ADR
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The author of this webinar-brief is Prayrana Singh, from Navrachana University Vadodara and has been edited by Oishika Banerji.

Introduction

GUEST SPEAKER: SENIOR COUNSEL, RAJEEV DATTA

DESIGNATION: SENIOR COUNSEL AT SENIOR COURT OF INDIA; F CIArb.; ARBITRATOR & MEDIATOR

HOST: RAMANUJ MUKHERJEE

ABOUT THE SPEAKER: – Rajeev Datta a Senior Counsel, practising in the Supreme Court of India and an Arbitrator and a Mediator, under the United Nations Commission on International Trade Law (UNCITRAL) model rules and have acted as Co-Arbitrator in ICC International Commercial Arbitrations. At present, he is a member on the SIAC’s Panel of Arbitrators and an Arbitrator at the ASSOCHAM International Council of Alternate Dispute Resolution (AICADR), New Delhi. He is the Country Representative for India at the International Bar Association, Mediation Committee. He was also a Member of the International Bar Association, Mediation Committee for drafting International Bar Association Rules, for Investor-State Mediation.

How did ADR get introduced in India?

What is Alternative Dispute Resolution?

ADR is something which all has been talking about for the last few years and it stands for alternative dispute resolution system.  It is something which was prevalent for a long time but exploring it and bringing it is for our system only a few years back.  There is no universally accepted definition for this expression. It comprises methods of resolving the dispute. The resolution of the dispute through Arbitration, Mediation and Conciliation.  ADR comprises this method that is Arbitration, Mediation and Conciliation and these procedures, in essence, comprised of and serve as an alternative to litigation which is of at most importance.

How are we going to resolve disputes or alternatives to litigation?

That is by the assistance of neutral and impartial third parties so that is absolutely the sense of ADR system and the underlined contained which we need to understand from the outside is infant negotiation. It is only through negotiations which are facilitated by a neutral third party that one can arrive at the solution and resolution of this dispute. Therefore, The ADR process comprehends any form of dispute resolution process which does not involve adjudication by courts which are established by the system which is by the state. 

The ADR system is classified into two segments. The first segment in which it is adjudicatory and the other is non-adjudicatory.  Arbitration is an adjudicatory process. For suppose, In arbitrary after arriving at a decision which is binding in nature, when one arrives at the decision by party putting their statements, their documents, pieces of evidence and then argue their case before the arbitrator and then the arbitrator finally gives an award which is to be then implemented or is to in forced and it has binding effect.

But as far as the non-adjudicatory process where they are driven through negotiation and facilities by the third party which is neutral and it does not render and this is where it is binding decisions parties arrive at a decision by themselves the third party negotiate and facilitates the parties to arrive at a decision and then this is termed as a self-determined decision by the parties.

The history of the ADR system

In the number of years that are in ancient times when English ruled India we were laid and driven by common law system in-law section jurisprudence. It almost abhorred resolution of the dispute by any other method than the king’s court. In the Indian Contract Act 1872 in Section 28, even today as it exists says that any person who has a dispute with regard to a contract has to go through that resolution of that dispute by proceedings in an ordinal tribunal but there is only an exception which is made in Section 28 which is an exception by arbitration but not an alternative. Even today the Contract Act has a provision that forces parties to go to court for resolution of that dispute pertaining to the contract.

How has it evolved so far?

After independence when we adopted arbitration through the legal process of rehabilitation act 1996 when 1996 came into by way of an amendment it was enacted only because after 1990 when there was globalization, people of outside India they felt that their investment in India are not very safe because if any dispute arises they will have to go with normal procedures.

These procedures may take years to resolve and therefore as a signatory to New York convention, there made an amendment in 1996 accordance to internationally known arbitration system that existent, but those amendments also let to lots of litigation and over a year’s many amendments were made only when it was found by the courts that some of the amendment were in 1996 were contrary to our jurisprudence and then slowly we come to 2015 amendments then now there is 2019 amendment which still brought into force. 

arbitration

How the attitude of the public and the court has changed towards ADR and what factors are influencing?

