ADR
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This article has been written by Nivrati Gupta, a student at Nirma University, Ahmedabad. In this article, she introduces and provides insights into the concept of Additional Dispute Resolution.

Introduction

A democratic country has an inevitable requirement of continuously advancing, making continuous variations in the policies and law and making efforts to make it a more socially politically and economically developed state. A major pillar of democracy is the judicial body which holds a powerful stand in achieving the above. Traditional courts were made to solve disputes between the people and safeguard the constitution. But with time and gradual increase in population the disputes on civil and criminal matters also started burdening the courts with abundant cases. With the recent introduction of information technology, the burden has furthermore increased. The fact that a large number of these cases which the traditional courts deal with are on very trivial issues which are also not to be ignored because of these matters worth hearing get piling up. The vast case log that is pending in the courts the government and judicial committees recommended alternate methods of dispute resolution (ADR) via Mediation and Negotiations. 

In this modern era where courts all around the world are burdened with cases and file loads, ADR is a widely accepted alternative to resolve disputes which may be regarding divorce, tax or commercial disputes like merger and acquisition or a dispute which involve a disagreement between parties and many people are turning towards these dispute resolution methods to resolve before acquisition disputes. The procedure taken to resolve disputes here is affordable, less procedural, less time consuming, the promise of confidentiality and gives more control to the individuals involved in the dispute and yields more efficient results. Many Jurists have preferred and advocated for ADR as a post-proceedings resolve settling mechanism. ADR is also being used more frequently in commercial and company based disputes. 

Concept

Additional Dispute Resolution (ADR) also known by the name External Dispute Resolution. It is a method that encompasses numerous methods and techniques aimed to resolve disputes. It has been practised since traditional times. The main aim and the technique around which this dispute resolution work is to use a less intricate procedure that around which the judicial courts work. 

ADR includes direct negotiations, outside judicial settlements, arbitration, mediation, informal and formal tribunals, and mini-trials. All these might be binding, non-binding or advisory in nature. Nature here may be dependent upon that respective country jurisdiction and the legalization of Additional Dispute Resolution committees. 

Objectives of ADR 

  • Affordable and speedy trials with less procedural work. 
  • Aims to settle the disagreement peacefully by way of compromise, negotiation or fair settlements.
  • Uses a direct approach to settle the dispute– one to one conversations and rigorous discussions to give a better understanding of each party’s view. 
  • Explanatory in nature- gives in-depth information about the judicial policies and rules without being binding on the party. 
  • Works on the principle of diplomacy- win-win for both parties. 
  • Communication is the key- the more the parties at dispute communicate the more it increases the chances of coming to a mutually agreeable point. 
  • Maintaining confidentiality– Keeping the information and dispute classified and inside the organization. 
  • Creating pre-dispute guidelines and rules to save from future issues and give a systematic framework. 
  • The most important aim- avoid judicial proceedings and trials.

The Supreme court of India has also in many instances emphasized the need of ADR: In one case M/s Guru Nanak Foundation Vs M/s, Rattan Singh & Sons. 

“Interminable, time consuming, complex and expensive Court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 (Act for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceeding under the Act has become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with ‘legalese’ of unforeseeable complexity.” [1] 

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Modes of Additional Dispute Resolution 

Mediation 

Mediation in eased negotiation, the decision of the mediator is not binding. There are basically three parties in a mediation, a mediator, who practices neutral interest in the subject matter of the dispute or party and the two parties in dispute. The mediator holds no judicial authority and decision-making power; his mere role is to show a broad view and come up with a favourable solution to help the party come to a mutually acceptable approach. It is a process that comes into place when both parties consent to such a resolution mechanism and are committed to the decision or agreement settled upon.

The process involves coming together of the parties for a joint session, where the guidelines of the mediation which include- a confidentiality clause are explained to the parties. The guidelines and rules are not rigid and can be changed on the consent of both parties. In the next step, the parties explain their position and dispute, later the mediator holds a confidential and one to one conversation. This helps the mediator to come up with a more mutually agreeable settlement. Mediations hold a good success ratio because first, they are very cost-effective, though the agreement done here is not binding in nature but can the contract be legal and can be enforced like any other contract. Second mediation is not a lose-win situation, even if the parties till the end of the mediation do not come in agreeable terms the doors of traditional litigation are always open. 

Negotiation

Any assembly of two or more parties aimed to reach a mutually intended beneficial settlement is negotiation. It can be held either between the parties or the parties and counsel. Negotiation is a part of Additional Dispute Resolution as well as a part of litigation. In negotiation the third party roles do not involve much communication with the parties nor do they have any authority to impose a resolution. Negotiation is the first informal stage to resolve a conflict, it involves identifying the problem and interests. A negotiation is only successful when the solution is a win-win for both parties and both parties feel they are having an upper hand. In negotiation, if there is a third party it is very important for the negotiator to be well collected with all the facts and fixes of both the parties. A Negotiation won’t be successful if either of the parties feels like they are not in their intractable position. 

Mini-Trials 

Mini-trials can be said as the last institution in a dispute resolution mechanism. It is held after all the facts and circumstances are laid clear. Mini- trials are pliable in nature and basic litigation rules are set. Strengths and weak points are again analyzed and each party is being represented by their respective counsels unlike in negotiation and mediation. Here a third party a mediator acts as a counsellor or advisor. After all the discussions with the disputed parties, the advisor rules a decision which is also non-binding but prompts the disputed parties to call for a further mutually agreeable resolution. The main purpose of having a Mini- trial is giving the parties a chance to sit on an outside legal dispute resolution committee and come up with a more economically and time-efficient resolution or mutual settlement. 

