter.

1) London Court of International Arbitration (the LCIA) in India Goes Alive In April 2009 the LCIA launched its first independent subsidiary in New Delhi. The LCIA is one of the longest-established arbitral institutions in the world and the LCIA in India offers all the services offered by the LCIA in the UK and is expected to extend the same care to ensure the expeditious, cost effective and totally neutral administration of arbitration and other forms of alternate dispute resolutions (ADR). Disputes can be resolved according to LCIA India's own rules, or the UNCITRAL rules, or any other procedures agreed by the parties. The LCIA published the LCIA India Arbitration Rules and the LCIA India Mediation Rules (both adopted to take effect for arbitrations/mediations commencing on or after 17 April 2010) rendering the LCIA India operational with this. Currently the following options are available to resolve disputes in India: the Indian court system, which is well-known to be a lengthy process; ad hoc arbitration in India, also subject to delays, expense and excessive judicial intervention; and arbitration using an offshore institution, notably the LCIA, ICC and SIAC in Singapore. The effectiveness of the LCIA in India will go a long way in allaying the fear of litigation delays in India and will help reduce litigation costs for the parties. 2) New Dispute Resolution Opportunities Offered By Investment Treaties India has entered into bilateral investment treaties with a number of countries including Australia, France, Japan, Korea, the UK, Germany, Russian Federation, The Netherlands, Malaysia, Denmark and OPIC of the U.S.. Each agreement makes provision for settlement of disputes between an investor of one contracting party and an investor of the other contracting party through negotiation, conciliation and arbitration. India is a party to the Convention establishing the Multilateral Investment Guarantee Agency (MIGA), which provides for settlement of disputes between parties of members states under the Convention and the MIGA through negotiation, conciliation and arbitration. Under Indian law, the following types of differences cannot be settled by arbitration, but must be settled only through civil suits: matters of public rights; proceedings under the Foreign Exchange Management Act, 1999 which are quasi-criminal in nature; validity of IPR granted by statutory authorities; Taxation matters beyond the will of the parties; winding up under the Companies Act, 1956; and disputes involving insolvency proceedings. 3) Supreme Court of India decides that an entity not a party to an arbitration agreement is not bound by an arbitration clause in the agreement In Indowind Energy Ltd. vs. Wescare (I) Ltd. & Subuthi Finance Ltd. the Supreme Court of India held that the third party to an arbitration agreement is not bound by an arbitration clause in an agreement to which it is not a party. In addition the Supreme Court categorically stated that once a High Court renders a decision under the Act holding that there is an arbitration agreement between the parties, arbitrators are not permitted to re-consider or re-examine the same issue. It is clear that only the parties who have signed or accepted the agreement can be considered as the parties to the arbitration agreement. In this context, it may be quite pertinent to state that the Sec. 82 (2) of the U.K Arbitration Act, 1996 has a broader scope by increasing the definition of parties to include any person claiming under or through a party to the agreement.

4) SC: Multiple Arbitration Proceedings for Different Disputes In Dolphin Drilling Ltd. v. M/s. Oil and Natural Gas Corporation Ltd. Order dated February 17, 2010 in Arbitration Petition No. 21 of 2009, the Supreme Court of India (Court) has, amid additional things, held that the fact that there is already a continuing arbitration in respect of other disputes between the same parties under the same agreement, would not come in the way of either party invoking a fresh arbitration in respect of other disputes that can be arbitrated under the same agreement. Thus, multiple arbitration proceedings for different disputes under one agreement can be possible. 5) Mandatory Submission to Alternate Dispute Resolution Mechanism (ADRM) Since arbitration in India is expensive and time consuming given the delays and lack of arbitrators, businesses are resorting to innovative methods of resolving disputes. It has now become imperative to resort to ADRM as contemplated by Section 89 of the Code of Civil Procedure 1908. There is a requirement that the parties to the suit must indicate the form of ADR, which they would like to resort to during the pendency of the trial of the suit. If the parties agree to arbitration, then the provisions of the Act will apply and that will go outside the stream of the court. (Shree Subhlaxmi Fabrics Pvt. Ltd. v Chand Mal Baradia, Civil appeal no: 7653 of 2004). The popularity and use of ADRM is increasing but it can achieve its best only if the same is integrated with the information technology. The ADR techniques are extra-judicial in character. ADRM is not proposed to displace in total the long-established means of resolving disputes by means of litigation. It Only Offers Alternatives To Litigation. Constitutional law and criminal law are areas, where ADR cannot surrogate courts - one has to take route of the existing traditional modes of dispute resolution. a) Online Dispute Resolution in India (ODRM) Section 16 of the Act provides that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or authority of the arbitration agreement. Thus, the base provided by the Act is sufficient to accommodate the mandates of ODRM. The ADR system can be efficiently used to settle online disputes by modifying it as per the requirement. It is time effective and cost efficient. It can also conquer the geographical obstacles. A complete techno-legal support is recognized and is being geared up before hand. b) Dispute Resolution Panel Gets Life in India to Settle Transfer Pricing Disputes Speedy resolution of tax disputes and certainty in tax aspects has been a long-standing demand of foreign companies doing business with/in India. The Indian Government finally reacted to this demand and announced ADRM in the form of a Dispute Resolution Panel (DRP) in the last budget. The DRP mechanism applies to Indian companies where the tax authorities have proposed to make an adjustment to the arms length price in relation to their transactions with overseas affiliates. It also applies to all foreign companies who are assessed to tax in India. However, it does not apply to withholding tax orders passed by the tax authorities. The DRP as an ADRM would be welcomed by MNCs who either are reeling under the cumbersome, time consuming and expensive tax litigation process or have heard about Indias reputation as a

