ALTERNATE DISPUTE RESOLUTIONS SYSTEM (ADRS)

Test – 1

ANSWER IN DETAIL 2 x 10 = 20

1. What are the different modes of Dispute Resolution Practiced in India ?

INTRODUCTION

Alternative Dispute Resolution (ADR) has emerged as a significant component of India’s legal
landscape, providing an alternative to traditional litigation for resolving disputes. ADR
encompasses various methods such as mediation, conciliation, arbitration, and Lok Adalats,
which offer flexible and efficient means of dispute resolution. The popularity of ADR in India has
grown steadily due to factors like overcrowded courts, lengthy legal proceedings, and rising
costs of litigation.

ADR methods offer parties greater control over the outcome, confidentiality, cost effectiveness,
and the ability to maintain relationships. This blog explores the different alternative modes of
dispute resolution in India and their relevance in addressing the evolving needs of the justice
system.

Arbitration, mediation, and negotiation are at least three different types of alternative dispute
resolution (ADR). Although conciliation can be regarded as a fourth category, for the purposes
of this discussion, it can be viewed as a subset of mediation.
Various Modes of Dispute Resolution

ARBITRATION

In arbitration, the parties to a dispute submit it to one or more individuals known as arbitrators,
to whom they expect to be bound by their decision, in order to resolve the conflict outside of
the judicial system.
It is a process for resolving conflicts where a neutral third party reviews the evidence and
makes a decision that is binding on both parties. There are few avenues for review or appeal of
arbitration rulings. Arbitration is distinct from mediation and civil court processes.

Arbitration may be mandatory or discretionary. It is obvious that a jointly signed agreement or

law requiring arbitration of all pending or future disputes between the parties is the only source
of mandatory arbitration. In India, the provisions of the Arbitration and Conciliation Act, 1996
shall be applicable if the dispute is referred to arbitration.

MEDIATION AND NEGOTIATION

Mediation is a widely used method of resolving disputes globally, characterized by its non-
binding and informal nature. It involves a neutral third party who employs specific
communication and negotiation techniques to assist parties in reaching a mutually agreeable
resolution.

Mediation is a voluntary, party-centered, and structured negotiation process where the parties
retain control. The mediator’s role is limited to facilitating the negotiation and does not involve
making decisions or imposing settlements. In mediation, a skilled neutral mediator meets with
both sides, allowing each party to present their perspective on the issue and potential
solutions.

Negotiation in India follows universal principles but is influenced by cultural factors. It involves
communication and discussion to reach mutually satisfactory agreements. Indian negotiators
prioritize relationship preservation and harmony. Techniques include active listening,
persuasive arguments, finding common ground, and seeking win-win outcomes.

Non-verbal cues and indirect communication play a role. Legal frameworks and alternative
dispute resolution methods like mediation are often used. Negotiation in India combines
cultural sensitivities, interpersonal skills, and strategic decision-making to achieve mutually
beneficial outcomes in various contexts.

CONCILIATION

Conciliation is a consensual alternative dispute resolution process where a neutral conciliator

helps parties resolve their issues through negotiation and reaching a mutually acceptable
settlement.

It focuses on reducing conflicts, identifying problems, and considering the parties’ interests. The
resulting settlement holds legal validity and is applicable in any court. Conciliation is often used
in trade disputes to maintain commercial relationships.
LOK ADALATS

One of the ADR processes is Lok Adalat, a forum for the amicable resolution of legal issues and
cases that are pending in court or in the preliminary stages of litigation. The Legal Services
Authorities Act, 1987 conferred legal status for Lok Adalats. According to the aforementioned
Act, the award (judgment) given by the Lok Adalats is deemed to be a decree of a civil court, is
final and enforceable against all parties, and no legal recourse against such an award exists.

Emerging Trends of Online Dispute Resolution (ODR)

ODR essentially refers to the use of information and communication technology to provide ADR
services or to the application of ADR in an online setting. It makes use of the internet as a more
effective platform for parties to settle their differences using a range of ADR techniques that
are similar to traditional ADR.

