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ADR: Alternative Ways to Resolve Disputes

By Arunesh Bhardwaj July 29, 2016


Justice delayed is justice denied”, this legal maxim holds the utmost significance in the Indian Judicial system where the judicial bodies are flooded with the unresolved disputes and the justice that needs to be delivered to the requisite party is being denied because of the delay. To resolve this dispute and to lessen the burden of the Judicial Courts a few steps were taken by the Legislature, and one of these steps was introduction of Alternative Dispute Resolution wherein three main methods of resolving disputes were introduced. They are a) Arbitration b) Conciliation and c) Mediation.

 

Arbitration

Arbitration is an alternative method for dispute resolution wherein arbitrator/s is (are) appointed for the purpose of resolving the dispute between two or more parties. The first and foremost condition necessary for dispute to go to the arbitration is that there must be an arbitration agreement between them. The term arbitration agreement is defined in Section 7 of the Arbitration and Conciliation Act, 1996 (herein after referred as Act, 1996). As per the section, arbitration agreement can either be a clause in an agreement or an agreement in itself wherein the parties have agreed to submit to arbitration in case a dispute arises between them. This dispute may or may not be of a contractual nature. Apart from that, the clause or the agreement pertaining to the arbitration must be in writing and it should be signed by the parties. Section 10 of the Act provides the composition of the arbitral tribunal wherein it is mentioned that the number of arbitrators in the tribunal can be one or if it is appointed by both the parties then they can’t be in an even number. According to Section 11 of the Act, in case the parties think that are incapable of coming on a common ground for appointment of one arbitrator then they can each appoint one arbitrator who in turn will select the third arbitrator who will act as the presiding arbitrator. Also, the parties can take help of any judicial body or any person or any institution for appointing an arbitrator.  The onus to decide the procedure to be followed by the arbitral tribunal and the place of the arbitration will be on the parties of the arbitration agreement. Section 19 of the Act clearly mentions that the proceeding of the arbitral tribunal shall not be restricted by the provisions of the Civil Procedure Code, 1908 and the Indian Evidence Act, 1872. Section 20 of the Act gives the choice to decide the place for arbitration to the parties involved in it and in case they fail to do so the arbitral tribunal will decide the same for them on the basis of the condition and the circumstances of the case.

The Act under Section 35 has given a legal binding and finality to the order passed by the arbitration tribunal and according to Section 36 it will be enforced in the manner as if it was passed as a decree by a Civil Court.

 

Conciliation

Conciliation is an alternative method of dispute resolution wherein conciliator/s is (are) appointed by the parties whose main aim is to settle the dispute between the parties. This method of ADR is governed by the Arbitration and Conciliation Act, 1996 (herein after referred as the Act). To commence the conciliation proceedings a written invitation needs to be sent to the other party as per Section 62 of the Act after which the other party needs to either accept or reject the invitation of the party in writing. In case no such reply is received by the sender within thirty days the invitation will be deemed to be rejected. If accepted, then the conciliator will be appointed whose number as per Section 63 can be one or more than one if parties agrees to the same. In case the parties are not able to decide the number of conciliators or they are not on the same page with respect to a conciliator they can take help of any institution or person for the same. The main role of the conciliator as given in Section 67 of the Act is to settle the dispute between the parties and in doing so he can conduct the proceeding in a manner which he thinks to be fit for the dispute. As prescribed by Section 69 of the Act, the mode of communication between the parties of the conciliation and the conciliation will depend on the conciliator. He can either communicate in writing or orally to the parties of the conciliation. Also, the conciliator can meet the parties personally or can meet them together at any decided place by the parties or at a place of the choice of the conciliator after consulting the parties. This process will go on until it appears to the conciliator that there is a chance of settlement between the parties after which he will formulate the terms of settlement and that terms will be given to the parties for observation wherein the parties can suggest some changes, if any. After receiving the observation and changes, the conciliator will reformulate the terms. If both the parties agree on settlement of the dispute then the conciliator may draw up or assist the parties in drawing up, if requested by the parties, the settlement agreement. As per Section 73 of the Act, once the agreement has been signed by the parties, it will become binding on the parties under it and will have same effect as it has been passed by the arbitral tribunal under Section 30 of the Act.

 

Mediation

The term mediation has been defined under the Civil Procedure Alternative Dispute Resolution and Mediation Rules, 2006 as the process, by which a mediator appointed by the parties or by the Court, as the case may be, mediated the dispute between the parties. The rules regarding mediation have been provided in the second part of the said Rules. Section 122 of Code of Civil Procedure, 1908 has given the power to add or alter any of the rules given in Schedule I of the aforementioned code. Also as per Section 89, which gives the power to the Court to transfer any suit to alternative method of dispute resolution, the process for the same shall be prescribed and this prescription refers to Order X Rule 1A wherein the Court can refer any mode of alternative dispute resolution. By the power to alter or add any rules in the First Schedule vested by Section 122 of the Code, High Courts have made the rules regarding mediation under Civil Procedure Mediation Rules, 2006.

The first step in the mediation is to appoint a mediator wherein both the parties can agree on the same mediator or each can appoint a mediator and they in turn will appoint a sole mediator and if they are not able to do so, then the court will appoint a sole mediator. Once the mediator has been appointed then the place for the mediation has to be decided which can be either a venue of Lok Adalat or any place identified by the High Court or the precinct of any other Court or any other place agreed upon by the parties and approved by the High Court. The procedure for the mediation can be either previously decided by the parties or in case they are not able to decide a process unanimously then the procedure given in the Rules need to be followed wherein it has been mentioned that first of all the date, place and time of each of the mediation session has to be fixed by the mediator after consulting the parties. It is required that each party provides a brief memorandum, 10 days prior, setting forth the issue to be discussed in the coming session and the memoranda needs to be exchanged by the parties. In mediation, the parties of the dispute are the most important and they can decide or reject the offer of settlement given by any of the parties or the mediator. The parties are not bound by law to accept the offer of settlement but, if they agree to a settlement offer and then they will be bound by it. The expiration period of the mediation as provided is 60 days, in addition to which an extension of 30 days can be granted by the Court after applying for the same. Once a settlement order has been accepted by both the parties, within 7 days the Court shall fix a date for recording the settlement and then the Court will pass a decree in accordance to the recorded settlement. Further, it has been mentioned that the fee of the mediator will be decided at the time of referring the dispute to the mediator by consulting the parties and the mediator by the Court.

 

Image Credits: http://www.bedeawi.com/articledetailes.php?id=310

Tags: Arbitration , Mediation , Conciliation , Alternate Dispute Resolution , Arbitration and Conciliation Act , Arbitrator , Mediator , CPC


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By Arunesh Bhardwaj July 29, 2016