PG NO.

1
INTEGRAL UNIVERSITY
DEPARTEMENT OF LAW
2024-2025

ALTERNATE DISPUTE RESOLUTION (LW367)

PRACTICAL FILE

( PART-I )

SUBMITTED BY: SUBMITTED TO:

NAME: MAHIN RABBANI DR. MANZOOR KHAN

BRANCH: BA LLB “ASSISTANT PROFESOR”

YEAR/SEM: III/VI

ENROLLNMENT NO: 2200101243

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INTRODUCTION
2
Alternative Dispute Resolution (ADR) refers to the processes and techniques used to resolve
disputes outside traditional litigation. It has become an increasingly important aspect of modern
legal systems globally, as it provides faster, more cost-effective, and often more amicable
resolutions. ADR encompasses a range of methods, including mediation, conciliation, and
arbitration, each offering a flexible and collaborative approach to resolving conflicts. The origins
of ADR can be traced back to ancient civilizations where community elders and leaders served
as mediators to settle disputes. Over time, formalized mechanisms for dispute resolution outside
of the judicial system developed, with significant growth occurring in the 20th century as
countries began to recognize ADR’s potential to reduce court congestion, legal costs, and
provide accessible dispute resolution alternatives. Today, ADR is widely recognized and
employed in both domestic and international contexts.

The nature of ADR lies in its emphasis on providing an informal, voluntary, and private means
of resolving disputes. Unlike the adversarial nature of traditional litigation, ADR seeks to
facilitate a collaborative atmosphere where parties maintain control over the process and can
craft mutually agreeable solutions. The primary objectives of ADR are to reduce legal costs,
expedite the resolution process, preserve privacy, and offer a more flexible and personalized
means of resolving conflicts. ADR also promotes the preservation of relationships between
parties, especially in cases where they may need to continue working together after the dispute is
resolved.

On an international scale, ADR has been further institutionalized through various treaties and
conventions, such as the New York Convention of 1958 1and the Geneva Convention of 1927,
which provide frameworks for the recognition and enforcement of foreign arbitral awards. These
agreements have made international arbitration an indispensable tool for resolving cross-border
disputes. In India, ADR is embraced through legal frameworks such as the Arbitration and
Conciliation Act of 19962, which promotes arbitration and conciliation as effective alternatives
to litigation. The Indian legal system also encourages mediation and conciliation, especially in
matters involving family disputes, commercial conflicts, and labor issues.

One of the most widely recognized ADR techniques is mediation. In mediation, a neutral third
party, the mediator, assists the disputing parties in reaching a mutually acceptable agreement.
Mediation is characterized by its voluntary nature, confidentiality, and non-binding outcomes
unless the parties agree to a resolution. The essential elements of mediation include the
mediator’s impartiality, the autonomy of the parties, and the flexible, structured process that
allows the parties to address the underlying issues and work toward a solution. The advantages of

1
United Nations, June 10, 1958, 330 U.N.T.S.
2
No. 26 of 1996
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mediation are manifold, including lower costs, faster resolution, greater party control, and the
preservation of relationships, especially when long-term collaboration is needed. 3

Another important ADR technique is conciliation, which is similar to mediation but involves a
more active role for the conciliator, who may suggest potential solutions to the dispute. The
process is informal, allowing the parties to explore various options for settlement while retaining
control over the outcome. Conciliation is used in both domestic and international contexts and is
particularly useful in situations where parties need assistance in overcoming communication
barriers or in exploring settlement options that might not have been initially considered. A
conciliator’s role is to facilitate communication, clarify issues, and offer solutions while
respecting the autonomy of the parties to accept or reject any proposed resolutions.

The commencement and termination of conciliation proceedings are typically initiated by the
agreement of the parties, with the proceedings concluding either when a settlement is reached or
when the conciliator determines that further negotiation is not possible. This flexibility is one of
the major benefits of conciliation, allowing parties to retain control over the process and walk
away at any point.

Arbitration is another cornerstone of ADR, where the parties agree to submit their dispute to one
or more arbitrators, who make a binding decision. For arbitration to be effective, an arbitration
agreement must be clear, mutual, and comply with specific legal requirements. The doctrine of
severability ensures that even if the underlying contract is invalid, the arbitration agreement
remains enforceable. The validity of an arbitration agreement is crucial, as it guarantees the
binding nature of the arbitrator’s decision. The arbitral award, which is the final decision made
by the arbitrator, is enforceable according to international conventions, including the Geneva and
New York Conventions. These agreements provide a framework for enforcing foreign arbitral
awards, making arbitration a reliable and effective mechanism for resolving international
disputes.

In conclusion, ADR plays a crucial role in the modern legal landscape by offering parties a range
of effective, flexible, and efficient alternatives to traditional litigation. From mediation and
conciliation to arbitration, ADR techniques have transformed the way disputes are resolved,
focusing on cooperation, speed, and mutually beneficial solutions. These methods are becoming
an integral part of legal systems across the world, ensuring that disputes are resolved more
amicably, quickly, and with greater cost efficiency.
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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Dr. Manzoor Khan3, whose expert guidance and
unwavering support have been instrumental in the completion of this assignment. His
encouragement and insightful direction have greatly enriched my understanding of the topic. I
am also deeply thankful to the University for providing a platform that has allowed me to
enhance my legal knowledge and refine my writing skills. This assignment has enabled me to
explore many new aspects related to the subject of "ADR, Techniques & Enforcement of
Certain Arbitration Awards."

Furthermore, I would like to extend my appreciation to my parents and friends for their constant
support and invaluable assistance in finalizing this work. I am also grateful to the various legal
resources, databases, libraries, and online repositories that contributed to the depth and breadth
of my research, making it a comprehensive and well-informed analysis.

Thank you all for your encouragement, support, and resources throughout this process.

3
ASSISTANT PROFESSOR, INTEGRAL UNIVERSITY LUCKNOW
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LIST OF CASES

ONGC vs. Western Co. of Northern America 4

ONGC vs. Saw Pipes Ltd.5

Punjab & Sind Bank vs. Allahabad Bank 6

Nanak Foundation V. Rattan Singh & Sons 7

Haresh Dayaram Thakur v. State of Maharashtra and Ors 8

Mysore Cements Ltd. V. Svedala Barmac Ltd.9

4
(1988) 2 SCC 190
5
(2003) 5 SCC 705
6
(2006) 6 SCC 294
7
(2018) 2 SCC 201
8
(2000) 8 SCC 143
9
(2004) 2 SCC 477
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TABLE OF CONTENT

S NO. CONTENET PAGE NO.

1. INTRODUCTION 2-3
2. ACKNOWLEDGMENT 4
3. LIST OF CASES 5
4. TABLE OF CONTENT 6
5. ORIGIN OF ADR 7-15
6. TECHNIQUE OF ADR-I 16
 MEDIATION 15
 CHARACTERSTICS 15
 ADVANTAGES 17-18

7. TECHNIQUE OF ADR-II
 CONCILIATION 18
 APPOINTMENT & ROLE 19-21
 COMMENCEMENT & TERMINATION 21-23
 ARBITRATION AGREEMENT & ESSENTIALS 23-26
 ROLE,ADVANTAGES & DISADVANTAGES 27-28
8. ENFORCEMENT OF CERTAIN ARBITRATION AWARDS 29-32

9. CASE ANALYSIS
 TITLE 33
 FACTS & ARGUMENTS 34-35
 DECISION RATIO 36-38
 CONCLUSIVE ANALYSIS 39
10. BIBLIOGRAPHY 40

KEYWORDS: ADR, Techniques, Mediation and Conciliation, Arbitration Agreement, Arbitral

Award, International Conventions, Enforcement of Awards, Party Autonomy, Cost-effective,
Dispute Resolution.
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ADR
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ADR is an alternative to litigation which involves arbitration, mediation, negotiation,
conciliation, etc. Settlement of disputes through a third party is not a new phenomenon. It has
been practiced since time immemorial, dating back to ancient times. In India, people believed in
resolving disputes within four walls because this was somewhere considered as an element to
protect their dignity and personality in the society.

In many parts of India, due to huge pendency of suits, alternative dispute resolution mechanisms
are becoming more popular and crucial for resolving business disputes. ADR is necessary in
today’s fast developing world as it provides for a swift, efficient and amicable settlement. ADR
has undergone a huge change from dispute resolution by old men sitting under a tree to gaining a
statutory recognition. India has developed its own progressive legislation based on the Model
Law and the UNCITRAL10 Arbitration Rules.

OBJECTIVES

1. To Provide an Efficient Dispute Resolution Mechanism

Faster Resolution: One of the key objectives of ADR is to provide a faster means of resolving
disputes. Court cases can be lengthy, often taking years to reach a conclusion. ADR processes
like mediation, arbitration, and conciliation are generally quicker, helping parties avoid
prolonged conflicts.

Reduced Backlog in Courts: By diverting disputes from the traditional court system, ADR helps
reduce the backlog of cases in the judicial system. This leads to faster resolution not just for the
cases being mediated or arbitrated but also for those remaining in the judicial queue.