ODR is an emerging trend in India, utilizing digital platforms and technology to resolve disputes
online. It offers advantages such as increased accessibility, allowing parties to participate from
anywhere with an internet connection, eliminating the need for physical presence.

It provides convenience and flexibility by enabling parties to schedule dispute resolution

sessions at their convenience, accommodating personal and professional commitments. It also
promotes time efficiency through streamlined communication, instant document exchange,
and the availability of digital records for easy review.

In India, various ODR platforms and initiatives like the e-Courts Project, Centre for Alternative
Dispute Resolution (CADR), Resolve Disputes Online (RDO), Presolv360, and ODRways cater to
the demand for online dispute resolution. With advancing technology and improved
connectivity, ODR adoption is expected to grow, revolutionizing dispute resolution by providing
accessible, convenient, and time-efficient mechanisms that align with India’s digital
transformation initiatives, contributing to an efficient and inclusive justice system.

Future of Alternative Dispute Resolution

To secure a promising future for ADR in India, several key suggestions can be considered.

1. First, there should be a focus on promoting ADR education and training to enhance
understanding and skills among legal professionals and the public.

2. Second, encouraging the inclusion of ADR clauses in contracts can make it a standard
practice.

3. Third, establishing specialized ADR centers at national and regional levels can provide
dedicated resources and support.
 4. Fourth, emphasizing the role of mediation and conciliation can lead to faster resolutions
and reduced court burdens.

5. Fifth, fostering collaboration between ADR institutions and courts can improve
integration and efficiency.

6. Sixth, embracing technology, such as online platforms and virtual hearings, can enhance
accessibility and convenience.

7. Seventh, promoting international ADR initiatives can strengthen India’s global standing
in dispute resolution.

By implementing these suggestions, India can pave the way for an effective and efficient ADR
system, ensuring a brighter future for alternative dispute resolution in the country.

CONCLUSION

Owing to the development of alternative dispute resolution techniques, people now have a
new way to resolve their disputes. Widespread public support for the quick resolution of
disputes in Lok Adalat has given ADR a new momentum that will surely result in fewer cases
going to court.

ADR processes are crucial for facilitating access to justice. We need to urge the ADR movement
to advance more quickly. In addition to providing quick justice at a minimal cost, this will greatly
alleviate the pressure on the courts. They will successfully accomplish the goal of giving the
disputants social justice if they are completely put into practice.
2. Define Arbitration. Explain the nature, meaning and Importance of Arbitration agreement.

Introduction

Arbitration is an alternative dispute resolution mechanism gaining significant popularity in India

due to its efficiency, confidentiality, and flexibility. It provides parties with a private an
impartial forum to resolve their disputes outside of traditional court proceedings. In India, two
main types of arbitration exist: ad hoc arbitration and institutional arbitration.

Ad hoc arbitration allows parties to determine the arbitration process and rules themselves.
Institutional arbitration, on the other hand, involves arbitration conducted under the rules of a
recognized arbitral institution, such as the Indian Council of Arbitration or the International
Court of Arbitration.

This article aims to provide a comprehensive understanding of arbitration in India, including its
legal framework, key features, advantages, and recent developments.

Legal Framework for Arbitration in India

In order for national governments to create effective arbitration laws in their nations, the
UNCITRAL Model Law on International Commercial Arbitration serves as a set of guidelines. In
other words, it is intended to serve as a lighthouse, directing governments to properly establish
their own domestic arbitration legislation.

It was initially adopted in 1985 and then changed in 2006 by modifications. The UNCITRAL
Model Law is intended to help States modernize and reform their domestic arbitration laws to
bring them into compliance with international norms in circumstances where those countries
already have arbitration laws in place. Starting with the arbitration agreement and ending with
the implementation of the arbitral ruling, it includes every phase of arbitration.

