Introduction

Human beings’ need for survival brought competition

for resources, which are limited in nature, with its fellow
beings. And, with competition, came disputes and
conflict, which were resolved firstly and foremost, part
of human existence, by fighting or war. This instinctive
phenomenon continues till today. But for particular
disputes, human beings have been able to come up
with other systems for resolving disputes; firstly,
distribution of justice by the king (in case of tribes by
the tribal chief); secondly, the most prominent method
used in today’s world, litigation. Litigation as a process
involved to party contending of their rights, in front of
an impartial Judge, through their respective advo cates.
The Judge after hearing the contention of both the
parties delivers a judgment which determines the rights
and liability of the parties. No doubt, this method is
better than justice delivered by kings/queens (which
can be on their whims and fancies) or war (which leads
to damage to both the parties on a massive scale).
Litigation is a consequence of one of the human beings’
another instinct i.e. evolution. War and arbitrary
judgments evolved into litigation because of limitations
in those systems. Litigation, also, is not devoid of
limitations, hence, human being’s quest for a better
way of resolving disputes lead them to evolve an
efficient and effective way of resolving the disputes i.e.
the alternative dispute resolution (hereinafter referred
to as “ADR”) system....

HISTORY
In India, the law and practice of private and transactional commercial disputes
without court intervention can be dated back to ancient times. Arbitration or
mediation as an alternative to dispute resolution by municipal courts has been
prevalent in India from Vedic times.
The earliest known treatise is the Bhradarnayaka Upanishad, in which various
types of arbitral bodies viz (i) the Puga (ii) the Sreni (iii) the Kula are referred to.
These arbitral bodies, known as Panchayats, dealt with variety of disputes, such as
disputes of contractual, matrimonial and even of a criminal nature.[4] The
disputants would ordinarily accept the decision of the panchayat and hence a
settlement arrived consequent to conciliation by the panchayat would be as binding
as the decision that was on clear legal obligations.
The Muslim rule in India saw the incorporation of the principles of Muslim law in
the Indian culture. Those laws were systematically compiled in the form of a
commentary and came to be known as Hedaya. During Muslim rule, all Muslims
in India were governed by Islamic laws- the Shari’ah as contained in
the Hedaya. The Hedaya contains provisions for arbitration as well.
The Arabic word for arbitration is Tahkeem, while the word for an arbitrator
is Hakam. An arbitrator was required to posses the qualities essential for a Kazee–
an official Judge presiding over a court of law, whose decision was binding on the
parties subject to legality and validity of the award. The court has the jurisdiction
to enforce such awards given under Shari’ah though it is not entitled to review the
merits of the dispute or the reasoning of the arbitrator.[5]
ADR picked up pace in the country, with the coming of the East India Company.
The British government gave legislative form to the law of arbitration by
promulgating regulations in the three presidency towns: Calcutta, Bombay and
Madras. Bengal Resolution Act, 1772 and Bengal Regulation Act, 1781 provided
parties to submit the dispute to the arbitrator, appointed after mutual agreement and
whose verdict shall be binding on both the parties.[6] These remained in force till
the Civil Procedure Code 1859, and were extended in 1862 to the Presidency
towns.

LEGISLATIONS OF ADR IN
INDIA
Code Of Civil Procedure
The Code of Civil Procedure, 1859 in its sections 312 to 325 dealt with arbitration
in suits while sections 326 and 327 provided for arbitration without court
intervention. The Code of Civil Procedure (Act 5 of 1908) repealed the Act of
1882. The Code of Civil Procedure, 1908 has laid down that cases must be
encouraged to go in for ADR under section 89(1).[7] Under the First Schedule,
Order XXXII A, Rule 3 a duty is cast upon the courts that it shall make an
endeavor to assist the parties in the first instance, in arriving at a settlement in
respect of the subject matter of the suit.[8]
The second schedule related to arbitration in suits while briefly providing
arbitration without intervention of a court. Order I, Rule 1 of the schedule says that
where in any suit, all the parties agree that any matter in difference between them
shall be referred to arbitration, they may, at any time before judgment is
pronounced; apply to the court for an order of reference. This schedule, in a way
supplemented the provisions of the Arbitration Act of 1899.

