Legum Baccalaureus (LLB) -PAPER-IV: ALTERNATE DISPUTE RESOLUTION 5th Semester Syllabus Short Notes
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PAPER-IV
SYLLABUS
SHORT NOTES
UNIT-I:
ALTERNATE DISPUTE RESOLUTION
Alternate
Dispute Resolution (ADR) refers to a range of procedures for settling disputes
outside the traditional court system. It offers parties an alternative to
litigation, aiming to settle conflicts in a way that is often faster, more
flexible, and less costly than going to court. ADR methods are popular in both
civil and commercial disputes and are seen as complementary to the judicial
system.
Key Points
of ADR
Purpose:
ADR is designed to reduce the burden on the courts, save time and expenses for
parties, and provide a more amicable, less adversarial way of handling
disputes.
Types of
ADR:
- Negotiation:
Direct discussion between parties to reach a mutually acceptable resolution.
- Mediation:
A mediator facilitates discussion between parties to help them arrive at a
solution, but does not impose a decision.
- Conciliation:
Similar to mediation, but the conciliator may play a more active role in
suggesting solutions.
- Arbitration:
A neutral arbitrator hears both sides and makes a binding decision, somewhat
like a private judge.
Benefits:
- Time
and Cost Efficiency: ADR can resolve disputes faster and at a lower cost
than litigation.
- Confidentiality:
ADR proceedings are private, protecting sensitive information from public
exposure.
- Control
and Flexibility: Parties often have more control over the process and
outcome, tailoring solutions to their needs.
Legal
Support in India:
- The
Arbitration and Conciliation Act, 1996: This act
provides the legal foundation for arbitration and conciliation in India.
- Civil
Procedure Code (Section 89): Courts can refer cases to ADR
to encourage resolution outside of traditional litigation.
ADR thus
serves as a valuable alternative for those seeking quicker, less formal, and
often more cooperative ways to resolve disputes, complementing the judicial
system by handling a wide range of cases outside the courts.
CHARACTERISTICS
The
characteristics of Alternate Dispute Resolution (ADR) reflect its core values
and purpose as an alternative to traditional litigation. Here are some key
characteristics of ADR:
1. Voluntary
Participation
ADR generally involves
voluntary participation from the parties. They agree to resolve their dispute
outside the court, which often leads to a more cooperative and less adversarial
process.
2.
Confidentiality
ADR proceedings, particularly
in mediation and conciliation, are private and confidential. This allows
parties to freely discuss issues without fear of public exposure, making ADR
ideal for sensitive matters like family or business disputes.
3.
Flexibility in Process and Procedure
Unlike courts, ADR processes
are flexible and can be tailored to suit the specific needs of the parties.
There are fewer procedural formalities, which allows ADR methods like mediation
and conciliation to adapt to the nature and context of the dispute.
4.
Neutral Third-Party Assistance
ADR often involves a neutral
third party, such as a mediator, conciliator, or arbitrator, who facilitates
the resolution process. This impartial presence helps maintain fairness and
balance, especially when there is a power imbalance between parties.
5.
Control over Outcome
In ADR processes like
negotiation, mediation, and conciliation, the parties retain control over the
final outcome. Unlike court judgments, which are imposed by a judge, ADR
outcomes are generally agreed upon by the parties, making them more acceptable
and often easier to implement.
6.
Time-Efficient
ADR typically resolves
disputes faster than traditional court proceedings, as there are fewer
formalities and no lengthy court schedules to follow. This characteristic makes
ADR particularly appealing for commercial and civil disputes that need quick
resolution.
7.
Cost-Effective
Due to its simplified and
often informal procedures, ADR can be more cost-effective than litigation. This
is especially important in high-stakes or complex disputes, where lengthy court
battles can become costly.
8.
Preservation of Relationships
ADR, particularly mediation
and conciliation, fosters a collaborative environment, which can help preserve
or even improve relationships between parties. This characteristic is
particularly valuable in family, employment, and business disputes where ongoing
relationships are essential.
9.
Non-Adversarial Approach
Unlike litigation, which can
be confrontational, ADR focuses on cooperation and problem-solving. This helps
avoid the adversarial tone of court proceedings, reducing the stress and
animosity often associated with litigation.
10.
Legally Recognized Framework
In India, ADR has a legal foundation through laws like
the Arbitration and Conciliation Act, 1996, and Section 89 of the Civil
Procedure Code, 1908, which direct courts to encourage ADR where possible.
These
characteristics make ADR an appealing choice for many individuals and
businesses seeking an alternative to formal litigation, providing a fair,
private, and adaptable way to resolve disputes efficiently.
ADVANTAGES AND DISADVANTAGES
Advantages
of Alternate Dispute Resolution (ADR)
1. Cost-Effective
- ADR methods, especially mediation and negotiation, generally cost less than
traditional court litigation. There are fewer legal fees, lower administrative
costs, and a shorter time frame, making it an affordable option.
2. Time-Saving
- ADR is typically faster than court proceedings, which can take months or
years to resolve. The flexibility of ADR processes allows for quicker
scheduling and resolution, making it ideal for those seeking prompt outcomes.
3. Confidentiality
- ADR proceedings, especially in mediation and conciliation, are private and
confidential, keeping sensitive information out of the public domain. This is
beneficial in disputes involving trade secrets, personal matters, or
reputational concerns.
4. Flexibility
and Control - ADR offers more flexibility in procedures, allowing
parties to tailor the process to their specific needs. In methods like
mediation and negotiation, parties retain control over the outcome, as they
work together to reach a mutually agreeable solution.
5. Preservation
of Relationships - ADR focuses on collaboration and problem-solving,
often helping to preserve or even strengthen relationships between the parties.
This is particularly valuable in family, employment, and business disputes,
where ongoing relationships are crucial.
6. Fewer
Formalities - ADR does not require strict adherence to legal
procedures and evidence rules, which simplifies the process. This informality
can make ADR less intimidating and easier to navigate for parties.
7. Finality
of Decisions - In arbitration, decisions are typically binding and
have limited grounds for appeal, providing a sense of finality that can be
appealing to parties who wish to avoid protracted legal battles.
8. Expert
Decision-Makers - In arbitration, parties can select an arbitrator
with expertise in the specific subject matter of their dispute. This can lead
to more informed and relevant decisions, particularly in technical or complex
cases.
Disadvantages
of Alternate Dispute Resolution (ADR)
1. Limited
Scope for Appeal - In arbitration, the decision is usually binding
with limited opportunities for appeal. This can be a disadvantage if one party
feels the decision was unfair or incorrect, as there is little recourse.
2. Potential
Imbalance of Power - In negotiation and mediation, there is a risk of
power imbalances, where one party may dominate the proceedings, especially if
they have more resources or legal support. This can lead to unfair outcomes in
some cases.
3. No
Precedent Value - ADR decisions, particularly in mediation and
conciliation, do not create legal precedents that can guide future cases. This
lack of precedent may be a drawback for parties or industries looking for
consistency in dispute resolution.
4. Possible
Lack of Formal Discovery - ADR often lacks the formal
discovery process available in court litigation, which can limit the parties'
ability to gather evidence. This can be challenging in complex cases where
detailed evidence and documentation are necessary.
