Alternative Dispute Resolution (ADR): Comprehensive Guide
Varun Verma
International Business Lawyer | U.S. Immigration Law I Legal Research & Drafting I Corporate Compliance & Governance
Introduction
“Conflict is inevitable but combat is optional.” — Max Lucado.
Alternative Dispute Resolution (ADR) is a widely chosen option of the 21st century. Individuals and organizations today broadly believe upon handling the disputes amicably and in a less time consuming manner. It not only relieves some stress from the shoulders of our judicial system but carries a bag of numerous advantages that we would be discussing further in this article.
To understand better, let’s compare different scenarios: In terms of business, the world is a globalized economy - businesses based in one country want to expand their business worldwide and sell their products and services across borders.
Irrespective of business growing at a fast pace, disputes are inevitable as the realm of culture, technologies, and the way of operating business differs. Businesses, usually, are not only one step away from innovation but also at risk of reputational harm. Simultaneously, if we talk about contracts where specific performance to be performed or any civil disputes that need to be resolved, ADR always proves to step in and gets the job done.
ADR vs. Litigation
The next question arises, why should one substitute litigation or civil suit process to alternative dispute resolution? The answer to this question solely depends upon the gravity of the case. However, to some extent, it has been observed that cases which can be solved easily through numerous methods of ADR, becomes an unpleasant and cumbersome experience for the parties involved in the case when it goes to litigation. Since, parties lose their control over the course of process and the decision ultimately falls in the hands of the court. Thus, when there is slightest ability to get the cases settled amicably outside the courtroom, the parties must and shall prefer to the process of ADR which also results in less burden on the shoulders of court so that the court can also allot their time efficiently to the cases which are in priority.
Although, as mentioned above, ADR is not suitable for every dispute, it still has the potential to resolve matters pertaining to Civil, Commercial, Industrial, and Family etc. It has been discussed in detail further in this article.
Meaning of ADR
In literal terms, alternative dispute resolution (ADR) refers to the process where the disputes between the parties gets settled amicably without the intervention of judicial authority or trial. ADR consists of several types of processes i.e.,
●????? Arbitration
●????? Mediation
●????? Conciliation
●????? Negotiation
●????? Lok Adalat and more.
History and importance of ADR in India
Let’s explore a little on the history of ADR. For instance in the pre independence era, The Indian Arbitration Act, 1899 was enacted to introduce alternate dispute mechanisms in India. Later, Code of Civil Procedure was enacted again in 1908 and provided broad powers to the court to direct a case of dispute to the ADR mechanism. However, The Indian arbitration was soon repealed after the Geneva Convention was signed in 1937 and was adopted by India as The Arbitration Act, 1940.
Yet again, due to the technicality and complications which used to result in legal challenges, The arbitration act, 1940 was proving to be problematic in handling the disputes in an efficient manner. In M/S Guru nanak Foundation vs. Rattan Singh & Sons (1981), the Supreme Court describes arbitration act, 1940 as,
“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 proceedings under the act have become highly technical and accompanied by unending prolixity, at every stage providing a legal trap to the unwary”
Finally in 1996, The Arbitration and Conciliation Act, 1996 was passed and all the previous acts were consolidated into single legislation, amended twice in the year 2015 and 2019.
Simultaneously, the importance of ADR in India can be glanced by the following case. In Salem Advocate Bar Association vs. Union of India (2005), the Supreme Court ruled that where it appears to the court that there exists an element of a settlement that might be acceptable to both the parties, they shall direct the parties in the dispute to consider using any of the ADR process outlined in Section 89 of the Code of Civil Procedure, 1908.
The above case clearly highlights that ADR was not just enacted because of the pendency of cases in courts but also because of the tendency of getting the cases resolved through the process of ADR.
Few important Acts related to ADR
The Acts which deal with alternative dispute resolution are:
●????? Arbitration and Conciliation Act, 1996 and,
●????? The Legal Services Authority Act, 1987.