2. To Reduce the Cost of Dispute Resolution

Lower Legal Costs: ADR methods are typically less expensive than going through a formal court
trial. The cost savings arise from fewer procedural complexities, shorter timelines, and the
absence of formal legal fees and court costs.

Simplified Processes: The ADR process is often less formal and does not require the extensive
use of legal representation, thus reducing associated legal fees. Furthermore, the time required to
resolve the dispute is significantly shorter, translating into lower costs for all parties involved.

3. To Promote Voluntary Settlements

Autonomy for Parties: ADR allows parties to control the outcome of their dispute. They are not
bound by a judge’s ruling or an arbitrator's award unless they choose to accept it. In methods like

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United Nations Commission on International Trade Law1966
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mediation and conciliation, the focus is on reaching a mutual agreement that both parties find
satisfactory. 8

Self-Determination: The parties, rather than an external authority (like a judge), are in charge of
designing the solution. This level of autonomy helps ensure that the parties are more invested in
the resolution, which often leads to better compliance with the agreed terms.

4. To Preserve Relationships Between the Parties

Collaborative Nature: ADR, particularly mediation and conciliation, aims to resolve disputes in a
manner that fosters cooperation rather than confrontation. These processes emphasize
communication and negotiation, which can help preserve and even improve relationships
between the parties.

Minimize Adversarial Conflict: Unlike court cases, which are often adversarial and can escalate
tensions between parties, ADR offers a less hostile approach. This is particularly useful in
ongoing relationships, such as in business partnerships, family disputes, or labor conflicts.

5. To Offer Flexibility in the Dispute Resolution Process

Customizable Procedures: ADR offers more flexibility than litigation, as the parties can choose
the process, the timing, and the location of the dispute resolution. For instance, the parties can
agree to hold mediation sessions at mutually convenient times and locations, as opposed to rigid
court schedules.

Adaptability: The ADR process can be tailored to the specific needs of the parties and the nature
of the dispute. This means that ADR can accommodate diverse issues, from commercial disputes
to family matters, by allowing the involved parties to create solutions that best fit their unique
situations.

HISTORY

Arbitration or mediation as an alternative to dispute resolution by municipal courts has been

prevalent in India from Vedic times. The ‘Bhradarnayaka Upanishad’ is the earliest text
mentioning the various types arbitral bodies which are the Puga, the Sreni and the Kula. They are
also called the Panchayats and they dealt with disputes of a variety of nature including disputes
of contractual, matrimonial and criminal nature. The decision of these Panchayats would be
binding on the parties to the dispute and had legal obligations. With the arrival of Muslim rule in
India, the Muslim law principles were absorbed in Indian culture. Those laws were
systematically complied and were known as Hedaya which contained provisions for arbitration
as well. Tahkeem was the word for arbitration while Hakam meant arbitrator. The Tahkeem
needed to possess certain qualities to be an official judge presiding over the process.
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Arbitration as a method of dispute resolution picked up pace with the arrival of the East India
Company. The British rule brought with it legislations regarding arbitration, the beginning of 9
which was by promulgating regulations in the presidency towns of Calcutta, Bombay and
Madras.

The British East India Company opened their first trading Centre at Surat, Gujarat in 1612. This
was as per the deed of right Mughal Emperor Jehangir granted to them. Their first major
interference with the internal politics of India was when they supported Mir Kasim, a minister of
Bengal, militarily to sabotage Siraj-ud-Daula, the Nawab. On 23rd June, 1757, the Nawab was
defeated by a joint military action of Robert Clive's troops and those of Mir Kasim in a battle at
Plassey.

However, with the advent of the British Raj these traditional institutions of dispute resolution
somehow started withering and the formal legal system introduced by the British began to rule.
ADR in the present form picked up pace in the country, with the coming of the East India
Company. Modern arbitration law in India was created by the Bengal Regulations. The Bengal
Regulations of 1772, 1780 and 1781 were designed to encourage arbitration.

Bengal Resolution Act, 1772 and Bengal Regulation Act, 1781 provided parties to submit the
dispute to the arbitrator, appointed after mutual agreement and whose verdict shall be binding on
both the parties. Hence, there were several Regulations and legislation that were brought in
resulting considerable changes from 1772.

After several Regulations containing provisions relating to arbitration Act VIII of 1857 codified
the procedure of Civil Courts except those established by the Royal Charter, which contained
Sections 31211 to 325 dealing with arbitration in suits. Sections 326 and 327 provided for
arbitration without the intervention of the court.

After some other provisions from time to time Indian Arbitration Act,1899 was passed, based on
the English Arbitration Act of 1889. It was the first substantive law on the subject of arbitration
but its application was limited to the Presidency - towns of Calcutta, Bombay and Madras. Act,
however suffered from many defects and was subjected to severe judicial criticisms. In 1908 the
Code of Civil Procedure (CPC) was re-enacted.

The Code made no substantial changes in the law of arbitration. The Arbitration Act of 1940 was
enacted replacing the Indian Arbitration Act of 1899 and section 89 12 and clauses (a) to (f) of
section 104(1) and the Second Schedule of the Code of Civil Procedure, 1908. It amended and
consolidated the law relating to arbitration in British India and remained a comprehensive law on
Arbitration even in the Republican India until 1996.

11
Royal Charter Act, 1833
12
Code of Civil Procedure,1908
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POST INDEPENDENCE
10
Bodies such as the panchayat, a group of elders and influential persons in a village deciding the
dispute between villagers are very common even today. The panchayat has, in the recent past,
also been involved in caste disputes. In 1982 settlement of disputes out of courts started through
Lok Adalats. The first Lok Adalat was held on March 14, 1982 at Junagarh in Gujarat and now it
has been extended throughout the country. Initially, Lok Adalats functioned as a voluntary and
conciliatory agency without any statutory backing for its decisions.

By the enactment of the Legal Services Authorities Act, 1987, which came into force from
November 9, 1995, the institution of Lok Adalats received statutory status. To keep pace with the
globalization of commerce the old Arbitration Act of 1940 is replaced by the new Arbitration
and Conciliation Act, 1996.

Settlement of matters concerning the family has been provided under Order XXXIIA of the Code
of Civil Procedure, 1908 by amendment in 1976. Provisions for making efforts for reconciliation
under Sections 23 (2) and 23 (3) of the Hindu Marriage Act, 1955 as also under Section 34 (3) of
the Special Marriage Act, 1954 are made.

Family Courts Act was enacted in 1984. Under Family Courts Act, 1984 it is the duty of family
court to make efforts for settlement between the parties. Introduction of section 89 13 and Order X
Rule 1A, 1B and 1C by way of an Amendment in the Code of Civil Procedure, 1908 is a radical
advancement made by the Indian Legislature in embracing the system of Court Referred
Alternative Disputes Resolution.

EVOLUTION OF ADR

The Law Commission of Indian has maintained that, the reason for judicial delay is not a lack of
clear procedural laws, but rather the imperfect execution, or even utter non-observance, thereof.
The Law Commission of Indian in its 14th Report categorically stated that, the delay results not
from the procedure lay down by the legislations but by reason of the non-observance of many of
its important provisions particularly those intended to expedite the disposal of proceedings.

Given the huge number of pending cases, the governance and administrative control over judicial
institutions through manual processes has become extremely difficult. The Supreme Court made
it clear that this state of affairs must be addressed: "An independent and efficient judicial system
is one of the basic structures of our Constitution. It is our Constitutional obligation to ensure that
the backlog of cases is decreased and efforts are made to increase the disposal of cases.

The analysis of the Law Commission of India reports sheds light on the factors contributing
towards delays and huge backlog of cases before the Courts. The prominent contributory factors
are the frequent adjournments at the instance of the clients and lawyers, the boycotts of the

13
Code of Civil Procedure, 1908
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Courts by the lawyers, shortage of presiding officers of the Tribunals and Courts, lack of
adherence to basic procedures and principles of case management and disposal. 11

The Government is also known to be a huge contributor to delays, in matters where it is a party
at various stages from evading notices, replying to notices and replying without application of
mind, unnecessarily appealing even when the laws are clearly in favour of the other side. The
improper management of Court diary, absence of strict compliance with the provisions of Code
of Civil Procedure such as, provisions of the Order 10 Code of Civil Procedure relating to
examination of parties before framing issues, to ensure narrowing and focusing the area of
controversy, the laxity in enforcing the provisions of Order 8, R 1, Code of Civil Procedure by
allowing repeated adjournments with Order 17, Rule 1, Code of Civil Procedure to be read with
the proviso to Order 17, Rule 2 where Clause (b) for giving adjournments also are the prominent
contributors to the problem of delays and the resultant judicial arrears.

The Code of Civil Procedure (Amendment Act) 2002, Act No.22 was sought to bring a change in
the procedure in suits and civil proceedings by way of reducing delays and compressing them
into a year's time from institution of suit till disposal and delivery of judgment, yet the revised
procedures are also not strictly adhered to.