notorious tax jurisdiction. If the government can iron out procedural lacunas and provide sufficient capacity and competent officers to the DRP, it will finally be walking the talk on an ADRM. 6) Consultation Paper on Changes to the Indian Arbitration Act, 1966 In April this year, the Indian Ministry of Law and Justice tabled a consultation paper on changes to the Indian Arbitration Act, 1966. The consultation paper acknowledges that in certain cases the Arbitration Act has been interpreted in ways that "defeated the main object" and also recognizes issues in the current law. In view of this several amendments have been proposed and some important changes are listed below:

a clearer definition of "public policy" as a grounds for refusing enforcement of a foreign arbitral award. This will be a welcome change as an eralier Supreme Court decision had been viewed as authorising greater judicial interference in foreign awards; stricter timelines in arbitration; and mandatory institutional arbitration in disputes of over Rs 5 crore (US$1.11 million) unless expressly excluded by the parties in writing.

It is unclear as to when proposed legislation based on on the consultation paper will be tabled before Parliament. In the meantime, the consultation paper has for the large part evoked positive reactions from the legal community. However, not all the proposals are well received. For instance the last proposal, which is against the well-established principle of party autonomy in arbitration, is controversial. Conclusion The Government by bracing new updates on the dispute resolution is cooperating in the achievement of an accelerated, inexpensive, appropriate and useful justice system. In this manner, the sooner the updates are accepted the better it will be for the nation in general and the justice seeker specifically. http://lawquestinternational.com/dispute-resolution-india-%E2%80%93-update Link 3 Alternate Dispute Resolution: by aniket datta on August 18, 2009 In a rapidly developing society multiplicity of human needs results in conflict of interests, which is further compounded due to the lack of discipline in litigation, due to this the judicial mechanism, finds it extremely difficult to cope up with its enormous case load. Litigation particularly civil litigation in India is notoriously known for pendency of cases. Government of

India Statistics indicate that a total of 23.9 million cases are pending in various courts of India1[1] Majority of Indian Courts are flooded by adjournments, revisions, appeals, and cross appeals; on an average a civil case takes anything from about 5 to 8 years for its final disposal & causes are not wanting when cases have lingered in courts for 15 to 20 years. The workload of Indian Judiciary increased by leaps and bounds and has now reached a stage of unmanageable magnitude, which has in fact led to a large backlog of cases.2[2] In Surjit Singhs Case3[3] , the Supreme Court expressed its anguish for such long delay, as the particular case was lying pending in the civil court at Patiala with no sight of its finalization. It was in fact the common mans disgust for traditional court litigation, which led to the evolution of alternate methods of dispute resolution. To quote, Mr. Justice V.R Krishna Iyer 4[4] Interminable, time consuming, complex and expensive court procedure impelled jurists to search for an alternate forum less formal, more effective and speedy for resolution of dispute avoiding procedural clap trap led to the Arbitration act. The Constitution Of India Provides For The Right To Speedy Justice: The Preamble to the constitution of India, as well as Directive Principals enumerated under Art 39(A), of Indian Constitution promise to secure socio, economic, political justice and equality of status and opportunity to all citizens. However all things said and done the ground reality is that, the Indian judicial system ,has not on one but several occasions fallen short of fulfilling such promises.