Advantages and disadvantages of alternative dispute resolution
Advantages
The key advantages of ADR are:
Disadvantages
As with the advantages there are certain disadvantages as well pertaining to ADR, such as,
Various modes of alternative dispute resolution
Arbitration:
Arbitration is a dispute resolution mechanism under which the dispute is submitted with the consent of both the parties for arbitration. An arbitrator is appointed who can be an individual or organization/institution to overlook the dispute and help both the parties to reach a decision. The award or decision passed by the arbitrator is binding in nature and is agreed by both the parties in dispute to abide by the same.
However, there are certain exceptions where arbitral award can be set aside, such as:
Forms of arbitration
●????? Private arbitration: Companies would be a perfect example for this form of arbitration, as to protect themselves from reputational harm and in some cases from labor laws, they always opt for arbitration for keeping matters out of courts. It is the most widely used form of alternative dispute resolution.
●????? Judicial arbitration: Under the relevant regulations and mandated power, the traditional courts conduct the judicial arbitration that follows the federal and state laws. Arbitrators having wide power assists the parties to a certain level where the dispute is addressed mutually and amicably.
Types of Arbitration
●????? Domestic arbitration: When the parties, whether individuals or corporate entities and the arbitration are within the same jurisdiction, it is known as domestic arbitration.
●????? International arbitration: When at least one party, whether individual, corporate entity or government is a foreign entity, in such a case it is known as international arbitration.
●????? Institutional arbitration: Where certain institutions which are setup solely for the purpose to resolve the disputes through ADR or arbitration, contain their set of own rules aligned with the arbitration act and maintain an arbitration panel are known as Institutional arbitration. Some broad examples would be, the American arbitration Association (AAA), the International Chamber of Commerce (ICC), and the London Court of International arbitration (LCIA).
●????? Ad Hoc arbitration: When parties mutually decide and agree to resolve the future dispute through the process of ADR or arbitration and for the same they appoint an individual that would act like arbitrator, following the arbitration act, such a case is known as ad hoc arbitration.
Conduct of arbitration proceedings
●????? Commencement: When a party to the dispute sends a written request to counterparty referring the dispute to arbitration valid through either arbitration clause in their contract or through arbitration agreement, such scenario would be considered as commencement of the proceedings.
●????? Impartial treatment: During the process of arbitration, the arbitration tribunal must treat both the parties equally and shall pass the award Impartially.
●????? Procedure: The parties are free at their will upon deciding the procedure of their arbitration proceedings, However, in the absence of such agreement or clause, the arbitration tribunal may conduct proceedings as they feel appropriate.
●????? Evidence: The power to determine materiality, admissibility, relevance, and weightage of any evidence resides upon the arbitration tribunal.
Procedure of arbitration proceedings
●????? The initiation of the procedure begins by filing a statement of claim by the applicant specifically highlighting the relevant facts along with attaching a certified copy of the arbitration agreement or the agreement with the arbitration clause. The statement of claim can be described as a written document which is filed in the court or tribunal in order to instigate the proceedings seeking remedies from the defendant.
●????? The defendant replies in retaliation to the claimant’s claims while highlighting his arguments in defense.
●????? Both the parties receive a list of potential arbitrators or panel of arbitrators available for the selection unless they have not decided prior mutually.
●????? Documents and information are exchanged in the preparation of hearing known as “Discovery” followed by the physical meeting of parties and arbitrators to present their arguments in their respective cases.
●????? The arbitrator passes the award after closely monitoring the evidence presented, arguments made and claims that are seeked.
Arbitration agreement
According to Section 7 of the Arbitration and Conciliation Act, 1996, an “Arbitration Agreement” refers to a promise or mutual agreement between the parties to settle any future dispute amicably through the process of ADR or arbitration, pertaining to their any specific legal relationship. This agreement supersedes the disputes clause mentioned in the previous agreement between the same parties, if any.
An arbitration agreement is a legal contract made between two or more parties, where they specifically agree to refer to the process of ADR or arbitration instead of going to the court pertaining to any of the future conflicts. The arbitrators appointed in the process pass a final and binding award considering the facts and arguments from both the parties.
Essentials of arbitration agreement:
●????? Intention of the parties.
●????? Written form.
●????? Presence of dispute.
●????? Signatures of the parties.