As a result, the time taken in the final disposal of the cases by the Courts still runs into years by
unduly lengthy and winded examination and cross examination of witnesses, protracted
arguments, inadequate electronic connectivity and use of information technology and so forth.
The problem judicial delay and judicial arrears are spreading like epidemic at every level of the
judicial system and thus it is a major cause of concern for the very survival of the entire process
of litigation.

ADR was at one point of time considered to be a voluntary act on the apart of the parties which
has obtained statutory recognition in terms of Code of Civil Procedure (Amendment) Act 1999,
Arbitration and Conciliation Act 1996, Legal Services Authorities Act, 1997 and Legal Services
Authorities (Amendment) Act, 2002. The Parliament apart from litigants and the general public
as also the statutory authorities Like Legal Services Authority have now thrown the ball into the
court of the judiciary.

What therefore, now is required would be implementation of the Parliamentary object. The
access to justice is a human right and fair trial is also a human right. In some countries trial
within a reasonable time is a part of the human right legislation. But, in our country, it is a
Constitutional obligation in terms of Article 1414 and 2115. Recourse to alternative dispute
resolution as a means to have access to justice may, therefore, have to be considered as a human
right problem. Considered in that context the judiciary will have an important role to play.

14
Constitution of India, 1950
15
Constitution of India, 1950
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Even before the existence of Section 89 of the Civil Procedure Code, there were various
provisions that gave the power to the courts to refer disputes to mediation, which sadly have not 12
really been utilized. Such provisions, inter alia, are in the Industrial Disputes Act, the Hindu
Marriage Act and the Family Courts Act and also present in a very nascent form via Section 80,
Order 32 A and Rule 5 B of Order 27 of the Code of Civil Procedure. A trend of this line of
thought can also be seen in ONGC vs. Western Co. of Northern America 16 and ONGC vs.
Saw Pipes Ltd.17

Industrial Disputes Act, 1947 provides the provision both for conciliation and arbitration for the
purpose of settlement of disputes. Section 23(2) of the Hindu Marriage Act, 1955 mandates the
duty on the court that before granting relief under this Act, the Court shall in the first instance,
make an endeavour to bring about a reconciliation between the parties, where it is possible
according to nature and circumstances of the case.

For the purpose of reconciliation the Court may adjourn the proceeding for a reasonable period
and refer the matter to person nominated by court or parties with the direction to report to the
court as to the result of the reconciliation.

The Family Court Act, 1984 was enacted to provide for the establishment of Family Courts with
a view to promote conciliation in, and secure speedy settlement of, disputes relating to marriage
and family affairs and for matter connected therewith by adopting an approach radically different
from that ordinary civil proceedings.

In Punjab & Sind Bank vs. Allahabad Bank18, it was held that the direction of the Supreme
Court in ONGC III to the government to setup committee to monitor disputes between
government departments and public sector undertakings make it clear that the machinery
contemplated is only to ensure that no litigation comes to court without the parties having had an
opportunity of conciliation before an in-house committee.

INTERNATIONAL PERSPECTIVE

The ADR “movement” started in the United States in the 1970s in response to the need to find
more efficient and effective alternatives to litigation. Today, ADR is flourishing throughout the
world because it has proven itself, in multiple ways, to be a better way to resolve disputes. The
search for efficient and better ways to resolve disputes, and the art of managing conflicts, are as
old as humanity itself, yet it has only been within the last thirty years or so that ADR as a
movement has begun to be embraced enthusiastically by the legal system. More recently, ADR
has become institutionalized as part of many court systems and system for justice as a whole
throughout the world. As trade, investment and private business expand throughout the world at
an increasing speed, dispute resolution systems face growing challenges. In fact, just as domestic
16
1988) 2 SCC 190
17
(2003) 5 SCC 705
18
(2006) 6 SCC 294
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courts have been overwhelmed by the demand on their services arising from expanding
economies and social life, so too International dispute resolution is facing the need to develop the 13
appropriate responses.

An International Alternative Dispute Resolution system, combining renewed traditional

mechanisms with new approaches, is already in place and will no doubt be much perfected in the
years ahead. Alternative, private forms of dispute resolution are deeply rooted in the Western
legal tradition. With the dawn of modern International commerce, a number of International
commercial dispute resolution mechanisms developed that were effectively independent of
traditional sovereign based adjudicatory powers. Both the Law Merchants, which developed
from arbitration commissions of merchants organized by the courts, and the Law of Nations
(International Law), evolved into uniform bodies of trade customs and practices that were
independent of any one sovereign Nation.

Over the past few decades, International commercial dispute resolution has witnessed substantial
change and improvement. A notable feature has been a move away from the traditional court-
based litigation model, allowing exploration of other methods and techniques. The United
Nations Commission on International Trade Law (UNCITRAL) has played an important role in
development of alternative dispute resolution. Since its establishment in 1966, UNCITRAL has
made improving International commercial dispute resolution one of its priorities. Two important
achievements arising from its efforts are the UNCITRAL Arbitration Rules (1976) and the

UNCITRAL Conciliation Rules (1980).

The Arbitration Rules were adopted by UNCITRAL 19 on 28 April 1976 and by the General
Assembly of the UN on 15 December 1976. The products of active participation of International
experts from various legal, economic and social backgrounds, both have made a significant
contribution to the more efficient resolution of International commercial disputes. The
Conciliation Rules were adopted by UNCITRAL on 23 July 1980 and by the General Assembly
of the UN on 4 December 1980. Like the Arbitration Rules, they are written in plain English and
sequentially correspond with the process they describe. They are also concise, consisting of just
20 articles and a short Model Conciliation Clause. 6 In 1999 UNCITRAL commenced a process
of evaluating the ‘extensive and favorable experience with the use of the UNCITRAL
Arbitration Rules and the UNCITRAL Conciliation Rules’ with a view to their future
development. UNCITRAL entrusted this work to the Working Group on Arbitration. In relation
to conciliation, the Working Group was instructed to consider the development of a model law to
support the increased use of conciliation and, specifically, to facilitate the enforcement of
settlement agreements and reduce the potential for delay in conciliation proceedings. At
UNCITRAL’s 35th session (19 to 30 November 2001), the Working Group completed its draft
model law on International commercial conciliation. In relation to arbitration, the Working

19
United Nations Commission on International Trade Law1966
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Group was instructed to examine the requirement that arbitration agreements be in writing, the
enforceability of interim protection measures issued by arbitral tribunals, and the enforceability 14
of awards that have been set aside in the state of origin. The Working Group is continuing its
work on these issues.

INDIAN PERSPECTIVE

Alternative Dispute Resolution in India is an attempt made by the legislators and judiciary alike
to achieve the “Constitutional goal” of achieving Complete Justice in India. ADR first started as
a quest to find solutions to the perplexing problem of the ever increasing burden on the courts. In
India, the quest for justice has been an ideal, which the citizens have been aspiring for
generations down the line. Our Constitution reflects this aspiration in the Preamble itself, which
speaks about justice in all its forms: social, economic and political. Justice is a constitutional
mandate. The possibility of a justice delivery mechanism in the Indian context and the
impediments for dispensing justice in India is an important discussion. Delay in justice
administration is the biggest operational obstacle, which has to be tackled on a war footing. In a
country, which aims to protect the socio-economic and cultural rights of citizens, it is extremely
important to quickly dispose the cases in India, as the Courts alone cannot handle the huge
backlog of cases. This can be effectively achieved by applying the mechanisms of Alternative
Dispute Resolution. Alternative Dispute Resolution in India was founded on the Constitutional
basis of Articles 14 and 21 which deal with Equality before Law and Right to life and personal
liberty respectively. These Articles are enshrined under Part III of the Constitution of India
which lists the Fundamental Rights of the citizens of India. ADR also tries to achieve the
Directive Principle of State Policy relating to Equal justice and Free Legal Aid as laid down
under Article 39-A of the Constitution. The Acts which deal with Alternative Dispute Resolution
are Arbitration and Conciliation Act, 1996 and the Legal Services Authorities Act, 1987. The
Section 89 of the Civil Procedure Code, 1908 makes it possible for Arbitration proceedings to
take place in accordance with the Acts stated above. The Arbitration and Conciliation Act, 1996
was passed on the basis of the UNCITRAL Model Law on International Commercial Arbitration,
1985 and UNCITRAL Conciliation Rules, 1980. It had been recommended by General Assembly
of the United Nations that all countries should give due consideration to the said Model Law in
view of the desirability of uniformity of the law of arbitral procedures and the specific needs of
the International commercial arbitration practices. It has also recommended the use of the said
Rules in cases where a dispute arises in the context of international commercial relations and the
parties seek on amicable settlement of that dispute by recourse to conciliation. These rules are
believed to make a significant contribution to the establishment of a unified legal framework for
the fair and efficient settlement of disputes arising in International commercial relations.