Indian Arbitration Act, 1899:

This Act was substantially based on the British Arbitration Act of 1889. It
expanded the area of arbitration by defining the expression ‘submission’ to mean
“a written agreement to submit present and future differences to arbitration
whether an arbitrator is named therein or not”. [9]
Arbitration (Protocol And Convention) Act
1937:
The Geneva Protocol on Arbitration Clauses 1923 and the Geneva Convention on
the Execution of Foreign Arbitral Awards 1927 were implemented in India by the
Arbitration (Protocol and Convention) Act, 1937. This Act was enacted with the
object of giving effect to the Protocol and enabling the Convention to become
operative in India.
The Arbitration Act Of 1940:
The Arbitration Act, 1940, dealt with only domestic arbitration. Under the 1940
Act, intervention of the court was required in all the three stages of arbitration in
the tribunal, i.e. prior to the reference of the dispute, in the duration of the
proceedings, and after the award was passed.
This Act made provision for- a) arbitration without court intervention; b)
arbitration in suits i.e. arbitration with court intervention in pending suits and c)
arbitration with court intervention, in cases where no suit was pending before the
court.

Before an arbitral tribunal took cognizance of a dispute, court intervention was

required to set the arbitration proceedings in motion. The existence of an
agreement and of a dispute was required to be proved. During the course of the
proceedings, the intervention of the court was necessary for the extension of time
for making an award.

Finally, before the award could be enforced, it was required to be made the rule of
the court.[10] This Act did not fulfill the essential functions of ADR. The extent of
Judicial Interference under the Act defeated its very purpose.[11] It did not provide
a speedy, effective and transparent mechanism to address disputes arising out of
foreign trade and investment transactions. [12]
Arbitration And Conciliation Act, 1996:
The government enacted the Arbitration and Conciliation Act, 1996 in an effort to
modernize the 1940 Act. In 1978, the UNCITRAL Secretariat, the Asian African
Legal Consultative Committee (AALCC), the International Council for
Commercial Arbitration (ICCA) and the International Chamber of Commerce
(ICC) met for a consultative meeting, where the participants were of the
unanimous view that it would be in the interest of International Commercial
Arbitration if UNCITRAL would initiate steps leading to the establishment of
uniform standards of arbitral procedure.

The preparation of a Model Law on arbitration was considered the most

appropriate way to achieve the desired uniformity. The full text of this Model Law
was adopted on 21st June 1985 by UNCITRAL. This is a remarkable legacy given
by the United Nations to International Commercial Arbitration, which has
influenced Indian Law. In India, the Model Law has been adopted almost in its
entirety in the 1996 Act.[13]
This Act repealed all the three previous statutes. Its primary purpose was to
encourage arbitration as a cost-effective and quick mechanism for the settlement of
commercial disputes. It covers both domestic arbitration and international
commercial arbitration.[14] It marked an epoch in the struggle to find an
alternative to the traditional adversarial system of litigation in India.
The changes brought about by the 1996 Act were so drastic that the entire case law
built up over the previous fifty-six years on arbitration was rendered superfluous.
Unfortunately, there was no widespread debate and understanding of the changes
before such an important legislative change was enacted. The Government of India
enacted the 1996 Act by an ordinance, and then extended its life by another
ordinance, before Parliament eventually passed it without reference to
Parliamentary Committee.

Arbitration, as practiced in India, instead of shortening the lifespan of the dispute

resolution, became one more “inning” in the game. Not only that, the arbitrator and
the parties’ lawyers treated arbitration as “extra time” or overtime work to be done
after attending to court matters. The result was that the normal session of an
arbitration hearing was always for a short duration. Absence of a full-fledged
Arbitration Bar effectively prevented arbitrations being heard continuously on day-
to-day basis over the normal working hours, viz. 4-5 hours every day. This resulted
in elongation of the period for disposal.

Veerappa Moily also said in the ADR congress held in the year 2010 that the 1996
Act, although modeled along international standards, has so far proved to be
insufficient in meeting the needs of the business community, for the speedy and
impartial resolution of disputes in India.[15]
The Law Commission of India prepared a report on the experience of the 1996 Act
and suggested a number of amendments. Based on the recommendations of the
Commission, the Government of India introduced the Arbitration and Conciliation
(Amendment) Bill, 2003, in the Parliament. The standing committee of law
ministry felt that provisions of the Bill gave room for excessive intervention by the
courts in arbitration proceedings.[16]
MODES AND PRACTICES
OF ADR IN INDIA
ADR can be broadly classified into two categories: court-annexed options
(Mediation, Conciliation) and community based dispute resolution mechanism
(Lok-Adalat).

