ALTERNATIVE DISPUTE RESOLUTION
MODULE 1
A) CONCEPT OF ADR
Alternative Dispute Resolution (ADR) is a system of resolving disputes without going to regular
courts. It focuses on settlement through discussion, cooperation and agreement between the parties.
The main concept behind ADR is that justice should be quick, affordable and friendly, rather than
time-consuming and complex. ADR encourages parties to solve their disputes amicably, which helps
in maintaining relationships and reducing hostility.
ADR does not replace courts but supports the judicial system by reducing its workload.
B) ORIGIN OF ADR
ADR is not a new concept. Its roots can be traced back to ancient India, where disputes were resolved
through Panchayats, village elders and community councils.
These traditional systems aimed at consensus and social harmony rather than punishment. During the
medieval period, similar methods were followed by local and religious authorities.
In modern times, due to increase in litigation and delay in justice, ADR was formally recognized
through laws such as Section 89 of the Civil Procedure Code, 1908 and the Arbitration and
Conciliation Act, 1996.
Thus, ADR evolved from informal traditional practices to a structured legal mechanism.
C) DEFINITION & SCOPE OF ADR
Definition of ADR
ADR refers to various methods used for resolving disputes outside the court system in a peaceful and
voluntary manner. It aims to settle disputes with the help of a neutral third party or through mutual
negotiation.
ADR includes arbitration, mediation, conciliation, negotiation and Lok Adalat.
Scope of ADR
The scope of ADR is wide, especially in civil matters.
ADR can be used in:
• Civil and commercial disputes
• Family and matrimonial disputes
• Labour and industrial disputes
• Consumer and banking disputes
However, ADR is not suitable for serious criminal offences and matters involving public interest.
D) CONSTITUTIONAL BACKGROUND OF ADR
The Constitution of India provides a strong foundation for ADR.
• Article 39A directs the State to ensure equal access to justice and provide free legal aid. ADR
helps achieve this by making justice affordable and speedy.
• Article 14 ensures equality before law, which ADR supports by offering justice without
unnecessary delay or expense.
• The Preamble aims to secure social, economic and political justice, which is strengthened
through ADR mechanisms.
Thus, ADR is in harmony with the constitutional vision of justice.
E) JUSTICE MALIMATH COMMITTEE REPORT
The Justice Malimath Committee was constituted to suggest reforms in the judicial system, especially
to deal with delay and pendency of cases.
The Committee strongly recommended the use of ADR mechanisms and emphasized that:
• Courts should actively refer cases to ADR
• Judges should encourage settlement between parties
• ADR should be promoted to reduce burden on courts
• Legal education should include ADR training
The Committee viewed ADR as an effective tool for speedy and affordable justice.
A) ARBITRATION AGREEMENT
An arbitration agreement is the foundation of arbitration proceedings. It is an agreement by which
parties agree that disputes arising between them will be resolved by arbitration instead of regular
courts.
The agreement may be for existing disputes or future disputes and can be:
• A separate agreement, or
• An arbitration clause in a contract
Essential requirements:
• The agreement must be in writing
• There must be a clear intention to refer disputes to arbitration
• The dispute must be legally enforceable
• Parties must be competent to contract
Without a valid arbitration agreement, arbitration proceedings cannot be initiated.
B) COMPOSITION OF ARBITRAL TRIBUNAL
The Arbitral Tribunal is the authority that hears and decides the dispute.
Appointment of arbitrators:
• Parties are free to decide the number of arbitrators
• The number must be odd to avoid deadlock
• If parties fail to appoint, the court can appoint arbitrators
Role and qualities:
• Arbitrators must be independent and impartial
• They must disclose any circumstances that may raise doubts about neutrality
The tribunal ensures that disputes are decided in a fair, unbiased and professional manner.
C) JURISDICTION OF ARBITRAL TRIBUNAL
Jurisdiction refers to the legal authority of the arbitral tribunal to hear and decide a dispute.
The tribunal derives its jurisdiction from:
• A valid arbitration agreement
• The nature of the dispute
• The place of arbitration
Under the principle of Kompetenz–Kompetenz, the tribunal has the power to rule on its own
jurisdiction, including objections regarding the validity of the arbitration agreement.
This principle reduces unnecessary court interference.
D) CONDUCT OF ARBITRAL PROCEEDINGS
Arbitral proceedings are conducted in a less formal and flexible manner compared to court trials.
Important principles:
• Parties must be treated equally
• Each party must be given full opportunity to present its case
• Tribunal is not bound by the Civil Procedure Code or Evidence Act
• Proceedings are confidential
This flexibility makes arbitration faster and more efficient than litigation.
E) MAKING OF ARBITRAL AWARD AND TERMINATION OF PROCEEDINGS
Arbitral Award:
An arbitral award is the final decision of the arbitral tribunal on the dispute.
