INTRODUCTION
Many of us have heard of or even experienced a lawsuit taking too much time to resolve. Cases in India take an average of 13 years and 6 months to resolve[1]. In subordinate courts, it may take around 5 to 9.5 years to get resolved[2]. The Karnataka High Court takes about 4.1 years[3] to dispose of a case, while Calcutta High Court takes 3.7 years.[4] Approximately 35 million cases[5] are pending in various courts across India. There are various systematic lags due to which this is happening but we are not here to ponder about this.
Have you ever wondered if going to court is only the option to get justice?
Are there any other legal alternate mechanisms to get justice?
UNDERSTANDING DISPUTE RESOLUTION MECHANISMS
There are various ways of addressing disputes. There’s the traditional way i.e. Litigation, then there’s Judicial Dispute Resolution (JDR) and Alternate Dispute Resolution (ADR).
Judicial Dispute Resolution is a legal and recognized process that involves parties engaging with a judge to settle disputes outside traditional litigation. JDR is less formal and can be both binding and non-binding in courts. In binding, the judge issues a final decision if both the parties fail to reach a settlement and this decision cannot be appealed in courts. The process is kept confidential and promotes open dialogue and negotiation. JDRs provide an expedited resolution are low costs and help in narrowing down the issues to reach a final decision. It is a middle way between lengthy court trials and mediation.
ADRs are legal and widely recognized as a legitimate means of resolving disputes. Section 89 of the Code of Civil Procedure, 1908[6] encourages courts to refer disputes to ADRs whenever suited best. The section gives recognition to Arbitration, Conciliation, Mediation, and Judicial Settlement (including Lok Adalats) as valid alternatives to Litigation.
Arbitration: Arbitration is one of the formal methods of ADR. The involved parties submit their disagreements to two or more neutral third parties, known as Arbitrators, who make a binding decision on the issue. The decision is known as Arbitrator Award which is legally binding and enforceable in Indian courts. One of the major advantages of this method is that the process can be tailored to the needs of the involved parties, from selecting arbitrators to determining procedural rules for the arbitration, everything can be tailored. The proceedings are kept confidential along with the details of the case and Arbitration award which is advantageous for parties wishing to keep the dispute confidential. Arbitration awards are also recognized and enforceable in many countries under international treaties. Arbitration is recognized and governed in India by The Arbitration and Conciliation Act of 1996.[7] It is based on the UNCITRAL Model Law on International Commercial Arbitration[8]. Commercial Arbitration, International Arbitration, Consumer Arbitration, and Labour Arbitration are the four types of Arbitration. The MSMED Act 2006[9] provides for the resolution of disputes involving MSMEs through conciliation and arbitration. The disputes can be easily settled through the Micro and Small Enterprises Facilitation Council (MSEFC).
Mediation: The Mediation Act 2023[10] establishes a structured framework for mediation in India. The Act recognises mediation settlements as legally enforceable. Mediation involves a mediator, the neutral third party, who encourages communication and negotiation between the disputing parties and helps them reach a mutually acceptable resolution. Unlike Arbitration, Mediation does not involve the third party making decisions. Instead, Mediator guides the conversation and helps the parties explore potential solutions. It is voluntary, and parties can withdraw at any point if they feel the mediation is not leading anywhere and is not beneficial. It is cost and time-saving when compared to traditional litigation. The discussions that occur are also kept confidential and encourage open dialogue without the fear of repercussions in future legal proceedings. The decisions reached are not binding until and unless they are formalized through a written contract. Mediation can be used in various cases including commercial disputes, family and community conflicts, and workplace issues. The Consumer Protection Act 2019[11] introduced mediation cells at the District, State, and National Consumer Dispute Redressal Commissions encouraging consumers and businesses to settle disputes through mediation before formal litigation. Through The Hindu Marriage Act 1955[12] and The Family Courts Act 1984[13], Mediation and Conciliation are also encouraged for solving family disputes by the courts before proceeding with divorce and custody cases.
Negotiation: Negotiation is a process in which two or more conflicting parties communicate through open dialogue, resolve their differences, and reach an agreement. It is one of the most commonly used dispute-resolution mechanisms. Unlike Arbitration and Mediation, it does not involve a third party who helps the disputing parties reach an agreement. There is direct communication with parties engaging in direct discussions about issues at hand. It is voluntary and parties can choose whether or not to engage in the process. Along with being highly confidential, it is also a flexible process with allows parties to set their terms, settings, and procedures according to their needs without any strict rules governing the process.