5. Voluntary
Nature and Non-Binding Resolutions - In some
ADR forms, such as negotiation and mediation, the outcome is not binding unless
both parties agree to it. If parties fail to reach an agreement, they may still
need to resort to litigation, resulting in additional time and costs.
6. Risk
of Inadequate Legal Protections - ADR may
not provide the same level of legal protections as courts, which can be a
disadvantage for parties unfamiliar with the law or without adequate legal
support.
7. Inconsistencies
in Arbitrator Decisions - Unlike judges, arbitrators are not bound by
precedent, so similar cases may lead to different outcomes. This inconsistency
can be a disadvantage in industries seeking standardized solutions.
8. Potentially
Costly Arbitration - Although arbitration is usually faster than
litigation, it can sometimes become costly, especially in complex cases with
multiple arbitrators or extensive procedures. In such cases, arbitration may
lose its cost advantage over traditional litigation.
UNILATERAL
Unilateral
intervention in dispute resolution refers to actions taken by a single party
independently, without involving the other party or any third party in the
process. In a unilateral approach, one party seeks to address or resolve the
dispute on its own, often through measures that don’t require the other party’s
consent or collaboration.
Key Points
of Unilateral Intervention:
Independent
Action:
Only one
party is involved in taking steps to resolve or address the conflict.
Examples:
-
Sending a demand or warning letter.
-
Filing a complaint or report with an authority.
-
Taking preventive measures to avoid further
escalation.
Purpose and
Limitations:
-
Unilateral actions may serve as a preliminary step to
indicate a party’s intentions or protect their interests.
-
However, these actions are typically limited in scope
because they don’t involve cooperation from the other party and rarely result
in a binding resolution.
Unilateral
approaches may lay the groundwork for later negotiations or signal the need for
further, more collaborative forms of resolution.
BILATERAL
Bilateral
intervention in dispute resolution involves both parties actively participating
in the process to resolve the conflict through direct communication and
negotiation. This approach is collaborative, with both parties working together
to reach a mutually acceptable solution without external intervention.
Key Points
of Bilateral Intervention:
Direct
Interaction:
Both
parties communicate directly to discuss issues, exchange perspectives, and
negotiate possible solutions.
Examples:
-
Negotiation: Both parties discuss their interests and
attempt to find common ground.
-
Settlement Agreements: Parties agree on terms to
settle the dispute themselves without involving third parties.
Benefits:
Bilateral
intervention promotes mutual understanding and cooperation, often preserving or
improving relationships.
It allows
both parties to control the outcome, ensuring that any resolution is acceptable
to both sides.
Limitations:
-
This approach may not work if there is a significant
power imbalance, or if one party is unwilling to compromise.
-
Without a neutral third party, strong emotions or past
conflicts may hinder productive discussion.
Bilateral
methods are effective in situations where both parties are willing and able to
engage openly, aiming for a solution that benefits both sides.
TRIADIC (THIRD PARTY) INTERVENTION
Triadic
(Third-Party) Intervention in dispute resolution involves the participation of
a neutral third party who assists the conflicting parties in resolving their
dispute. This third party can play a variety of roles, from facilitating
communication to making binding decisions, depending on the method used (e.g.,
mediation, conciliation, or arbitration).
Key Points
of Triadic (Third-Party) Intervention:
Neutral
Third Party:
The third party
is neutral, impartial, and does not take sides in the dispute. Their role is to
facilitate resolution by assisting both parties in reaching a mutually
acceptable solution or by making decisions for them.
Types of
Triadic Intervention:
-
Mediation: The
mediator helps the parties communicate and negotiate, but does not impose a
solution. The mediator’s role is to facilitate understanding and guide the
parties towards their own resolution.
-
Conciliation: The
conciliator is more active than the mediator, often suggesting terms of
settlement or offering solutions. Like mediation, the process remains
non-binding unless an agreement is reached.
-
Arbitration: In
arbitration, the arbitrator acts as a judge, hearing both parties' arguments
and evidence and then making a binding decision (an award). Arbitration is
often used for more formal and complex disputes.
Benefits:
-
Impartiality: The third
party’s neutrality ensures fairness, especially in cases where there is an
imbalance of power between the parties.
-
Expertise: The third
party may have specialized knowledge, making them better equipped to understand
complex or technical issues in the dispute.
-
Binding or Non-Binding: Depending
on the process (arbitration or mediation/conciliation), the resolution may be
binding (in arbitration) or non-binding (in mediation/conciliation), offering
flexibility in how the dispute is handled.
Limitations:
-
Cost: While cheaper than
litigation, some forms of third-party intervention, especially arbitration, can
still be costly.
-
Limited Control: In
arbitration, the parties have less control over the outcome, as the arbitrator
makes the final decision.
-
Compliance: Even in
non-binding processes like mediation, there is no guarantee that the parties
will follow through with the resolution unless they voluntarily agree to do so.
Summary
Triadic
(third-party) intervention is often the most structured form of ADR, where a
neutral third party helps guide or decide the resolution. It provides an
effective way to handle disputes where direct negotiation or bilateral
solutions have failed or are unlikely to work, especially in more complex or
high-stakes situations.
TECHNIQUES AND PROCESSES
In
Alternate Dispute Resolution (ADR), several techniques and processes are used
to help parties resolve their disputes outside traditional court litigation.
These techniques and processes can vary depending on the nature of the dispute,
the parties involved, and the desired outcome. Below are the key techniques and
processes used in ADR:
1. Negotiation:
Direct, informal discussion between parties to reach a solution.
2. Mediation:
Neutral third-party helps the parties communicate and find a solution
(facilitative or evaluative).
3. Conciliation:
Neutral third-party actively suggests solutions and terms for settlement.
4. Arbitration:
Formal dispute resolution where an arbitrator makes a binding decision after
hearing both sides.
5. Online
Dispute Resolution (ODR): Use of digital platforms to
conduct ADR processes remotely.
6. Settlement
Conferences: Structured meetings with a facilitator to encourage
settlement before trial.
These
techniques and processes provide flexibility and different levels of formality,
allowing parties to choose the method best suited to their dispute, whether it
involves negotiation, collaboration, or formal decision-making.
NEGOTIATION
Negotiation
is one of the most fundamental and widely used methods in Alternative Dispute
Resolution (ADR). It involves a direct discussion between the parties involved
in a dispute, where they seek to resolve their differences and reach a mutually
agreeable solution without the involvement of any third party.
Key
Characteristics of Negotiation:
1. Direct
Communication: Both parties communicate directly with each other to
resolve the issue. There is no external party guiding the process unless
needed.
2. Voluntary:
The process is entirely voluntary, meaning that both parties agree to
participate and can withdraw at any time.
3. Informal:
Unlike litigation or arbitration, negotiation is informal. There are no strict
procedures or rules that must be followed.
4. Flexible:
The parties have complete control over the terms of the resolution. They can
decide on the settlement terms that best suit their interests.
5. Confidential:
Negotiations are often confidential, and any discussions or offers made during
the process are generally not admissible in court if the negotiation fails.
The Process
of Negotiation:
1. Preparation:
Each party evaluates the dispute, identifies their goals, and considers
possible outcomes. They also prepare by understanding the interests and needs
of the other party.
2. Opening:
The parties meet and present their positions. Each side explains its stance and
why it believes the dispute should be resolved in its favor.