Malimath Committees, Recommendations for Dealing with Increase of Arrears in Litigation: The Indian Judicial System has been stretched almost to a breaking point right from apex court to lower subordinate courts, thus with a view to remedy this anomaly The Malimath Committee ,also known as the arrears committee ,undertook a comprehensive review of the working of the court system ,particularly all aspects of arrear and laws delay in addressing such concerns .It also made various useful recommendations for reducing litigation and making justice readily accessible to people at minimum cost of time and money .5[5] In its recommendations for reducing backlog of cases pending in various courts, The Malimath committee underlined the need for adopting an alternate dispute resolution mechanism, for encouraging Arbitration ,Mediation, Conciliation and Lok Adalats, as a viable alternative to conventional court litigation, In its view such alternate dispute resolution mechanism were capable of going a long way in restoring confidence of people and establishing rule of law , which is in fact a key objective of our constitution.

Alternate Dispute Resolution (Meaning): Alternate Dispute Resolution, is a procedure for settling a dispute by means other than litigation, such as arbitration, mediation or mini-trial 6[6] Purpose of ADR Mechanism: The purpose of ADR is to resolve the conflict in a more cost effective and expedited manner, while fostering long term relationships. ADR is in fact a less adverse means, of settling disputes that may not involve courts. ADR involves finding other ways (apart from regular litigation) which act as a substitute for litigation and resolve civil disputes ,ADR procedure are widely recommended to reduce the number of cases and provide cheaper and less adverse form of justice, which is a lesser formal and complicated system. Off late even Judges have started recommending ADR to avoid court cases.7[7]

In essence the system of ADR emphasizes upon:

Mediation rather than winner take all. Increasing Accessibility to justice. Improving efficiency and reducing court delays

Historical Background of Development of ADR: To Quote, Victor Hugo: An Invasion of Armies can be resisted, but not an idea whose time has come. The time to settle disputes through ADR has quietly and irresistibly come. Alternate Dispute Resolution has become an indispensable need for todays world, Our Courts are already overburdened by arrears which appear to be insoluble in near future, Cases are increasing in courts in a super fast speed and the courts have proved to be helpless in rendering speedy justice in majority of the pending cases, so much so that: A resolution had been adopted by the Chief Minister and the Chief Justices of The High Court on 4 th of December 1993,declaring that the courts were not in a position to bear the entire burden of the justice system and that a no. of disputes would be better settled, if resolved by alternative modes like; Arbitration, Mediation and Negotiation , Alternate to dispute resolution need to have procedural flexibility in order to save time, money and avoid miseries and delays associated with conventional trial, under the scheme of ADR the litigants are in fact encouraged to resort to alternative dispute resolution, so that the actual court systems would be left with a smaller number of important disputes that demand judicial attention. Consequently ADR has received a grand welcome in each and every field in which it has ventured. The closing years of the 20th century witnessed a world wide change, towards the growing trend of resolving problems of disputants; it was during this time that the popularity of ADR methods as a good substitute for conventional judicial convention gained popularity. Most countries including India have accepted Arbitration, Mediation and Conciliation as the best ADR techniques for resolution of civil disputes, particularly those relating to money suits, injunctions and specific performance of contracts. A D R as a mode of dispute resolution has been quite popular with the business community, Due to globalization of economy and competitive market policy; there has been a tremendous increase in trade, commerce and industry, which has resulted in a surge in disputes pertaining to commercial transactions and businesses. Business community and industrial entrepreneurs cannot afford to indulge in protracted litigation and thus prefer to get their disputes settled through ADR.

To Quote, Mr. Justice A.M.Ahmadi8[8] ,While we encourage ADR Mechanisms ,we must create a culture for settlement of disputes through these mechanisms , unless members of bar encourage their clients to settle their disputes through negotiation ,such mechanism cannot succeed.

Thus to summarize the above discussion ADR shall be instrumental in tackling the menace and monstrosity of what is known as Docket Explosion-,An unmanageable upsurge in the number of pending cases , before regular courts.9[9]

Various Types of Alternate Dispute Resolution: Arbitration alone is not ADR; ADR may be through the following modes of ADR:

Negotiation: Is a non-binding procedure, in which discussions between the parties are initiated without the intervention of any third party, with the sole objective of arriving at a negotiated settlement of a dispute. Conciliation/Mediation: A non-binding procedure in which an impartial third party i.e the conciliator or the mediator, assists the parties to a dispute in reaching a mutually satisfactory and agreed settlement of disputes. Mediation/Arbitration : A Procedure which combines conciliation and mediation at a subsequent stage in instances where the dispute is not settled through either conciliation /mediation within a period of time agreed in advance by the parties to arbitration. MEDOLA : Is a procedure in which ,if parties fail to reach an agreement through mediation, a neutral person ,who may be the original mediator or an arbitrator ,will select between the final negotiated offers of parties, such selection being binding on the parties. Mini Trial: A Non-binding procedure in which the disputing parties are presented with summaries of their cases, so as to enable them to access the strengths, weaknesses and prospects of their case and then an opportunity to settle it is explores. Arbitration: Is a procedure in which the dispute is submitted to an arbitral tribunal which makes a decision(an award) on the dispute, that is binding upon the parties