The award must:
• Be in writing
• Be signed by arbitrators
• State reasons (unless waived)
• Mention the date and place of arbitration
Termination of proceedings:
Arbitral proceedings are terminated when:
• Final award is made
• Claimant withdraws the claim
• Parties mutually agree to terminate
• Tribunal finds continuation unnecessary
F) ENFORCEMENT OF ARBITRAL AWARD
An arbitral award is final and binding on the parties.
Enforcement process:
• Award is enforced like a decree of a civil court
• Enforcement can be sought after the time limit for setting aside the award expires
• Court will enforce the award unless valid grounds for refusal exist
This gives arbitration practical effectiveness.
G) APPEALS
The Arbitration Act allows very limited appeals to ensure finality.
Appeals are permitted against:
• Orders refusing to refer parties to arbitration
• Orders granting or refusing interim measures
• Orders setting aside or refusing to set aside arbitral award
No appeal lies against every order of the tribunal, preserving the speed and efficiency of arbitration.
A) NEW YORK CONVENTION AWARD
Meaning
A New York Convention Award is a foreign arbitral award made in a country that is a signatory to
the New York Convention, 1958, and is notified by the Government of India.
India has adopted the New York Convention through Part II, Chapter I of the Arbitration and
Conciliation Act, 1996.
Conditions for Enforcement
A foreign award under the New York Convention can be enforced in India if:
• The award arises out of a commercial dispute
• It is made in a notified convention country
• There is a valid arbitration agreement
• The award is final and binding on the parties
Grounds for Refusal of Enforcement
Enforcement of a New York Convention award may be refused if:
• Parties were under incapacity
• Arbitration agreement is invalid
• Proper notice was not given
• Award goes beyond the scope of arbitration
• Award is against public policy of India
Importance
The New York Convention is the most important and widely accepted convention for enforcement
of foreign arbitral awards, making India an arbitration-friendly jurisdiction.
B) GENEVA CONVENTION AWARD
Meaning
A Geneva Convention Award is a foreign arbitral award made under the Geneva Convention, 1927,
which is an older convention compared to the New York Convention.
India recognizes Geneva Convention awards under Part II, Chapter II of the Arbitration and
Conciliation Act, 1996.
Conditions for Enforcement
For enforcement of a Geneva Convention award:
• Award must be made pursuant to an arbitration agreement
• Award must be final in the country where it was made
• Award must be enforceable under the law of the country of origin
• The subject matter must be commercial in nature
Grounds for Refusal
Enforcement may be refused if:
• Award has been annulled in the country of origin
• Arbitration procedure was not in accordance with agreement
• Enforcement is against public policy
Present Status
The Geneva Convention has limited practical importance today, as most countries, including India,
prefer the New York Convention.
A) MEANING OF COURT-ANNEXED ADR
Court-annexed ADR refers to dispute resolution mechanisms that are linked with courts, where
disputes already pending before courts are referred to ADR methods for settlement.
It aims to reduce delay, pendency of cases and litigation costs, while ensuring speedy and amicable
justice.
SECTION 89 OF THE CIVIL PROCEDURE CODE, 1908
Meaning
Section 89 of the CPC empowers civil courts to refer disputes to Alternative Dispute Resolution
mechanisms when there appears to be a possibility of settlement between parties.
This provision was inserted to promote settlement outside courts and reduce the burden on the
judiciary.
Modes under Section 89
Under Section 89, courts may refer disputes to:
1. Arbitration
2. Conciliation
3. Judicial settlement (including Lok Adalat)
4. Mediation
Purpose of Section 89
• To encourage amicable settlement
• To reduce pendency of cases
• To ensure speedy and cost-effective justice
• To make courts more efficient
Section 89 acts as a bridge between courts and ADR.
B) ROLE OF COURTS – REFERRAL OF DISPUTES TO ADR
Duty of Courts
Courts play an active role in promoting ADR by:
• Identifying cases suitable for ADR
• Explaining benefits of ADR to parties
• Referring disputes to appropriate ADR methods
Stage of Referral
Courts may refer disputes to ADR:
• After filing of pleadings
• Before framing of issues
• At any stage where settlement seems possible
Nature of Court’s Role
• Courts act as facilitators, not decision-makers
• Referral is generally made with consent of parties
• Courts ensure that ADR process is fair and voluntary
Judicial Approach
Indian courts have emphasized that:
• ADR is not a substitute but a support to judicial system
• Proper implementation of Section 89 is necessary for speedy justice
MODULE 2
A) MEANING OF MEDIATION AND CONCILIATION
Mediation
Mediation is a voluntary and informal process of dispute resolution in which a neutral third person
called a mediator helps the parties to communicate and negotiate in order to reach a mutually
acceptable settlement.
The mediator does not decide the dispute but only facilitates discussion. The final decision always
rests with the parties.
Conciliation
Conciliation is a process in which a neutral third person known as a conciliator assists the parties
in resolving their dispute by suggesting terms of settlement.
Unlike mediation, the conciliator takes a more active role and may propose solutions to the parties.