3. Bargaining:
Both parties discuss their interests, make offers, and counter-offers. This
phase involves exploring possible solutions, making concessions, and trying to
reach a mutually acceptable agreement.
4. Resolution:
If the parties find common ground, they can agree on a solution and formalize
it in writing (e.g., a settlement agreement or contract).
5. Closure:
Once an agreement is reached, the negotiation is concluded, and both parties
sign the agreement. If no agreement is reached, the parties may decide to
explore other ADR methods like mediation or arbitration.
Advantages
of Negotiation:
-
Cost-Effective:
Negotiation is generally less expensive than formal litigation or arbitration
because it does not require legal fees, court costs, or professional
third-party services.
-
Control: The
parties maintain full control over the process and the outcome, allowing them
to find creative solutions tailored to their needs.
-
Preserves Relationships:
Because the process is based on cooperation and mutual understanding, it is
often used to preserve business relationships, personal ties, or professional
associations.
-
Speed: Negotiation can often lead
to a quicker resolution than litigation or arbitration since it avoids the need
for lengthy court procedures.
-
Confidentiality: As a
private process, the parties can keep their discussions and any agreements
confidential, which can be important for protecting business interests or
personal privacy.
Disadvantages
of Negotiation:
-
Power Imbalance: If one
party has significantly more bargaining power than the other, the weaker party
may be pressured into an unfavorable agreement.
-
No Binding Outcome: In
voluntary negotiations, there is no binding result unless the parties reach a
formal agreement. If they do not agree, the dispute may remain unresolved, or
the parties may resort to more formal ADR or litigation.
-
Requires Willingness: Both
parties must be willing to negotiate in good faith. If one party is unwilling
to cooperate, negotiation is unlikely to succeed.
-
Lack of Expertise: In
complex or technical disputes, the parties may lack the expertise to find a
satisfactory solution on their own, making negotiation less effective.
Examples of
Negotiation:
Business Contracts:
Companies often negotiate the terms of contracts to avoid disputes later on.
Employment
Disputes: Employees and employers negotiate terms of
severance, salary, and benefits to avoid litigation.
Divorce
Settlements: Spouses may negotiate issues like property division,
child custody, and spousal support without going to court.
Conclusion:
Negotiation
is a versatile and effective ADR technique that allows parties to resolve their
disputes amicably and on their own terms. It is widely used because of its
flexibility, cost-effectiveness, and ability to preserve relationships.
However, the success of negotiation depends on the willingness and ability of
the parties to communicate and reach a mutually beneficial agreement.
CONCILIATION
Conciliation
is a form of alternative dispute resolution where a neutral third party, known
as the conciliator, helps the parties involved in a dispute to reach a mutually
acceptable settlement. While similar to mediation, conciliation involves a more
active role for the conciliator, who may suggest solutions or propose terms of
settlement to the parties.
Key
Characteristics of Conciliation:
1. Active
Role of Conciliator: The conciliator not only facilitates communication but may
also suggest possible solutions or proposals for settlement, guiding the
parties toward an agreement.
2. Voluntary:
Like other forms of ADR, conciliation is voluntary, meaning the parties are not
compelled to participate. However, once an agreement is reached, it is usually
binding.
3. Non-Binding:
In most cases, the recommendations or suggestions made by the conciliator are
non-binding, and the parties are free to accept or reject them. However, if
both parties agree, the conciliation outcome can become binding.
4. Confidential:
The process is confidential, and the details discussed during conciliation
cannot be disclosed in any subsequent litigation or arbitration, if the dispute
is not resolved.
5. Flexible
and Informal: Conciliation is less formal than litigation or arbitration, and
there are no rigid procedural rules. This allows the parties and the
conciliator to tailor the process to their needs.
The Process
of Conciliation:
1. Initiation:
Either party or both parties agree to engage in conciliation. A conciliator is
appointed, often by a mutual agreement or through an ADR body or court order.
2. Introduction:
The conciliator meets with both parties to explain the process and set
expectations. The conciliator ensures both parties understand that the goal is
to reach a settlement that satisfies both sides.
3. Information
Gathering: The conciliator collects information about the
dispute, understanding the positions and interests of each party. This step may
involve individual meetings (private caucuses) with each party to understand
their concerns better.
4. Facilitation
and Suggestion of Solutions: The conciliator facilitates
discussions between the parties, helping them identify common ground. They may
propose settlement options and encourage the parties to consider solutions that
satisfy both sides.
5. Negotiation:
The parties negotiate, possibly with the assistance of the conciliator’s
suggestions, in an effort to resolve the dispute. The conciliator may offer
ideas for resolving specific issues.
6. Agreement:
If the parties reach an agreement, the conciliator helps formalize the
settlement terms. This agreement can be written and signed by both parties, and
it may become binding.
7. Conclusion:
If the parties cannot reach an agreement, the process ends, and they may choose
to pursue other forms of dispute resolution like arbitration or litigation.
Advantages
of Conciliation:
1. Preserves
Relationships: Since conciliation is less adversarial than
litigation, it helps maintain or restore relationships between the parties,
making it ideal for disputes in business, family, or community settings.
2. Flexibility:
The process is adaptable to the needs of the parties. The conciliator can
suggest various ways to settle the issue, and the parties can choose what works
best for them.
3. Cost-Effective:
Conciliation is generally cheaper than going to court or arbitration, as it
avoids lengthy legal processes and is less formal.
4. Confidential:
The process remains private, and no details of the conciliation process can be
disclosed in court. This allows the parties to negotiate without fear that
their statements will be used against them later.
5. Speed:
Conciliation can be much quicker than litigation, which can take months or
years. The conciliator helps to streamline the process and resolve issues
faster.
6. Control
Over Outcome: The parties retain control over the outcome. If they
agree to the conciliator’s suggestions, they can form their own settlement
terms.
Disadvantages
of Conciliation:
1. Limited
Enforcement: While the process can lead to a binding settlement,
the conciliator’s suggestions are not automatically enforceable unless both
parties agree to make them so.
2. Dependence
on Willingness: The success of conciliation depends on the
willingness of the parties to engage in the process and cooperate with the
conciliator. If one party is unwilling, the process may fail.
3. No
Final Decision: In cases where the parties cannot agree, there is no
definitive decision from the conciliator. The process may end with no
resolution, leaving the parties to seek other legal avenues.
4. Possible
Power Imbalance: If one party is more dominant than the other, they
may pressure the weaker party into agreeing to an unfair settlement, especially
since the conciliator’s role is to assist rather than make binding decisions.
Examples of
Conciliation:
Labor
Disputes: A conciliator may help resolve disputes between
employers and employees over working conditions, wages, or strikes.
Commercial
Disputes: Companies may use conciliation to settle contract
disputes or disagreements over business partnerships.
Family
Disputes: In divorce or inheritance cases, conciliation may
help the parties agree on matters like child custody, property division, or
alimony.
Legal
Framework for Conciliation:
In India,
conciliation is governed by the Arbitration and Conciliation Act, 1996,
specifically under Section 61-81, which covers the process of conciliation in
resolving disputes. The Act provides a legal framework for conciliators and
outlines how conciliation agreements can be enforced if the parties reach a
settlement.