Fast Track Arbitration: A form of Arbitration in which the arbitration procedure is rendered in a particularly short time and that too at a reduced cost. Lok Adalats: Besides the above , Lok Adalats are also doing well as a mode of alternate dispute resolution system Ombudsman: Ombudsman is a person with special powers to investigate cases in certain areas such as health, pensions or in instances where there may be a dispute particularly if a government body is involved. An ombudsman can only recommend as to how a dispute may be resolved, however his/her recommendations cannot be enforced. Tribunals: Tribunals are similar to a court without the ritual or formality they, there are a no. of specialized tribunals which bear the name of their specialization, eg: Employment Tribunal, Immigration Tribunal.

Salient Features of ADR: ADR encompasses a variety of techniques such as mediation, arbitration, conciliation, judicial settlement, lok adalat and early neutral evaluation, which gives an opportunity to settle the disputes by mutual consent by parties through more or less informal and flexible processes. Scope of ADR: Under ADR, a dispute may be settled out of court and that too without litigation, however ADR system applies to only those disputes, as have arisen out of a legal relationship which may or may not be contractual.

Benefits of Alternate Dispute Resolution:

Speed: ADR is far quicker than the traditional litigation methods of going to courts, certain types of ADR supply very quick solutions, and ensure that the legal system can operate more quickly with lesser damage. Economy of Cost: ADR proceedings tend to be less formal and expensive than traditional litigation, more particularly because, in most cases ADR processes are successful in avoiding the expenses incurred for engaging court barristers or solicitors. Expertise: In ADR experts are frequently used, in matters where judges are unlikely to have expert knowledge.10[10]

Restores Good Relations between Disputing Parties: An ADR system brings, both parties to terms without damaging their good relations, and is in fact quite instrumental in restoring their relations to a position, as had existed before the creation of such dispute. ADR System Is Devoid Of Corruption: ADR system is bereft of corruption, which is on and off found and of whose existence there is always a likely apprehension in any of the traditional justice systems. Free From Prejudice: Since both parties to ADR come to terms on mutually agreeable terms, & that too out of their own free will, without having any fear of consequences of winning or losing, the system on a whole is quite free from prejudice. Confidentiality: ADR process maintains confidentiality and is not open to public at large. And thus consequently saves the parties from the fear of any adverse publicity Option Of Withdrawing From Some Kinds Of ADR Is Always Open: ADR reserves the freedom of parties to withdraw from conciliation without prejudice to their legal position, inter-se at any time during the commencement of such proceedings. ADR Is a Flexible and Independent Dispute Resolution System: ADR is a very flexible and independent system of dispute resolution, which is free of any statutory or custom ridden procedural law. Choice of Decision Maker: The Choice of selecting the mediator and the arbitrator lies with the parties and they are free to appoint any mutually agreeable, expert to adjudicate over any issue in dispute. ADR Helps In Clearing Bottle Necks In Litigation: ADR mechanism is quite instrumental in clearing bottlenecks, within the domestic judicial system

ADR Is Capable of Achieving Results That Meet the Needs of All the Parties Involved, at least in some measure.

http://jurisonline.in/2009/08/alternate-dispute-resolution/ Link 4 Introduction : ADR in India History of ADR in India India has had a long history of ADR; the earliest recorded instances date back to several centuries before Christ. Many of these forms exist with little change in the interiors and rural India. Bodies such as the panchayat, a group of elders and influential persons in a village deciding the dispute between villagers are not uncommon even today. There are also instances of disputes between persons of two different villages being settled by a body of