Lok Adalat is a unique ADR measure in India. As such, ADR has been, a vital, and vociferous,
vocal and vibrant part of our historical past. Undoubtedly, Lok Adalat (Peoples' Court) concept
and philosophy is an innovative Indian contribution to the world jurisprudence. It has very deep
and long roots not only in the recorded history but even in pre historical era. It has been proved
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to be a very effective alternative to litigation. Lok Adalat is one of the fine and familiar fora
which has been playing an important role in settlement of disputes. The system has received 15
laurels from the parties involved in particular and the public and the legal functionaries,in
general. It also helps in emergence of jurisprudence of peace in the larger interest of justice and
wider sections of society. The Section 89 of the Civil Procedure Code also provides as to
referring the pending Civil disputes to the Lok Adalat. When the matter is referred to the Lok
Adalat then the provisions of the Legal Services Authorities Act, 1987 will apply. Every award
of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order
of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat.

MEDIATION

Mediation is a private but structured method of dispute resolution. It is a voluntary process in

which both the disputing parties come together to find a solution to their problem by entering
into a written contract and appointing a mediator who assists parties in reaching an amicable
settlement. A mediator can be of any designation and can be appointed either formally or
informally. Contrary to conventional courts, the decision of the mediator is not imposable and
the decision-making power rests in the disputing parties. Mediation provides the parties to
express their emotions, interests, end goal, and opinions which are often not given importance in
the conventional courts.

There are no fixed and rigid proceedings in alternate dispute resolution and mediation is the most
flexible of all these methods making it the most desirable one. It is a party-centric and neutral
procedure. Parties can withdraw from the procedure of mediation at any stage without stating
any explanation. All the information and evidence presented during mediation is kept
confidential thus outside parties do not have access to the mediation proceedings. Data given to
the mediator cannot be used for any other purpose besides helping the mediator to reach an
appropriate resolution. This ensures that nobody’s public image gets tarnished in the process.

One of the major advantages of mediation is that neither of the parties loses and the interests of
both the parties are conserved. It is a win-win situation for both parties. The parties control the
end result of the mediation and either party has the advantage of terminating the mediation
without giving any reason.

CHARACTERSTICS

1. Voluntary Process

Willing Participation: Mediation is a voluntary process, meaning both parties must agree to
engage in the process. Unlike litigation or arbitration, where one party may be compelled to
participate, mediation requires the cooperation of all involved parties.
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Freedom to Withdraw: Participants are free to withdraw from the mediation at any time, without
providing reasons. This ensures that no party is coerced into an agreement that they do not find 16
acceptable.

2. Neutral Third Party

Impartial Mediator: In mediation, a neutral third party, known as the mediator, helps facilitate
the discussion between the disputing parties. The mediator does not take sides and does not
impose any solutions. Their role is to encourage open communication and help both sides
explore possible solutions.

Facilitator, Not Decision-Maker: Unlike in arbitration, where the arbitrator makes a final
decision, the mediator’s role is strictly to assist the parties in finding a mutually agreeable
resolution.

3. Confidentiality

Privacy of Proceedings: Mediation is a confidential process. What is discussed during the

mediation cannot be used in court or disclosed to others without the consent of both parties. This
confidentiality ensures that parties can speak openly without fear that their words will be used
against them in a legal setting.

Protection of Sensitive Information: Confidentiality encourages participants to disclose all

relevant information to the mediator, enabling the mediator to better facilitate the resolution
process.

4. Informality

No Rigid Procedures: Mediation is informal and does not follow the rigid rules of court
procedures. There are no formal rules of evidence or strict protocols. The process can be adjusted
to suit the needs and preferences of the parties involved.

Flexible Settings: Mediation can take place in various environments — whether in a conference
room, online, or even at a neutral location agreed upon by both parties. This flexibility makes
mediation adaptable to the nature of the dispute.

5. Control of the Outcome

Party-Driven Solutions: One of the defining characteristics of mediation is that the parties have
control over the final outcome. Unlike litigation or arbitration, where a judge or arbitrator
imposes a ruling, the decision in mediation is made jointly by the parties.
 PG NO.

Mutual Agreement: The goal of mediation is to reach a voluntary and mutually agreeable
solution. If the parties do not agree, the dispute remains unresolved, but if they reach an 17
agreement, it is based on their own terms.

6. Non-Binding (Unless Agreed Otherwise)

No Imposed Decisions: The mediator does not have the authority to impose a decision on the
parties. The mediation process is non-binding, meaning that no legal obligation exists to follow
any suggestions made by the mediator unless both parties decide to formalize the agreement into
a binding contract.

Binding Agreements: If the parties come to a resolution, they may choose to convert their
mediation agreement into a formal contract, which may then be legally binding.

ADVANTAGES

Cost efficient and time saving

The cost incurred in the mediation process is nominal compared to judicial procedures. It is not
mandatory to appoint legal counsels in mediation thus a huge cost is saved. There are no
obligatory procedures like conventional courtrooms hence saving procedural cost fees. The
dispute resolution process is quicker due to the least legal formalities and procedural flexibilities.
A mediator has the liberty to consider those issues she/he deems significant to bring parties to the
agreement, time-consuming evidence is generally avoided, thereby saving time and resources.

Flexible and creative solutions

There exists no set procedure for mediation thus providing parties access to a wide range of
outcomes. Different mediators have different styles which are often amended as per the
requirements of the specific case. The resolutions achieved by the process of mediation
sometimes aren’t possible through arbitration or judicial procedures. Both the parties work
together to resolve the dispute among themselves and are free to formulate customised solutions
as per their requirements.

Confidentiality and privacy

All the information and evidence presented during mediation is kept confidential thus outside
parties do not have access to the mediation proceedings. Data given to the mediator cannot be
used for any other purpose besides helping the mediator to reach an appropriate resolution. In
fact, there is such secrecy that there is unique confidentiality between one party and the mediator
i.e. if one party provides information to the mediator, it can be kept confidential from the other
party subject to specific conditions. Another significant benefit of mediation in India is that it is
 PG NO.

completely private and helps to protect the public image of the parties. Only the disputing parties
and the appointed mediator is present during the process making it personal and private. 18

Restoration of relationship

In conventional court proceedings blame is put on one of the parties which is often detrimental to
the relationship of the parties. The final decision of the court is imposed on both the parties and it
can be undesirable because one party always loses. On the contrary in mediation parties alone are
responsible for their own decision and can choose to not accept the final settlement brought
about by this process. This helps parties to come to a solution peacefully and amicably. Even if
the relationship between the parties was compromised due to existing issues it can be restored by
the process of mediation as it upholds the interests of both parties.

Control and dominion

The parties can choose the time, location, and the duration of the proceedings giving parties a lot
of control. Courts have their own schedule that is to be adhered to by everyone hence it is not as
convenient. Contrary to the judicial system parties in mediation are not opponents but are
collaborators striving to find a resolution that is mutually acceptable. One of the major
advantages of mediation is that neither of the parties loses and the interests of both the parties are
conserved. The parties control the end result of the mediation and either party has the advantage
of terminating the mediation without giving any reason.

CONCILIATION

The Arbitration and Conciliation Act, 1996 (the Act) is based on the UNCITRAL Model Law on
international commercial arbitration and conciliation. While the Act was not intended to displace
the judicial system, the new law ushered in an era of private arbitration and conciliation. It was
also the first time that a comprehensive legislation was made on the subject of conciliation in
India. This bulletin will provide an overview of the conciliation proceedings in India along with
the relevant provisions under various statutes.

Conciliation under the Act:

The UNCITRAL Rules on Conciliation, 1980 recognized the value of conciliation as a method
of amicably settling disputes arising in the context of international commercial relations and that
adoption of uniform conciliation rules by countries with different legal, social and economic
systems would significantly contribute to the development of harmonious international economic
relations. Accordingly, these rules were closely followed by the Indian legislators to formulate
conciliation rules under Part III of the Act.

Principles of conciliation:
 PG NO.

The procedure laid down in Part III of the Act reflects the following broad principles:
19
[Link]-adversary nature of conciliation proceedings – there is no claimant or plaintiff in
conciliation proceedings,

[Link] nature of proceedings – any party can commence and discontinue the proceedings,

[Link] procedure – the conciliator has the discretion to adopt any procedural law to ensure
speedy and inexpensive conduct of proceedings, and

[Link] are recommendatory – disputes are settled by mutual agreement and not by imposed
decisions.

In this context, reference may be made to the judgment of the Supreme Court of India. In Guru
Nanak Foundation V. Rattan Singh & Sons20, it was observed: “Interminable, time-
consuming, complex and expensive court procedures impelled jurists to search for an alternative
forum, less formal more effective and speedier for resolution of disputes avoiding procedural
claptrap and this led to Arbitration Act, 1940.

Appointment of a conciliator under the Arbitration and Conciliation Act, 1996

According to Section 64 of the Arbitration and Conciliation Act, 1996-

(1) Subject to sub-section-

(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole
conciliator;

(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;

(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator
and the parties may agree on the name of the third conciliator who shall act as the presiding
conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in connection with the
appointment of conciliators, and in particular,

(a) a party may request such an institution or person to recommend the names of suitable
individuals to act as conciliator; or

(b) the parties may agree that the appointment of one or more conciliators be made directly by
such an institution or person.