Types of arbitration agreements:
●????? Arbitration clause: A provision in a contract between two parties that highlights if any dispute or conflict arises out of the contract, the parties would opt to arbitration to resolve such dispute instead of moving to court.
●????? Standalone agreement: Independent from any contractual agreement made between the parties, the standalone agreement is a separate agreement dedicated to arbitration.
●????? Submission agreement: An agreement that is entered after the dispute has arisen, where parties mutually agree to submit a particular dispute to arbitration.
Separability doctrine
This doctrine refers to the validity of the arbitration agreement which is independent of the validity of the main contract, that means it is separable from the main contract.
Arbitration clause
As discussed above, rather than opting for litigation proceedings, the arbitration clause is required to resolve the dispute through arbitration and simultaneously specifies the key elements involved i.e., the language of arbitration, the number of arbitrators, the rules governing the arbitration proceedings, etc.
International commercial arbitration
The commercial arbitration mechanism underscores the areas which include disputes relating to commercial contracts, intellectual property, investment constructions, etc. It proves to be an efficient way to resolve disputes instead of approaching court, especially in the cross-boarder or heavy commercial transactions.
Key features of international commercial arbitration are:
●????? Private proceedings: While ensuring confidentiality, the proceedings of arbitration take place privately, unlike litigation.
●????? Enforceability: With the emergence of treaties and conventions such as, foreign arbitration awards or New York convention, the international arbitration awards are enforceable across borders.
●????? Cross-Border disputes: When parties are across different legal jurisdictions, international commercial arbitration is well-suited in such cases where parties are from across borders and want to solve disputes amicably.
●????? Flexibility: Unlike court proceedings, the parties can mutually arrive upon certain terms such as, the language of proceedings, applicable law, etc.
Mediation
Mediation is a structured process where a third party is involved known as a mediator to intervene in order to assist the parties in resolution for issues in conflict. Mediation sessions are purely confidential and also decisions pertaining to which are non-binding in nature. If the parties are unable to solve the dispute under the process of a mediation, the parties can always opt for either arbitration or litigation.
Who is a Mediator?
A “Mediator” is an impartial person who assists the parties under dispute to reach a mutually acceptable resolution, he serves as a neutral third person and facilitator in between the parties. As being a neutral third party, mediators can analyze the case and issues of conflict between the parties closely and can suggest alternatives or options that they consider in order to resolve the dispute. Although, the mediator does not decide upon the final decision pertaining to the dispute but rather helps the parties to communicate well so they try to settle the disputes themselves.
Role of a Mediator
●????? After the appointment of mediator, the mediator organizes a meeting between the parties arranging the time that suits both the parties.
●????? With mutual understanding, both the parties with the help of mediator set out the guidelines and procedures via signing a document for the same which shall be followed throughout the process.
●????? The mediator then reviews the documents and evidence presented by the parties and simultaneously creates a brief summary of facts to analyze the weak points and strong points of each party.
●????? At the final stage, the mediator tries to discuss the scenario of the case and works with both the parties to come to a win-win situation.
Process/Stages of mediation
●????? Opening statement: At the outset, the mediator welcomes everyone and highlights the guidelines and procedures that shall be followed by both the parties involved in the conflict and mediator requests them to cooperate with each other during the settlement.
●????? Opening arguments: Each party is given a reasonable opportunity to highlight their issues and if any financial or non-financial losses incurred between them.
●????? Closed caucuses: Following the previous step, each side gets the opportunity to discuss the dispute with the mediator at the private caucus, the separate room for each side mediator closely analyses what everyone wants and finds the gap where both the parties can settle.
●????? Completion: If the parties are able to decide upon the dispute and arrive at the settlement, the mediator in general prepares the agreement of settlement with principles, terms and conditions and requests both the parties to sign the written settlement agreement.
Negotiation Instruments of Mediators
●????? Best Alternative to Negotiated Agreement (BATNA)
BATNA which is referred to as the best alternative that can be the most advantageous alternative for a negotiation party when the negotiations are about to fail. It is not considered wise entering into serious negotiation while not being aware of one’s best alternative.
