What is Alternative Dispute Resolution?

 Definition: Alternative Dispute Resolution (ADR) refers to methods of resolving legal conflicts outside of
traditional court litigation.
 Purpose: ADR aims to provide quicker and more efficient resolution compared to court proceedings,
especially in light of court backlogs.
 Approaches: ADR encompasses various approaches such as mediation, arbitration, and negotiation, offering
parties more control over the resolution process.
 Scope: It can be applied to a wide range of disputes including legal, economic, industrial, and family matters.
 Benefits: ADR promotes faster resolution, preserves relationships, and supports economic development by
reducing legal bottlenecks.
 Implementation: Many countries, including India, have adopted ADR as a means to alleviate pressure on the
judicial system and enhance access to justice.
 Judicial Support: ADR is seen as complementary to traditional courts, with the judiciary recognizing its role in
expediting case disposition and strengthening personal and business relationships.
 In the case of Salem Advocate Bar Association v. Union of India, the Supreme Court ruled that where it
appears to the court that there exists an element of a settlement which may be acceptable to the parties, it
can direct them to consider the alternative dispute resolution (ADR) methods outlined in Section 89 of the
Code of Civil Procedure, 1908.

Methods of Alternative Dispute Resolutions

 The word “Alternative Dispute Resolution” includes various negotiation mechanisms including, Lok Adalats,
Arbitration, Conciliation, and Mediation in its fold.

 Several countries have used this Alternative Dispute Resolution strategy for successful dispute resolution.

 ADR is usually less formal, less expensive and less time consuming than traditional trials.

 ADR can also give people a greater opportunity to decide when and how to settle their conflict.

 Arbitration, Conciliation, Mediation, Judicial Settlement, and Lok Adalat are the most commonly used ADR
processes in civil proceedings.

 Section 89 of the Code of Civil procedure allows for the out-of-court resolution of disputes.

 It is founded on the Law Commission of India’s and the Malimath Committee’s suggestions.

 The Law Commission of India advised that the Court may encourage any party to a suit or action to attend in
person in order to find an amicable resolution of the disagreement.

 The Malimath Committee recommended that it be made compulsory for the Court to refer the conflict to
arbitration through Arbitration, Conciliation, Mediation, Judicial Arbitration via Lok Adalat, after the issues
have been framed. The case could only proceed further if the parties refuse to resolve their differences
through any of the alternative dispute resolution approaches.

 The different methods of ADR can be summarized as under: –

1. Arbitration;
2. Conciliation;
3. Mediation;
4. Judicial Settlement;
5. Lok Adalat.
ADR: Why needed

1. Amicable Settlement of Disputes: ADR fosters friendly resolutions, promoting healthy competition in
business and reducing animosity between parties.

2. Speedy Disposal of Trials: ADR ensures swift resolution without the delays often associated with traditional
litigation, as there's no room for adjournments or stay orders.

3. Economical Settlement of Disputes: Compared to the costly litigation process, ADR is more cost-effective as
it minimizes expenses on advocates and other trial-related costs.

4. Time-Saving Management: ADR streamlines dispute resolution, bypassing the complex procedures of
litigation, thus saving time for all involved parties.

5. Legal Recognition: ADR methods are recognized by Indian statutes, providing a legitimate framework for
resolving disputes. For example, the Civil Procedure Code and the Industrial Disputes Act contain provisions
for compromise and conciliation, respectively.

6. Advent of Multinational Corporations: With the rise of multinational corporations investing in various
sectors, there's a need for efficient dispute resolution mechanisms that can address issues promptly and
cater to dynamic business environments. ADR meets this need by offering immediate resolutions without
delays.

Merits of ADR

1. Flexibility in Procedure: Parties in arbitration can choose the procedural and domestic rules for their
dispute, providing flexibility tailored to their specific needs.

2. Cost-Effectiveness: Compared to litigation, which can incur significant expenses on attorneys and expert
witnesses, ADR is less costly and resolves cases quickly, saving parties time and money.

3. Satisfaction and Speed: ADR allows parties to collaborate with a neutral arbitrator or mediator, facilitating
quick resolution and ensuring satisfaction with the outcome.

4. Timely Initiation: ADR processes can be initiated at any time, providing flexibility and enabling parties to
address disputes promptly.

5. Adaptability: ADR programs are not rigid, allowing for customization based on the nature and complexity of
the dispute, making them suitable for a wide range of cases.

6. Conflict Mitigation: ADR can help reduce the intensity of contentious issues between parties, fostering
cooperation and facilitating smoother resolution processes.

Mediation
 Mediation is a process in which an external person who is known as mediator works with the transacting
parties to resolve the dispute and differences between them.
 Mediation is always carried out with an assistance of third party.
 The mediator has no power to impose his/her decision on the parties.
 The village Panchayats and the Nyaya Panchayat are good examples of this.
Importance of mediation ?

1. Voluntary Resolution: Mediation is a voluntary process where parties have control over the outcome. They
can actively participate in finding a solution that meets their needs and interests.

2. Preservation of Relationships: Unlike adversarial litigation, mediation focuses on collaboration and

3. Cost-Effective: Mediation is often less expensive than going to court. It saves parties the costs associated
with litigation, such as legal fees, court costs, and time away from work.

4. Time-Efficient: Mediation typically resolves disputes more quickly than litigation. Parties can schedule
mediation sessions at their convenience, avoiding the lengthy court process and delays.

5. Confidentiality: Mediation proceedings are confidential, providing a safe environment for parties to discuss
their concerns openly without fear of public exposure.

6. Empowerment: Mediation empowers parties to find their own solutions. With the assistance of a neutral
mediator, they can craft creative and mutually beneficial agreements that may not be possible in court.

7. Flexibility and Customization: Mediation allows for flexible and customized solutions tailored to the specific
needs and interests of the parties. This flexibility can lead to more durable and satisfactory outcomes.

8. Reduced Stress and Emotional Toll: Mediation is generally less adversarial and confrontational than
litigation, reducing the stress and emotional toll on parties involved in the dispute.