20
(2018) 2 SCC 201
 PG NO.

The parties have to agree on the composition of the conciliation tribunal when the invitation to
conciliation is acknowledged. In the absence of any agreement to the contrary, there shall be 20
only one conciliator. If both parties fail to appoint a conciliator with consent, the same may be
conducted by two conciliators (maximum limit is three), then each party appoints own
conciliator, and the third conciliator is appointed unanimously by both parties.

The third conciliator so designated shall be the directing conciliator. The gatherings to the
discretion understanding as opposed to selecting the conciliator themselves may enrol the help of
an organization or individual in their decision for the arrangement of conciliators. In any case,
the establishment or the individual should keep in view during arrangement that, the conciliator
is free and unbiased.

Role of conciliator as per Arbitration and Conciliation Act, 1996

Section 67 of the act describes the role of the conciliator as-

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt
to reach an amicable settlement of their dispute.

(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving
consideration to, among other things, the rights and obligations of the parties, the usages of the
trade concerned and the circumstances surrounding the dispute, including any previous business
practices between the parties.

(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers
appropriate, taking into account the circumstances of the case, the wishes the parties may
express, including any request by a party that the conciliator hear oral statements, and the need
for a speedy settlement of the dispute.

(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a
settlement of the dispute. Such proposals need not be writing and need not be accompanied by a
statement of the reasons therefore.

A conciliator is also expected to review relevant documents and information to help reach
conclusions. Meet with witnesses and other persons related to the parties to obtain statements
and additional information about the dispute in question and practice confidentiality regarding
the personal information of the parties and of the dispute. A brief written statement of all the
issues faced by the parties is to be submitted to the conciliator before the process of conciliation.

A positive dialogue and an atmosphere of comfort is to be created by the conciliator in order to

promote harmonious and cooperative problem-solving between the parties. In India conciliator
 PG NO.

plays an evaluative role where he attempts to get the gatherings to acknowledge the benefits and
demerits of their cases along these lines driving them to a general adequate arrangement. Along 21
with being well-educated, a conciliator should impact the parties with his/her personal and
convincing skills and play a proactive role in reaching an agreement.

Restrictions on Role of Conciliator – Section 80

Section 80 places two restrictions on the role of the conciliator in the conduct of conciliation
proceedings:

Clause (a) prohibits the conciliator to act as an arbitrator or as a representative or counsel of a

party in any arbitral or judicial proceeding in respect of a dispute which is subject of the
conciliation proceedings.

Clause (b) of prohibits the parties to produce the conciliator as a witness in any arbitral or
judicial proceedings.

Commencement of conciliator proceedings

Either of the parties to the dispute can commence the conciliation process. The conciliation
proceedings are said to have been initiated when one party invites the other party for the
resolution of their dispute through conciliation. The process commences when the other party
accepts the invitation.

If they reject it, then no conciliation proceedings will be conducted for that dispute. The
invitation should identify the subject of the dispute. If no reply is received by the inviting party
within 30 days then it may be treated as rejection to conciliate.

Commencement of conciliation proceedings under section 62 of the act states that-

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate
under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the
invitation to conciliate.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on
which he sends the invitation, or within such other period of time as specified in the invitation,
 PG NO.

he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall
inform in writing the other party accordingly. 22

The conciliation proceedings shall be terminated as given under section 76-

(a) by the signing of the settlement agreement by the parties on the date of the agreement; or

(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that
further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the
conciliation proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the
effect that the conciliation proceedings are terminated, on the date of the declaration.

The conciliation proceedings shall stand terminated on the date as and when the parties reach an
amicable settlement on the disputes which had been referred to the conciliator, and a duly
authenticated copy (by the conciliator) of the settlement agreement is handed over to the parties.
There is no provision in the Act for review of the settlement agreement, nor there does any
provision under which any of the parties to the settlement agreement can retrace its steps and
wriggle out of the written commitments in the form of a settlement agreement.

Haresh Dayaram Thakur v. State of Maharashtra and Ors. 21 AIR 2000 SC 2281

While dealing with the provisions of Sections 73 and 74 of the Arbitration and Conciliation Act
of 1996 in paragraph 19 of the judgment as expressed thus the court held that –

From the statutory provisions noted above the position is manifest that a conciliator is a person
who is to assist the parties to settle the disputes between them amicably.

For this purpose the conciliator is vested with wide powers to decide the procedure to be
followed by him untrammelled by the procedural law like the Code of Civil Procedure or the
Indian Evidence Act, 1872. When the parties are able to resolve the dispute between them by
mutual agreement and it appears to the conciliator that their exists an element of settlement
which may be acceptable to the parties he is to proceed in accordance with the procedure laid
down in

Section 73. It follows therefore that a successful conciliation proceeding comes to end only when
the settlement agreement signed by the parties comes into existence. It is such an agreement
which has the status and effect of legal sanctity of an arbitral award under Section 74.

21
2000 SC 2281
 PG NO.

Mysore Cements Ltd. V. Svedala Barmac Ltd. 22 AIR 2003 SC 3493

23
It was said that Section 73 of the Act speaks of Settlement Agreement. Sub-section (1) says that
when it appears to the Conciliator that there exist elements of a settlement which may be
acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to
the parties for their observation. After receiving the observations of the parties, the Conciliator
may reformulate the terms of a possible settlement.

In the present case, we do not find there any such formulation and reformulation by the
Conciliator, under Subsection (2), if the parties reach a settlement agreement of the dispute on
the possible terms of settlement formulated, they may draw up and sign a written settlement
agreement. Under Sub-section (4), the Conciliator shall authenticate the Settlement Agreement
and furnish a copy thereof to each of the parties. From the undisputed facts and looking at the
records, it is clear that all the requirements of Section 73 are not complied with.

ARBITRATION AGREEMENT

Arbitration agreements serve as the foundation for resolving disputes through arbitration. By
mutually agreeing to submit their disputes to arbitration, parties opt for a private and streamlined
process that avoids the complexities of traditional litigation. At the core of this process lies the
arbitration agreement, a contractual foundation that enables parties to voluntarily submit their
disputes to arbitration. Understanding the essentials of such agreements and the rule of
severability is crucial for individuals and businesses navigating the realm of alternative dispute
resolution.

Arbitration unquestionably provides benefits, but some types of conflicts may not be amenable to
arbitration. However, there are numerous circumstances where choosing arbitration as the
alternative dispute resolution method in a specific agreement does not consider whether possible
issues can be arbitrated. Legal obstacles brought on by these contradictory inclusions lengthen
the dispute resolution process and raise the expense. Before deciding the method of dispute
resolution to use, the contractual parties must carefully analyze the nature of the agreement, any
potential conflicts that may result from it, and their intentions.

Definition of Arbitration Agreement

According to Section 7 of The Arbitration and Conciliation Act, 1996, an “arbitration

agreement” is defined as a commitment by the parties to subject to arbitration any or all disputes
22
2003 SC 3493
 PG NO.

that have occurred or may arise between them about a specified legal relationship, regardless of
whether they are expressly stated in a contract or not. An arbitration agreement is also known as 24
a submission agreement. An arbitration agreement is a legal contract entered into by two or more
parties that stipulates any disputes or disagreements arising between them will be resolved
through arbitration rather than litigation in court. It is a mutual agreement between the parties
that their disagreements will be brought before an arbitrator or arbitral tribunal, which will
render a binding judgment based on the facts and arguments offered by both sides.

An arbitration agreement typically outlines the terms and conditions under which the parties
agree to submit their disputes to arbitration. It may include details such as the scope of the
disputes covered, the rules and procedures to be followed during arbitration, the selection
process for appointing the arbitrator(s), the venue or location for conducting the arbitration, and
any other relevant provisions agreed upon by the parties.

Essentials of an Arbitration Agreement

An arbitration agreement serves as the foundation for initiating and conducting arbitration
proceedings. To ensure the effectiveness and enforceability of an arbitration agreement, several
essential elements should be considered:

Voluntary Agreement

For an arbitration agreement to be valid, it must be a product of the parties’ free will and
voluntary consent. Coercion, fraud, or undue influence should not taint the agreement, ensuring
that parties willingly choose arbitration as their preferred method of dispute resolution.

Mutual Consent

Mutual consent forms the core of an arbitration agreement. All parties involved must provide
their consent to resolve disputes through arbitration. There must be a clear indication of mutual
acceptance and intention to engage in arbitration. Without the explicit consent of all parties, an
arbitration agreement cannot be enforced.

Inclusion of Applicable Rules and Procedures

The agreement should specify the rules and procedures that will govern the arbitration process.
This may include referencing established sets of rules provided by recognized arbitration
 PG NO.

institutions or bodies. The language and provisions of the agreement should reflect this intention,
leaving no ambiguity regarding the chosen method of resolution. 25

Legal Capacity

All parties entering into an arbitration agreement must possess the legal capacity to do so.
Minors, individuals lacking mental capacity, or parties acting under duress may not be able to
enter into a valid arbitration agreement.