individuals drawn from the disputantsvillages, a third village or a combination of the two. The disputants are required to present their cases before the panchayat which will attempt to resolve the dispute. The working of the panchayat is such that it would be difficult to classify it as a mediator, a conciliator, an arbitral tribunal or a judicial body. While all disputes are heard by the panchayat it dons different forms, depending on the circumstances and the situation. If the facts disclose a clear legal obligation, it would act as a judicial body to decide the rights of the parties and enforce the decision by sanction. On the other hand, it may persuade one of the parties to act in a particular manner in a situation where the petitioner has no real claim in law but appeals to the righteousness of action to seek relief. This may be seen as the first indication of the process of conciliation in India. The disputants would ordinarily accept the decision of the panchayat and hence a settlement arrived consequent to conciliation by the panchayat would be as binding as the decision that was on clear legal obligations. One ought to understand that the decision of the panchayat was always to be followed, irrespective of the source of the decision. The panchayat has, in the recent past, also been involved in caste disputes. One may compare some activities of the panchayat to that of the 18th. century English guilds since the caste system began with a classification based on the profession of its members. The Muslim rule in India saw the incorporation of the principles of Muslim law in the Indian culture. The Kazi was the designated judicial officer who decided disputes between individuals. There are many recorded instances where the kazi has decided a case beyond the law by getting the disputants to agree to a solution that has been arrived at by conciliation, without actually giving that colour to the decision. Thus the decision from the authority of the kazi would be binding on the parties before him, it may just be that the decision is more acceptable and the disputants go back with the feeling that the decision was just and neither lost. ADR in modern India In the not so distant past too, conciliation has been effectively used in dispute resolution. The most prominent and effective use of conciliation has been in the Industrial Disputes Act, 1947 (the I.D. Act). Conciliation has been statutorily recognised as an effective method of dispute resolution in relation to disputes between workmen and the management of the industry. The I.D. Act makes it attractive for disputing parties to settle disputes by negotiation, failing which by conciliation by an officer of the Government before resorting to litigation. Several provisions set the scene for conciliation to be successful: 1. The conciliation is by an officer of the Labour Department in the Government.1 2. The parties may not go on strike or declare a lock-out during the period of conciliation. 3. The conciliation officer shall make all efforts to settle the disputes by conciliation2. 4. The agreement reached in the process of conciliation shall be certified by the conciliation officer as a fair settlement3. 5. Such a settlement shall bind all the other trade unions that are party to the dispute and are invited to participate in the conciliation but prefer to stay away from the conciliation process.4 6. The settlement is a self-executing document and the breach of the settlement by the management is a ground for recovery of dues under a simplified summary process.5 All parties in an industrial dispute that has had the misfortune of being litigated know that it is a tedious process that could go well beyond the lifetime of some of the beneficiaries. It is this factor that has contributed greatly to the success of conciliation in industrial relations. There are however certain abuses of the process and the benefits of the agreement arrived in the

course of conciliation that are used to supress the trade unions which do not cooperate with the management. This however does not diminish the effectiveness of the process. Litigation in India - the need for ADR Like every developed legal system, India too has a reputation for long winding procedures and an elaborate system of revisions and appeals from the order of the court of first instance. While the rationale is to ensure that the plaintiff has the satisfaction of the knowledge and erudition of the best legal minds, the price for this is the delay in finality of proceedings. There have been attempts to simplify the appeals procedure but the sheer number of cases seems to overwhelm the system. In the background of this and the fact that India is presently at a critical stage of its development, one needs to rethink the dispute resolution mechanisms of the past so that those contemplating investment in India are satisfied that they will get the benefit of international dispute resolution procedures in India. In the absence of this, those looking to investing in India may evaluate the legal risk and conclude that exit is dependent on the outcome of laborious litigation. One may be led to believe that a legal system that is slow is a risk to be considered while deciding to invest since it affects the investment in such a way that the investor may not only lose control of the investment but also finds the exit from the difficult situation closed. An example of a limitation on the investor imposed by the government while granting approvals for investment in India is that the governing law of the contract be Indian law. Unless Indian law is as effective as some of the legal systems of other nations, investors would not be comfortable investing in India. The restriction on the choice of law is also a restriction on ADR techniques and choice of forum for ADR. Consequently, unless India provides a good system of dispute resolution, it would be difficult to attract and retain investment. It is expected that the investor would look 1 Section 2(d). 2 Section 12(2). 3 Section 12(3). 4 Section 18(3). 5 Section 33-C. to ADR rather than litigation to settle disputes in Indian since it is not certain if the judiciary is competent to deal with complex investment disputes and if the laws are sufficiently comprehensive to deal with them. The advantages of a developed system of ADR in India include: 1. Choice of judges/experts who understand international business, commercial transactions and are not lost in the language of the law. In addition, the parties are sure that the chosen person(s) will have the expertise to resolve the dispute to the satisfaction of the parties. At the very least, one is sure that the dispute will not be decided by a person who is totally ignorant of the relevant laws, business practices and commercial aspects of the transaction. 2. One expects that the chosen person(s) will not only understand the transaction better and more easily but also appreciate the underlying motivations and expectations that led the parties to enter into the transaction and act the way they did. 3. Most transactions are founded on timing. Once the timing is lost, the transaction makes little or no sense to the parties. In this situation, the remedy also has to be considered in the same tone. A remedy that would be acceptable to the parties at a certain point in time may be unacceptable at another. The expert who applies ADR is expected to understand these positions of the parties and guide the procedure to the solution accordingly. It is not expected that the judge, a generalist would understand such considerations of the parties.