●????? Worst Alternative to Negotiated Agreement (WATNA)
WATNA which is referred to as the worst alternative that can happen if the negotiation fails. Keeping in mind the worst-case scenario while making a deal or solving the dispute helps parties to avoid making unfavorable decisions that may go against them.
Types of mediation
●????? Statutory/Mandatory: In India, Under Civil Procedure Mediation Rules, 2003, it is preferred to refer to mediation for certain types of disputes such as, labor and family law cases.
●????? Private: Private mediation is offered by the qualified private mediators in courts, commercial/governmental, and public sectors for dispute resolutions.
●????? Contractual: Before approaching the court for the litigation, certain contracts highlight to refer to mediation first in order to resolve the dispute amicably.
Common Errors in Mediation advocacy:
●????? Poor communication skills such as, not listening actively, not being able to interpret the dispute professionally, continuous interrupting or at worse using aggressive language may lead to misunderstanding and escalate the conflicts.
●????? Lack of preparation such as, not understanding each party’s motive behind dispute or not being able to bring the parties to negotiation.
●????? Ethical lapses such as, violating confidentiality or misrepresenting facts may damage the integrity of the mediation process.
Conciliation
Conciliation is a similar structured process like mediation where the process remains confidential, flexible and interest based on parties. Conciliator works as a neutral third party between the disputing parties. The crucial difference between mediation and conciliation is that during the process the conciliator can provide a non-binding settlement proposal to the parties.
Also, when compared it is less formal procedure than arbitration, where the parties are free to either accept or reject the proposal of the conciliator.
Process of conciliation proceedings
Conciliation being another mechanism of alternative dispute resolution is discussed under part 3 of the Arbitration and Conciliation Act, 1996. The act outlines the provisions that govern the process of conciliation. The process of conciliation is as follows:
●????? Step 1: Commencement of proceedings
One of the parties in the dispute must send a written notice to the other party as an invitation to join the proceedings of conciliation. The Section 62 of the act addresses the initiation of the proceedings. Besides, in order to begin the proceedings, the other party needs to accept the invitation, and if no response is received from the other party within 30 days of invitation, It will be deemed as non-accepted.
●????? Step 2: Conciliators appointment
Once both the parties accept the conciliation proceedings, next the parties proceed to engage a conciliator. Both the parties can either engage one conciliator, two conciliator, each for both parties or can even engage three conciliators where each conciliator for both parties and together they appoint a third conciliator acting as the presiding one. Section 64 of the act covers the provisions of appointing the conciliator.
●????? Step 3: Submission to conciliator
After the appointment of a conciliator, both the parties must provide the written statements to the conciliator containing all the facts and relevant details pertaining to the dispute/conflict between the parties. Additionally, the parties may exchange the written statements with each other.
●????? Step 4: Conciliation proceedings conduct
It is within the sole discretion of the conciliator as to how to undertake the communication procedure i.e., whether through oral or written means. Section 67(3) and 69(1) addresses the conduct of the conciliation proceedings.
●????? Step 5: Administrative assistance
If during the proceedings at any point the conciliator feels to engage assistance from any institution or individual, they may do so according to Section 68 of the act which allows the conciliator to seek assistance or to engage in such administrative support.
Negotiations
Negotiation is a process of communication and discussion, by way of exploring potential solutions, finding compromises and identifying common interest between the parties to the dispute in order to reach an agreement to settlement.
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Key aspects of negotiation are:
●????? Voluntary: The main essence of negotiation is that it is a completely voluntary process and no party shall be forced to negotiate with the opposite party.
●????? Non-adjudicating: The process of negotiation only involves the parties to the dispute and no other governing authority or neutral third party.
●????? Informal: Negotiations are less formal in nature unlike any other ADR process, since parties involved in the dispute have the flexibility to define the rules on their own with mutual discussion and acceptance.
●????? Flexible in nature: Every strategy for negotiation totally depends upon the parties such as, Place, time, topic of negotiation and the approach both parties will take.
●????? Bargaining strategies: Numerous strategies, such as bracketing, anchoring, or making the first offer, diplomacy, and more can strategically influence the ultimate outcome of the process.
Types of Negotiation
●????? Integrative negotiation: When parties to the dispute negotiate over numerous topics, it creates chances to get a win-win situation for the parties to mutually gain from negotiation.
