Introduction

 Alternative dispute resolution (ADR) refers to a range of dispute settlement methods

that help the parties in the dispute to come to a settlement without going to court,
or without litigating on the said matter.
 ADR offers to resolve all type of matters including civil, commercial, industrial and
family etc.,
 These methods usually involve a third party, who helps the parties to communicate,
discuss the differences and settling the disputes. In many cases, ADR methods are
used alongside the litigation process as well through court authorisation.
 Alternative Dispute Resolution mechanism provides scientifically developed
techniques to Indian judiciary which helps in reducing the burden on the courts. ADR
provides various modes of settlement including, arbitration, conciliation, mediation,
negotiation and lok Adalat.

Methods of Alternative Dispute Resolution

1) Arbitration
Under the Arbitration and Conciliation Act, 1996. It is a form of dispute resolution
where one or more parties are appointed to settle the dispute. They act as third
parties. This third party should be neutral and this party is referred to as an
’arbitrator’ while the decision of the arbitrator, which is essentially a
determination of merits in the case, is known as ‘arbitration award’.

The arbitration process is informal and this process allows the dispute to be
resolved amicably and efficiently as it takes less time and involves lesser costs for
the parties. Therefore, parties frequently choose to arbitrate when disputes arise,
especially in the business world. Big corporations would rather settle disputes
quickly, rather than fight long cases in the courts.

Types of arbitration are: 1.Ad Hoc Arbitration, 2.Institutional Arbitration, 3.Statutory

Arbitration, 4.Fast track arbitration

2) Mediation
In mediation, a third neutral party aims to assist two or more disputants in
reaching a settlement. This third party is referred to as the mediator. The
mediator needs to properly communicate with both the parties and use proper
negotiation techniques, in order to make one party fully aware of the other
party’s perspective, through empathy and dialogue. This process is controlled by
the parties.

One of the characteristics of this type of dispute resolution is that the mediator is
not allowed to give an outcome of the dispute. The solution is given mutually,
and the agreements are generally non binding.
 Parties are in significant control of the mediation process, and it is strictly
confidential. The parties can even go for litigation if they are not satisfied with
the mediation process.

It must be observed that the main aim of the mediation process is to build
relationships, and not to make a decision. It is more of an amicable resolution
of differences with potential form future business between the parties.

3) Negotiation

Negotiation is also a form of dispute resolution, but there is no third party to

adjudicate the matter, therefore the parties work together to find a mutually
acceptable solution or a compromise. The parties may choose to be represented
by their attorneys during their negotiations. Negotiation is not statutorily
recognized in India. There are no set rules for conducting a negotiation.

Essentials of negotiation-
 It is a process of communication which helps to resolve conflicts.
 It can be entered into voluntarily and its outcome is non-binding.
 The parties are benefitted here as they have control over the outcome and
procedure and the process is carried out keeping their interests in mind.

4) Conciliation

 In conciliation, the third party, who is called the conciliator, talks to the parties
involved separately so that the parties can arrive at a mutually acceptable
solution through facilitating talks between the parties.

 Conciliation is also governed in India under The Arbitration and Conciliation Act,
1996. Under Section 61, conciliation is provided for disputes arising out of legal
relationships, whether they are contractual or not.

5) Lok Adalat
 In a country like India where there are many illiterate people, the concept of Lok
Adalats is a necessity. This was first introduced in 1982 in Gujarat. This concept
mainly focused on reducing the burden of pending cases on the Courts and has
incorporated the concept keeping in mind various factors like social justice.

Advantages of ADRS.

 Less time consuming: people resolve their dispute in short period as compared
to courts
  Cost effective method: it saves lot of money if one undergoes in litigation
process.

 It is free from technicalities of courts , here informal ways are applied in

resolving dispute.

 Efficient way: there are always chances of restoring relationship back as parties
discuss their issues together on the same platform.

 In ADRs, parties can choose their own rules or procedure for dispute settlement.
 The Time & Place: of hearing can be chosen by parties according to the
convenience in ADR
 People are free to express themselves without any fear of court of law. They can
reveal the true facts without disclosing it to any court.

