At the very inception, I would begin by saying that with the passage of time, Alternative Dispute Resolution ( ADR ) has not only gained currency by catching people's imagination but also witnessed sweeping changes over the years and is now becoming the most preferable mode for amicable and speedy resolution of disputes. This holds true not just for India alone but for most of the countries of the world. The General Assembly of the United Nations in its Resolution No. 40 / 72, dated December 11, 1985, recommended that:
All States give due consideration to the Model Law on International Arbitration, in view of the desirability of uniformity of law of arbitral procedures and the specific needs of international commercial practice.

This certainly must be honoured by all members of the United Nations without any exception whatsoever. It must be pointed out here that numerous countries have enacted laws to give legal force to the United Nations Commission on International Trade Law, 1966 ( UNCITRAL Model Law ) within their jurisdictions.

Back home, the Constitution of India, Article 51 clauses (c) and (d), stipulate that the State shall endeavour to (c) foster respect for international law and treaty obligations in the dealings of organized peoples with one another; and ( d ) encourage settlement of international disputes by arbitration. Also, what cannot be overlooked is the provision contained in Order 10 of CPC. Order 10 Rule 1A talks about direction of the Court to opt for any one mode of alternative dispute resolution.

It says:
After recording the admissions and denials, the Court shall direct the parties to the suit to opt either mode of the settlement outside the Court as specified in sub-section ( 1 ) of section 89. On the option of the parties, the Court shall fix the date of appearance before such forum or authority as may be opted by the parties. Order 10 Rule 1B talks about appearance before the conciliatory forum or authority.

It states that:
Where a suit is referred under rule 1A, the parties shall appear before such forum or authority for conciliation of the suit. Order 10 Rule 1C talks about appearance before the Court consequent to the failure of efforts of conciliation. It stipulates that, Where a suit is referred under rule 1A and the presiding officer of conciliation forum or authority is satisfied that it would not be proper in the interest of justice to proceed with the matter further, then, it shall refer the matter again to the Court and direct the parties to appear before the Court on the date fixed by it. Section 89 of CPC talks about settlement of disputes outside the Court.

It runs as follows:

1. Where it appears to the Court that there exists 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.
2. Where a dispute has been referred:
   1. for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 ( 26 of 1996 ) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
   2. 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 ( 39 of 1987 ) and all other provisions of that Act shall apply in respect of the dispute so referred to the Lok Adalat;
   3. for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution oe person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 ( 39 of 1987 ) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
   4. for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.

Further, I must point out here that in consonance with the provisions of CPC, Constitution and the aforementioned UN Resolution, the President of India promulgated the Indian Arbitration and Conciliation ( Second ) Ordinance, 1996 on March 26, 1996. The Preamble of the Ordinance very explicitly states that it is promulgated as:
it is expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules. The Ordinance has become an Act of Parliament with effect from 22 August, 1996.

Needless to say, gram panchayats, lok adalats, arbitration, conciliation and mediation have all emerged as all weathered reliable alternative tools for speedy and effective resolution of disputes. Let us not forget that the decision of 'Nyaya Panchayat' as still rendered in not only villages but small towns also is still accepted as binding mostly and it is adjacent to conciliation and mediation in many respects. Also, it must be added here that the decision of the head or mukhiya of Nyaya Panchayat is based on the pattern of mediator for resolving petty disputes at the village or local level without going through the cumbersome process of approaching courts and then waiting endlessly for the judgment only to further get entangled in higher courts on appeal by one party or the other.

As we see, in the current scenario, ADR is showing healthy signs of being an effective catalyst in resolving disputes between parties. This serves well in not just minimizing the huge backlog of pending cases but also in providing succour to the common man who is worst affected by the inordinate delay in imparting of speedy and effective justice. This alone explains why ADR is even employed extensively in daily chores like disputes between employers and employees, disputes between relatives, disputes between neighbours and et al. A huge maze of ADR institutions at various levels be it local, regional, national or even international are at work to settle disputes by various alternative means like mediation, arbitration, conciliation etc.

It is imperative to mention here that for this ADR to succeed in India, the members of legal fraternity must take special pains in educating their clients about what all it encompasses and how disputes can be effectively resolved by employing this recourse.

As former CJI Justice AM Ahmadi puts it succinctly:
While we encourage ADR mechanisms, we must also create a culture for settlement of disputes through those mechanisms. Unless the members of the Bar encourage their clients to settle their disputes through negotiations, such mechanisms cannot succeed. The Legal Services Authorities Act contains provisions which entitle a party or the Court to refer any matter to the Lok Adalat for settlement through negotiation. Our Lok Adalats have the unique feature of their awards automatically becoming decrees of courts and being binding on the parties.