Conclusion:
Conciliation
is a valuable ADR method for resolving disputes through a collaborative and
flexible process. By involving a neutral third party who actively suggests
solutions, it can help parties find common ground while preserving
relationships. However, its effectiveness relies on the parties’ willingness to
negotiate and the conciliator’s ability to guide the process toward a
resolution.
MEDIATION
Mediation
is an Alternative Dispute Resolution (ADR) method where a neutral third party,
called the mediator, assists the disputing parties in reaching a mutually
agreeable solution. Unlike a judge or arbitrator, the mediator does not impose
a decision but rather facilitates communication and negotiation, helping the
parties find common ground.
KEY
CHARACTERISTICS OF MEDIATION
Neutral
Mediator:
The
mediator is an impartial facilitator who ensures balanced communication and
helps parties express their views and understand each other.
Voluntary
Process:
Participation
in mediation is voluntary, and the parties retain control over whether to agree
to a resolution or end the process without reaching an agreement.
Confidentiality:
Mediation
discussions and documents are generally confidential. Any information shared in
mediation cannot be used in court unless agreed upon by the parties.
Non-Binding
Until Agreement:
Any
agreements reached in mediation are non-binding until both parties formally
accept them. This allows parties to explore solutions without feeling locked
into commitments.
Flexible
and Informal:
Mediation
does not follow strict rules or formalities, allowing the mediator and parties
to tailor the process to suit the needs of the dispute.
THE
MEDIATION PROCESS
Preparation:
The
mediator meets with each party separately to understand their perspectives,
issues, and goals. This allows the mediator to assess any imbalances in power
or understanding that could affect the process.
Joint
Session:
The
mediator brings the parties together in a joint session where they can openly
discuss the issues in dispute. The mediator establishes ground rules for
respectful dialogue and ensures each party can present their concerns.
Issue
Identification:
The
mediator clarifies the main issues by listening to both parties, summarizing
their positions, and identifying common areas and points of disagreement.
Private
Sessions (Caucuses):
The
mediator may meet with each party separately in a caucus to discuss specific
concerns or explore potential solutions without the other party present. These
sessions allow the mediator to address sensitive issues and encourage openness.
Negotiation:
The
mediator facilitates negotiation, suggesting ideas and helping the parties
generate options for settlement. The mediator does not impose solutions but
encourages creative problem-solving and compromises.
Agreement
and Conclusion:
If the
parties reach a resolution, the mediator helps draft a settlement agreement
detailing the terms of the agreement. Once both parties agree, this settlement
can become legally binding.
Closure:
If
mediation does not result in an agreement, the process concludes, and the
parties may explore other ADR methods or proceed to court.
TYPES OF
MEDIATION
Facilitative
Mediation:
The
mediator focuses on guiding discussions and ensuring clear communication,
allowing the parties to control the outcome without offering solutions.
Evaluative
Mediation:
The
mediator provides feedback on each party’s case strengths and weaknesses,
helping them realistically assess their positions and potential court outcomes.
Transformative
Mediation:
This
approach emphasizes transforming the relationship between the parties, focusing
on empowerment and recognition rather than reaching a specific settlement.
ADVANTAGES
OF MEDIATION
Preserves
Relationships:
Mediation’s
cooperative approach can help maintain or repair relationships, making it
useful for family, business, or community disputes.
Control and
Autonomy:
The parties
maintain control over the decision-making process and are free to reject any
proposals that do not satisfy their needs.
Cost-Effective:
Mediation
is generally less expensive than litigation, as it avoids lengthy court
processes, legal fees, and formal procedures.
Faster
Resolution:
Mediation
can often be scheduled and completed more quickly than a court case, providing
a more timely resolution to disputes.
Confidentiality:
The privacy
of mediation allows parties to discuss sensitive issues openly, which is
particularly beneficial in personal or business matters.
Creative
Solutions:
Since
mediation is flexible, parties can create unique, practical solutions that may
not be possible through the court system.
DISADVANTAGES
OF MEDIATION
Non-Binding
Unless Formalized:
Mediation
agreements are non-binding until a formal agreement is reached, which may mean
the dispute could remain unresolved if no settlement is reached.
No
Guarantee of Settlement:
Mediation
depends on both parties’ willingness to negotiate. If one party is
uncooperative, the process may fail without achieving any outcome.
Possible
Power Imbalance:
If one
party has more power, influence, or resources than the other, they may dominate
the negotiation, resulting in an unfair outcome.
Limited
Scope:
Mediation
may not be suitable for disputes requiring authoritative decisions, such as
cases needing legal precedents or those involving public interest issues.
LEGAL
FRAMEWORK FOR MEDIATION
In India,
mediation is governed by the Civil Procedure Code, Section 89, which promotes
the use of mediation to resolve civil disputes before court intervention.
Additionally, the Mediation Rules 2003 provide further structure to
court-referred mediation.
Landmark
Case Example: In the case of Afcons Infrastructure Ltd. v. Cherian Varkey
Construction Co. (P) Ltd. (2010), the Supreme Court of India emphasized the
importance of mediation as a primary mode of ADR, especially for cases where
preserving relationships is essential, such as family and commercial disputes.
EXAMPLES OF
MEDIATION USAGE
Family
Disputes: Divorce or child custody issues where both parties are encouraged to
settle amicably in the child’s best interest.
Commercial
Disputes: Business partners might use mediation to resolve disagreements over
contracts, financial issues, or operational strategies.
Workplace
Conflicts: Employee-employer disputes over conditions or conduct can be settled
through mediation to maintain a productive work environment.
CONCLUSION
Mediation
is a valuable ADR method for achieving a mutually satisfactory resolution. Its
flexibility, informality, and emphasis on cooperative problem-solving make it
well-suited for disputes requiring a balanced and amicable outcome. With a
focus on communication and preserving relationships, mediation continues to be
an essential tool in the ADR toolkit, particularly effective for personal,
family, and business conflicts.
ARBITRATION
Arbitration
is a formal alternative dispute resolution mechanism where disputing parties
agree to submit their conflict to a neutral third party, known as the
arbitrator, whose decision (the arbitral award) is binding. It is a private
judicial process designed to resolve disputes efficiently without resorting to
courts.
KEY
CHARACTERISTICS OF ARBITRATION
Binding
Decision: The arbitrator’s decision, called an arbitral award,
is final and binding on the parties, similar to a court judgment.
Neutral
Third Party: The arbitrator acts as an impartial decision-maker,
chosen by the parties or appointed by an authority in case of disagreement.
Consensual:
Arbitration is based on a prior agreement between the parties (arbitration
clause) or a submission agreement to resolve the dispute through arbitration.
Private and
Confidential: Arbitration proceedings are generally private, and
sensitive information is protected, unlike court proceedings that are public.
Flexible:
The parties can decide procedural rules, the venue, and the arbitrator(s),
providing flexibility compared to formal court procedures.
Enforceable:
Arbitral awards are legally enforceable under domestic laws and international
conventions, such as the New York Convention.
THE
ARBITRATION PROCESS
Arbitration
Agreement: Parties must agree to resolve their dispute through
arbitration, either in a contract (arbitration clause) or a separate agreement
after the dispute arises.
Appointment
of Arbitrator(s): Arbitrators are selected as per the agreement or by
an appointing authority if the parties fail to agree. Arbitration can be
conducted by a sole arbitrator or a panel.