Judicial approach to ADR in India The judiciary, in its zeal to ensure justice for all has been extremely protective about its supervisory role in the ADR process. Since the only ADR that the judiciary has known so far has been arbitration, its approach to arbitration is relevant for the present enquiry. Conciliation has had a very limited application in India.6 The higher judiciary has looked upon the arbitral tribunal as a subordinate court and treated it as such. It appears that the judiciary believes that the judicial power of the State is vested exclusively in the judiciary and therefore it is necessary for it to exercise supervision over the functioning of the arbitral tribunal.7 It has, on occasions, been extremely protective about the freedom to the arbitral tribunal. For example, the court would not leave it to the arbitrators to finally decide on their jurisdiction8, whereas a subordinate court is empowered to decide on its jurisdiction. This has been reversed by the Arbitration and Conciliation Act, 1996 which specifically empowers the arbitral tribunal to decide on its jurisdiction.9 Therefore, while on the one hand the judiciary is happy to let the arbitrators decide matters at the first instance, it would not allow the arbitrators to be beyond the supervision of the courts. It is to be seen if the new legislation which limits the scope of judicial review changes the position. 6 Indias experience with conciliation is dealt with later in this paper. 7 See for example, F.C.I. v. Joginderpal Mohinderpal, (1989) 2 SCC 347. 8 See, Union of India v. G.S. Atwal & Co., (1996) 3 SCC 568. 9 Section 16. Arbitration and Conciliation Act, 1996. The Arbitration and Conciliation Act, 199610 is an attempt by Parliament to take a holistic approach to alternative dispute resolution in India. In the past, domestic and international arbitrations were dealt with separately under different legislations; the Arbitration Act, 1940 dealt only with domestic arbitrations. Foreign arbitral awards were further classified on the basis of the New York and Geneva Conventions and governed by the Foreign Awards (Recognition and Enforcement) Act, 1961 and the Arbitration (Protocol and Convention) Act, 1937 respectively. The Act is cast in terms of the UNCITRAL Model Law on International Commercial Arbitration11 and seeks to break away from the regulated and supervised forms of ADR as have been in existence in India. The need to provide flexibility to the parties in a legal relationship to decide for themselves the mode of settlement of their differences has finally been recognized. While the major changes have been in the area of arbitration, it is noteworthy that conciliation has received recognition. The Act seems to have been a reaction to the response of the judiciary to ADR in the past. There are several provisions that clearly seek to settle certain issues that have been the subject of great contention before the Supreme Court of India. The salient provisions of this Act in the matter of arbitration are: 1. Limited judicial intervention.12 2. Duty of the court where a suit is filed, upon application in this behalf, to refer the parties to arbitration in accordance with the arbitration agreement between the parties.13 3. Power of the arbitrators to award interest from the date of the cause of action till the date of the satisfaction of the award.14 4. Empowering the arbitrators to order interim measures for the protection of the subject matter or to ensure satisfaction of the award.15 5. Empowering the arbitrators to decide on their jurisdiction.16 6. Equating the arbitral award to a decree of a court.17 7. Limiting the number of statutory appeals from the award to one.18

10 Hereinafter the Act. 11 United Nations Commission on International Trade Law, 1966. 12 Section 5. 13 Section 8. 14 Section 31(7) 15 Section 17. 16 Section 16. 17 Section 36. 18 Section 37(3). Since the basic premise for the courts to strike down certain actions of the arbitrators was that they were not empowered to act in a certain manner to decide on certain matters, the Act specifically empowers the arbitrators in these areas and consequently, certain decisions of the court may be nullified to the extent to which they differ from the provisions of the Act. While granting the arbitrators more powers, the Act also imposes on them the duty to give reasons for their award, unless the parties specifically agree that no reasons need be given.19 This would make the arbitrators open to criticism from the courts who had, until now, refused to interfere in most cases of non-speaking awards since they had little material to go by. Conciliation The Act, for the first time in India, provides for recognition of conciliation in commercial disputes20. Part III of the Act provides for ...conciliation of disputes arising out of legal relationships, whether contractual or not and to all proceedings relating thereto.21 This provision similar to that relating to arbitration, is arguably, the most important issue and needs careful attention. The choice of the method of ADR is a function of the kind of relationship and the nature of the dispute between the parties.22 The Act clearly applies only to commercial arbitrations and conciliations. From the description of the scope and application in section 61 one needs to understand if only legal obligations may be the subject of conciliation. Can differences of opinions that have an impact on the relationship between the parties be the subject matter of the conciliation? If the subject matter of the dispute is the legal obligation of the parties then a choice of the ADR mechanism is clearly available: the parties may choose either arbitration or conciliation. To equate conciliation to arbitration on so simplistic an analysis is to grossly understate the relevance of conciliation. While it is no doubt true that conciliation could be used in place of arbitration and parties may be happier with a settlement than an award, it must be recognised that conciliation has one special characteristic, i.e., it can go to the root of the difference, the real problem between the parties that had led them to disagree with each other. This is best explained with an illustration: In a joint venture agreement between an Indian and an American company, each holding 50% of the shares in the Indian joint venture company, certain matters are reserved i.e, decisions on these matters may be taken only if the directors nominated by both the parties vote in favour of the resolution in a meeting of the Board of Directors. Typically these would 19 Section 31(3). 20 Order XXXII-A of the Code of Civil Procedure, 1908 provides for a judge, in certain matters relating to the family, to make efforts to settle the dispute amicably and adjourn the proceedings to enable the