The Arbitration and Conciliation Act, 1996, which went into effect on August 22, 1996, and
covers the entirety of India, is the primary law that regulates arbitration in India. According to
the 246th Law Commission Report, The 1996 Act is based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985, and the UNCITRAL Conciliation Rules, 1980. The
Arbitration and Conciliation (Amendment) Act, 2021 was recently passed into law on March 10,
2021, and, unless otherwise noted, it retroactively took effect on and from November 4, 2020.

This follows the enactment of the Arbitration and Conciliation (Amendment) Acts, 2015 and
2019.

The Skeleton of Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 in India is structured into four parts and seven
schedules, providing a comprehensive framework for arbitration proceedings.

 Part I, of the Act, comprising Sections 2 to 43, deals with arbitration. It covers various
aspects such as the definition and scope of arbitration, the validity of arbitration
agreements, appointment and jurisdiction of arbitrators, conduct of arbitration
proceedings, and the making of arbitral awards.

 Part II, consisting of Sections 44 to 60, focuses on the enforcement of certain foreign
awards. This part aligns with the provisions of the “CONVENTION ON THE RECOGNITION
AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS”. It outlines the procedure for
recognizing and enforcing foreign arbitral awards in India.

 Part III, encompassing Sections 61 to 81, pertains to conciliation. It lays down the legal
framework for conciliation proceedings as an alternative method of dispute resolution,
including the appointment of conciliators, conduct of conciliation proceedings, and
settlement agreements.

 Part IV, which includes Sections 82 to 86, provides supplementary provisions for the
effective implementation of the Act. It covers aspects such as the power of the courts to
make rules, the application of the Act to existing arbitrations, and the power of the
Central Government to make certain modifications in the Act through notification.

Advantages of Arbitration in India

One of the significant advantages of arbitration is its timely procedure. Arbitration rules are
typically designed to promote efficiency and expedite the resolution process. Unlike lengthy
court battles, arbitration proceedings are less formal and complex, allowing for a quicker
resolution of disputes. This saves parties valuable time and resources.

Cost-effectiveness is another key benefit of arbitration. Parties usually share the costs of the
arbitrators equally as per the terms of the arbitration agreement. The streamlined nature of
arbitration reduces the need for extensive legal representation and speeds up the resolution
process, resulting in significant cost savings for both parties involved.
Confidentiality is a crucial aspect of arbitration. Parties involved in a dispute often prefer to
keep their conflicts private rather than exposing them in a public courtroom. Arbitration
provides a confidential setting for resolving disputes, ensuring that sensitive information
remains protected and not disclosed to the public.

Arbitral awards carry a final and binding nature. The decisions rendered by the arbitral tribunal
are enforceable, similar to a civil court decree. Challenging arbitral awards in court is only
possible under limited circumstances as prescribed by domestic legislation. This finality
provides parties with certainty and allows them to move forward after the resolution of the
dispute.

By opting for arbitration, parties also contribute to reducing the burden on the courts.
Overburdened court systems in many countries often struggle to handle the increasing number
of cases. By choosing arbitration, parties relieve the courts of additional workload, allowing
them to focus on more pressing matters that require judicial attention.

Disadvantages of Arbitration in India

One of the drawbacks is the lack of strict evidence rules in arbitration. Unlike traditional courts,
arbitrators often admit evidence without stringent adherence to admissibility rules. This can
lead to the admission of illegally obtained evidence, compromising the integrity of the process.

The absence of comprehensive rules for cross-examination is another limitation of arbitration.

Unlike courts, arbitrations often lack proper guidelines for effectively questioning witnesses and
examining documents, potentially impacting the credibility and reliability of the presented
evidence.
Inconsistency in arbitration rules across different countries and conventions poses another
challenge. The variations in regulations can lead to inconsistent outcomes and potentially
result in unjust or biased arbitral awards.

Transparency is a concern in arbitration, particularly when public entities are involved in

disputes. The private nature of arbitration proceedings can hinder public accountability and
prevent the exposure of wrongdoing or faults committed by public bodies, as they operate
behind closed doors.
Conclusion

Today, it is undeniable that India has made great strides in embracing, promoting, and putting
other alternative dispute resolution (ADR) procedures into practice. The dedication of the
Indian Government to turning India into a hub for arbitration and other ADR mechanisms is
demonstrated by the several revisions made to the Arbitration and Conciliation Act, 1996 to
meet the demands of the constantly changing international business community.