The newly enacted Arbitration and Conciliation Act, 1996, also makes substantial changes which are expected to encourage parties to have their disputes settled and resolved through such modes. Also, former CJI Justice JS Verma opines that:
Experience shows that inspite of provision of forum for resolution of disputes in another country and the applicability of a foreign law as the substantive law frequent litigation in Indian Courts gave rise to doubts about the efficacy of the arbitration clause incorporated in the agreement. This tendency was visualized as a disincentive to foreign investors and was likely to affect full implementation of the nation's economic policies. Care has been taken to enact measures in the 1996 law to eliminate these grey areas and to provide effective measures to circumvent laws delays limiting judicial intervention while retaining fairness in the process of adjudication.

It was not for nothing that in the meeting of the Committee of all the Chief Ministers and Chief Justices held on December 4, 1993, the Committee explicitly came out with a resolution to deal with the arrears of cases as expeditiously as possible and recommended for alternative dispute resolution mechanisms through arbitration, negotiation and mediation as the potent tools which would go a long way to alleviate the endless agony suffered by the people. Let me add here that on 6 October, 1995, The International Centre for Alternative Dispute Resolution ( ICADR ) was inaugurated by the then PM PV Narasimha Rao.

While inaugurating ICADR, Rao observed: While reforms in the judicial sector should be undertaken with necessary speed, it does not appear that courts and tribunals will be in a position to bear the entire burden of the justice system. It is incumbent on government to provide at reasonable cost as many modes of settlement of disputes as are necessary to cover the variety of disputes that arise. Litigants should be encouraged to resort to alternative dispute resolution so that the court system proper would be left with a smaller number of important disputes that demand judicial attention.

I must also point out here that the main objectives of the ICADR are:

1. to propagate, promote and popularize the settlement of domestic and international disputes by different modes of ADR;
2. to provide facilities and administrative and other support services for holding conciliation, mediation, mini-trials and arbitration proceedings;
3. to promote reform in the system of settlement of disputes and its healthy development suitable to the social, economic and other needs of the community;
4. to appoint conciliators, mediators, arbitrators, etc., when so requested by the parties;
5. to undertake teaching in ADR and related matters and to award diplomas, certificates and other academic or professional distinction;
6. to develop infrastructure for education, research and training in the field of ADR;
7. to impart training in ADR and related matters and to arrange for fellowships, scholarships, stipends and prizes.

For the benefit of my readers, I must also mention here that the Apex Court in Food Corporation of India v Joginder Pal, AIR 1989 SC 1263 at p. 1266 emphatically laid special emphasis on ADR system of adjudication. It is not possible for the courts to settle all the disputes and therefore recourse is made in suitable cases to various modes of ADR like arbitration, conciliation etc.

Also, in Food Corporation of India v Joginderpal Mohinderpal, AIR 1989 SC 1263 at 1267, the Supreme Court shed further light and said that:
We should make the law of arbitration simple, less technical and more responsible to the actual realities of the situations but must be responsive to the canons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence not only by doing justice between the parties, but by creating sense that justice appears to have been done.

Further, the Supreme Court also made it clear in M/s Guru Nanak Foundation v M/s Rattan Singh & Sons AIR 1981 SC 2075, at 2076, that:
Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 ( 'Act' for short ). However, 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 accompanied by unending prolixity, at every stage providing a legal trap to the unwary.

Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with 'legalese' of unforeseeable complexity. This case amply demonstrates the same.
The Law Commission in its 129th Report made in 1988 very categorically recommended that the court may require attendance of any party to the suit or proceeding to appear in person with a view to arrive at any amicable settlement of dispute between the parties.

It also recommended for mediation as alternative to adjudication to properly manage urban litigation. Further, the Law Commission in its 137th Report very strongly expressed the dire need for creating an office of Ombudsman for helping the parties to amicably resolve differences without having to battle for several decades in various courts. It also needs to be brought out here that the Malimath Committee also had suggested to make it obligatory for the court to refer the disputes after issues are framed, for settlement either by way of arbitration, conciliation, mediation or through Lok Adalat and it is only when the parties fail to settle their disputes through any of the above methods of ADR that the suit can be heard and decided on merit.

Be it noted, the eminent legal jurist and senior lawyer of Apex Court Fali S Nariman strongly advocates that:
There is much prosperity in arbitration – certainly, for arbitrators and arbitral institutions. But arbitration must also be popular with users. Whilst in the past, commercial men chose arbitration because it seemed a good way of resolving disputes, in the present, it is selected mainly through habit and only because all other methods seem even worse! The current pre-occupation with Alternative Disputes Resolution is a symptom of this, and demonstrates a growing sentiment that there is need, not for an alternative to national courts, for that does exist – in most places – in the shape of ( court structured ) arbitration; but a need for some alternative to 'judicial-arbitration'.