●????? Distributive negotiation: When parties to the dispute negotiate over one topic, it creates a win-lose situation, due to which only one party gains the advantage over the other.
●????? Team Negotiation: When parties to the dispute negotiate in teams.
Lok Adalat
Another alternative dispute redressal mechanism is Lok Adalat, a forum where disputes or cases which are pending in the court or are at the pre-litigation stage are resolved and settled amicably. Under the Legal Services Authorities Act, 1987, the Lok Adalat has been provided with the statutory status.
●????? The award passed by the Lok Adalat under the said act is binding in nature and shall be considered as a decree of civil court and no parties can appeal against the award passed by the Lok Adalat.
●????? However, in right to litigate, although there is no provision but if parties are not satisfied with the award passed the parties may approach the court of appropriate jurisdiction.
●????? An interesting part is, where if the matter has been referred by the court to the Lok Adalat and subsequently it is settled in the Lok Adalat successfully, the fees which was paid to the court earlier pertaining to the case would be refunded back to the parties respectively.
The interesting part of Lok Adalat is that there is no court fees payable for the cases that are filed and if in any matter which has been referred to Lok Adalat by court and such matter is consecutively is successfully settled in Lok Adalat, the fees paid to the court previously also gets refund back to the respective parties.
Nature of cases that can be referred to Lok Adalat
●????? Any case which is in pre-litigation process or is not yet present before the court.
●????? Any case already pending before the court.
However, the extent to which the case can be referred to Lok Adalat also has a bar as some cases which are not compoundable under law, cannot be settled through Lok Adalat.
Levels of Lok Adalat:
●????? At the state level;
●????? At High Court level;
●????? At District level; and
●????? At Taluk level.
Permanent Lok Adalat
As organized under the Section 22B of the Legal Services Authorities Act, 1987, The permanent Lok Adalat has been set up as the name suggests “permanently” with permanent bodies such as, a chairman and members of two pre-litigative mechanisms such as, conciliators, etc. When even the parties fail to reach a resolution or settlement, the permanent Lok Adalat resides in jurisdiction to pass an award to any dispute until it’s not related to any severe offence. The jurisdiction of the permanent Lok Adalat is up to Rs. 10 lakhs.
Fast track arbitration
Fast track arbitration is an efficient way of resolving the disputes in a simplified manner, limiting the submissions and setting strict deadlines. This gives parties a chance of securing settlement of disputes in a given timeline, escaping from the traditional arbitration time frame. Fast track arbitration is an economical and a faster option which helps the parties reach the solution.
“Fast track arbitration agreement” is binding upon the parties and can be enforced just like any other arbitration agreement. Its arbitral award is also binding and final on parties due to its nature of adjudicatory process by the authority of law. It is most suitable in the cases where the documents and oral hearings and witnesses can aid the arbitration process and decision. In the cases where the conflict requires urgent settlement, it can be submitted to the fast-track arbitration.
Foreign awards
Foreign awards refers to the matters, disputes and the decisions which are made by the recognized arbitration panels for the international or domestic arbitration proceedings. The Code of Civil Procedure, 1908 and the Arbitration and Conciliation Act, 1996 are the two enforcement which governs these procedures in India.
Let’s discuss the conventions under the foreign awards:
Geneva convention
●????? While covering a wide range of matters related to humanitarian law, diplomatic relations and arbitration, Geneva convention is a set of treaties and agreements binding across countries.
●????? Under the “Geneva convention” the foreign awards pertain to commercial disputes made after 28th July, 1924 after meeting certain terms and conditions such as, the validity of a contract, validity under applicable law, etc.
Relevant provisions of Geneva convention
●????? Section 56 in the arbitration and conciliation act, 1996, mandates compliance with the arbitration procedures and its submission of original award.
●????? Section 57 in the arbitration and conciliation act, 1996, underscores the grounds for refusal or decisions beyond scope.
●????? Section 58 in the arbitration and conciliation act, 1996, upon enforcement, the award shall be deemed as decree of a court.