The following are the modes of ADR practiced in India:

1. Arbitration
2. Mediation
3. Conciliation
4. Negotiation
5. Lok Adalat
MECHANISM
NEED OF ADR
The Nature and Concept of ADR

1. The ADR system is simple, free from procedural technicalities and

result oriented. The ADR techniques are extra judicial in character.
2. The ADR resolution system covers the civil and commercial nature
of disputes. The mechanism of ADR with the help of various
alternative techniques given very encouraging results in several
categories of disputes.
 3. The role of the third person is a basic concept in ADR. In ADR
disputes are settled with the assistance of a neutral third person.
The neutral third person is selected or appointed by the parties of
their own choice and without fear or favor in order to avoid any sort
of bias.
4. The basic concept of the ADR system is to resolve disputes.
Whatever the case may be, the basic concept is to manage and
resolve the disagreements between the parties at the lowest cost
and with little adverse impact on business activities.
5. The mechanisms of the ADR system are economical, Common
and voluntary, this system results in huge savings to the litigant
parties.

The objective of ADR system

The main objective of the mechanism of the ADR system is not to

replace the judicial procedural laws but to decrease the time taken for
trial. Its few main objectives are mentioned below –

1. The ADR system provides cheap and speedy justice to the

disputant.
2. It aims to settle disputes on less lawyering.
3. It aims to settle the dispute without any discord.
4. It maintains confidentiality or keeping the information and disputes
classified and inside the organization is key to the ADR system.
5. The most important aim is to avoid long judicial proceedings and
trials because it is an alternative mechanism.

Conclusion

It is a well known fact that there are plenty of cases which are pending
before the Indian courts due to lack of resources including human
resources and proper infrastructure. Although various steps have been
taken towards the improvement of the system, the problem still
continues.

India is a relatively under-developed country and majority of litigants are

from below middle class and rural backgrounds. The mechanism of the
ADR system is a viable substitute and effective in providing speedy,
cheap and timely justice to litigants. The litigants can opt for any of
various forums. It does not mean to replace the existing judicial system.
But to aid and assist the existing judicial and justice delivery system in
providing timely relief.

Explain Historical perspectives of arbitration as a

dispute settlement mechanism, and law of
arbitration. – FOR THIS YOU WRITE EVOLUTION OF
ADR AND THEN THIS AND THEN THE LAWS WITH THE
SAME HEADING.
Evolution of Modern Arbitration Law in India Though arbitration prevailed in India,
in the form of panchayats (which have been now given recognition in the
Constitution of India)[1] before the Britishers came in and established their
authority. In 1923, the League of Nations gathered and agreed to the Geneva
Convention. The Geneva Convention also contained clauses for arbitration.[2]
The first arbitration dedicated provision in the Civil Procedure Code, 1908 which
had Section 89 providing for arbitration but the same was repealed by Section 49
and Schedule III to the Arbitration Act, 1940.[3] Prior to enactment of the
Arbitration Act, 1940, the Britishers enacted Arbitration (Protocol and
Convention) Act, 1937 wherein the Preamble of the Act stated that India was
signatory as a State to the Protocol on arbitration as established by League of
Nations.[4] The League of Nations intended to bring the world closer through
trade which made it realise the importance of arbitration. As a result, the
Protocol on Arbitration Clauses, 1923 came into existence. There were several
lacunae in the Protocol, hence, a need for amendment was felt. The League of
Nations came up with another Convention for Enforcement of Foreign Arbitral
Awards which was lacking in the 1923 Convention.[5] This Convention of 1927 is
also known as the Geneva Convention of 1927. This Convention formed the basis
for other enactment i.e. the Arbitration (Protocol and Convention) Act, 1937.
Section 3 of the Arbitration (Protocol and Convention) Act, 1937 refers to the
existence of the Arbitration Act, 1899.[6] The Arbitration Act, 1940 came into
picture repealing all the previous laws governing arbitration. The Arbitration
(Protocol and Convention), 1937 failed to achieve its objective. Then after several
years of work, in 1958, the world came up with a convention i.e the New York
Convention, which is still running its course till date. Then, the Arbitration Act,
1940 was repealed and replaced by the Arbitration Act, 1960. The New York
Convention inspired another legislation in the Foreign Awards (Recognition and
Enforcement) Act, 1961 which was lacking in the Arbitration Act, 1960. In 1981,
in Guru Nanak Foundation v. Rattan Singh[7], Desai, J. observed with regards to
the 1961 Act that the arbitration system has become ineffective. The point was
that even in cases if the arbitrator passed an arbitral award, the parties used the
provisions of the Act to challenge the award. This observation presented the
1961 Act as an additional layer which party may choose or not, prior to the
litigation process. The lacunae in the provisions of the 1961 Act, made it
redundant and people ended up approaching the courts for litigation. Arbitration
as a process was meant to be cost effective and time efficient, but the 1961 Act
failed miserably to achieve this objective. This Act would be further repealed and
replaced by the Arbitration and Conciliation Act, 1996. In 1985, United Nations
Commission on International Trade Law (UNCITRAL) presented a comprehensive
model for arbitration. The present Arbitration and Conciliation Act, 1996 is based
on that UNCITRAL model. The Arbitration and Conciliation Act, 1996 has been
subjected to two more amendments in 2015 and 2019....
MODES AND PRACTICES
OF ADR IN INDIA
ADR can be broadly classified into two categories: court-annexed options
(Mediation, Conciliation) and community based dispute resolution mechanism
(Lok-Adalat).