However, India still has a long way to go before it is the preferred country by international
commercial organizations for the simplicity of arbitrating business disputes and using other ADR
techniques. The only way to properly apply constant modifications based on lessons learned
from the relevant commercial jurisdictions around the world with regard to arbitration. India
can only strengthen its position as the global leader in rapid and effective dispute resolution by
continuous adjustments based on lessons learned from the relevant commercial jurisdictions
throughout the world and proper execution of those learnings with reference to arbitration.

WRITE SHORT NOTES 2 x 5 = 10

1. Write short note on Arbitral award

The role of an arbitrator is to resolve disputes which the parties have agreed to submit
to arbitration. The decisions of the arbitrator require a document subject to certain formalities,
and known as the arbitral award. The content and form of an arbitral award, and the discretion
enjoyed by arbitrators in making an award will necessarily vary according to the procedural law
applicable to the arbitral procedure (lex arbitri), the powers conferred by the parties upon
the arbitrator under the applicable arbitration agreement, and the specific form of arbitration
used.

There is no internationally accepted definition of “arbitral award,” but the

characterisation of any given decision as an arbitral award is nevertheless of great practical
significance, since only arbitral awards are covered by international conventions
governing recognition and enforcement of awards. Similarly, only an arbitral award may be the
subject of an action for annulment or recognition and enforcement.

When it comes to identifying an arbitral award, and isolating an award from other types
of decisions, it is not the terminology that identifies an arbitral award but rather the nature of
the decision per se. The inclusion or omission of elements such as the arbitrators’ names, their
signatures or the date, should properly be irrelevant insofar as defining the concept is
concerned, although such formalities may well affect the arbitral award once it has been
identified as such by virtue of its nature and content.

Accordingly, an arbitral award could be defined as the final and binding decision made
by a sole arbitrator or an arbitral tribunal, which resolves, wholly or in part, the dispute
submitted to his/its jurisdiction.

2. Write short note on Role of Conciliator

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 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 there 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, formulate
the terms of settlement and make it over to the parties for their observations; and the ultimate
step to be taken by a conciliator is to the terms formulated by him. The settlement takes shape
only when the parties draw up the settlement agreement or request the conciliator to prepare
the same affix their signatures to it. The settlement agreement signed by the parties is final and
binding on the parties and persons claiming under them. On the basis of notes by the
conciliator during the course of conciliation proceedings held separately and jointly with each
of the parties to the dispute, and also on the basis of written statements and documentary
evidence produced by the parties in support thereof, the conciliator shall reduce to writing the
terms of the possible settlement, if he finds that there exists the possibility of a settlement
which may be acceptable to both parties. The conciliator shall send the draft settlement to both
the parties. For their consideration and approval. If the parties make any observation on the
draft settlement, the conciliator shall reformulate the draft settlements incorporating therein
the observations made by the parties. If, after going through the reformulated draft settlement,
the parties agree thereon, they shall convey the same to the conciliator, either orally or in
writing, that they have no objection to the reformulated draft settlement. They will also make a
formal request to the conciliator to either himself draw up the settlement agreement, or assist
the parties in drawing up the same. It is not every agreement or arrangement between parties
to the dispute arrived at in whatever manner or form during the pendency of the conciliation
proceedings that automatically acquires the status of a settlement agreement so as to have the
same status and effect as if it were an arbitral award for being enforced or as if it were a decree
of the court. It is only that agreement which has been arrived at in conformity with the manner
stipulated and form envisaged and got duly authenticated in accordance with this section,
alone can be assigned the status of a settlement agreement within the meaning of and for
effective purpose of the Act and not otherwise. If the draft settlement agreement is agreed to
the entire satisfaction of the parties, and thereafter they finally draw up the document and sign
the same, the said document shall be final and binding, not only on the parties to the
controversy, but also on the persons claiming under them. When the parties sign the
settlement agreement, the conciliator shall authenticate the same as having been executed in
his presence, as a result of their free volition and the conciliator shall hand over a copy of such
authenticated settlement agreement to each of the parties and retain a copy thereof in his
possession for future reference, if required. The settlement agreement arrived at between the
parties, and duly authenticated by the conciliator, shall not only be final and binding on the
parties, but will have the same effect as if the settlement agreement is n arbitral award on
agreed terms on the substance of the dispute rendered by a duly constituted arbitral tribunal
under section 30 of the Act.
 ALTERNATE DISPUTE RESOLUTIONS SYSTEM (ADRS)