parties to reach a settlement. 21 Section 61. 22 See further, Tania Sourdin, Matching Disputes to Dispute Resolution Processes - The Australian Context, and Frank E.A.Sander, Dispute Resolution within and Outside the Courts - An overview of the US Experience in P.C. Rao and William Sheffield (eds.) Alternative Dispute Resolution: What it is and How it Works, ICADR, New Delhi, 1996. include expansion of the capital base, diversification of activities, creation of subsidiaries, mergers and acquisitions, creation of liabilities exceeding a certain amount, etc. If the American partner wishes to expand the equity base of the joint venture company so that it may undertake larger projects or expand its activities but the Indian partner is unable to match the capital contribution required to maintain the ratio of shareholding due to unavailability of free resources at that point of time, the Indian partner will instruct its nominee directors to vote against the resolution even though it agrees, in principle, that the company needs additional funds for the expansion. The Indian partner may wish to increase the debt exposure of the joint venture company, which the American partner may view as an ad hoc response, rather than as a long-term solution. The Indian partner may perceive this action as a threat by the American partner to supress the Indian partner by forcing the dilution of its control in the joint venture company. This may be the first sign of insecurity of the Indian company and the beginning of the loss of trust between the partners. Once the resolution fails, the American partner may not be very interested in the joint venture as it sees that the company is unlikely to grow in a manner that it expects. It may also perceive the Indian company as lacking in vision and ambition. This may be a natural inference by the persons who make the policies and direct the activities of the American partner. If the American partner is allowed to continue to hold this view, it would sour the relationship between parties that was based on the understanding of equality. The difference of perception of the situation could not be the subject of arbitration since there is no breach of any obligation of the parties under the joint venture agreement. There is no obligation on the parties to vote in a particular manner on issues that are in the list of reserved matters. At best the parties could allege that the other did not act in good faith and in the best interest of the joint venture company. This however, could be a matter that could be referred to conciliation. The parties could express their concerns and feelings in the matter to the conciliator who could help them find a solution to the problem after understanding their concerns. It may be that the parties have not been able to communicate their understanding of the situation to each other adequately, have failed to understand each others perception of the situation, have a difference of opinion regarding the future of their relationship or differ in their vision for the joint venture company. In most of these cases, conciliation will help them communicate their views so that, at the very least, the air may be cleared for a review of the relationship. In the present illustration, a possible solution that may be acceptable to both parties could be an expansion of the capital base of the company by a fresh issue of shares to the American partner with a right to the Indian partner to purchase half the shares at an agreed price(or formula) within a fixed period of time in the future. Thus, though the Indian partner may hold

