An analysis on evolution of alternative dispute resolution mechanism in Indian judiciary

Introduction

The justice delivery system is vital to the promotion of public interest and the maintenance of social order. Since the beginning, some sort of dispute resolution has been needed. For the administration of justice, an efficient mechanism for resolving disputes is needed. The platform selected by its subjects for the settlement of conflicts distinguishes the societies’ cultures.

The courts use ethical principles to administer justice, which exposes social values. Every civilised society is built on the basis of justice. While litigation is the most common form of dispute resolution in India, other forums are also commonly used. Outside of the formal legal system, India has a long history of promoting dispute resolution.

Equal justice for all is a cardinal concept that underpins the entire system of justice administration. It is not agreed if justice is not just and equitable. The aim of the rule of law is to compile justice and administer justice in every welfare state. The possibility of a justice delivery system in the Indian context, as well as the obstacles to dispensing justice in India, is a hot topic of debate.

Disputes were resolved by the intervention of family elders or assemblies of learned persons and other such bodies. Panchayat is a one-of-a-kind example of this. Life is full of conflicts and differences of opinion. We are human beings, and we cannot imagine an existence free of challenges; human society is fraught with disputes over conflicting interests. Conflict occurs as a consequence of human conflict.

Human nature can never improve, so these conflicts are inevitable. However, conflicts must be resolved, and they must be resolved judiciously, since such resolution is important for social peace, amity, comity, and harmony.

As a consequence, there is a need for an appropriate and efficient conflict resolution system, which is a required condition for the existence of a civilised society and welfare state. One of the most critical goals for the life of a democratic and civilised state is access to justice. Discovering justice has been an ideal that society has aspired to for centuries[1].

The notion of “access to justice” focuses specifically on legal system objects: first, the system must be fairly open to all individuals, and second, it must result in personally and socially just outcomes[2]. As a consequence, access to justice genuinely means successfully settling a conflict, which is often essential for the realisation of individuals’ constitutional rights in a welfare state.

As a general rule, one of the primary duties of the welfare state is to provide appropriate conflict resolution mechanisms to all people in order to ensure the equality of law guaranteed by Article 14 of the Indian constitution. ‘Justice-social, economic, and political’ is described in the Indian constitution’s preamble as a constitutional aim.

To seek justice in the courts, one must first go through the time-consuming and costly legal process. Litigation expenses, such as legal fees and solicitor fees, must be charged. A poor litigant who is barely alive would not be able to afford justice or legal redress for a wrong done to him in the courts. In addition, a substantial portion of India’s population is illiterate and lives in poverty.

As a result, they are utterly unaware of court proceedings, and when met with judicial machinery, they are scared and perplexed. Outside of the formal legal system, India has a long history of promoting dispute resolution. As a result, the majority of Indian people are unable to exercise their civil or legal rights, resulting in deprivation.

The provision of judicial and non-judicial dispute-resolution systems to which all people have fair access for the resolution of legal disputes and the protection of their constitutional and legal rights is one of the most essential duties of a welfare state. Poverty, ignorance, and socioeconomic inequity should not be obstacles.

Justice is conducted to protect the innocent, punish the guilty, and settle disputes in a satisfactory manner[3]. A successful judicial system is one that not only produces only outcomes, but also does so rapidly.

Concept of ADR

Alternative Dispute Resolution (ADR, also known as “Appropriate Dispute Resolution”) is a generic concept that refers to a range of methods and strategies for resolving conflicts in a non-confrontational manner. It involves a wide variety of approaches, from direct participation in mediation between parties as the most direct way to achieve a mutually satisfactory agreement, to arbitration and adjudication at the other end, where a settlement is dictated by a third party.

“Mediation,” a mechanism through which a third party supports the disputants in finding a mutually agreed settlement, is situated somewhere along the axis of ADR approaches between these two extremes. ADR is a means of attempting to design a workable and equal alternative to the conventional judicial system. It’s a framework for delivering justice efficiently.

These steps are being taken all over the world to settle unresolved conflicts and to stop going to court. The law commission found out that in all existing frameworks, only about 15% of cases go to final adjudication. Alternative conflict resolution methods such as conciliation, mediation, and arbitration are used to settle the remaining cases. A significant number of cases are resolved by pre-trial conciliation.