Test – 2

ANSWER IN DETAIL 2 x 10 = 20

1. What is Negotiation ? Explain the Different Phases of Negotiation

INTRODUCTION

Negotiation is the process which helps people settle their differences and disputes. It is
the method by which amicable agreement is reached avoiding arguments.

The term 'Negotiation' can be defined as a direct or indirect form of communication through
which the parties with conflicting interest deliberate a form of Joint Action aiming to resolve
the dispute between them. Negotiation can be used either to resolve any existing problem or
for a future relationship between two or more parties by setting a ground work.

The presence of negotiation can be found at all aspects of everyday life whether at individual
level, Institutional level, National level or global level. Negotiation therefore has been
characterized as the preeminent mode of dispute resolution. In compliance to the presence of
negotiation in daily life it is not astounding to find that negotiation can be applied to other
dispute resolution processes for example mediation and litigation settlement conferences.

tages Of Negotiation (Process)

Each negotiation has its own unique characteristics. Therefore, there is no such uniform and
exclusive method of negotiation and bargaining session.
A structured approach has to be followed in order to come at a desired outcome. Therefore,
various steps have to be followed in the negotiation process so that the parties with conflicting
ideas and differences reach to an amicable solution.

The process includes following stages:

1. Preparation

2. Discussion

3. Clarification of goals

4. Negotiate towards a Win-Win outcome

 5. Agreement

6. Implementation of course of action

Preparation/ Initial Assessment

The process of negotiation begins with the signal of communication from one party to the other
showing a willingness to bargain. As negotiation is a voluntary process it is of primary
importance to know that whether the other party is interested in negotiation or not.

Some of the important factors should be ensured before moving on. They are:

 if there is desire to resolve the dispute

 the credibility of other parties

 the willingness of parties to preserve or establish the relationship

 whether there is disparity between the parties that it would be impossible to bargain
equal or not

 desirability of using any other form of dispute resolution system.

This stage involves ensuring the important facts of the dispute and its situation in order to
clarify the position of both the parties. Before any negotiation takes place, a decision shall be
taken as to when and where the meeting for negotiation shall happen and as to who will attend
the discussion and negotiation sessions. During this time setting of a limited timescale can help
prevent this agreement continuing.

Discussions
Once it has been established that negotiation is the appropriate course of action the further
arrangement shall be made in that course with the other party included. The arrangement must
include:

 outlining the scope of negotiation

 forming a time table as to whether or not that will be a fixed duration of negotiation

 ensuring that all the interested parties are identified and have been consulted

 choosing a location Which is feasible to both the parties.

During this stage the parties of other side put forth their case as they see it and try to
understand the vice-versa situation. Clarification as to misunderstandings and disagreements
shall be spoken and heard. An equal opportunity shall be granted to both the side.

Clarification Of Goals

From the second stage of discussion whatever goes interest and viewpoints of the parties of
this agreement needs to be clarified. To clarification it becomes easy and possible to identify
and establish a common ground post settlement. Clarification is one of the crucial parts of
negotiation process is without a doubt the misunderstanding and disagreements are likely to
continue which main result to cause problems and barrier in reaching a beneficial outcome.

This can lead to harmonizing and Reconcile the bearing and competing interest of the parties.