Preliminary
Hearing: The arbitrator holds an initial meeting to set out
the procedures, timeline, and other administrative details.
Submission
of Claims and Defenses: Each party submits its claims, defenses, and
supporting evidence. This is similar to pleadings in court.
Hearing:
The arbitrator conducts a hearing where parties present their case, evidence,
and witnesses. Cross-examination may be allowed.
Deliberation
and Award: After reviewing the evidence and arguments, the
arbitrator issues an arbitral award. This award is usually final and binding.
Enforcement:
The award is enforceable under laws like the Arbitration and Conciliation Act,
1996 in India or international treaties like the New York Convention, 1958.
LEGAL
FRAMEWORK FOR ARBITRATION IN INDIA
Arbitration
in India is governed by the Arbitration and Conciliation Act, 1996, which is
based on the UNCITRAL Model Law. Significant amendments to the Act in 2015 and
2019 have strengthened India’s arbitration regime.
Key
Provisions:
- Section
7: Defines an arbitration agreement.
- Section
8: Courts must refer disputes to arbitration if there is a valid arbitration
agreement.
- Section
34: Grounds for setting aside an arbitral award (e.g., if it violates public
policy or suffers procedural irregularities).
- Section
36: Enforcement of arbitral awards as a decree of the court.
DISTINCTION BETWEEN ARBITRATION, CONCILIATION AND NEGOTIATION
|
Aspect |
Arbitration |
Conciliation |
Negotiation |
|
Definition |
A
formal ADR process where a neutral arbitrator renders a binding decision. |
An
informal ADR process where a conciliator facilitates an amicable settlement. |
A
direct process where parties discuss and resolve their dispute themselves. |
|
Role of Third Party |
Arbitrator
acts like a private judge, issuing a binding award. |
Conciliator
acts as a facilitator, helping parties reach a settlement. |
No
third party is involved; the parties negotiate directly. |
|
Binding
Nature |
The
arbitral award is legally binding and enforceable. |
The
settlement is binding only if both parties accept it. |
Outcomes
are non-binding unless formalized in a contract. |
|
Formality |
More
formal, resembling a court process with procedural rules. |
Less
formal, flexible, and voluntary. |
Completely
informal and flexible. |
|
Confidentiality |
Proceedings
are private but may require disclosure for enforcement. |
Entirely
confidential, including communications made during the process. |
Confidentiality
depends on the parties' agreement. |
|
Grounds for Challenge |
Limited
grounds to challenge an arbitral award (e.g., fraud, bias). |
Limited,
typically related to procedural fairness or agreement terms. |
Not
applicable, as outcomes are informal and voluntary. |
|
Legal
Framework |
Governed
by the Arbitration and Conciliation Act, 1996. |
Governed
by Part III of the Arbitration and Conciliation Act, 1996. |
No
specific legal framework; often guided by contractual or personal
understanding. |
|
Applicability |
Suitable
for complex commercial disputes requiring finality. |
Suitable
for disputes where amicable solutions are preferred. |
Suitable
for simple disputes or preliminary discussions. |
|
Example |
Dispute
between two corporations over breach of a contract. |
Family
disputes where the conciliator facilitates an agreement. |
Two
businesses negotiating a deal or settlement terms. |
ADR UNDER DIFFERENT LAWS IN INDIA
India has
incorporated ADR mechanisms in various laws to promote efficient dispute
resolution. These mechanisms are recognized in civil, commercial, family, and
other domains. Below are the key legal provisions supporting ADR:
1. Civil
Procedure Code, 1908 (CPC)
-
Section 89: Mandates
courts to refer disputes to ADR methods (arbitration, conciliation, mediation,
Lok Adalats) if deemed appropriate.
-
Order X, Rules 1A, 1B, and 1C:
Provides procedural guidance for courts to refer cases to ADR.
2.
Arbitration and Conciliation Act, 1996
-
Comprehensive legislation for arbitration and
conciliation in India.
-
Part I: Governs domestic arbitration.
-
Part II: Governs enforcement of foreign arbitral
awards.
-
Part III: Governs conciliation processes.
-
Recognizes international conventions like the New York
Convention (1958) and Geneva Convention (1927) for enforcement of arbitral
awards.
3. Family
Courts Act, 1984
-
Encourages mediation and conciliation in resolving
matrimonial and family disputes.
-
Family Courts are empowered to adopt ADR methods to
promote amicable settlements.
4.
Commercial Courts Act, 2015
-
Introduced mandatory pre-institution mediation for
commercial disputes under Section 12A.
-
Aims to reduce litigation burden and encourage
settlement.
5. Legal
Services Authorities Act, 1987
-
Provides for the establishment of Lok Adalats.
-
Lok Adalats offer speedy resolution of disputes
through compromise, particularly for smaller claims or issues where parties are
willing to settle.
6.
Companies Act, 2013
-
Allows for arbitration and mediation in resolving
disputes involving companies.
-
Recognizes the role of the Mediation and Conciliation
Panel to handle disputes between stakeholders.
7.
Industrial Disputes Act, 1947
-
Promotes conciliation for resolving disputes between
employers and employees.
-
Recognizes conciliation officers and boards of
conciliation to mediate and settle industrial disputes.
8. Consumer
Protection Act, 2019
-
Encourages mediation for disputes between consumers
and service providers/manufacturers.
-
Establishes Consumer Mediation Cells for dispute
resolution.
9. Real
Estate (Regulation and Development) Act, 2016 (RERA)
RERA
tribunals can refer disputes to mediation or conciliation to resolve issues
between developers and buyers.
10. Indian
Contract Act, 1872
Does not explicitly
mandate ADR but permits parties to include arbitration or other ADR clauses in
contracts.
11.
Specific Relief Act, 1963
Encourages
amicable resolution before granting specific performance or injunctions.
12. Banking
Laws
-
SARFAESI Act, 2002: ecognizes
the role of Lok Adalats and Debt Recovery Tribunals (DRTs) in settling disputes
between borrowers and financial institutions.
-
Debt Recovery Tribunal (DRT):
Promotes settlement through mediation and conciliation.
13.
International Commercial Arbitration
- Governed
by Part II of the Arbitration and Conciliation Act, 1996.
- Recognizes
international conventions for enforcement of foreign awards:
- New
York Convention, 1958
- Geneva
Convention, 1927
14.
Mediation Rules, 2003
Issued
under Section 89 of the CPC, providing detailed procedures for mediation
referred by courts.
15.
Pre-Litigation Mediation
Introduced
under various laws like the Commercial Courts Act, encouraging parties to
mediate before initiating formal litigation.
UNIT-II:
THE ARBITRATION AND CONCILIATION ACT, 1996
The
Arbitration and Conciliation Act, 1996 is India’s primary legislation for
governing arbitration and conciliation. It was enacted to provide a unified and
comprehensive legal framework for both domestic and international arbitration
and for conciliation as a mode of alternative dispute resolution.
HISTORICAL BACKGROUND AND OBJECTIVES OF THE ACT
Prior
Arbitration Laws in India:
-
The Arbitration Act, 1940, governed domestic
arbitration but was criticized for excessive court intervention and procedural
delays.