ADR has become a major movement in these nations, not just in terms of reducing the expense and time it takes to settle conflicts, but also in terms of creating a friendly climate. Alternative conflict resolution systems play an important role in the legal system, not just in terms of enhancing access to dispute resolution procedures, but also in terms of ensuring quality ‘Justice.’

Alternative Dispute Resolution (ADR) is a general concept that includes a range of strategies for resolving conflicts outside of conventional legal and administrative networks. As a result of the rise in foreign trade and the need for faster and less costly solutions to litigation, a wide range of ADR procedures has evolved over time.

The word “alternative dispute resolution” can refer to anything from mediated mediation agreements, in which disputants are encouraged to negotiate directly with each other before resorting to a more structured legal process, to arbitration arrangements or mini-trials that mimic a courtroom environment.

Negotiation, conciliation, mediation, arbitration, and a group of hybrid procedures such as med-arb, mini-trial, MEDLOA, private judging (rent a judge), early impartial assessment, and last bid arbitration are all examples of these procedures.

Some of the world’s most renowned universities and ADR centres in the United States, the United Kingdom, Canada, and Australia have developed these techniques on a scientific basis. There are two parts of the ADR processes. There are adjudicatory and non-adjudicatory options available.

The adjudicatory process is one in which a neutral third party hears all parties before making a decision. Arbitration is the name of this strategy. A non-adjudicatory approach is one in which a neutral third party does not make a judgement. The parties to the conflict maintain power over the proceedings’ outcome. Negotiation, Mediation, and Conciliation are three of these processes.

An analysis of the evolution of alternative dispute resolution mechanism in the Indian judiciary

In India judiciary is the tangible delivery point of justice. Resolving disputes is one of the important factor for the peaceful existence of society. Arbitration, the mode of ADR, is recognized by Indian Judiciary as a tool of settlement of dispute. The arbitration was originally governed by the provisions of the Indian Arbitration Act, 1940.

The Courts are mainly concerned with the supervision of Arbitral Tribunals and they were very keen to see whether the arbitrator has exceeded his jurisdiction while deciding the issue, which has been referred to him for arbitration the arbitrator has exceeded his jurisdiction while deciding the issue, which has been referred to him for arbitration.

It is clear from the study of the Preamble to our Constitution also aspiration as “justice-social, economic and political”. Article 39A of the Constitution provides for ensuring equal access to justice. Administration of Justice involves the protection of the innocent, punishment of the guilty, and the satisfactory resolution of disputes.

The Law Commission of India in its 14th Report categorically stated that the delay results not from the procedure lay down by the legislation but by reason of the non-observance of many of its important provisions particularly those intended to expedite the disposal of proceedings.

Given the huge number of pending cases, governance and administrative control over judicial institutions through manual processes have become extremely difficult.[4] The Supreme Court made it clear that this state of affairs must be addressed: “An independent and efficient judicial system is one of the basic structures of our Constitution…It is our Constitutional obligation to ensure that the backlog of cases is decreased and efforts are made to increase the disposal of cases.[5]

Alternative dispute resolution was at one point of time considered to be a voluntary act on the apart of the parties which has obtained statutory recognition in terms of the Code of Civil Procedure Amendment Act, 1999, Arbitration and Conciliation Act, 1996, Legal Services Authorities Act, 1997 and Legal Services Authorities (Amendment) Act, 2002.

The Parliament apart from litigants and the general public as also the statutory authorities Like Legal Services Authority have now thrown the ball into the court of the judiciary. What, therefore, now is required would be the implementation of the Parliamentary object. Access to justice is a human right and fair trial is also a human right.

In some countries trial within a reasonable time is a part of the human right legislation. But, in our country, it is a Constitutional obligation in terms of Articles 14 and 21. Recourse to alternative dispute resolution as a means to have access to justice may, therefore, have to be considered as a human right problem. Considered in that context the judiciary will have an important role to play.

In ONGC vs. Collector of Central Excise[6] , there was a dispute between the public sector undertaking and the Government of India involving principles to be examined at the highest governmental level. Court held it should not be brought before the Court wasting public money any time.

