Beyond Litigation: Understanding the Concept of Alternative Dispute Resolution (ADR)

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Introduction

When it comes to legal conflicts, the traditional litigation route frequently evokes visions of drawn-out legal fights, strained relationships, and astronomical expenditures. But there is a world outside of the courts where disputes can be settled more effectively and amicably, known as ADR, or Alternative Dispute Resolution. In this article, we will explore the concept of resolving disputes using an Alternative Dispute Resolution (ADR) mechanism that is beyond litigation including types of ADR and its advantages.

What is Alternative Dispute Resolution?

In Layman’s language, Alternative Dispute Resolution (ADR) is a mechanism to resolve issues outside the conventional courtroom setting or without trial. It is a non-adversarial mechanism which means parties co-operatively work together to reach a mutually beneficial resolution. According to the Merriam-Webster Dictionary, Alternative Dispute Resolution is “a forum or means for resolving disputes (as arbitration or private judging) that exists outside the state or federal judicial system.” It is capable of providing a substitute for the traditional methods of resolving disputes such as trial, jury, or lawsuit. It means with the help of ADR one can resolve conflicts without litigating the matter and seek timely justice. ADR uses a third party who helps in settling disputes either civil, industrial, commercial, or family.  

Importance

ADR, by its diverse techniques, plays a significant role in dealing with the situation of pendency and delay of cases in Indian courts. To reduce the burden on the courts, the ADR mechanism provided certain techniques to the Indian judiciary. Unlike litigation, which involves the adjudication of disputes by a judge or jury, ADR methods emphasize collaboration, negotiation, and compromise to reach mutually acceptable resolutions. 

What are the types of ADR?

ADR is categorized into five types Arbitration, Mediation, Conciliation, Negotiation, and Lok Adalat, which are discussed as follows:

Arbitration

It is a strategy that involves the submission of a dispute to one or more impartial arbitrators, who then render a decision, known as an award. Arbitration is a process for resolving disputes where a neutral third party reviews the relevant facts and makes a ruling that both parties can legally execute. It can be binding, meaning that the parties agree to abide by the arbitrator's decision, or non-binding, where the award serves as a recommendation that the parties can choose to accept or reject. In India, the provision of the Arbitration and Conciliation Act of 1996 will apply if the matter is referred to Arbitration. Arbitration is less formal than a trial and there is no right to appeal the decision of Arbitrator. Some of the types of arbitration include Voluntary Arbitration, Compulsory Arbitration, Ad-hoc Arbitration, Institutional Arbitration, Statutory Arbitration, and Domestic or International Arbitration. 

Mediation

A neutral third party, called Mediator, facilitates communication between the two parties in dispute and helps them to reach a mutually acceptable resolution of the conflict. Unlike a judge, the mediator does not impose a decision but helps the parties in conflict to communicate and craft their own agreement. The mediator helps the parties explore their interests, identify common ground, and generate potential solutions. If the parties are not satisfied with the mediation process then they can go for litigation to reach an absolute solution for the conflict. 

Conciliation

The conciliator, an impartial third party, meets with parties in dispute separately to settle their conflict and reach a mutually satisfactory settlement by facilitating talks between them. It is a less formal form of arbitration where parties are free to accept or reject the recommendations or suggestions of the conciliator. This type of ADR is also governed under the Arbitration and Conciliation Act of 1996. 

Negotiation

Negotiation is a direct communication process between the parties in conflict, wherein they attempt to reach a mutually satisfactory resolution without the involvement of a third party. Negotiation can take place informally or with the assistance of legal representatives. In this type of Alternative Dispute Resolution, all parties are in a win-win situation because they are in charge of the process, and its outcome as everything is done keeping the party’s best interests in mind. 

Lok Adalat

It is a unique, significant, and most steaming form of ADR in India. Lok Adalat, which translates to "People's Court" in Hindi, is a forum where disputes pending in courts or at the pre-litigation stage are settled amicably, outside the formal judicial system. It aims to reduce the burden of pending cases on the Courts and provide swift as well as cost-effective justice to the litigants, while also promoting reconciliation and compromise. Another important motive of Lok Adalat is to provide access to justice to every individual either rich or poor, efficiently serving the concept of ‘Justice for All’. The concept of Lok Adalat is rooted in the principles of social justice, equity, and inclusivity. It is governed under the Legal Services Authorities Act, 1987, empowering both the NALSA (National Legal Services Authority) at the national level and SLSAs (State Legal Services Authorities) at the state level to organize Lok Adalats for resolving conflicts. 

Which provisions are related to ADR?

Section 89 of the Code of Civil Procedure, 1908: It deals with the ‘Settlement of disputes outside the Court’. Section 89(1) of the CPC states that “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 settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for:

1. arbitration;
2. conciliation;
3. judicial settlement including settlement through Lok Adalat: or
4. mediation.”

The Legal Services Authorities Act, 1987, and the Arbitration and Conciliation Act, 1996, deal with the ADR.

What are the advantages of ADR?

Some of the advantages of ADR are mentioned as follows:

• The concept of ADR offers a quicker resolution to conflicts, allowing parties to avoid lengthy court processes and delays.
• It is cost-effective because fewer financial resources are required as compared to litigation. This is because it involves less formal procedures, shorter timeframes, and reduced legal fees (as in most of the cases no legal representative is required).
• It helps in maintaining confidentiality as the dispute resolution usually takes place in private allowing them to protect sensitive information and maintain privacy. 
• The parties are free from the court system’s technicalities.
• The process is flexible and customizable as per the needs and interests of the parties enabling creative solutions that may not be possible in the case of traditional methods of dispute resolution such as litigation.
• ADR methods also help preserve relationships by fostering open communication and collaboration, with no feeling of enmity between the parties.

Related Case laws

• Food Corporation of India vs. Joginderpal Mohinderpal (March 03, 1989)
• Afcons Infrastructure Ltd.& Anr. vs. Cherian Varkey Construction Co.(P) Ltd.& Ors. (July 26, 2010)

Conclusion

Alternative Dispute Resolution (ADR) presents a compelling alternative to traditional litigation, offering a range of methods designed to promote efficient, cost-effective, and collaborative resolution of conflicts. By embracing ADR, individuals and organizations can navigate disputes with greater agility, preserve relationships, and achieve outcomes that satisfy the interests of all parties involved. It has been successful in clearing the backlog of cases in the Courts but still, there seems to be a lack of awareness regarding the availability of types of ADR for the general public. Both NALSA and SLSAs should initiate to spread more information regarding the mechanism so that every individual can seek justice easily and quickly.