Certain amendments were made to bring ADR into civil procedure court because now it was felt that, it is very important that somehow we must make people go to a system go through a system which will resolve their disputes if those disputes can be resolved by settlement, therefore, an amendment was made in sec 89 which was introduced in the CPC and the court-appointed mediation system emerge in our country. The CPC 1908 lays down the procedure which the courts will follow to adjudicate any dispute brought before them. Section 89 of CPC empowers the civil courts to refer matters to alternative dispute resolution methods – arbitration, conciliation, and judicial settlement including Lok Adalats and mediation. The opening lines of sec 89 state that:

(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of the settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for:

(a) Arbitration;

(b) Conciliation;

(c) Judicial settlement including settlement through Lok Adalats; or

(d) Mediation.  

What would take for ADR to be adopted widely?

The Section was challenged and ultimately, in 2003  under Section 89 of CPC was first challenged before the Supreme Court in the famous Salem Bar Association Cases I and II. 

In Salem Bar association Case II, the Supreme Court made the following important observations about the mediation mechanism under Section 89 of CPC. Under Section 89, when it is provided that the Court will formulate a ‘settlement’ and refer it to one of the ADR mechanisms, it only means that what is referred to one of the ADR modes is the dispute which is summarised in the terms of the settlement. The Supreme Court clarified that all the odes mentioned in the Section are meant to be the action of the authorities outside the court and therefore not before or by the court”.

The Court which refers the matter to mediation/conciliation is not debarred from hearing the matter where settlement is not arrived at. The court acknowledged that Section 89 maintains a fine line between conciliation and mediation – in ‘conciliation’ there is more latitude as the conciliator can suggest some terms of the settlement, while a mediator has no such power”. But once evidence is commenced, the court will be reluctant to refer the matter to the ADR processes lest it becomes a tool for protracting the trial.

In Afcon International Infrastructure limited case, as per case set back to the time when an alternate resolution system was set up in our country by sec 89. The Supreme Court held it is only if the parties are willing then they can be sent for the ADR system and even for conciliation which is in chapter 3 of the Arbitration and Conciliation Act the court held that concerned is necessary now, therefore, ADR system and mechanism today as far as the law is a concern.

What is the future of ADR in India? 

It began with the amendment of Section 89, the advent of the Arbitration act Section 30 etc. and now we find that it is important we look at the support that the courts or the judicial give to the systems.

For centuries in our country, we have practised this resolution practise at the village level by panchayat where even the parties appeared and disputes were settled by the heads of the villages so it is basically nothing but homecoming for India and it is also now stage set for many of the mediation centres which have come up in India and almost every high court have mediation centre which is a step further enforcing the ADR in our country and the first Indian centre was set up in India was Madras in 2001 then subsequently in 2005 the first mediation and conciliation centre was set up by Madras high court itself. 

We have these mediation centres in many states of India. Conciliation rules have also been set up, the Supreme Court has also set up a new institution that is a Mediation and Conciliation Project and regularly conducts seminars and several webinars and training giving to a lawyer for mediation. Today mediation has captured the mind of people in this country and mediation is very well structured and it is also a scientific method of getting into minds of people and what leads mediators to explore the emotional intelligence of the person who brings forth their dispute in the mediation process.

What does the future hold for ADR? and as the arbitration process is expensive it is not affordable for the common people or can be only afforded by the rich people?

The biggest litigant in India in the courts and even in the arbitration is the government itself. The government and the public sector all this provision of the arbitrations and most of the provision is Ad Hoc arbitration. Ad Hoc arbitration has its own drawbacks firstly the procedures set by the arbitrators and most of the arbitrators appointed by the courts where retired judges carry the burden of the procedural knowledge of the law that they had into arbitration. 

And thus also it became expensive but after amendment, we are driving towards institution arbitration, in 2019 there are setting up an institution which is yet to come, also in arbitration and conciliation act there have included two important features to get rid of the some of the problems exists In arbitration that is one is that the awards have to be given within a particular time and the time is extendable up to the certain limit of time and the fees of the arbitrators are fixed in the schedule so, therefore, this is major steps taken. The cost system has also been developed by an online process. By online process, it saves the expense and the time of every person. Mediation is going on online people are resolving their issues and therefore time factor and money factor is also being reduced so far.


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