In ONGC vs. Collector of Central Excise[7], a dispute was between the government department and PSU. The report was submitted by the cabinet secretary pursuant to a Supreme Court order indicating that an instruction has been issued to all departments.

It was held that public undertaking to resolve the disputes amicably by mutual consultation in or through or good offices empowered agencies of govt. or arbitration avoiding litigation. The government of India directed to constitute a committee consisting of representatives of different departments. To monitor such disputes and to ensure that no litigation comes to court or tribunal without the Committee’s prior examination and clearance. The order was directed to communicate to every High Court for information to all subordinate courts.

In Chief Conservator of Forests vs. Collector [8]were relied on and it was said that state/union govt. must evolve a mechanism for resolving interdepartmental controversies- disputes between department of Government cannot be contested in court.

In Punjab & Sind Bank vs. Allahabad Bank,[9] it was held that the direction of the Supreme Court in ONGC III41 to the government to setup committee to monitor disputes between government departments and public sector undertakings make it clear that the machinery contemplated is only to ensure that no litigation comes to court without the parties having had an opportunity of conciliation before an in-house committee.

In the judgment of the Supreme Court of India in Salem Bar Association vs. Union of India,[10] the Supreme Court has requested prepare model rules for Alternative Dispute Resolution and also draft rules of mediation under section 89(2)(d) of Code of Civil Procedure, 1908. The rule is framed as “Alternative Dispute Resolution and Mediation Rules, 2003”.

Rule 4 of the Alternative Dispute Resolution and Mediation Rules, 2003”, lays down that the Court has to give guidance to parties (when parties are opting for any mode of Alternative Dispute Resolution) by drawing their attention to the relevant factors which parties will have to take into account, before they exercise their opinion as to the particular mode of settlement.

Although alternative dispute resolution systems are essential, and great attention and effort must go towards them to make successful, it is necessary that apart from many other factors, improvement in the functioning of the courts is brought first.

Thereafter alternative dispute resolution be encouraged, but confined to matters where it is more suitable/ appropriate as compared to the ‟efficient and proper‟ court procedures. It should not merely be regarded as an escape route form the inability of the courts to dispense justice in time.

Contribution of alternative dispute resolution in the administration of justice

Case laws

In Sundaram Finance Ltd. vs. NEPC India Ltd.,[11] the Supreme Court explicitly made it clear that the 1996 Act is very much different from that of Act, 1940. The provisions made in Act of 1940 lead to some misconstruction and so the Act of 1996 was enacted or rather repealed.

In order to get help in construing these provisions made in Act of 1996, it is more relevant to refer to the UNCITRAL Model Law besides the Act of 1996 rather than following the provisions of the Act of 1940.

In Grid Corp. of Orissa Ltd. vs. Indian Charge Chrome Ltd.[12], Section-37(1) of the Indian Electricity Act, 1910 provides for arbitration by the Commission or its nominee any dispute arising between the licensees or in respect of matters provided under Section-33.

The Orissa High Court held that Section-7 of the Arbitration Act, 1996 would apply to the present case in view of the fact that the scope of the Arbitration Act, is very wide and it not only contains arbitration agreement in writing but also other agreements as mentioned in sub-section (4).

It also held that if there is any arbitration agreement in any other enactment for the time being in force i.e., statutory agreement, provisions of Arbitration Act, 1996 shall apply except sub-section (1) of Section-40 and Sections 41 and 43.

In Baba Ali, Petitioner vs. Union of India and Others[13], the validity of the Act was challenged on the ground that under the Act of 1996 the question of jurisdiction of the arbitrator can only be considered by the appropriate court after the award is passed and not any penultimate stage. The Delhi High Court rejected the plea. Against this decision a Special Leave Petition was filed in the Supreme Court.

The Supreme Court of India dismissed the Special Leave Petition and held that there is no question of the Arbitration and Conciliation Act, 1996 being unconstitutional or in any way offending the basic structure of the Constitution of India, as the High Court has rightly observed that judicial review is available for challenging the award in accordance with the procedure laid down therein.

The time and manner of judicial scrutiny can legitimately be laid down by the Act passed by the Parliament.