Conciliation: Conciliation involves a neutral third party, the Conciliator, who assists the disputing parties in resolving the conflict. The conciliator plays the role of being a facilitator between the conflicting parties, identifies issues, and works towards a mutually acceptable agreement while also not imposing a decision on the parties but helping in exploring potential solutions. Just like all other ADRs, the discussions are kept confidential, successfully eliminating the fear of public disclosure. Conciliation is also voluntary and parties can withdraw anytime from the discussions. Conciliation is commonly used in labour disputes, family matters, and commercial conflicts. The Arbitration and Conciliation Act 1996[14] governs Conciliation in India. The Companies Act, 2013[15] also encourages mediation and conciliation for corporate disputes. The Act also established the Mediation and Conciliation Panel under the NCLT (National Company Law Tribunal).[16]
Judicial Settlement: Judicial Settlement is another legal method in which a judge assists the disputing parties in resolving their dispute, outside court proceedings. Unlike Judicial Dispute Resolution, these do not have a strict time limit (usually within a day) to issue a binding decision. Judicial Settlement focuses more on reaching an amicable agreement through discussions facilitated by the Judge and the decisions are not imposed on the parties instead helps the parties explore options and negotiate terms. If the parties can resolve all the issues, then it is formalized as a consent order; and if not then the case proceeds to the trial. Judicial settlements can be used in various conflicts, for eg. civil disputes, family law matters, and commercial conflicts.
Lok Adalat: The Legal Services Authorities Act 1987[17] establishes Lok Adalats to resolve disputes. Lok Adalats are People’s Courts, an ADR mechanism in India that is designed to settle disputes amicably. These provide a platform for settling disputes that are either pending in court or at the pre-litigation stage without the need for formal court procedures. Awards passed are considered decrees of civil courts and are binding and cannot be appealed. Deals mainly with civil cases, compoundable criminal cases, and disputes related to public matters. These are a cost-effective solution as parties do not need to pay any court fees to settle their cases in Lok Adalats. The process is informal, facilitating direct communication between both the parties and the adjudicator. The mechanism also promotes quicker resolutions compared to the traditional court process.
CONCLUSION
ADR encompasses various methods such as mediation, arbitration, conciliation, and negotiation, each offering unique benefits tailored to the needs of disputing parties. ADRs alleviate court congestion, reduce costs, and while also providing faster resolutions and maintain confidentiality and flexibility. Despite some challenges related to enforceability and potential power imbalances, the advantages of ADR make it an essential component of modern dispute resolution. Moving forward, enhancing legislative frameworks and increasing public awareness will be crucial in promoting the effective use of ADR. Ultimately, embracing ADR can lead to more amicable resolutions and improved access to justice for all parties involved.
Author(s) Name: Trishla Sethi (Pravin Gandhi College of Law, Mumbai)
Reference:
[1] Soutik Biswas, ‘Supreme Court: Why India’s powerful top court is in a ‘crisis’’ (BBC, 31 July 2023) <https://www.bbc.com/news/world-asia-india-66292895> accessed 25 January 2025
[2] Meera Emmanuel, ‘India Justice Report on the Judiciary: Average case pendency in subordinate courts is 5 years’ (Bar & Bench, 08 November 2019) <https://www.barandbench.com/news/india-justice-report-on-the-judiciary-average-case-pendency-in-subordinate-courts-is-5-years> accessed 25 January 2025
[3] Pradeep Thakur, ‘Some HCs take average of 4 years per case’ The Times of India (18 December 2017) <https://timesofindia.indiatimes.com/india/some-hcs-take-average-of-4-years-per-case/articleshow/62111687.cms> accessed 25 January 2025
[4] Ibid
[5] ‘National Judicial Data Grid’ (District Court of India) <https://njdg.ecourts.gov.in/njdg_v3/> accessed 25 January 2025
[6] Code of Civil Procedure 1908, s 89
[7] The Arbitration and Conciliation Act 1996
[8] The UNCITRAL Model Law on International Commercial Arbitration 1985
[9] The Micro, Small and Medium Enterprises Development Act 2006, s 18
[10] The Mediation Act 2023, s 5(1)
[11] The Consumer Protection Act 2019, s 74
[12] The Hindu Marriage Act 1955, s 23(2)
[13] The Family Courts Act 1984, s 9
[14] The Arbitration and Conciliation Act 1996
[15] The Companies Act 2013, s 442
[16] Ibid
[17] The Legal Services Authorities Act 1987