Form and Writing

While the form and writing requirements for arbitration agreements vary across jurisdictions, it is
generally recommended to have the agreement in writing. A written arbitration agreement
provides clarity and evidence of the parties intention to arbitrate. It helps avoid
misunderstandings and disputes regarding the terms of the agreement.

Enforceability of Arbitration Agreements

The enforceability of arbitration agreements is governed by national laws and international

conventions. These legal frameworks may vary across jurisdictions, and it is crucial to
understand the specific laws applicable to the agreement.

In India, the law governing arbitration agreements is primarily based on the Arbitration and
Conciliation Act, of 1996 (the “Act”). The Act provides a comprehensive legal framework for
the conduct and enforcement of arbitration in India. The Act provides for the autonomy of the
parties in determining the procedure for conducting the arbitration, subject to certain mandatory
requirements. The parties are free to agree on the number of arbitrators, the appointment
procedure, the place of arbitration, and the language to be used in the proceedings. The Act also
establishes the role of the courts in the arbitration process. The courts have the power to
intervene in various aspects of arbitration, such as the appointment of arbitrators, granting
interim measures, setting aside arbitral awards, and enforcing awards.
 PG NO.

International conventions play a significant role in facilitating the recognition and enforcement
of arbitration agreements in India. The key international conventions that govern arbitration 26
agreements in India are as follows:

New York Convention: India is a signatory to the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention.
This convention sets out the rules for recognizing and enforcing arbitral awards made in other
countries. It provides a framework for the mutual recognition and enforcement of arbitral awards
among the contracting states, including India.

Geneva Convention: India is also a signatory to the Geneva Protocol on Arbitration Clauses of
1923. This convention focuses specifically on arbitration agreements. It states that signatory
countries shall recognize the validity of arbitration agreements and honor them when disputes
arise, subject to certain conditions.

Washington Convention: India is a party to the Washington Convention’s International Centre

for the Settlement of Investment Disputes (ICSID), which was formed to settle investment
disputes between states and citizens of other states. This convention provides a mechanism for
resolving investment disputes between states and nationals of other states through arbitration.

International conventions provide a framework for the enforcement of arbitration agreements in

India, they operate in conjunction with domestic legislation, primarily the Arbitration and
Conciliation Act, of 1996, which sets out the procedural and substantive law governing
arbitration in India.

Rule of Severability

The “autonomy of the arbitration clause” is another name for the “doctrine of severability”. The
rule of severability is a fundamental principle in arbitration law that ensures the autonomy and
enforceability of arbitration agreements. Also known as the doctrine of separability, it allows the
arbitration clause within a contract to be treated as a separate and independent agreement from
the rest of the contract. In other words, if a contract contains an arbitration clause, the arbitration
agreement is treated as a distinct and separable part of the contract.

Section 16(1) of the Arbitration and Conciliation Act, 1996 defines the concept of ‘severability’
and states, any arbitration provision included in a larger contract must be viewed as a separate
agreement from the other provisions, and if the arbitral tribunal rules that the entire agreement is
void, the arbitration provision will not automatically become ineffective as a result.
 PG NO.

The severability principle ensures that challenges to the validity of the underlying contract do not
automatically render the arbitration agreement invalid. Arbitrators have the authority to 27
determine the validity and enforceability of the arbitration agreement independently, regardless
of any disputes related to the main contract.

Application in International Arbitration

The rule of severability is particularly significant in international arbitration. In cases where

parties from different jurisdictions have entered into a contract with an arbitration clause, the
separability of the arbitration agreement ensures that the dispute can proceed to arbitration even
if there are conflicts regarding the substantive aspects of the contract.

The rule of severability is commonly recognized and applied in international law, including
international trade and investment agreements. It is also reflected in international arbitration
rules and guidelines, such as those promulgated by the International Chamber of Commerce
(ICC), the United Nations Commission on International Trade Law (UNCITRAL), and other
arbitral institutions.

Article 16(1) of the UNCITRAL Model law of 1985 on international commercial arbitration
defines the doctrine of severability and states that: The arbitral tribunal has the authority to
decide on its jurisdiction and to settle any disputes originating from the Arbitration Agreement,
as well as any challenges to the agreement’s legality[4]. An arbitration provision included in a
contract is regarded for this purpose as a separate agreement from all other provisions.

Application of the rule of severability may still vary depending on the specific laws and legal
frameworks of the relevant jurisdictions involved in the international agreement.

Advantages of Arbitration Agreements

Arbitration agreements offer several benefits that make them an attractive choice for resolving
disputes:

Confidentiality: Arbitration provides a confidential forum for dispute resolution. Unlike court
proceedings, arbitration allows parties to keep their disputes and related information out of the
public domain. This confidentiality can be particularly advantageous in sensitive commercial or
personal matters.

Flexibility: Arbitration offers flexibility in terms of procedural rules, the choice of arbitrators,
and the place of arbitration. Parties have the freedom to tailor the arbitration process to suit their
specific needs, making it a more efficient and adaptable alternative to litigation.

Efficiency and Speed: Arbitration often offers a faster and more streamlined process compared to
traditional litigation. Parties can choose the rules and procedures that best suit their needs,
 PG NO.

allowing for a more efficient resolution. Additionally, the availability of dedicated arbitrators and
the absence of court delays can significantly expedite the proceedings. 28

Expertise and Neutrality: Arbitration allows parties to choose arbitrators who have expertise in
the relevant field. This ensures that the dispute will be resolved by individuals with specialized
knowledge, increasing the likelihood of a fair and informed decision. Additionally, arbitrators
are typically neutral and independent, which promotes impartiality in the resolution process.

Cost-effectiveness: While arbitration can involve costs, it can still be more cost effective than
traditional litigation in certain cases. The streamlined process, reduced discovery, and shorter
timelines can lead to lower legal fees and other expenses associated with litigation.

The benefits of arbitration agreements may vary depending on the specific circumstances and the
preferences of the parties involved.

Disadvantages of Arbitration Agreements

Arbitration agreements have certain disadvantages that individuals or businesses should consider
before agreeing to them.

Limited judicial review: When parties agree to arbitration, they typically waive their right to
pursue the matter in court. This means that the decision made by the arbitrator is final and can
have limited opportunities for appeal.

Unequal power dynamics: In some cases, one party may have more power, resources, or
expertise compared to the other. This power imbalance can potentially disadvantage the weaker
party during the arbitration process.

Limited discovery process: The discovery process in arbitration is generally more limited
compared to court proceedings. This means that parties may have less opportunity to gather
evidence, examine witnesses, or compel the other party to disclose relevant documents. As a
result, important information that could influence the outcome of the dispute may not come to
light.

Lack of precedent: Arbitration decisions do not create legal precedents in the same way that
court judgments do. This can lead to inconsistency in the interpretation and application of the
law, as each arbitration case is typically treated as an individual matter.
 PG NO.

Arbitral Award and Arbitral Tribunal

29
Arbitration, as a method of Alternative Dispute Resolution (ADR), is characterized by the
finality and binding nature of its decisions. The Arbitral Award is the final decision rendered by
the arbitrator or arbitral tribunal, and the Arbitral Tribunal refers to the panel of arbitrators that
hear the dispute and issue the award. Below is a detailed explanation of these two fundamental
components of the arbitration process:

ENFORCEMENT OF CERTAIN ARBITRATION AWARDS

Enforcement of foreign arbitral awards in India

The enforcement of arbitral awards involves two primary aspects: domestic awards, governed by
Section 36 of Part I of the Arbitration and Conciliation Act, 1996, and foreign arbitral awards,
which are recognized and enforced through two avenues: the New York Convention, outlined in
Chapter I of Part II of the Arbitration and Conciliation Act, 1996, and the Geneva Convention,
specified in Chapter II of Part II of the Arbitration and Conciliation Act, 1996.

When the arbitral award from one country is recognized and enforced in another, this
involvement is considered as the enforcement of foreign arbitral awards.

The origins of the present law can be traced back to the provisions of the Arbitration (Protocol
and Convention) Act, 1937, and the Foreign Awards (Recognition and Enforcement) Act, 1961.
Both are repealed by the Arbitration and Conciliation Act, 1996. These have been incorporated
or referenced in Part II of the 1996 Act. Over time, there have been many amendments and
deletions to align with international protocols such as the Geneva Protocol of the Arbitration
Clauses, 1923 and the United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, 1958.

Enforcement of foreign arbitral awards under the New York Convention

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 deals with the enforcement of
New York Convention Awards. From Sections 44 to 52, this chapter essentially outlines the
conditions under which a foreign award is recognized and enforced in accordance with the New
York Convention.

Definition of a foreign award

The foreign award is an arbitration settling disputes between those parties arising out of the legal
relationship, whether contractual or not, to be considered as commercial under law.
 PG NO.