New York convention
●????? Adopted in 1958, the New York convention is a recognized international treaty which facilitates the recognition and enforcement of arbitral awards. The signatory countries would deem the arbitral award under New York convention as a domestic award.
●????? Primary objective of the New York convention is facilitating the recognition and enforcement of arbitral awards. This basically means that if an arbitral award is rendered in one of the signatory countries, then in this circumstance this arbitral award can be enforced in other signatory countries as well.
●????? For enforcing a foreign arbitral award in a signatory country, the party seeking enforcement has to submit an application in that country’s competent court. Once the foreign award is enforced, it gains the same status as a domestic award in the country in which it is enforced. Read more about the New York Convention here.
Scope of New York convention
●????? This convention applies to arbitral awards arising out of disputes considered commercial under the national laws of the country where the enforcement is sought.
●????? This convention covers both domestic awards (awards made in the territory of a state other than where enforcement is sought) and non-domestic awards (awards which are not considered as the domestic under the state where the enforcement is sought).
Domestic ADR
Domestic ADR means a private mechanism of alternative dispute resolution within a national jurisdiction. This approach provides an effective framework for disputes resolution along with maintaining business relationships and ensuring resource efficiency. This framework particularly benefits from its alignment with local legal systems and cultural contexts. In domestic ADR, primary focus is on well-established mechanisms such as arbitration, mediation and conciliation. This provides a structured yet flexible resolution process based on the merits of applicable national laws.
International ADR
ADR in international context means a sophisticated framework for resolving cross border disputes among the parties. This approach significantly helps in today’s globalized business environment where disputes involve multi-country parties having diverse backgrounds and varied legal systems. International ADR helps in overcoming geographical barriers offering significant procedural flexibility while maintaining legal standards like due process and fairness. This serves as an essential tool in modern global commerce via providing resolution through a culturally sensitive, flexible and international approach.??
Why should businesses opt for ADR
Choosing ADR for resolving business disputes can be greatly beneficial for businesses as it creates a win-win situation in any dispute for both the parties involved. Unlike the traditional court system, ADR considers everyone’s position rather than prevailing on one party over another party. Below we will analyze some of the reasons for businesses to opt for ADR:
●????? Business Reputation: For a sustainable continued business reputation, ADR provides for private dispute resolution avoiding the negative publicity which can hamper the company’s market position and goodwill. ADR’s collaborative nature of dispute resolution can help in safeguarding the important business relationships.
●????? Maintaining Business Relationships: Preserving valuable business relationships is a crucial advantage of choosing ADR for business disputes. ADR by burning the bridges and severing ties, enables businesses to maintain and sometimes strengthen their relationship.
●????? Protection of Intellectual Property: ADR helps in safeguarding the sensitive information and trade secrets by resolving the disputes privately and availing the flexible remedies like cross licensing agreements.
●????? Corporate Governance: By providing a discreet and controlled dispute resolution environment, ADR helps in efficient resolution of disputes involving the corporate leaders and shareholders. This further aids in maintaining the corporate stability and investors confidence.?
●????? Efficient Management: ADR offers flexibility to support the businesses undergoing significant changes, and aids the businesses swiftly deal with the sensitive matters securing the privacy of the company and its employees.
●????? Financial Benefits: ADR provides significant financial benefits, reducing the litigation costs, minimizing the operational disruptions, and shortening the dispute resolution ordinary timeline.
●????? Time and Resource Efficiency: ADR is a time and resources efficiency method of resolving the disputes. This allows businesses to redirect their focus and resources to core business operations rather than getting involved in complexity of litigation.
●????? Global Advantage: ADR proves advantageous in the global business operations context. This is especially beneficial for cross border disputes as it accommodates different business cultures, legal systems and languages.
Therefore, ADR offers a wide benefit to businesses with objectives like relationship preservation, cost control, strategy flexibility and mitigating risks. By choosing ADR, businesses can resolve the disputes in an efficient manner maintaining long term business stability and sustainability.
Now, let’s explore the living example of how adopting ADR with collaborative strategy can do wonders in the legal domain, following we talk about the Samadhan - mediation and conciliation center led by the collaborative initiative from the bar and the bench.