-
The Arbitration (Protocol and Convention) Act, 1937,
and Foreign Awards (Recognition and Enforcement) Act, 1961, dealt with the
enforcement of foreign arbitral awards.
UNCITRAL
Model Law:
-
The 1996 Act was based on the UNCITRAL Model Law on
International Commercial Arbitration, 1985, and the UNCITRAL Conciliation
Rules, 1980.
-
The Model Law aimed to standardize arbitration
procedures globally and make arbitration more effective for resolving disputes.
Objective
of the Act:
-
To consolidate and amend Indian laws relating to
domestic and international arbitration and enforcement of foreign arbitral
awards.
-
To reduce court interference in arbitration
proceedings.
-
To make arbitration a cost-effective and
time-efficient method for dispute resolution.
-
To promote conciliation as an amicable settlement
method.
ARBITRATION AND CONCILIATION (AMENDMENT) ACTS, 2015
The 2015
Amendment aimed to address procedural inefficiencies and reduce delays in
arbitration.
KEY CHANGES:
Time Limit
for Arbitral Awards: Section 29A:
Introduced a 12-month time frame to complete arbitration proceedings,
extendable by 6 months with mutual consent.
Appointment
of Arbitrators: Section 11: High Courts (domestic
arbitration) and the Supreme Court (international arbitration) were designated
for appointing arbitrators.
Reduction
in Judicial Intervention: Courts can only intervene in arbitration when
expressly permitted by the Act.
Cost
Accountability: Section 31A: Introduced provisions to
determine costs of arbitration, ensuring cost-effectiveness.
Interim
Relief: Section 9: Courts can grant interim
relief before arbitration begins. Post-arbitration relief can only be sought
from the arbitral tribunal.
SIGNIFICANCE:
Improved procedural efficiency and made arbitration more appealing for
businesses.
ARBITRATION AND CONCILIATION AMENDMENT ACT, 2019
The 2019
Amendment focused on institutionalizing arbitration and enhancing India’s
reputation as an arbitration-friendly jurisdiction.
KEY
FEATURES:
Arbitration
Council of India (ACI): Establishment of ACI to promote and regulate
institutional arbitration and accredit arbitrators.
Time Limits:
-
Section 23(4): Statement
of claim and defense must be filed within 6 months.
-
Time frame for arbitral awards excluded international
commercial arbitrations.
Confidentiality:
Section 42A: Mandated confidentiality in arbitration proceedings
except for award disclosure when required for enforcement.
Qualifications
for Arbitrators: Section 43J: Prescribed qualifications
and experience for arbitrators to ensure competence.
E-Arbitration:
Promoted the use of technology in arbitration proceedings.
IMPACT:
Institutionalized arbitration and encouraged its adoption over ad hoc methods.
2019 ACT–DEFINITIONS OF ARBITRATION, ARBITRATOR, ARBITRATION AGREEMENT
Arbitration
(Section 2(1)(a))
Definition:
Arbitration refers to a process where parties to a dispute agree to submit the
matter to a neutral third party (arbitrator) for resolution, and the
arbitrator’s decision is binding.
Example:
A contractual dispute between two companies is resolved by arbitration instead
of litigation.
Arbitrator
(Section 2(1)(d))
Definition:
An arbitrator is a neutral individual or panel appointed to resolve a dispute
through arbitration. Arbitrators can be chosen by mutual agreement or by the
court if parties fail to agree.
Qualifications:
Arbitrators must be impartial and independent, with qualifications often
determined by the arbitration agreement or institution.
Arbitration
Agreement (Section 7)
Definition:
A written agreement between parties to resolve disputes through arbitration
rather than litigation.
Key
Features:
-
Must be in writing (e.g., a clause in a contract or a
separate agreement).
-
Can cover present or future disputes.
-
May specify procedural rules, arbitrators, and
governing laws.
Example:
"Any disputes arising under this contract shall be resolved through
arbitration under the ICC Rules."
APPOINTMENT OF ARBITRATOR (Section 11)
Procedure:
Parties are
free to agree on the procedure for appointing arbitrators.
If parties
fail to agree:
-
In arbitrations with three arbitrators, each party
appoints one arbitrator, and the two appointed arbitrators appoint the third.
-
In arbitrations with a sole arbitrator, both parties
must agree on the appointment.
Role of
Courts:
If there is
a deadlock in the appointment, a party can approach: The High Court (domestic
arbitration) or the Supreme Court (international commercial arbitration) for
appointment.
The courts
must ensure arbitrators are independent, impartial, and qualified as per the
agreement or law.
Amendments:
The 2015
Amendment removed delays by empowering specific institutions or bodies to
appoint arbitrators in some cases.
The 2019
Amendment introduced qualifications for arbitrators, emphasizing competence and
neutrality.
TERMINATION OF ARBITRATOR (Section 14 & 15)
Grounds for
Termination:
Incapacity:
If an arbitrator becomes unable to perform their duties or delays the process
unduly.
Failure to
Act: If an arbitrator fails to proceed with arbitration
within the agreed timeline or as mandated.
Lack of
Independence or Impartiality: When evidence arises
indicating bias or a conflict of interest.
Procedure
for Termination:
-
If the parties cannot agree, the court may decide the
termination.
-
Once terminated, a substitute arbitrator is appointed
using the same procedure as the original appointment.
PROCEEDINGS IN ARBITRAL TRIBUNAL (Sections 18–27)
Principles:
-
Equality: Section
18 mandates equal treatment for all parties.
-
Party Autonomy: Parties
can decide on the rules of procedure, subject to the Act.
-
Flexibility: Tribunals
are not bound by strict rules of evidence or procedure as in courts.
Conduct of
Proceedings:
-
Submission of claims and counterclaims (Section 23).
-
Oral hearings or written proceedings based on parties'
preferences.
-
Powers to decide jurisdiction, admissibility, and
relevance of evidence.
Interim
Measures:
Arbitral
tribunals can grant interim relief (Section 17), similar to courts.
TERMINATION OF PROCEEDINGS (Section 32)
When
Proceedings Terminate:
By Final
Arbitral Award: The tribunal issues a final award resolving all
disputes.
By
Agreement: If parties agree to terminate proceedings before an
award is issued.
By
Tribunal’s Decision: If the tribunal finds continuation unnecessary or
impossible (e.g., failure to pay arbitration fees).
Effect of
Termination:
Ends the
tribunal’s mandate, except for correcting or interpreting the award.
ARBITRAL AWARD
Definition:
The
decision of the arbitral tribunal on the dispute is called an arbitral award.
Essentials
of an Award:
-
Must be written and signed by all arbitrators.
-
Includes reasoning unless parties agree otherwise.
-
Specifies the date and place of arbitration.
Types of
Awards:
-
Final Award: Concludes the arbitration.
-
Interim Award: Temporary relief before the final
decision.
Choice of
Laws:
-
Domestic arbitration: Governed by Indian substantive
law (Section 28).
-
International arbitration: Can apply foreign or chosen
laws.
SETTING ASIDE OF ARBITRAL AWARD
Grounds for
Setting Aside:
-
Party incapacity or invalid agreement.
-
Lack of proper notice or opportunity to present the
case.
-
Award deals with matters beyond the scope of
arbitration.
-
Violation of public policy: E.g., fraud, corruption,
or contravention of fundamental policy of Indian law.
