Need for an Alternative Dispute Resolution in India

"I'm glad we settled ..."
“I’m glad we settled …”

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Man has been fighting  since evolution of time.  There will exist an utopian world without the existence of disputes and fights . it is in the nature of man to be greedy which leads to fights and disputes . Law is the solver of basic as well as complex issues. The Indian law being precisely clear and well drafted has provided us with easy solutions for issues that save people from loss of energy , money and time . The population of India being vast , the judiciary tends to fall back on providing speedy justice . One more factor for the slow justice provided is the idea of “justice hurried is justice buried”. With growing times of development and rapid rush of cases in courts , the cases need to be filtered through a strain. Today when about 3.32 crore cases are pending in our courts, that means at least five crore people are directly involved in litigation. Administration of Justice involves protection of the innocent, punishment of the guilty and the satisfactory resolution of disputes. In order to overcome the much criticised delay in justice delivery, the adoption of Alternative Dispute Resolution (ADR) mechanisms. [1]

What is Alternative Dispute Resolution (ADR) ?

Alternative Dispute Resolution is a mechanism which acts as a substitute for litigation .  It arose from the idea of the overfull hands of the courts to deliver justice to all. ADR provides for a winning at both ends situation . Parties with issues that can be cleared out, without suffering through the trials of court , are at an advantage by the mechanism of ADR.  It is an attempt to bring about resolution of disputes between parties, minimize costs and reduce the burden of the courts. It is provided for with the sole objective of blending judicial and non-judicial dispute resolution mechanism and bringing alternate dispute mechanism to the centre of the Indian Judicial System[2]

History of ADR in India

ADR system was adopted from the old age old dispute solving method of the Panchayat system. A man of high cadre, status and respect was accorded the position of being the village head , known as the “ sarpanch” . He was supported by few other respected and knowledgeable men of the village.  Parties to the dispute varied from neighbours fighting for property of each other, family quarrels and as well caste issues. The main aim of the Panchayat system was to maintain a friendly and smooth relation between the villagers and also uphold their welfare .The disputes rarely went to the courts. This system then faded with time with the biased and unauthoritative rule of the Panchayat system.

ADR system in India

Conciliation as a method of ADR was first introduced in the Labour laws of India .

In The Industrial Dispute Act  , conciliation  has been statutorily recognized as an effective method of dispute resolution in relation to disputes between workers and the management. The provision in the I.D. Act makes it attractive for disputing parties to settle disputes by negotiation and failing that through conciliation by an officer of the Government, before resorting to litigation. Several provisions in the Act get the scene for conciliation to be more successful. [3]

Other legislations that have ADR has a part of their dispute settlement method are  –

The Family court Act and the Legal Services Authority Act 1985.

Laws representing ADR system in India .

Section 89 of the Code of Civil procedure was introduced with a purpose of amicable, peaceful and mutual settlement between parties without intervention of the court.

 Section 89 of the Code of Civil Procedure States 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 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 Adalat; or

(d) mediation.

(2) Where a dispute had been referred-

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act.

(b) to Lok Adalat, the court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;

(c) for judicial settlement, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

(d) for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]

India till now has mostly emphasised on the method of dispute resolution by arbitration. As said by Apex Court in the decision reported in Food Corporation of India Vs. Jogindarlal Mohindarpal 1989(2) SCC 347 :

“Arbitration as a mode for settlement of disputes between the parties has a tradition in India. It has a social purpose to fulfill today. It has a great urgency today when there has been an explosion of litigation in the Courts of law established by the sovereign power. However in proceedings of arbitration, there must be adherence to justice, equality of law and fair play in action. The proceedings of arbitration must adhere to the principles of natural justice and must be in consonance with such practice and procedure, which will lead to a proper resolution of the dispute and create confidence of the people, for whose benefit these procedures are resorted to. It is therefore, the function of the Court of law to oversee that the arbitrator acts within the norms of Justice. Once they do so and the award is clear, just and fair, the Court should as far as possible give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. It is in this perspective that one should view the scope and limit of corrections by the Court of an award made by the arbitrator. The law of arbitration must be made simple, less technical and more responsible to the actual realities of the situation but must be responsible to the canon of justice and fair play. The arbitrator should be made to adhere to such process and norms which will create confidence not only doing justice between parties but by creating a sense that Its primary purpose was to encourage arbitration as a cost-effective and quick mechanism for the settlement of commercial disputes. It covers both domestic arbitration and international commercial arbitration[4] . According to this Act justice appears to have been done.

At the time of this case law , the Act in existence for arbitration was Indian Arbitration Act, 1940.The Government then gave birth to a new legislation called “The Arbitration and Conciliation Act 1996”.

The Arbitration and Conciliation Act 1996

Any commercial matter including an action in tort if it arises out of or relates to a contract can be referred to arbitration. The most effective feature of this Act is that the role of the courts has been reduced . In relation to arbitration proceedings, parties can approach the Court only for two purposes: (a) for any interim measure of protection or injunction or for any appointment of receiver etc or (b) for the appointment of an arbitrator in the event a party fails to appoint an arbitrator or if two appointed arbitrators fail to agree upon the third arbitrator. [5] The arbitrator can also be challenged if circumstances exists that give rise to justifiable grounds as to his independence or impartiality; and if he does not possess the qualifications agreed to by the parties [6].

 Advantage of Alternate Dispute Resolution:

 1) It is less expensive

. 2) It is less time consuming.

 3) It is free from technicalities as in the case of conducting cases in law Courts

4) The parties are free to discuss their difference of opinion without any fear of disclosure of this fact before any law Courts.

5) The last but not the least is the fact that parties are having the feeling that there is no losing or winning feeling among the parties by at the same time they are having the feeling that their grievance is redressed and the relationship between the parties is restored.[7]


Abraham Lincon has once said: “Discourage litigation. Persuade your neighbours to compromise whenever you can point out to them how the nominal winner is often a real loser, in fees, expenses, and waste of time”.

India is moving towards the ray of light of judicial equality. The ADR system acts as an supporting agent to climb up the ladder of justice for ALL . India is in a desperate need for equality for all .  ADR is a solution for ALL.


[2]  Gupta, VInay. Mulla: The Code of Civil Procedure. 14th ed. New Delhi: LexisNexis, 2005. 420.


[4] Krishna Sarma, Momota Oinam & Angshuman Kaushik, “Development and Practice of Arbitration in India –Has it Evolved as an Effective Legal Institution”,,




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