fewer shares for a short while, the American partner may continue to treat the Indian partner as a full and equal partner thereby putting to rest the fear of the Indian partner that the increase in the share capital is a ploy to dilute its control in the joint venture. Whether the difference of opinion in the above illustration qualifies for the benefits under section 6123 of Part III of the Act is therefore an issue. It would if one takes a view that it is a proceeding relating to disputes arising out of a legal relationship. The Supreme Court of India has held that the phrase arising out of is of the widest amplitude and should not be read restrictively.24 Whether the fact situation in the illustration would qualify as a dispute would be the next level of enquiry. While dealing with the issue of the date from which limitation runs in a matter to be referred to arbitration, the Supreme Court was required to determine the date when the dispute or difference arose. It held that the ...dispute or difference arises on unequivocal denial of claim of one party by the other party as a result of which the claimant acquires the right to refer the dispute to arbitration.25 If one were to expect that the courts would interpret the word dispute in the context of conciliation in a similar manner, it may be necessary for the agreement containing the conciliation agreement to confer a right on the parties to resort to conciliation in situation where the difference of opinion, which may not be a breach of any legal obligation, is likely to affect their relationship. This would ensure that the parties have always a course of action to resolve their differences and are not left without a chance to resolve such differences that could be fatal to the joint venture company (in the illustration above). Conciliation v. Arbitration While one has a choice of ADR techniques in most situations, it may be that some techniques are better suited for certain situations. A comparison of conciliation and arbitration is sought to be made to highlight the situations in which conciliation would be preferred to arbitration, after listing certain characteristics of conciliation that distinguish it from arbitration. Conciliation is different from arbitration and hence is better suited in certain situations: 1. Decisions of parties in a relationship arising out of non-legal obligations situations are not arbitrable. 2. Certain decisions based on the unfettered, and unrestricted rights of the parties affecting the relationship between them. 3. Minor breaches or breaches of legal obligations that would not normally lead to termination or large-scale liabilities but cause a loss of faith between the contracting parties are better dealt with by conciliation than arbitration. 23 Supra n.8. 24 Tarapore & Co. v. Cochin Shipyard, (1984) 2 SCC 680, 715; Renusagar Power Co. Ltd. v. General Electric Company, (1984) 4 SCC 679. 25 State of Orissa v. Damodar Das, (1996) 2 SCC 216. 4. Operational issues that are not arbitrable but affect the continuing relationship between the contracting parties. 5. Operational issues that have become such that lines of difference are drawn and have turned into unrectractable positions without the other side giving in. Arbitration in such cases would only make matters worse and only foreclose any possibility of working together.

6. The conciliator may not follow the law strictly; he may persuade the parties to come to a settlement on principles of ex aeque et bono or amiable compositeur.26 7. Commercial practices giving rise to actions that have in fact happened but are sometimes not easy to prove as facts in accordance with the rules of evidence in court or arbitration. Parties may not admit these facts in arbitration or litigation since they know that these cannot be proved by the other. In conciliation however, these may be admitted and justice may be done, as it should be. 8. All proceedings in conciliation are confidential. Statements, concessions and admissions made, and documents produced are to be used only for the conciliation. These may not be used as the basis of claims in subsequent arbitrations or litigation. In addition, the conciliator may not be the arbitrator in the same matter and hence a party that admits a position in conciliation may demand proof of the facts alleged from the other party in arbitration or litigation. 9. The end result in a conciliation is acceptable to both parties since it is not imposed like an award/decree. 10. Consequently the possibility of better compliance increases tremendously. 11. Conciliation is more easily acceptable since the outcome of arbitration and/or litigation is both uncertain and imposes an unwarranted additional expense. 12. Conciliation does not close the option of arbitration or litigation until settlement is signed by the parties. 13. The settlement is treated on par with a decree of a court and consequently, may be executed as such. 14. Subsequent to the Act, the cause of action, i.e., the matter in conciliation, may be said to have merged with the settlement becoming final and therefore, neither of the parties may resort to litigation or arbitration on those matters, as an afterthought. This proposition has been affirmed by the Supreme Court of India in a matter where the dispute was settled by 26 One may venture to hypothesize that the above six factors may be the reasons for conciliation to be preferred to arbitration in respect of industrial disputes under the I.D. Act. the parties and one of them sought to arbitrate the difference that was settled. The court was of the view that a party may not seek arbitration on a matter after agreeing to a settlement since all differences may be said to have been disposed of by the settlement and no dispute would exist.27 Thus there would be no scope for appeals. Conciliation brings a finality that arbitration sometimes does not. Conclusion Conciliation has been successful in India through a system that has become popular as Lok Adalat (peoples court). These were initially ad hoc bodies composed of eminent persons, lawyers, judges, social activists, government officials and para-legals who would endeavour to help the parties who in the pre-litigation process reach a settlement.28 The Lok Adalats have also been useful to the judiciary since courts have referred parties to these Lok Adalats when it is felt that a dispute could be better resolved there. The success of the Lok Adalats is seen in the number of cases that are settled: upto 31st. March 1996, more than 13,000 Lok Adalats have been held in India where were 5 million cases have been settled. Of these, 278, 801 cases of motor accident claims accounting for 8,612 million Rupees were paid to the claimants.29 In a sense, Lok Adalats have achieved the status of ADR. That courts allocate a day in a

fortnight or month to hear matters that the parties have agreed to settle out of court through the Lok Adalat is sufficient evidence of its popularity. It may also be a statement about the peoples choice of dispute resolution mechanisms, their discontentment with the judicial system - its uncertainties and delays. That may be the cue for us to attempt to settle disputes through conciliation, now that even the judiciary has begun to see merit in it. http://www.nishithdesai.com/Research-Papers/adr.pdf