In Sri Venkateshwara Construction Co. vs. Union of India[14], Andhra Pradesh High Court, in an application filed under Section 11, referred to the provisions of Section 10, sub-section (1) and (2) and held that after a close reading of the aforesaid provision it clearly shows that the parties are free to determine the number of Arbitrators, but such number shall not be an even number. Sub-section (2) further provides that if the parties fail to provide for an odd number of arbitrators, the arbitral tribunal shall be constituted by a sole arbitrator.

In Ashalata S. Lahoti vs. Hirala Lilladhar[15], the Bombay High Court has taken a stand in a few matters, wherein the number of arbitrators was even. It was held that under Section 14 of the Act 0f 1996 the mandate of Arbitrator should terminate if he becomes de facto or de jure to perform his functions.

It was held that if the Tribunal is constituted contrary to Section 10 of the Act of 1996, the Arbitrators de jure will not be able to perform those functions. In that case, the parties can move the Court for decision to decide whether the mandate has been terminated or not. And thus, this matter is to be dealt by the Court having jurisdiction under Section 14 (2). So, once it is so treated it will be so held that the Arbitrators de jure cannot proceed with the Arbitration.

In Guru Nanak Foundation vs. M/s Rattan Singh & Sons,[16] the Supreme Court held “Interminable, time-consuming, complex and expensive Court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedier for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940.

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 and 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 the legalese of unforeseeable complexity.”

In Godrej Properties & Investments Ltd. vs. Tripura Construction,[17] the Bombay High Court it was held that Section- 18 itself is not a ground of challenge; a challenge to an award can only be under Section 34(2). Section 18 could at the highest be invoked to point out the denial of opportunity.

Conclusion

Now it is proved all over the world that Alternative Dispute Resolution is a mechanism of resolving disputes by consensus in an organised manner with skills and techniques that could be learned and used. Alternative Dispute Resolution mechanism is in addition to courts and complements them.

Ever Method of Alternative Dispute Resolution mechanism has their own logic, purpose and justification. Arbitration is used definitively resolve a dispute like adjudication and that has transpired and requires fact finding, interpretation of contractual terms, or application of legal principles on the other hands mediation and conciliation are often used to improve communication between parties especially those with preexisting relationship, to reorient the parties to each other and to develop future oriented solution to broadly defines conflicts.

The Administration of justice system in India has come under the great stress for so many reasons mainly because of the large number of pendency of case in courts. The large number of case filed in the court every year which has shown a tremendous change in recent year resulting in delay and pendency underlining the need of Alternative Dispute Resolution methods.

In the ultimate analysis it may be concluded that widening gap between the common people and the judicially is indeed a serious cause of concern for all those who deal with administration of Justice.

The concept of Alternative resolution of Dispute in alternate mode should be deeply ingrained in the minds of litigant, lawyers and the judges so as to ensure that ADR methods in desperation of justice are frequently adopted. The effective utilization of ADR mechanism would go a long way in plugging the loop hole which is obstructing the path of justice.

