The Power Of ADR- Types, Significance Global Comparison

Jahnvi Malhotra, Bharti Vidyapeeth Institute Of Management And Research

INTRODUCTION

It is rightly said that “ The best way to resolve any conflict is to find a common ground through mutual understanding and open communication”. The concept of justice dates back to the mid-third millennium BC, the concepts of precedent and jurisprudence have evolved and expanded, now the judges would decide cases on civil and criminal matters. The judges hold the responsibility to determine the facts and interpret the law to provide justice. In 2024, the total number of pending cases of all types and at all levels rose above 51 million There is a growing awareness that courts will not bear the entire burden of the justice system. To overcome this ADR comes into force, it stands for Alternate Dispute Resolution. ADR includes arbitration, mediation, conciliation, and negotiation. Arbitration in India has a long history, dating back to the Vedic times ADR works in almost all disputes including civil, commercial, and labor.

ADR- CONCEPT AND SIGNIFICANCE

According to Blackstone, Justice is a reservoir from which rights, duty, and equity evolve. In India, the state must provide speedy justice to the citizens. The Hon’ble Supreme Court Of India In the case of Anita Kushwaha v. Pushap Sudan ruled that the right to justice is a component of the right promised under Articles 14 and 21 of the Indian Constitution. For speedy disposal of trails, ADR comes into the picture, it is comparatively faster and less expensive than going to court. ADR saves a lot of time by allowing resolution in weeks or months, compared to court, which can take years. It offers parties a more flexible and collaborative approach to finding solutions. All civil and quasi-judicial matters including disputes involving joint ventures, and time-barred debt can be referred to ADR as it includes only private matters between two parties. ADR methods can be used to resolve conflicts outside court litigation. They include arbitration, mediation, negotiation, and conciliation. These methods provide opportunities for parties to discuss and clarify their issues and to mutually accept resolutions. With its efficiency, cost-effectiveness, and flexibility, ADR offers a compelling alternative to traditional class actions, presenting both plaintiffs and defendants with a more accessible avenue for seeking justice.

Time The Indian judiciary is overburdened with cases, resulting in parties having to wait for a prolonged period before getting a verdict. ADR is designed in ways to avoid this problem.
Confidentiality- Litigation is frequently a matter of public record and often becomes a determinative factor for the parties who wish to uphold their privacy on the other hand ADR mechanisms provide greater confidentiality
Flexibility- ADR allows parties to choose arbitrator and mediator allowing them to have control over the process and the environment is somewhat less procedural and formal than litigation. This gives the parties more flexibility
Cost-effective- The ADR methods involve less formality and hence fewer legal fees and quicker resolution

ARBITRATION AND ITS WORKING

‘’ Arbitration is like a referee in a game, ensuring a fair outcome for both sides’’ – John Roberts. Arbitration is the most common method of ADR. It is a method of resolving disputes outside the recourse of court. The UNCITRAL Model on International Commercial Arbitration from 1985 serves as the foundation for the Arbitration and Conciliation Act 1996, which controls and governs arbitration in India. Arbitration can be defined as how parties to a dispute consent to get it settled with the intervention of a third person called an Arbitrator. The Arbitrator must be disinterested and impartial. Parties have the right to fix any number of arbitrators to decide their dispute. The proceeding before him is called ‘Arbitral Proceeding’ and his decision is called ‘ award’ as per section 29A of the Arbitration and Conciliation Act, 1996- The award shall be within twelve months from the date when the arbitral tribunal enters upon the reference. The Hon’ble Supreme Court of India in the case of Bharat Aluminium Co. v Kaiser Aluminium Technical Services dealt with the interpretation of the Arbitration and Conciliation Act,1996, and the scope of judicial intervention in arbitration proceedings. The court clarified the principles of separability and the Doctrine of competence.

In the case of S.B.P. & Co. v. Patel Engineering and Anr, the court held that the Chief Justice’s power to appoint arbitrators under Section 11(6) was a judicial function. This meant that the Chief Justice had to satisfy himself with the existence of a valid arbitration agreement and other prerequisites before making the appointment.

CONCILIATION AND ITS WORKING

The Conciliation process is as old as Indian History. In Mahabharata, Lord Krishna made efforts to resolve the conflicts, similarly, we have the panchayat system in villages nowadays. Conciliation is called the precursor to arbitration as Conciliation is the first step and if it fails then the parties resort to arbitration. Conciliation is a process of dispute settlement where a neutral third party called a conciliator assists the parties to reach a mutually acceptable resolution. It is the amicable settlement of disputes between the parties. Conciliation is often used in labor and employment disputes, family matters, and commercial conflicts. The Conciliator doesn’t make a binding decision instead they assist parties for a mutually acceptable decision. Conciliation is comparatively less formal and more friendly than Arbitration. In the case of Afcons Infrastructure Ltd v. Cherian Varkey, the court emphasized the importance of conciliation as an effective means of dispute resolution and also highlighted the need for parties to actively participate in the process. The case of Guru Nanak Foundation v. Rattan Singh & Sons (1981) held that the proceedings in Conciliation are independent of the Court and that the parties have the right to go for the process of conciliation even during the pendency of court proceedings

ADR IN DIFFERENT LEGAL SYSTEMS

INDIA-

In India Arbitration is primarily governed under the Arbitration and Conciliation Act, 1996 while mediation and conciliation are regulated by various institutions and rules. The ADR in India is known for its flexibility, efficiency, and cost-effectiveness, although there’s still a huge scope to grow in this field and it is less prevalent compared to litigation.

USA-

The arbitration process in the United States is governed under the Federal Arbitration Act of 1925. Several arbitration organizations exist in the USA such as the American Arbitration Association, National Arbitration Forum, etc. Mediation is the most common technique in the USA, with a strong emphasis on voluntary participation. It’s a popular choice for many individuals and businesses in the USA who are seeking efficient and collaborative dispute resolution.

UNITED KINGDOM

The Arbitration Act of 1996, regulates arbitration procedures in England, Wales, and Northern Ireland. The other various acts related to arbitration in the UK are the acts of 1889, 1950, 1975, and 1979. A significant milestone in the development of ADR was the establishment of the Advisory, Conciliation, and Arbitration Service (ACAS) in 1974. ACAS played a crucial role in promoting mediation and conciliation as methods of resolving workplace disputes. There are several different Alternative Dispute Resolution (ADR) schemes in the UK such as the Financial Ombudsman Service (FOS), Property Ombudsman, Centre for Effective Dispute Resolution (CEDR), etc these schemes cater to specific industries or sectors.

CONCLUSION

According to the National Judicial Data Grid (NJDG), 29.97% of civil cases and 42.77% of criminal matters are presently pending before the Supreme Court. This violates Articles 14, 15, 16, and 17 of citizens of India as they have to fight legal battles much longer than they should. This is when the ‘Alternate remedy’ comes into the picture which is the Alternate Dispute Resolution. The most common technique of ADR in India is arbitration. Arbitration is a dispute redressal mechanism that is gaining popularity every day. In the absence of governing laws of the arbitration, the procedure becomes costly and time-consuming. To make this process easier and error-free, parties should wisely choose the arbitration agreement, arbitrator, and seat of arbitration. Choosing the appropriate dispute resolution strategy is crucial and could make the difference between a speedy settlement and a lengthy legal battle.