Arbitration

Arbitration is a dispute resolution mechanism in which the disputed parties choose and a neutral and independent arbitrator, the arbitrator can be a person or an institution. The dispute may be an ongoing one or which may arise in the future course of time. It is agreed upon prior to the arbitration that any decision given by the arbitrator shall be binding in nature and shall be abided upon but also will not be mandatory. Here the parties can either submit their resolutions or dispute before the dispute arises, to prevent future complications or also after the dispute has arisen. Arbitration is in many ways similar to that of the judicial courts. Rules and provisions to be followed upon are decided beforehand. The Arbitration Law is a recognized approach and the procedural system is not less than that of the traditional courts. 

Arbitration is also of two forms private and judicial arbitration. Amongst which in ADR, private arbitration is the most widely used. Prior agreements are made in private arbitration where future disputes that may arise will be governed under the said agreement and the parties decide to keep matters falling under the decision criteria to be treated outside the court via private arbitration. The most use of this arbitration is done for company and labour regarding issues. Judicial arbitration is the one followed by our traditional courts which are mandated and given power under the respective regulations and rules. It follows state and federal law. Arbitration is a flexible means of dispute resolution that allows the parties to impose and create a formulated structure to address issues and disputes. The arbitrator practices wide powers to come to a mutually beneficial relief. The awards that may be granted by the arbitrator is an award which is procured by misconduct or corruption or one owned by fraud. 

The various procedures that fall under Additional Dispute Resolution have been discussed above. 

The Base of Additional Dispute Resolution 

Bona Fide Intention

Through the course of ADR methodology, the different alternative methods are structured to work within an adversarial context. If the parties negotiate in a competitive adversarial mode or a constructive problem-solving mode, both can be used. The most cooperative ADR procedures will be strengthened by a duty to bargain in good faith on the participants. This does not mean an obligation on parties to behave against their best interests. The parties are duty-bound to conduct fair and effective negotiations. When the talks are conducted with mutual self-interest and the interests of another are ignored, the parties will not be in a position to negotiate a satisfactory settlement. Nevertheless, the proceedings under the ADR Process Mechanism, the procedure used and the procedures applied are always carried out honestly in good faith and without prejudice to any of the parties. The ADR Program Mechanism has the power to permanently resolve the dispute.

Third-Party Roles 

The ADR method consists of different approaches such as conciliation, negotiation or mediation, which is often carried out with the help of a third party who is either appointed as conciliator, mediator or negotiator. The third-party Mediator is committed to resolving their dispute with disputants with the laudable property. He has the opportunity to consider the complexity of the dispute and provide fair incentives for the parties to represent their cases effectively. He also gives them careful hearing and is able to control impulses during conciliation, given an unpleasant situation. Third-party Mediator is committed to settling their dispute with laudable land disputants. He has the ability to consider the nature of the conflict and provide equal incentives for the parties to best represent their cases. He also allows them effective listening, and, in an adverse situation, is able to control impulses during conciliation. 

Legal History of ADR in India 

Alternate dispute resolution was acknowledged after the coming of British’s, after the formation of Bengal Regulations of 1772 and 1781 which recognized non-traditional court dispute resolution committees and provided the allowance of submission of disputes via arbitrator. 

Then later Arbitration Act VIII, 1857 came into place which codified the procedure followed by courts. In this Act, sections 312 to 325 dealt with suits coming via arbitration which acknowledged the ADR committee without the involvement of the civil courts. The Arbitration Act of 1889 which was a born of the English Arbitration Act of 1889 was the first pillar law. Arbitration Act 1940 replaced the act of 1889 and had ADR regarding provisions in Section 104 of the IInd Schedule of Code of Civil Procedure 1908. 

In India, Lok Adalats are also a subject of ADR. They were given statutory authority in 1987 which came into 1995. The Arbitration Act was replaced by the Arbitration Act, 1996. 

Application of Section 89 and Order X Rules 1A, 1B and 1C by way of the 1999 amendment to the Code of Civil Procedure, 1908 is a revolutionary step forward taken by the Indian Parliament in implementing the ‘Court Referred Alternative Dispute Resolution’ method. Section 8 of the Arbitration and Conciliation Act, 1996 is of a peremptory sort. It is mandatory for the court to refer the case for alternative dispute settlement in India if all the proof is proved and there is an arbitration arrangement and the parties have, however, submitted an application before the first declaration on the nature of the dispute is made. It is solely the court’s discretion whether to refer the case in India for arbitration or for other alternative dispute resolution or electronic dispute resolution.

Existing Online ADR Services

Ombuds Office 

World Intellectual Property Organization (WIPO)

Conclusion

The whole process and mechanism of Additional Dispute Resolution consist of numerous techniques as discussed above – Mediation, Mini-trials, Arbitration, Negotiations and Lok Adalats in some parts. 

ADR has proved to be a very effective and time-saving process and a substitute for the traditional courts for specific matters like company and labour. The ADR does not aim to replace the working of judicial courts but to divide the burden of the shoulders off the courts with handling the trivial and settlement issues with also being a pocket-friendly solution. It works on the platform of justice, impartiality, good faith, and confidentiality. 

But despite all the success of the ADR it is important to remember that it is not a substitute for every legal dispute. Many people organizations are still resisting ADR because the substantive, procedural, and evidence-based protections provided in informal civil litigation are missing. If a claimant claims that by waiving the formalities of civil procedure, one will lose so many rights and privileges, ADR may not be the correct tool for settling conflicts that involve violation of rights or matters related to crimes. 

References

  •  M/s Guru Nanak Foundation Vs M/s Rattan Singh & Sons, A.I.R 1981 SC p-2075 at 2076.

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