In reality 'arbitration', 'conciliation' and 'mediation' are different forms of dispute-resolution outside courts: ADR and arbitration are complementary; hence the preferred use of the words 'appropriate' or 'additional' in place of 'alternative'. That is how we in India now understand ADR – and that is why our new statute of dispute-resolution is titled the Arbitration and Conciliation Ordinance. The Ordinance has become an Act of Parliament w.e.f. 22nd August, 1996. It is based on the UNCITRAL Model Law and Rules. Since July 25, 1996, it has replaced a strict Court-controlled arbitration regime worked for over twenty-five years through the Indian Arbitration Act, 1940: this latter enactment stood repealed on January 24, 1996.

Nariman further said that:
In what direction should dispute-resolution in commercial matters proceed ? Based on the ethos of the people who live in the Asian region and of the experience of those well-versed in the arts of dispute-resolution in the areas, I would suggest the following:

1. First, (and always first) – conciliation with third party assistance, should be the primary method of dispute settlement. It is an invaluable technique – helping to resolve disputes whilst preserving amicable relationships, thus fostering further international trade.
2. Second, since we in India appear to have lost the art of conciliation, and have not yet acquired the necessary modern expertise, we must learn from other countries, then evolve our own standards for strengthening the mechanism of conciliation – The International Centre for Alternative Dispute resolution – ICDAR, - now set up in New Delhi, provides this and hopefully will help develop the requisite technique.
3. Third, in the event of a failure to resolve a particular commercial dispute by negotiation and conciliation, resort to arbitration under the aegis of our new law based on the UNCITRAL Model Law and Rules.
4. Fourth, (and above all) the development of arbitration along non-litigious, non-adversarial lines; in other words, less lawyer-techniques, less court-craft; lawyers are certainly useful but not in their confrontational capacity, but in their more meaningful role as negotiators and mediators.

Milon K Banerji who is former Attorney General of India with a vast legal experience points out that:
When we compare the virtues and pitfalls of arbitration before a private forum with those of litigation before courts of law, there are cogent arguments which can be addressed on either side. Time can only tell whether arbitration under the new law would be more successful or would make greater inroads or achieve greater success in the method of settling disputes than before.

The future of our International Centre for Alternative Dispute Resolution, for short ICADR, will also depend upon the success which the new arbitration law achieves and the ability of ICADR to project itself as the outstanding centre for dispute resolution through arbitration and other private forms of settling disputes. My own feeling borne out of my fairly extensive experience in arbitrations, both domestic and foreign, is one of optimism based on the care and attention given to starting this new regime in arbitration.

He further points out that the advantages of arbitration as against litigation have been variously indicated to be:

1. that arbitration allows the parties to keep private the details of the dispute
2. the parties can choose their own rules or procedure;
3. there is greater scope for minimizing acrimony;
4. the costs can be kept low;
5. the times and places of hearing can be chosen according to convenience;
6. there will be saving of time; and
7. the ability of the parties to choose their own judge permits and choice of an expert in the field who is more able to view the dispute in its commercial setting.

ACC Unni who was the Additional Secretary, Ministry of Law, Company Affairs and Member, Governing Council of the International Centre for Alternative Dispute Resolution very lucidly says that:
A viable and effective alternative to litigation for resolving disputes and a qualitative change in the style of conducting arbitration has become an imperative need for sustaining the credibility of the legal system and the role of law itself.

 The new law of arbitration and conciliation would, hopefully, open up new vistas in the area of dispute resolution in the country and usher in an era of new and efficient processes of justice delivery system by promoting Alternative Dispute Resolution ( ADR ) systems in the country. ADR systems are gaining increasing recognition and acceptance in other parts of the world such as the United States of America, the United Kingdom, Canada and Australia.

It has already emerged as a significant movement in some of the countries and is likely to become a significant international movement in the years to come. The first pre-requisite for a well developed system of arbitration and other forms of ADR systems is a modern and well conceived legal framework. The Arbitration and Conciliation Ordinance, 1996 provides such a framework.

It has repealed the Arbitration Act, 1940 and introduced a new law which has eliminated the core weakness in the earlier Act, i.e., the numerous provisions which provided for court intervention at almost every stage of conduct of arbitral proceedings. Modelled on the United Nations Commission on International Trade Law ( UNCITRAL ) Model Law on International Commercial Arbitration, the new law provides for only two occasions when court intervention can be sought at the pre-arbitral award stage – Sections 9 and 14 (2) of The Arbitration and Conciliation Ordinance, 1996.

The new law has provided a unified regime for both international commercial arbitration and domestic arbitration of all types. It is a new and bold initiative. It is based on the assumption that many disputes can be resolved without resort to litigation in courts. Let me also reveal here that the Chief Justice of India while delivering his Patron's Address at the inauguration of the ICADR at New Delhi on 6 October 1995 observed:

Those who are practitioners, particularly those who practice in the trial courts, would appreciate that out of the total number of cases which go to court hardly 50 percent require adjudication by a court on a point of law. Most of the cases, almost 50 percent or more essentially involve issues of fact and they can certainly be resolved by people of robust commonsense outside the court.

