ADr Lect 1

ADR
Introduction:
Today’s world has become globalised and commercial with the advent
of technology. People can now contact each other and settle business
deals and disputes when they are sitting at the opposite ends of the
world. Most people no longer have the time to go and file papers at the
courts and then wait long periods for a hearing. We are rapidly
approaching a stage where litigation is being replaced with alternative
dispute resolution (ADR), due to the inefficiencies and drawbacks of
litigation. India hasn’t quite reached a stage where litigation has been
completely displaced by ADR methods, but the legal system is
beginning to see the benefits of ADR.
What is alternative dispute resolution?
Alternative dispute resolution (ADR) refers to a range of dispute
settlement methods which help the parties in the dispute to come to a
settlement without going to court, or without litigating on the said
matter. These methods usually involve a third party, who helps them in
settling the disputes. In many cases, ADR methods are used alongside
the litigation process as well through court authorization.
Background of ADR:
The process of arbitration is not alien to India. It always had been
practiced since time immemorial. In India, people believed in resolving
disputes within the four walls because this was somewhere considered as
an element to protect their dignity and personality in the society. Hence,
the mechanism gained significance in India since Ancient times
Ancient India
In ancient India when there was Kulas, people used to live in joint
families with their clans and when there was caste system prevalent in
the society.
The disputes among the kulas were resolved by the head of the family,
clan or Kula.
Likewise, when there was common trade, corporations or Shrenis among
the people, they used to appoint person to resolve the disputes within the
Shrenis.
There are different models for dispute resolution:
1. Right based model
This is a simple model, if there is a dispute on infringement of any right;
the redressal is given by the court.
2. Legislative model
It gives us the statutes, rules and regulations which acts as a guidance to
settle down disputes. A simple example could be industrial disputes
3. Interest based Model
For eg in case of contract, there must be consensus btw the parties who
agrees to certain terms and conditions and those are acceptable at one
point of time. But when one of them breach it then in order to protect the
interest, if they had in their agreement had decided any method for
dispute resolution. Then it will be followed.
Pros and cons of ADR

Pros of ADR
 It is less expensive.
 It is less time consuming.
 It is free from the technicalities that are present in the court
system.
 The parties are free to differ in their opinion and can discuss their
opinions with each other, without any fear of disclosure of this fact
before the courts.
 There is no feeling of enmity between the parties as there is no
winning and losing side. They also get their grievances redressed
and their relationship remains as it was before, therefore, they can
conduct future business deals with each other.
 ADR is more suitable for multi party disputes, as all the parties can
put forward their opinions at the same place and in one go, rather
than going to court again and again. Also, it provides for a wider
perspective of the dispute.
 The parties often have the choice of the ADR method to be used.
They sometimes also have the choice to select the individuals or
bodies who will settle the dispute.
 The process is also very flexible, according to what suits the
parties.
 The parties also have the option of being confidential. The ADR
system also enables the parties to put focus on practical solutions.
 A wider range of issues are considered and shared future interests
of the parties are protected.
 ADR system also allows for risk management.
Cons of ADR
 ADR is not helpful where a dispute is to be decided on the basis of
a precedent.
 When there is a need for court and interim orders, ADR would not
be useful.
 ADR is less suitable when there is a need for enforcement.
 When there is a need for live and expert evidence and analysis in a
case, then ADR would not be useful.
 When there is an imbalance of power, between the parties in the
dispute, then ADR would not work.
 If the case is of a complex nature, then the adjudicating body must
look into minor details and may need expert advice and
suggestions. Here, ADR would probably not work.
Meaning of ADR:
This is an attempt to devise a machinery which should be capable of
providing an alternative to the traditional method of settling disputes. It
can also be defined as a technique of resolution of disputes through the
intervention of third party.
The Hon’ble SC of India in the case of food Corp. of India v. J mohindra

pal 1989 SC
It was suggested that making ADR as a part of a package system
designed to meet the needs of consumers of justice.
Characteristics of ADR
ADR provides for simple, quick, cheap and accessible justice.
It not only resolves disputes but harmonizes the relation of the parties.
It can be viewed as a compromise where no one loses or wins but
everyone walks out as a winner.
Statutes for ADR

1. Arbitration and conciliation Act, 1996
2. Article 51, COI
3. CPC S89, O27R 5[B]

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ADR

Pros and cons of ADR

The Hon’ble SC of India in the case of food Corp. of India v. J mohindra

Statutes for ADR

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