Time Limit:
Application to set aside must be made within three
months of receiving the award.
Judicial
Approach: Courts cannot review the merits but can examine
procedural fairness and legality.
FINALITY AND ENFORCEMENT OF AWARD
Finality:
-
Section 35 declares arbitral awards as binding on
parties.
-
Courts cannot reopen the case once the award is
finalized.
Enforcement:
-
Section 36 allows the successful party to enforce the
award like a court decree.
-
No enforcement is permitted during the pendency of a
challenge under Section 34.
Amendments:
The 2015 Amendment ensured that awards could be enforced
unless stayed by a court.
APPEALS (Section 37)
Appealable
Orders: Appeals are allowed in the following cases:
From Court
Orders:
-
Granting or refusing to grant interim measures under
Section 9.
-
Setting aside or refusing to set aside an arbitral
award under Section 34.
From Orders
of the Arbitral Tribunal: Accepting or rejecting a
plea of lack of jurisdiction under Section 16.
Other
Appeals: No second appeal is permitted, except an appeal to
the Supreme Court.
Timeframe:
Appeals must be filed within the prescribed limitation period under the
Limitation Act, 1963.
Judicial
Precedents: In "K.K. Modi v. K.N. Modi" (1998), the
Supreme Court clarified the limited scope of appeals, emphasizing minimal
judicial intervention.
CONCILIATION (Sections 61–81)
Conciliation
is a non-adjudicative process where an impartial conciliator assists parties in
resolving their disputes amicably.
Scope
(Section 61):
Conciliation
applies to disputes arising out of legal relationships, whether contractual or
non-contractual.
Voluntary
Nature:
Parties
voluntarily participate and may withdraw at any stage.
Binding
Outcome:
Unlike
arbitration, the outcome of conciliation (settlement agreement) is binding only
if parties agree to its terms.
APPOINTMENT OF CONCILIATORS
Number of
Conciliators:
-
There can be one conciliator unless parties agree
otherwise.
-
For multiple conciliators, they must act jointly.
Procedure
for Appointment:
-
Parties may agree on the conciliator(s) or request a
third party (such as an institution) to appoint them.
-
If parties fail to agree, the conciliator may be
appointed by an external body designated for this purpose.
POWERS AND FUNCTIONS OF CONCILIATOR
POWERS:
Conduct of
Proceedings: The conciliator can determine the procedural rules
if not specified by the parties (Section 67(2)).
Confidentiality:
The conciliator ensures confidentiality of the proceedings (Section 75).
FUNCTIONS:
Impartial
Assistance: Assist parties in understanding issues and exploring
options for settlement.
Proposals
for Settlement: Suggest proposals to resolve the dispute but cannot
impose a decision (Section 67(4)).
Information
Gathering: Request information or documents necessary to
facilitate settlement.
PROCEDURE
Initiation
of Proceedings:
A party
invites the other to conciliate, and proceedings commence when the other party
accepts the invitation (Section 62).
Process:
-
Submission of Statements:
Parties submit written statements outlining the dispute and desired outcomes
(Section 65).
-
Meetings: The
conciliator may hold joint or separate meetings with parties.
-
Flexibility:
Conciliation proceedings are informal and flexible, unlike litigation or
arbitration.
End of
Proceedings (Section 76):
Conciliation
proceedings terminate:
-
On the signing of the settlement agreement.
-
By a declaration from the conciliator.
-
Upon withdrawal by any party.
SETTLEMENT OF DISPUTES THROUGH CONCILIATION
Proposals
for Settlement:
The
conciliator helps parties explore solutions and may suggest terms.
Settlement
Agreement (Section 73):
-
If the parties agree, the terms are recorded in a
written settlement agreement.
-
The agreement is binding and has the same status as an
arbitral award enforceable under Section 74.
Judicial
Precedent:
In
"Haresh Dayaram Thakur v. State of Maharashtra" (2000), the Supreme
Court emphasized that conciliation is aimed at maintaining relationships while
resolving disputes amicably.
ARBITRATION COUNCIL OF INDIA (ACI)
Establishment
and Purpose:
ACI is a
statutory body created under the 2019 Amendment to promote institutional
arbitration and regulate arbitration services in India.
Functions
of ACI:
-
Accreditation: Frame
norms for accreditation of arbitrators and institutions.
-
Promotion: Encourage
the use of arbitration and other ADR mechanisms.
-
Training and Research: Conduct
training and establish arbitration institutes.
-
Quality Control: Ensure
standards of arbitration services.
Composition:
The ACI
consists of a chairperson (a judge or eminent person), two government
representatives, and arbitration experts.
Significance:
-
Strengthens India’s position as a hub for
international arbitration.
-
Encourages professionalization and transparency in
arbitration practices.
INTERNATIONAL COMMERCIAL ARBITRATION
International
Commercial Arbitration (ICA) is a method of resolving disputes arising from
international commercial agreements or transactions. It provides a neutral
forum for parties from different legal systems and jurisdictions.
Key
Features:
Neutrality:
Parties can choose neutral arbitrators and venues.
Flexibility:
Parties have autonomy to determine rules and procedures.
Finality:
Arbitral awards are binding and enforceable across borders.
UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION, 1985
Purpose:
-
Adopted by the United Nations Commission on
International Trade Law (UNCITRAL) to harmonize arbitration laws globally.
-
Serves as a legislative framework for states to
regulate ICA.
Key
Provisions:
-
Arbitration Agreement:
Recognizes the validity of written arbitration agreements.
-
Arbitral Tribunal: Parties
can appoint arbitrators; challenges to arbitrators are limited.
-
Jurisdiction: Allows
tribunals to rule on their own jurisdiction (Kompetenz-Kompetenz principle).
-
Interim Measures: Tribunals
can grant interim relief.
-
Enforcement: Awards
are binding and enforceable unless challenged on specific grounds.
Adoption in
India:
The
Arbitration and Conciliation Act, 1996, incorporates principles of the UNCITRAL
Model Law.
GENEVA CONVENTION, 1927
Objective:
The
Convention on the Execution of Foreign Arbitral Awards was the first
international effort to enforce arbitral awards across borders.
Features:
-
Awards made in one contracting state could be
recognized and enforced in another.
-
Required proving that the award was made under a valid
agreement.
-
Grounds for refusal included public policy and
procedural irregularities.
Limitations:
-
Complex enforcement processes.
-
Replaced by the New York Convention due to
inefficiencies.
NEW YORK CONVENTION, 1958
Objective:
The
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
simplifies the enforcement of international arbitration awards.
Scope:
-
Applies to awards made in a contracting state or
awards deemed international.
-
Over 170 countries are signatories.
Key
Provisions:
Recognition
and Enforcement: Requires signatory states to enforce foreign arbitral awards
unless they violate public policy.
Grounds for
Refusal:
-
Invalid arbitration agreement.
-
Lack of due process.
-
Award exceeds the scope of arbitration.
-
Award violates public policy of the enforcing state.
India’s
Adoption:
India is a
signatory, and the Arbitration and Conciliation Act, 1996, incorporates its
provisions.
RECOGNITION AND ENFORCEMENT OF FOREIGN AWARD
Legal
Framework:
-
Governed by Part II of the Arbitration and
Conciliation Act, 1996, in India.