K Jayachandra Reddy who is a former Judge of the Supreme Court of India and also former Chairman of Law Commission of India has this to say:
ADR is not an alternative to the court system but only meant to supplement the same aiming on less lawyering. The ADR is intended to cover almost all disputes, including commercial, civil, labour and family disputes in which parties are entitled to conclude a settlement and to be settled by ADR procedure.

The business world has rightly recognized the advantages that the ADR in one form or other is a right solution. It is felt that it is less costly, less adversarial and thus more conducive to the preservation of business relationships which is of vital importance in the business world. The use of ADR has grown tremendously in the international business field in recent years. Many governments around the world have supported the demand for ADR as an efficacious way of handling international commercial disputes.

Justice K Ramaswamy who is a former Supreme Court Judge and Executive Chairman of National Legal Services Authority champions the settlement of disputes through Lok Adalats. He says: Needless to say that in the present scenario, the alternative dispute resolution system of which Lok Adalat movement is one of the components, has assumed great importance. The Lok Adalat system has become a regular feature and has become a living and continuous movement. Day by day, large number of even private litigants are getting their cases disposed of in Lok Adalats.

Public has become conscious of their rights and are availing ADR for expeditious and inexpensive disposal of their disputes as would be evident from the Annexure attached herewith. It would thus be clear that Lok Adalat movement has become viable, efficacious and expeditious ADR system. Special status has been assigned to the Lok Adalats under the Legal Services Authorities Act, 1987, which has come into force with effect from 9th November, 1995. The said Act provides the statutory base to the Lok Adalats.

The Lok Adalats shall now have:

1. the same powers as are vested in a civil court under the Code of Civil Procedure, 1908
2. all proceedings before a Lok Adalat shall be deemed to be judicial proceedings within the meaning of sections 193, 219 and 228 of the Indian Penal Code;
3. every Lok Adalat shall be deemed to be a civil court for the purpose of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973;
4. the members of the Lok Adalats, in terms of the provisions of section 23 of the Act, shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code; and
5. every award made by a Lok Adalat shall be final, binding and non-appealable.

Justice M Jagannadha Rao who is former Chairman of Law Commission of India is at pains in emphasizing the need for more ADR centre and training for lawyers and also cautions against abusing these new methods of ADR. He says that, One centre for alternative dispute resolution at Delhi or a few centres here and there will not be sufficient. Such centres must abound in all states and in all centres where at least District Courts are located.The next question will be who are to man them ? Do we have the human material who are trained in the techniques of mediation, negotiation, conciliation, counselling or arbitration?

As of today, practically none is professionally trained in these skills. True, we are making a beginning. We must start in right earnest. Arbitration under the Indian Arbitration Act, 1940 has been more satisfactory than regular trial of civil cases in courts. Apart from the methods applied to stall arbitration – it is complained that arbitrators, including judges who serve as arbitrators ( barring a few ) – have contributed to abnormal delays in arbitration cases. Day-fee systems for arbitrators or lawyers appearing in arbitration cases has added to the delay and costs.

Indians have surely enough capacity to abuse any good system. I hope this will not happen to these new methods of alternative dispute resolution. I hope in the alternative dispute resolution, the parties and their lawyers, if any, will begin with a new culture and will try to shorten delays and costs – for that is the prime purpose of these systems. In my view, therefore, a lot of professional training must go into these new systems both for the lawyers, ( if they are permitted to espouse the cause of parties in their for a ) and also for the personnel who will man them. The emphasis must be on moral values, less delay and less cost. Lawyers and litigants must both be interested in an early and less costly resolution of the disputes.

The decision in these for a must also be fair and reasonable. Thus, a lot of professional training is required for implementation of ADR systems. More litigants, more lawyers, less courts, less judges, more uncertainty in judge made law have all added to greater delays and costs. In this scenario, one would not hesitate to say that it is high time that a culture or climate is created for alternative methods of dispute-resolution, like mediation, conciliation, counseling and arbitration. Very rightly so!

It is an encouraging sign to note that ADR system is nowadays becoming more and more popular among different strata of society for peaceful resolution of their long pending intractable disputes. This system has manifold advantages over the usual way of taking a legal recourse as I have already discussed above. I am sure that if the government opens more centres for disputes to be resolved through ADR systems as Justice Jagannadha Rao has so very rightly recommended also, it will go a long way in not only making it more popular but also in emerging as an effective catalyst for peaceful resolution of disputes. In addition, opening more centres will save people from spending more extravagantly in travelling to far away places and they will be able to secure justice without having to spend much and without having to travel much. What more do they need ? That is exactly what the ultimate aim of every government should be and which it must borne in mind always!

Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut -250001, UP.