Everyone Talks About ADR. Why Do Most Disputes Still End Up in Court?

As the CEO of ADRODR India, I am often asked a deceptively simple question: If everyone praises Alternative Dispute Resolution (ADR), why do most disputes still go to court? The answer lies not in a failure of ADR, but in a complex interplay of law, culture, incentives, and capacity. India has made real strides where arbitration is judicially supported, mediation has received statutory impetus, and online dispute resolution (ODR) has shown promise, yet litigation remains the default pathway for many.

First, enforceability and authority still shape behaviour. When rights are contested or urgent interim relief is required say, an injunction to prevent asset dissipation, parties instinctively seek the court’s coercive power. Although emergency arbitration has gained credibility after significant judicial recognition, many still perceive the court as the ultimate guarantor of immediate, enforceable orders, especially against recalcitrant counterparties.

Second, there is the matter of arbitrability and statutory limits. Certain disputes like criminal matters, matrimonial issues, insolvency, and key questions involving public rights are not amenable to ADR. In the Indian context, a large volume of cases involve the state as a party, or implicate public law elements, drawing them inevitably into the court system. When one of the largest litigants is the government, the gravity of court-centric resolution increases.

Third, drafting defects often doom ADR before it begins. Pathological dispute resolution clauses like missing seat, ambiguous institutional rules, poorly defined scope, or stamping and validity defects generate preliminary skirmishes that push parties into court for curative orders. A robust ADR clause is like a well-engineered bridge; a flawed one forces a detour through the courtroom.

Fourth, awareness and trust are uneven. Many corporates now appreciate institutional arbitration and structured mediation; however, SMEs, consumers, and even some legal advisors still view ADR as a soft option or an add on rather than a primary mechanism. Too often, mediation is mistaken for capitulation rather than a strategic, interest based process that preserves value and relationships. Equally, some fear that ADR awards or settlement agreements will be undermined by protracted challenges, notwithstanding the legislature’s and judiciary’s efforts to limit interference.

Fifth, incentives are frequently misaligned. Fee structures, adversarial legal culture, and a “fight to finish” mindset can make compromise appear weak and delay seem tactical. Even with cost sanctions and streamlined procedures, some actors perceive that time can be weaponised. Where there is asymmetry of resources or a desire to exhaust an opponent, litigation retains strategic appeal.

Sixth, capacity and quality vary widely. While India has exceptional arbitrators and mediators, institutional depth is still consolidating. Not all panels are curated; not all neutrals are trained in case management, industry nuance, or trauma informed practice. The market’s memory of ad hoc arbitration that mimicked court delays lingers. The antidote is consistent, professional, rules-based administration and we are building exactly that.

Seventh, multiparty and cross-border complexity creates drag. Consolidation, joinder, and parallel proceedings across forums are not always straightforward. Parties may need court assistance for evidence, interim relief, or consolidation. Until contractual architecture and institutional rules fully anticipate these realities, courts will remain part of the journey.

Eighth, confidentiality cuts both ways. Businesses value the privacy of ADR, but state actors and public interest litigants may seek the openness and precedent setting function of courts. For systemic issues, courts are better placed to pronounce norms. ADR excels at bespoke, commercial, and relational disputes where speed, expertise, and confidentiality produce superior outcomes.

If this is the diagnosis, what is the cure? From ADRODR’s vantage point, the path forward is pragmatic:

• Design better from the start. We promote tiered clauses, good-faith negotiation, followed by time bound mediation, then institutional arbitration with clearly designated seat, rules, and governing law. Clarity reduces jurisdictional tussles and preliminary objections.
• Embrace early case assessment. A disciplined front end evaluation on the facts, law, evidence, interests, and BATNA/WATNA allows executives to choose the right process at the right time. Mediation before positions calcify can save months of value destruction.
• Institutionalise excellence. Curated panels, conflict checks, rigorous training, and active case management are non-negotiable. Procedural timetables, capped adjournments, and reasoned cost orders keep matters on track.
• Leverage ODR. Digital platforms reduce cost and friction, increase participation, and suit low- value, high- volume claims when dealing with consumer disputes, logistics, fintech, and MSME receivables. Secure e-filing, virtual hearings, and asynchronous negotiation make resolution accessible.
• Align incentives. Outcome linked fees, cost consequences for unreasonable conduct, and settlement bonuses for counsel can shift behaviour towards resolution rather than escalation.
• Integrate with the courts. ADR thrives when courts stand behind it by enforcing agreements, recognising emergency orders, and limiting challenges to narrow grounds. Judicial support is no longer a question in India; we must translate that support into consistent practice.
• Build sector expertise. Energy, construction, technology, and financial services disputes benefit from specialised neutrals. Parties settle faster when decision makers understand the commercial heartbeat of the dispute.
• Mainstream mediation. With a legislative framework in place, pre-litigation mediation, if properly administered, can deflect a meaningful proportion of civil disputes from the courts. The key is credible neutrals, enforceable outcomes, and strict timelines.

Ultimately, ADR is not a slogan; it is a system. Litigation persists because it is entrenched, sometimes necessary, and often strategically rational. But the centre of gravity is shifting. As institutions professionalise, contracts get smarter, and parties demand predictability, ADR will become the first resort for commercial disputes. At ADRODR India, our mission is to make that choice easy: credible processes, expert neutrals, technology that works, and outcomes that stick. When those elements cohere, fewer disputes will end in court not because courts are weak, but because ADR is strong.

Author: Pavani Sibal is the CEO of ADRODR India. The views expressed are personal.