Suggestions

1. Firstly for the implementation of ADR, the public should be aware there is another method of settlement of dispute other then the court of law. In other words, there should be frequent awareness progammes for the public so that they come to about legal aid schemes.
2. Though the legal Service Authority are doing their best in giving legal aid to the poor, the central government and state government must should provide adequates funds for effective implementation of the legal service authority act.
3. The Government should appoint qualified mediators/councilors and they should be paid adequate honorarium so that they must take interest in settlement of the matter.
4. The mediator/councilors must also be given some powers to take suitable action so that the parties should participate in the mediation/conciliation proceedings. It needs to be done because the even after orders of the courts and request by the mediators/councilors, the parties do not appear before the mediators willfully because they know nothing will happen if they don’t appear before mediator/councilors.
5. The order passed by Lok Adalat under legal service authority act should have binding force. It is seen that some time the order her passed in the Lok Adalat between the private person and the state Government and when the order is not complied with by the state government, that person is not having remedy to file contempt petition for non compliance of the order passed by Lok Adalat. Because of these ambiguities, the parties do not wish to get order from the Lok Adalat, instead the parties want the order be passed by regular courts so that it has binding force.
6. Some times lawyers do not take interests in referring the matters to be resolved by ADR methods as the councils get handsome amounts in litigation on hourly basis or date wise but when the matter is decided through ADR without intervention of the court. To overcome this situation lawyers should help the litigants as a social work and the lawyer doing such job should be praised by the courts and even by the public.
7. Sometimes lawyers suggest their clients to settle the matter through compromise but the litigants do not agree with the suggestions of lawyer instead they doubt the suggestions of the council. In these circumstances courts should intervene in the matter and forcefully direct the parties to go for settlement.
8. Since the arbitration proceedings are lengthy in comparison to other ADR methods, the arbitral tribunal/arbitrator before starting arbitration proceeding should try to act as a mediator for resolving the dispute or may refer to third person for mediation which will sake the time for adjudication of the matter.
9. Though there is no regular appeal against the award of arbitral tribunal/arbitrator, the award can be challenge under section 34 of arbitration act of 1996 and against the order passed under section 34 there is further provision of appeal under section 37 of arbitration act. However, their judgments of the Hon’ble Apex Court, that award of the arbitrator should not normally be interfered with by the courts then also the appeal against the award and the orders passed under section 34 are pending before the High Court for longer period. Measures should be adopted to decide those appeals in priority otherwise no fruitful purpose of the arbitration and conciliation act 1996 as a mechanism of Administration of Justice will served.
10. Though, Legal Service Authority arranges legal aid camps at different places from time to time but no effective work is being done in this regard. The government funds utilized in these schemes but it does not reached to actual beneficiary. Legal Service Authority should also take help of social organization in the implementation of legal service authority act.
11. Now a days cases of cyber crimes or crimes through social media are generally seen and some time these crimes are not done intentionally or willfully, the people of India are in the stage of learning information technology or electronic methods in their routine work and by mistake, some wrong things happen and these things are crime under the information technology act and Indian penal code and in other laws but the public is not aware about these laws.

Today we are in the electronic age, the government is insisting the public to use electronic methods, Governments must give training programme to the public to use electronic methods in also to run awareness programmes for enabling the public to know the law about cyber-crimes and this will ultimately reduce the crime ratio and will say the time of the courts.

References:

[1] S.B. Sinha, “ADR and Access to Justice : Issues and Perspectives.” Available at : www.hcmardras.tn.nic.in/jacademy

[2] Law Commission of India 222nd Report, Need for justice-dispensation through ADR, etc., 2009 5 The justice delivery system, is under an obligation to deliver prompt and inexpensive justice to its consumers, without in any manner compromising on the quality of justice or the elements of fairness, equality and impartiality. Lecture of justice Y.K. Sabharwal at Justice Sobhag Mal Jain Memorial Lecture on Delayed Justice delivered on 25th July, 2006

[3] 222nd Report of Law Commission of India, para 1.7 and 1.8

[4] In all, 33,79,033 cases are pending before the High Courts. As on December 31, 2004, the total number of civil cases pending before the subordinate judiciary is 82,36,254 and criminal cases pending are 1,95,85,776. The total pendency thus is 2,78,22,030. This shows that out of the total national pendency at the subordinate Courts level, 70% is criminal cases and the remaining is civil cases. The total number of district and subordinate Courts are 12,401. These Courts are located in 2,066 towns.

[5] Brij Mohan LalVs. Union of India & Others (2002-4-Scale-433), May 6, 2002.

[6] 1992 Supp2 SCC 432,[ ONGC I]

[7] 1995 Supp4 SCC 541 (ONGC II)

[8] (2003) 3 SCC 472 ONGC I AND II

[9] (2006) (3) SCALE 557

[10] (2005) 6 SCC 344

[11] AIR 1999 SC 565; 1999 (1) Arb. LR 305 (SC)

[12] 1998 (2) Arb. LR 128 (Orissa

[13] 1999 (Suppl.) Arb. LR 433 (SC)

[14] 2001 (2) Arb. LR 619 (AP)

[15] 1993 (3) Arb. LR.462 (Bombay)

[16] AIR 1981 S.C. 2075

[17] 2003(2) Arb. LR 195 (Bombay)

This article has been authored by Juny Varghese, a student at Bharata Mata School of Legal Studies.