Thereby, the definitions outline two essential conditions for the Enforcement of Foreign Arbitral
Awards under New York Convention : Firstly, the country 30

According to the Supreme Court of India, the term “commercial” encompasses various activities
structured towards international trade. This interpretation was elucidated in R.M. Investments &
Trading Co. Pvt. Ltd. v. Boeing Co (1994) 23wherein the Court stated that the Arbitration Act
was enacted to facilitate international trade through a speedy redressal of disputes, therefore, the
meaning of terms like “commercial” occurring in the Act should be given a “liberal
construction”.

Power of judicial authority to refer parties to arbitration

Section 45, essentially outlines that the parties who are under the contract or agreement to
resolve the dispute through Arbitration, and if one party asks for it, a judicial authority must refer
to the dispute through the way of Arbitration. It establishes that the courts have the power to
refer parties to arbitration only when the agreement that contains the arbitration clause is not
“null and void”, “inoperative”, or “incapable of being performed”.

Evidence

Section 47 lists the evidence to be presented before the court by the party seeking the
enforcement of a foreign arbitral award. Such evidence must be produced at the time of
application and must include:

Original award or its duly authenticated copy;

Original arbitration agreement or its duly certified copy;

Any evidence of relevance that can show that the award in question is foreign; and

A certified copy of the award and/or agreement translated into English if the award or agreement
is in a foreign language.

Other provisions

Section 46 states that the foreign arbitral awards enforceable under Chapter I of Part II of the
Arbitration and Conciliation Act are binding in nature. They are binding against the parties
between whom it was made and can be used by them in any legal proceedings taking place in
India as a defence, set off, or otherwise. Section 48 lists the conditions for the enforcement of
foreign arbitral awards, which are the situations when the enforcement of a foreign arbitral award
in India can be refused. This article will discuss this provision in detail later on. Furthermore,

23
4 SCC 112
 PG NO.

Section 49 allows for a foreign arbitral award to be treated as the court’s decree if the said court
is satisfied with respect to the enforceability of the foreign award in question. 31

Enforcement of foreign arbitral awards under the Geneva Convention

Chapter II of Part II of the Arbitration and Conciliation Act deals with the avenue of enforcement
of the Geneva Convention Awards. This Chapter comprises Sections 53 to 60, which incorporate
the principles of enforcement as laid down in the Geneva Convention.

It involves the recognition and enforcement of arbitral awards made in accordance with an
arbitration agreement governed by the Geneva Convention. The conditions for recognition of
such an award are:

Validity under applicable law,

Potential for arbitration settlement,

Finality in the country of origin, and

Abidance with public policy

As per this Convention, enforcement of such awards may be refused if the award is annulled in
the country of origin or if the notice of representation to the parties against whom enforcement is
sought is not clear and proper.

The Convention also mandates the submission of certain important documentation, such as
authenticated awards, for the purpose of enforcement of such awards.

Ultimately, the purpose of the enforcement of foreign arbitral awards under the Geneva
Convention of 1927 is to ensure that the arbitral awards made in pursuance of an agreement are
recognized and enforced as per the procedural rules established in the territory where
enforcement is sought. The Convention serves as a framework for the recognition and
enforcement of foreign arbitral awards, promoting legal standards and fostering international
arbitration.

Foreign arbitral awards under the Geneva Convention

According to Section 53, of Geneva Protocol the three essential requirements for the
enforcement of a foreign arbitral award are:

The award is based on an arbitration agreement that falls under the Geneva Protocol on
Arbitration Clauses, 1923;
 PG NO.

The award involves parties who come under the jurisdiction of territories designated as
“reciprocating” by the Central Government and where the Geneva Convention on the Execution 32
of Foreign Arbitral Awards is applicable; and

The award in question is issued in a reciprocating territory recognized by the Central

Government.

What to submit

According to Section 56, the party that seeks the enforcement of a foreign arbitral award under
the Geneva Convention in India is required to submit the following:

Original award or its duly authenticated copy;

Evidence to show that the award is final;

Evidence proving that the award was issued based on a valid arbitration agreement and by the
arbitral tribunal specified in the agreement or as agreed upon by the parties under the applicable
laws; and

A certified copy of the award and/or agreement translated into English if the award or agreement
is in a foreign language.

Conditions for enforcement

Section 57 enlists the conditions necessary for the enforcement of foreign arbitral awards under
the Geneva Convention. They are as follows:

The award must have been issued based on an arbitration agreement valid under the relevant
laws;

The subject matter of the award must be one that can be resolved through arbitration under
Indian law;

The award must be issued by the arbitral tribunal specified in the arbitral agreement or agreed
upon by both parties;

The award must be final in the country where it was issued, meaning there are no appeals or
challenges to such award pending; and

The enforcement of the award must not be against “public policy” under Indian laws.
 PG NO.

PART-II
33
CASE ANALYSIS

SALEM ADVOCATES BAR ASSOCIATION V. UNION OF INDIA, 2003

(1)SCC49

Case Name: Salem Advocate Bar Association v Union of India

Citation: AIR 2005 SC 3353

Court: Supreme Court of India

Date of Decision: 17th August 2023

Bench: Y.K. Sabharwal, D.M. Dharmadhikari, Tarun Chatterjee

Parties: Salem Advocate Bar Association (Petitioner) v. Union of India (Respondent)

Subject: Constitutional validity of amendments made to the Code of Civil Procedure, 1908 by
the Amendment Acts of 1999 and 2002.

Introduction

The landmark case of Salem Advocate Bar Association v. Union of India addressed the
constitutional validity of amendments to the Code of Civil Procedure (CPC), introduced through
the Amendment Acts of 1999 and 2002. The case also examined practical frameworks for
implementing Section 89, which emphasizes Alternative Dispute Resolution (ADR). A
committee led by former Judge Supreme Court of India and Chairman, Law Commission of
India, Justice M. Jagannadha Rao, was constituted to suggest operational mechanisms and case
management strategies.
 PG NO.

Facts of the Case:

34
The Salem Advocates Bar Association challenged the amendments introduced in the Civil
Procedure Code (CPC) by the Union of India. The amendments were aimed at improving the
efficiency of the judicial system, primarily by promoting alternative dispute resolution (ADR)
methods, specifically mediation, arbitration, and conciliation.

The amendments mandated the adoption of these ADR mechanisms to help address the growing
backlog of cases in Indian courts. The goal was to encourage parties involved in disputes to opt
for out-of-court settlements rather than proceeding through lengthy litigation, thereby reducing
the burden on the judicial system and expediting the resolution of cases.

The Salem Advocates Bar Association contended that these reforms were unconstitutional,
arguing that they would diminish the role of advocates in the judicial process, reduce the
importance of formal litigation, and ultimately affect the rights of citizens to a fair trial. They
claimed that mandatory mediation and other forms of ADR would undermine the judiciary’s
traditional role and the rights of the litigants.

The case, therefore, raised critical questions regarding the constitutional validity of procedural
changes in the legal system, the role of advocates in new procedures, and the balance between
judicial efficiency and access to justice.

The following amendments were made:

(i) In Section 26(2) and Order 6 Rule 15(4) of Code of Civil Procedure, 1908 in this the
affidavit filed under Section 26(2) and Order 6 Rule 15(4) would not be evidence for purpose of
trial.

(ii) Written statement : Order 8 Rules 1 and 10 of Code of Civil Procedure, 1908:

There was a limitation for filing written statement. There was restriction regarding extension of
time for filing written statement. It was held that the limitation provided under Rule 1 is only
directory and finally Court empowered to extend time limit in exceptional cases.

(iii) Execution of decree: Section 39 (4) and Order 21 Rules 3 and 48:
 PG NO.

Section 39 does not authorize the Court to execute decree outside its jurisdiction but it does not
dilute other provisions giving such power on compliance of conditions stipulated therein. Order 35
21 Rules 3 and 48 would not be affected by Section 39(4).

(iv) Sale of attached property - Sections 64 (1) and 64 (2) of Code of Civil Procedure, 1908:

Sale of attached property on basis of registered contract such a sale is protected under Section
64(2).But the protection is available only to sale affected in pursuance of contract entered prior
to attachment. Sale on basis of unregistered contract not protected under Section 64 (2).

(v) Notice : Section 80 of Code of Civil Procedure, 1908 Central and State Governments
directed to appoint an Officer in charge of replying notices received by it under Section 80 or
under other similar provisions .In case notice has not been replied or reply is evasive and vague
and has been sent without proper application of mind. Court shall ordinarily award heavy cost
against Government and direct it to take appropriate action against concerned Officer including
recovery of costs from him.

(vi) Alternative Dispute Resolution: Section 89 of Code of Civil Procedure, 1908 and
Sections 82 and 84 of Arbitration and Conciliation Act, 1996: Procedure for option to arbitration
among four ADRs is not contemplated by Act of [Link] Sections 82 or 84 no application
where parties agree to go for arbitration under Section [Link] act of 1996 would apply only from
stage after reference and not before stage of reference if reference to arbitration made under
Section 89 - Judge who makes reference not disqualified to try suit afterwards if no settlement is
arrived at between parties.