Samadhan - Delhi High Court mediation and conciliation center
Samadhan meaning “resolution” is a mediation and conciliation center in the Delhi high court which as the word appropriately suggests works on resolution for the disputes or conflicts between the parties. Established in 2006, the samadhan is a joint initiative of both the bar and the bench with committing themselves for opting alternative dispute resolutions where and when applicable to the disputes. Samadhan with over almost two decades has changed the perceptions of legal minds as well as disputants when it comes to resolving the disputes amicably.
Samadhan covers a wide range of disputes and conflicts pertaining to commercial contracts, intellectual property rights, civil disputes, real estate transactions, labor laws or Industrial disputes, banking and Insurance disputes and more, which are mediated by more than 250 plus mediators.
Even when there were stiff views by lawyers initially pertaining to establishing such center for mediation and conciliation in lieu that their practice may be affected by such center, the bar and bench together took this courageous step which opened the new world of possibilities which is now evident by the success of Samadhan, where lawyers values ADR process as it proves to be efficient in cases where litigation would’ve been a prolonged process.
Legal aid
When parties involved in any dispute and do not have enough financial means to afford legal representation, legal aid cells often can come into picture for arbitration proceedings as well. Since, the main objectives of legal aid is to support people and give access to justice in traditional courts, however, there are certain mechanisms available as well which can support parties in arbitration proceedings.
Legal services authorities act, 1987
Established in 1987, the legal services authorities act provides free legal aid at national, state and district levels, provided that an individual shall prove one’s eligibility for it.
Eligibility for legal aid
●????? Disabled persons;
●????? Individual whose annual income is below prescribed threshold;
●????? Women and children; and
●????? Victims of human rights violations, trafficking, or any other form of exploitation.
Let’s understand how moving on in time, the ADR would look like in the legal domain with knowing the emerging trends.
Future and emerging trends of ADR
In recent years, ADR has evolved significantly adapting the advancements, change in societal needs and global business needs. Following are some of the common emerging trends and the future of ADR:
●????? ADR and technological advancement:
There has been a wave of innovation in ADR, largely driven by changing user experiences and technological advancements like:
??????????????????????? i.???????? Online dispute resolution (ODR): ODR is basically an ADR conducted online. This has helped a lot in the time of COVID-19 pandemic and has potential to help throughout in future conducting ADR when the physical presence of parties isn’t possible.
?????????????????????? ii.???????? Artificial intelligence and machine learning (AI and ML): AI and ML has been integrated into the various aspects of ADR to assess the likelihood of settlement success and to suggest optimal negotiation strategies also. Sometimes it can help in analyzing the case data and understanding the predicted outcomes.??
???????????????????? iii.???????? Virtual and augmented reality (V & AR): Many forward-thinking ADR practitioners are also experimenting with the virtual and augmented reality integration into ADR for efficiently handling the disputes involving complex issues like constructions and environmental conflicts.?
???????????????????? iv.???????? Smart contracts and blockchain: The technology like blockchain and smart contracts has been explored for its potential of creating self-executing contracts that can automatically help in enforcing the agreed upon terms and conditions.
●????? ADR and social justice: ADR is greatly viewed as a means of enhancing the access to justice focusing on rehabilitation and reconciliation rather than punishment. This approach can help the marginalized communities also. Organizations like the international institute of conflict prevention and resolution have planned and launched initiatives for promoting the ethnic, racial and gender diversity in ADR.
●????? ADR and globalization: With increased international trade and commerce, there is a growing need of efficiently and smoothly resolving the cross-border business disputes. There have been many efforts underway for harmonizing ADR practices across the jurisdictions like, united nations commission on international trade law has developed model laws and rules for international commercial arbitration and conciliation.
●????? ADR and sustainability: For sustainability, the concept of green ADR has gained momentum reflecting the growing environmental issues awareness. The efforts have been made for reducing the environmental footprint of ADR processes. As climatic change litigation increased, ADR is popularly a potential avenue for resolving climate related disputes especially those involving multiple corporations or countries.