 ADRs procedure protects the parties from the loss atmosphere of business
reputations, Good Will, and ongoing relations in litigations.

 Good relationship: It prevents further conflict and maintains good relationship

between the parties.

 It preserves the best interest of the parties.

Disadvantages of ADRS.

The amicable settlement through ADR is not favoured in the following

circumstances.

 When there is an imbalance of power, / One party may be Owed Money and
simply be looking for final and enforceable decision between the parties in the
dispute, then ADR would not work.

 ADR is not helpful where a dispute is to be decided on the basis of a

precedent.

 When there is a need for court and interim orders, ADR would not be useful.

 ADR is less suitable when there is a need for enforcement.

 When there is a need for live and expert evidence and analysis in a case, then
ADR would not be useful.

 If the case is of a complex nature, then the adjudicating body must look into
minor details and may need expert advice and suggestions. Here, ADR would
probably not work.

Conclusion

The ADR movement needs to be carried forward with greater speed. This will considerably
reduce the load on the courts apart from providing instant justice at the door-step, without
the substantial cost being involved. If they are successfully given effect then it will really
achieve the goal of rendering social justice to the parties to the dispute.
2) Kinds of Arbitration
Introduction
Under the Arbitration and Conciliation Act, 1996. It is a form of dispute resolution
where one or more parties are appointed to settle the dispute. They act as third parties.
This third party should be neutral and this party is referred to as an ’arbitrator’ while
the decision of the arbitrator, which is essentially a determination of merits in the case,
is known as ‘arbitration award’.

The arbitration process is informal and this process allows the dispute to be
resolved amicably and efficiently as it takes less time and involves lesser costs for the
parties. Therefore, parties frequently choose to arbitrate when disputes arise, especially
in the business world. Big corporations would rather settle disputes quickly, rather than
fight long cases in the courts.

Definition
According to Sec 2(1)(a) of the Arbitration and Conciliation Act, 1996 states that
arbitration means any Arbitration whether administered by a permanent arbitral
institution.
In Collins V. Collins case, Arbitration defined, “ an Arbitration is a reference to the
decision of

Kinds of arbitration
Unlike civil or criminal cases, a dispute is sent to the arbitration tribunal. The tribunal
resolves the dispute and the final decision cannot be appealed, making it binding on
both parties. No judicial proceedings are involved to ensure the swift resolution of the
disputes. The following are the different types of arbitration as per the jurisdiction of
the case:

1) Domestic, International, and Foreign Arbitration

a) Domestic arbitration
In domestic arbitration, both the parties must be Indians and the proceedings take
place in India itself. In the Arbitration and Conciliation Act, 1996 there is no specific
definition given to domestic arbitration. A mere reading of Section 2(2) can lead us to
infer that domestic arbitration is when the parties had agreed to resolve any disputes
that arise in India. The proceedings must be held in the domestic territory and must be
in lieu of the procedural and substantive law in India.

b) International arbitration
As the name suggests, international arbitration occurs outside the domestic territory
because of either a clause inserted in the agreement between the parties or the cause
of action that arises from a foreign element relating to the dispute or to the parties.
According to the circumstances that led to a case being filed foreign or Indian law would
be applicable.

c) Foreign Arbitration

Foreign Arbitration is an Arbitration conducted in place outside India, Where the

resulting award is sought to be enforced as Foreign Award”

2) Formal and Informal Arbitration

If the provisions of the Arbitration Act have been availed it’s a formal arbitration and if

not availed its informal arbitration, arbitration without an agreement in writing is by no

means bad,

3) Ad-hoc Arbitration
Ad-hoc arbitration refers to when parties with mutual consent opt for arbitration to
resolve the dispute. It is the most common form of arbitration used in India owing to
reasonable costs and adequate infrastructure. Arbitration is conducted without having
any institutional proceedings, that is, it does not comply with the rules of an arbitral
institution. The parties have the option to choose the rules and the procedure to be
followed. This form of arbitration can be used for international commercial transactions
and domestic disputes.