The former case which created the abovementioned amendments was rejected by this Court but it
was noticed in the judgment that modalities have to be formulated for the manner in which
section 89 of the Code and, for that matter, the other provisions, which have been introduced by
way of amendments, may have to be operated. For this purpose, a Committee headed by a former
Judge of this Court and Chairman, Law Commission of India (Justice M. Jagannadha Rao) was
constituted so as to ensure that the amendments become effective and result in quicker
dispensation of justice. It was further observed that the Committee may consider devising a
model case management formula as well as rules and regulations which should be followed
while taking recourse to the Alternate Disputes Resolution (ADR) referred to in section 89. It
was also observed that the model rules, with or without modification, which are formulated may
be adopted by the High Courts concerned for giving effect to section 89(2)(d) of the Code.
Further, it was observed that if any difficulties are felt in the working of the amendments, the
same can be placed before the Committee which would consider the same and make necessary
suggestions in its report.
 PG NO.

Issues:
36
Constitutionality of the CPC Amendments: Whether the introduction of mandatory mediation
and arbitration is valid and constitutional.

Regulation of Lawyers' Conduct: Whether the role and conduct of advocates should be
modified in light of alternative dispute resolution mechanisms.

Judicial Powers: Whether the Supreme Court has the power to frame procedural rules for
effective case management, including guidelines for mediation and arbitration.

Bench:

Justice R.C. Lahoti, Justice G.P. Mathur, and Justice M.B. Shah.

Arguments in Brief:

Petitioner’s Argument (Salem Advocates Bar Association):

Unconstitutional Amendment: The main argument presented by the petitioner, the Salem
Advocates Bar Association, was that the amendments to the Civil Procedure Code were
unconstitutional. The Bar Association contended that the amendments unfairly imposed a
compulsory mediation system upon litigants, thereby limiting their access to a fair trial before
the courts. It argued that ADR mechanisms should be voluntary rather than mandatory and that
forced participation in such systems could violate the constitutional rights of parties to be heard
in a judicial proceeding.

Reduction in the Role of Advocates: The petitioner argued that mandatory mediation and
arbitration would severely reduce the role of advocates in the legal process. Advocates, who had
traditionally been the central figures in litigation, would find their role minimized or eliminated
in cases that went through ADR mechanisms.

Judicial Overreach: The petitioners argued that the amendments represented an overreach of
the legislative powers by the Union of India and the judiciary. By mandating compulsory ADR,
 PG NO.

the Court and the legislature would be encroaching on the rights of litigants, thereby altering the
core function of courts. 37

Respondent’s Argument (Union of India):

Constitutionality of the Amendments: The Union of India, defending the amendments, argued
that the constitutional validity of the amendments could not be questioned. The amendments to
the CPC, particularly the introduction of ADR mechanisms, were part of broader reforms to
enhance the efficiency of the judicial system. It was emphasized that the objective was to reduce
judicial delays and ensure quicker resolutions of disputes, which was in the best interest of
justice.

Role of Advocates in ADR: The Union argued that while mediation and arbitration processes
would reduce the need for formal litigation, they would not eliminate the role of lawyers entirely.
Lawyers would continue to play a significant role in preparing parties for ADR and ensuring that
their rights were protected throughout the process. The Union also stressed that mediation and
arbitration would require trained legal professionals who could represent the interests of their
clients in these forums.

Separation of ADR from the Court System: The Union of India argued that ADR mechanisms
should be seen as complementary to traditional litigation, rather than a replacement. These
mechanisms were designed to offer parties an alternative way to settle disputes quickly, without
having to go through the lengthy and formal judicial process.

Decision:

The Supreme Court of India upheld the constitutional validity of the amendments to the Civil
Procedure Code (CPC). These amendments primarily aimed to introduce alternative dispute
resolution (ADR) mechanisms such as mediation, arbitration, and conciliation to reduce the
backlog of cases in Indian courts and expedite the dispute resolution process.

Judges:

The decision was delivered by a Bench of Three Judges:

 PG NO.

Justice R.C. Lahoti (Chief Justice of India at the time)

38

Justice G.P. Mathur

Justice M.B. Shah

The majority opinion was delivered by Justice R.C. Lahoti, with Justice G.P. Mathur and Justice
M.B. Shah concurring.

Ratio Decidendi (Reasoning):

Constitutionality of Amendments:

The Court held that the amendments to the CPC that sought to incorporate alternative dispute
resolution mechanisms such as mediation and arbitration were constitutional.

The Court emphasized that the right to access justice does not necessarily mean access to a
formal judicial hearing. Instead, the Court ruled that alternative means, such as ADR, could be a
legitimate way to resolve disputes, especially in light of the judicial backlog.

Promotion of ADR:

The Court acknowledged that ADR methods like mediation and arbitration are intended to
complement formal litigation, not replace it. The Court affirmed that these mechanisms would
reduce the burden on courts and expedite the resolution of cases.

The judgment reinforced that compulsory mediation or arbitration did not infringe on any
constitutional rights, as these mechanisms could be used voluntarily and would only supplement
the litigation process.
 PG NO.

39
Lawyers’ Role in ADR:

The Court made it clear that while ADR mechanisms might reduce the role of advocates in
traditional litigation, the role of lawyers would still be crucial in ADR procedures. Lawyers
would continue to assist parties in these alternative mechanisms by representing their clients and
ensuring fairness during mediation and arbitration.

Judicial Efficiency and Reform:

The Court emphasized that the introduction of ADR was part of the judicial reform process. The
Court observed that alternative dispute resolution offered a way to achieve justice more
efficiently, reducing the judicial delays and ensuring quicker relief for litigants.

The Role of the Judiciary in Procedural Changes:

The Court also affirmed the judiciary’s power to implement procedural reforms for enhancing
the administration of justice. The ruling underlined the responsibility of the judiciary to regulate
the legal profession and adapt to changes that would make the judicial system more efficient.

Conclusive Analysis by Student:

The case of Salem Advocates Bar Association v. Union of India (2003) provides a crucial insight
into the evolving relationship between traditional litigation and alternative dispute resolution
mechanisms. The ruling underscores the importance of adapting the judicial system to modern
challenges, such as the ever-increasing number of cases and the pressure on courts to deliver
timely justice. By supporting the constitutionality of the CPC amendments, the Supreme Court
highlighted the need for reforms that could streamline dispute resolution processes and address
the backlog of pending cases.
 PG NO.

However, the decision raises some important questions about the role of lawyers in the judicial
process. While the Court emphasized that lawyers would still play an essential role in ADR 40
processes, it is clear that the increased reliance on ADR could alter the traditional landscape of
legal practice. This shift presents both opportunities and challenges for the legal profession,
which will need to evolve to accommodate the growing importance of ADR alongside
conventional litigation.

From a legal reform perspective, the judgment indicates a clear commitment to improving the
efficiency and accessibility of justice in India. By promoting mediation and arbitration, the Court
advocates for a more holistic approach to resolving disputes, which could lead to faster, cheaper,
and more amicable settlements.

In conclusion, while the decision in Salem Advocates Bar Association v. Union of India supports
necessary judicial reforms, it also raises critical issues regarding the balance between procedural
efficiency and the protection of litigants' rights. As ADR becomes a more integral part of the
legal system, it will be crucial to ensure that its implementation is fair, transparent, and equitable
for all parties involved, while still maintaining the core principles of justice.

Conclusion

In conclusion, Alternative Dispute Resolution (ADR) has evolved significantly, offering a vital
mechanism for resolving disputes outside traditional litigation. From its historical origins to its
modern-day applications, ADR encompasses methods such as mediation and conciliation, each
with distinct characteristics, objectives, and advantages. The role of a conciliator, the procedure
for commencement and termination of conciliation, and the essentials of arbitration agreements
have shaped the current framework of ADR. International conventions, such as the Geneva
Convention (1927) and the New York Convention (1958), further reinforce the enforcement of
arbitral awards across borders. In the Indian context, the Salem Advocates Bar Association v.
Union of India case highlights the evolving legal landscape and the growing importance of ADR
in ensuring efficient and accessible justice.
 PG NO.

BIBLIOGRAPHY
41
[Link]
in-India

[Link]

Tiwari O.P., The Arbitration and Conciliation Act (2nd Edition), Allahabad Law Agency,
Allahabad.

Acharya N.K., Law relating Arbitration and ADR, Asia Law House, Hyderabad.

Supakar, Dr. Shraddhakara. (1986). Law of Procedure and Justice in Ancient India. New Delhi :
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Popularly called as Panchayats.

[Link]
[Link]#:~:text=One%20of%20the%20primary%20benefits,the%20parties%20personal%20
and%20private.&text=A%20mediator’s%20role%20is%20both%20
facilitative%20and%20evaluative.

[Link]
MEDIATION

[Link]

Section 7, Arbitration and Conciliation Act, 1996 available at <

[Link] > last seen on 16/5/2023

United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(New York, 10 June 1958) available at < [Link] > last seen
on 17/5/2023

"Alternative Dispute Resolution: A Step Towards Expedited Justice in India," Journal of Indian
Law and Society.

“The Impact of ADR Mechanisms on Indian Judiciary,” Indian Bar Review.