Negotiating Towards A Win-Win Situation

It is not always possible to reach to a Win-Win situation but it shall be the ultimate goal. this
stage focuses on which can be termed as Win-Win outcome wherein both the parties may have
the satisfaction that they have gained something positive through the process and both the
parties may feel that their point has been considered.

Agreement

A proper agreement can be achieved only when both the parties understand each others point
of view and interest are considered simultaneously. Every member involved in the negotiation
process it is essential to keep an open mind so that an acceptable solution can be reached full
stop such agreement needs to be clearly communicated so that no for the dispute can occur.

Implementation Of Action:
Once agreement is reached a proper course of action has to be implemented so that the
decision can be carried out.
CONCLUSION

The history of negotiation can be traced back to the times of Monarch era where Kings
used to negotiate at the time of ongoing Wars in order to prevent the bloodshed in war. After
the two great World Wars in the 20th century the negotiation rounds resulted into the creation
of League of Nations followed by United Nations.

The scope of negotiation has increased over the time. The major objective behind negotiation is
that the parties involved wishes to settle the dispute outside the court. The litigation process
has its own disadvantages such as: bulky paperwork, excessive time, delays in process, costly-
expensive and unfavorable decision.

Because of such reasons alternative dispute resolution gained fame and with increase in fame
of negotiation the demand for experienced negotiators also increased. Negotiation is
considered to be alternative dispute resolution as an informal process which helps the parties
to resolve that differences through mutual understanding and agreement.

WRITE SHORT NOTES 2 x 5 = 10

1. Write Short Note on Lok Adalat

INTRODUCTION

NALSA along with other Legal Services Institutions conducts Lok Adalats. Lok Adalat is
one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases
pending in the court of law or at pre-litigation stage are settled/ compromised amicably. Lok
Adalats have been given statutory status under the Legal Services Authorities Act, 1987. Under
the said Act, the award (decision) made by the Lok Adalats is deemed to be a decree of a civil
court and is final and binding on all parties and no appeal against such an award lies before any
court of law. If the parties are not satisfied with the award of the Lok Adalat though there is no
provision for an appeal against such an award, but they are free to initiate litigation by
approaching the court of appropriate jurisdiction by filing a case by following the required
procedure, in exercise of their right to litigate.
There is no court fee payable when a matter is filed in a Lok Adalat. If a matter pending in the
court of law is referred to the Lok Adalat and is settled subsequently, the court fee originally
paid in the court on the complaints/petition is also refunded back to the parties. The persons
deciding the cases in the Lok Adalats are called the Members of the Lok Adalats, they have the
role of statutory conciliators only and do not have any judicial role; therefore they can only
persuade the parties to come to a conclusion for settling the dispute outside the court in the
Lok Adalat and shall not pressurize or coerce any of the parties to compromise or settle cases or
matters either directly or indirectly. The Lok Adalat shall not decide the matter so referred at its
own instance, instead the same would be decided on the basis of the compromise or
settlement between the parties. The members shall assist the parties in an independent and
impartial manner in their attempt to reach amicable settlement of their dispute.

2. Write Short note on UNCITRAL

In an increasingly economically interdependent world, the importance of developing

and maintaining a robust cross-border legal framework for the facilitation of international trade
and investment is widely acknowledged. The United Nations Commission on International
Trade Law (UNCITRAL) plays a key role in developing that framework in pursuit of its mandate
to further the progressive harmonization and modernization of the law of international trade.
UNCITRAL does this by preparing and promoting the use and adoption of legislative and non-
legislative instruments in a number of key areas of commercial law.

UNCITRAL texts are developed through an international process involving a variety of

participants. UNCITRAL membership is structured so as to be representative of different legal
traditions and levels of economic development, and its procedures and working methods
ensure that UNCITRAL texts are widely accepted as offering solutions appropriate to many
countries at different stages of economic development.

To implement its mandate and to facilitate the exchange of ideas and information, UNCITRAL
maintains close links with international and regional organizations, both inter-governmental
and non-governmental, that are active participants in the work programme of UNCITRAL and in
the field of international trade and commercial law.