Both mediation and conciliation aim at amicable settlement and are non-adversarial in nature.
B) DIFFERENCE BETWEEN MEDIATION AND CONCILIATION
Basis Mediation Conciliation
Role of neutral Mediator facilitates discussion Conciliator suggests settlement
Nature of role Passive Active
Decision-making Parties decide Parties decide
Suggestion of terms Not usually Yes
Formality Informal Slightly formal
C) ADVANTAGES OF MEDIATION
Mediation offers several advantages over litigation and arbitration:
• Speedy resolution – disputes are resolved quickly
• Cost-effective – minimal expenses involved
• Confidentiality – proceedings are private
• Voluntary process – parties participate willingly
• Preserves relationships – promotes cooperation
• Flexible procedure – no rigid legal rules
Because of these benefits, mediation is widely used in family, commercial and labour disputes.
D) ROLE OF MEDIATORS / CONCILIATORS
Role of Mediator
The mediator:
• Acts as a neutral facilitator
• Encourages open communication
• Helps identify issues and interests
• Assists parties in reaching a voluntary settlement
• Maintains confidentiality and neutrality
The mediator does not impose a decision.
Role of Conciliator
The conciliator:
• Plays a more proactive role
• Examines facts and issues
• Suggests terms of settlement
• Helps parties arrive at an agreement
• Ensures fairness and neutrality
The conciliator’s proposals are not binding unless accepted by parties.
A) GENESIS AND MEANING OF LOK ADALATS
Genesis
The concept of Lok Adalat has its roots in ancient Indian justice delivery system, where disputes
were resolved through village panchayats and community elders. These forums focused on
conciliation, compromise and social harmony.
In modern India, Lok Adalats were introduced to deal with delay, pendency of cases and high
litigation costs. The aim was to provide speedy and inexpensive justice to the common people.
Meaning
The term Lok Adalat literally means “People’s Court.” It is a forum where disputes pending in courts
or at the pre-litigation stage are settled through mutual compromise with the assistance of a neutral
authority.
Lok Adalats emphasize conciliation rather than adjudication.
B) LEGAL RECOGNITION OF LOK ADALATS IN INDIA
Lok Adalats got statutory recognition through the Legal Services Authorities Act, 1987.
Legal Provisions:
• Section 19 – Organization of Lok Adalats
• Section 20 – Cognizance of cases by Lok Adalats
• Section 21 – Award of Lok Adalat
• Section 22 – Powers of Lok Adalat
An award passed by Lok Adalat is deemed to be a decree of a civil court and is final and binding on
the parties.
C) CONSTITUTION OF LOK ADALATS
Lok Adalats are constituted by:
• National Legal Services Authority (NALSA)
• State Legal Services Authorities
• District Legal Services Authorities
• Taluk Legal Services Committees
Composition:
A Lok Adalat usually consists of:
• A judicial officer (as chairman)
• A lawyer
• A social worker or person of repute
This combination ensures legal knowledge and social sensitivity.
D) JURISDICTION OF LOK ADALATS
Lok Adalats have jurisdiction over:
• Cases pending before courts
• Pre-litigation disputes
Types of cases:
• Civil cases
• Compoundable criminal cases
• Matrimonial and family disputes
• Motor accident claims
• Labour and service matters
Limitation:
Lok Adalats cannot deal with non-compoundable criminal offences.
E) POWERS OF LOK ADALATS
Lok Adalats enjoy powers similar to a civil court, but their approach is conciliatory.
Powers include:
• Summoning and enforcing attendance of witnesses
• Receiving evidence and documents
• Facilitating compromise and settlement
• Passing awards based on mutual consent
However, Lok Adalats do not decide disputes on merits; they only pass awards based on settlement.
A) Future of Alternative Dispute Resolution (ADR) in India
The Indian judicial system is facing serious problems such as delay in disposal of cases, high
pendency, and costly litigation. In this situation, Alternative Dispute Resolution (ADR) has emerged
as an effective mechanism to supplement the traditional court system. The future of ADR in India is
bright and promising.
ADR helps in providing speedy, economical and amicable settlement of disputes. The Indian
judiciary has strongly supported ADR through provisions like Section 89 of the Civil Procedure Code,
1908, which encourages courts to refer cases to ADR methods. Laws such as the Arbitration and
Conciliation Act, 1996 and the Legal Services Authorities Act, 1987 further strengthen ADR
mechanisms like arbitration, mediation and Lok Adalat.
With increasing commercial activities, globalization and foreign investments, arbitration is expected to
play a major role in resolving commercial and international disputes. Similarly, mediation has great
potential in family, matrimonial and labour disputes due to its cooperative nature. The use of
technology and online dispute resolution (ODR) will further expand the reach of ADR in the future.
Thus, ADR is set to become an integral part of the Indian justice delivery system, ensuring access
to justice, reducing court burden, and promoting peaceful dispute resolution.