-
Ensures foreign awards are enforceable unless refused
on specific grounds.
Procedure:
The party
seeking enforcement must produce:
-
Original or certified copy of the arbitral award.
-
Original or certified arbitration agreement.
Enforcement
may be refused on limited grounds like incapacity, public policy, or improper
procedure.
Judicial
Precedents:
-
Renusagar Power Co. v. General Electric Co. (1994):
Supreme Court ruled that public policy grounds must align with fundamental
legal principles of India.
-
Shin-Etsu Chemical Co. v. Aksh Optifibre Ltd. (2005):
Emphasized minimal judicial interference.
UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL MEDIATION AND
INTERNATIONAL SETTLEMENT AGREEMENTS RESULTING FROM MEDIATION, 2018
Purpose:
-
Aimed at creating a uniform legal framework for
international mediation.
-
Ensures enforceability of mediated settlement
agreements across borders.
Key
Provisions:
Definition
of Mediation:
A process
where a neutral third party assists disputing parties to reach a settlement.
Settlement
Agreements:
-
Agreements must be in writing and signed by parties.
-
Enforceable as court judgments or arbitral awards.
Grounds for
Refusal:
-
Invalidity of the agreement.
-
Non-compliance with mediation procedures.
SINGAPORE CONVENTION ON MEDIATION, 2019
Objective:
-
Also known as the United Nations Convention on
International Settlement Agreements Resulting from Mediation.
-
Facilitates the enforcement of mediated settlement
agreements across signatory countries.
Scope:
-
Applies to international settlement agreements arising
from mediation.
-
Excludes agreements related to family, inheritance, or
employment law.
Key
Features:
-
Parties can directly enforce mediated settlements
without filing a lawsuit.
-
Grounds for refusal include public policy and
procedural defects.
India’s
Position:
India
signed the Singapore Convention in 2020, promoting mediation in international
disputes.
ONLINE DISPUTE RESOLUTION
Definition:
ODR is the
use of technology to resolve disputes, combining ADR techniques with digital
platforms.
Techniques:
-
E-Negotiation: Automated
systems facilitate negotiation.
-
E-Mediation: Mediators
conduct virtual mediation sessions.
-
E-Arbitration:
Arbitration proceedings and awards are conducted online.
Benefits:
-
Accessibility: Parties
can resolve disputes remotely.
-
Efficiency: Reduces
time and costs.
-
Transparency: Digital
records of proceedings ensure accountability.
ODR in
India:
-
Promoted by platforms like SAMA and ODRways.
-
Encouraged under initiatives like the Justice Delivery
Mechanism of NITI Aayog.
UNIT-III:
OTHER ALTERNATIVE DISPUTE RESOLUTION SYSTEMS
Alternative
dispute resolution (ADR) systems extend beyond arbitration, mediation, and
conciliation to include other mechanisms designed to resolve disputes
efficiently. These include tribunals, Lokpal, Lokayukta, Lok Adalats, family
courts, and commercial courts.
TRIBUNALS
Definition:
Tribunals
are quasi-judicial bodies established to resolve specific disputes, often
involving public administration or specialized areas.
Key
Features:
-
Adjudicate cases involving taxation, labor,
environment, etc.
-
Decisions are binding and may be subject to judicial
review.
Legal
Basis:
Tribunals
in India operate under Articles 323A and 323B of the Constitution.
Examples:
-
Central Administrative Tribunal (CAT).
-
National Green Tribunal (NGT).
-
Debt Recovery Tribunal (DRT).
Advantages:
-
Specialized expertise.
-
Faster resolution than regular courts.
LOKPAL AND LOKAYUKTA
Lokpal Act,
2013:
-
Enacted to combat corruption by investigating
complaints against public servants.
-
Lokpal handles complaints at the central level, and
Lokayukta operates at the state level.
Jurisdiction:
Covers the Prime Minister (with restrictions), ministers, MPs, and government
officials.
Significance:
Enhances accountability and transparency in governance.
Example:
Anna Hazare’s movement led to the enactment of the Lokpal Act.
LOK ADALATS
Meaning:
-
Lok Adalats are forums for settling disputes amicably,
based on principles of compromise.
Legal
Framework:
-
Established under the Legal Services Authorities Act,
1987.
Characteristics:
-
Disputes resolved without formal litigation.
-
Parties cannot appeal against the award.
Types:
-
Permanent Lok Adalats (PLAs): For public utility
services.
-
Mobile Lok Adalats: Extend services to remote areas.
Advantages:
-
Cost-effective and speedy resolution.
-
Maintains harmony between parties.
FAMILY COURTS
Legal
Framework:
Governed by
the Family Courts Act, 1984.
Purpose:
Provide a
dedicated forum for resolving family disputes, including marriage, custody, and
maintenance issues.
Features:
-
Informal procedures.
-
Emphasis on conciliation and settlement.
Significance:
Ensures
privacy and quicker resolution of sensitive family matters.
COMMERCIAL COURTS
Legal Basis:
Governed by
the Commercial Courts Act, 2015.
Purpose:
Specialized
courts for resolving commercial disputes involving high monetary stakes.
Key
Features:
-
Time-bound resolution of cases.
-
Pre-institution mediation and settlement mandated for
disputes.
Significance:
Enhances
the ease of doing business in India.
SECTION 89 AND ORDER X, RULES 1A, 1B AND 1C OF CIVIL PROCEDURE CODE
Section 89
CPC:
-
Introduced to encourage ADR mechanisms in pending
cases.
-
Enables courts to refer disputes to arbitration,
conciliation, mediation, or Lok Adalat.
Order X,
Rules 1A, 1B, 1C CPC:
Lay down
procedural rules for referring cases to ADR:
-
Rule 1A: Court
identifies disputes suitable for ADR.
-
Rule 1B: Parties
choose the mode of ADR.
-
Rule 1C: ADR
process begins as per the chosen mode.
Judicial
Interpretation:
In Afcons Infrastructure
Ltd. v. Cherian Varkey Constructions (2010), the Supreme Court emphasized the
use of Section 89 for reducing court caseloads.
ADR AND MEDIATION RULES
Objective:
Provide a
structured framework for mediation and ADR proceedings.
Key
Features:
-
Courts appoint mediators from approved panels.
-
Mandatory pre-litigation mediation for certain cases.
Examples:
-
Delhi High Court Mediation and Conciliation Centre.
-
Bangalore Mediation Centre.
PRE-LITIGATION MEDIATION IN INDIA
Legal
Framework:
-
Mandated under the Commercial Courts Act, 2015, for
commercial disputes.
-
Encouraged in family disputes and Lok Adalats.
Purpose:
-
Prevent disputes from escalating into litigation.
-
Encourage parties to reach amicable settlements.
Process:
-
Conducted by trained mediators.
-
Settlement agreements are binding.
Significance:
-
Reduces burden on courts.
-
Promotes harmony between disputing parties.
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DOWNLOAD SYLLABUS SHORT NOTES PDF of ALTERNATE DISPUTE RESOLUTION:
DOWNLOAD - P-IV: Alternate Dispute Resolution syllabus short notes (Date: 24-01-2025)
DOWNLOAD - P-IV: Alternate Dispute Resolution IMPORTANT SHORT Q&A (Date: 03-02-2025)
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