●????? ADR and crisis management: ADR plays an important role in managing the crisis and disaster. ADR principles can help in development of conflict early warning systems aiming to identify the potential conflicts and address them before they escalate. ADR techniques can facilitate the multi-party negotiations bringing the government agencies, community representatives, and NGOs to coordinate response efforts in the dispute resolution process.
Hence, the future and emerging trends of ADR reflected by the technological innovations, scope of application expansion and global integrations. The adaptability of ADR is proving to be valuable in various aspects of the changing needs of present and future.
Who should go for ADR?
●????? Organizations who prioritize preserving business relationships and have a main aim of resolving the dispute opts ADR.
●????? Startups or companies who have time sensitive operations get significant benefits of ADR quicker process.
●????? Resource conscious entities also find the ADR method cost and resource effective.
●????? International business operators find ADR beneficial due to its easier enforcement across borders and flexibility in handling the disputes.
●????? Organizations with regular business transactions and those operating in the competitive markets find choosing the ADR advantageous.
Who should not go for ADR?
●????? Certain situations which can only be better reserved by traditional litigation.
●????? Organizations seeking to establish legal precedents or influence industry standards must go for litigation instead of ADR.
●????? Criminal matters, regulatory enforcement issues and statutory violations must be proceeded through litigation in courts.?
●????? Multi-party involved complex disputes with conflicting interests and unrelated parties get handled better in the courts.
●????? Cases involving class actions, constitutional rights and situations where public vindication is primary are generally not suitable through ADR.
●????? Companies needing to establish public accountability or facing disputes involving significant regulatory oversight.
Practical Steps for getting involved in ADR
To get into the Alternative Dispute Resolution in India, a person needs a strategic approach and understanding of the country’s unique legal landscape. First, it's important to obtain proper certification and training from recognized reputed institutes like Indian Institute of Arbitration and Mediation (IIAM), Supreme Court of India’s Mediation and Conciliation Project Committee (MCPC), etc. Secondly, one must gain practical experience through court annexed mediation centers. Thirdly, one must network within India’s growing ADR community and join professional bodies like Indian Council of Arbitration, etc. Lastly, one must develop expertise in the growing acceptance of virtual ADR/ online ADR and understanding technology driven dispute resolution.
Impact of ADR on career advancement
In India, adding ADR into your career can help in significantly advancing your professional growth and create diverse opportunities. Since many Indian companies and startups now prefer including ADR clauses in their contracts, the demand of ADR professionals is growing constantly. Also, the concept of peaceful and consensus building dispute resolution resonates with the Indian cultural principles making it a fulfilling career choice. Thus, adding ADR skills into your professional portfolio can transform your legal career significantly. ADR expertise provides a pathway to professional distinction, international recognition, and lasting influence in the legal field. Unlike traditional litigation, ADR practice provides professionals with flexible scheduling, better control over caseload, location independence and reduced court appearance stress, thus these factors aid longer and more sustainable careers.
Conclusion
Alternative Dispute Resolution has become a crucial component in the legal system of any nation. This provides a vital speedy solution for the disputes along with greater flexibility, confidentiality, financial benefits and relations management. The ADR involves varied dispute resolution mechanisms including arbitration, mediation, conciliation, fast track arbitration and Lok Adalat. As ADR continues to evolve, it has wide potential of reducing the courts burdens and providing the satisfactory solution for the future world needs along with many other benefits as discussed in the article. It can be useful in a variety of disputes and issues. The future of ADR is promising, offering better resolutions for all segments of the society.
Frequently Asked Questions
Unlike mediation, arbitration is more formal and just like simple court proceedings. Arbitration hears arguments and checks the evidence from both the parties then makes a legally binding decision.
Though ADR can be availed by anyone, it may not be suitable for all situations. ADR is best suitable for the following circumstances:
●????? Dispute does not require public ruling.
●????? Parties have a desire to preserve the relationship.
●????? Parties are willing to negotiate.
Generally, when people choose to go for ADR, they typically use arbitration or mediation. In both of these, negotiation may be an underlying factor for resolving the disputes.?
Not all forms of ADR decisions are legally binding. Only decisions in arbitration are typically legally binding on the parties. In case of mediation, mediation agreements can be made legally binding if the parties choose to formalize them as contracts affixing their signatures.
References