The following are the modes of ADR practiced in India:

1. Arbitration
2. Mediation
3. Conciliation
4. Negotiation
5. Lok Adalat
1. Arbitration:
The definition of ‘arbitration’ in section 2(1) (a) verbatim reproduces the text of
article 2(a) of the Model Law-‘arbitration means any arbitration whether or not
administered by a permanent arbitral institution’.[17] It is a procedure in which the
dispute is submitted to an arbitral tribunal which makes a decision (an “award”) on
the dispute that is binding on the parties.[18]
It is a private, generally informal and non-judicial trial procedure for adjudicating
disputes. There are four requirements of the concept of arbitration: an arbitration
agreement; a dispute; a reference to a third party for its determination; and an
award by the third party.[19]
The essence lies in the point that it is a forum chosen by the parties with an
intention that it must act judicially after taking into account relevant evidence
before it and the submission of the parties.[20] Hence it follows that if the forum
chosen is not required to act judicially, the process it is not arbitration.[21]
Types of arbitration are:

Ad Hoc Arbitration
An ad hoc arbitration is one which is not administered by an institution and
therefore, the parties are required to determine all aspects of the arbitration like the
number of arbitrators, manner of their appointment, etc. Provided the parties
approach the arbitration in a spirit of cooperation, ad hoc proceedings can be more
flexible, cheaper and faster than an administered proceeding. The advantage is
that, it is agreed to and arranged by the parties themselves. However, the ground
realities show that arbitration in India, particularly ad hoc arbitration, is becoming
quite expensive vis-à-vis traditional litigation.[22]
Institutional Arbitration
An institutional arbitration is one in which a specialized institution with a
permanent character intervenes and assumes the functions of aiding and
administering the arbitral process, as according to the rules of that institution. It is
important to note that these institutions do not arbitrate the dispute, it is the
arbitrators who arbitrate, and so the term arbitration institution is inapt and only the
rules of the institution apply.

Incorporation of book of rules in the “arbitration agreement” is one of the principle

advantages of institutional arbitration. Institutional Arbitration, throughout the
world, is recognized as the primary mode of resolution of international commercial
disputes. It is an arbitration administered by an arbitral institution.[23]
Further, in many arbitral institutions such as the International Chamber of
Commerce (ICC), before the award is finalized and given, an experienced panel
scrutinizes it. As a result, the possibilities of the court setting aside the award is
minimal.

Statutory Arbitration
When a law specifies that if a dispute arises in a particular case it has to be referred
to arbitration, the arbitration proceedings are called “statutory arbitration”. Section
2(4) of the Arbitration and Conciliation Act 1996 provides, with the exception of
section 40(1), section 41 and section 43, that the provisions of Part I shall apply to
every arbitration under any other act for the time being in force in India.[24]
Fast track arbitration
Fast track arbitration is a time-bound arbitration, with stricter rules of procedure,
which do not allow any laxity for extensions of time, and the resultant delays, and
the reduced span of time makes it more cost effective.[25] Sections 11(2) and
13(2) of the 1996 Act provides that the parties are free to agree on a procedure for
appointing an arbitrator and choose the fastest way to challenge an arbitral award
respectively. The Indian Council of Arbitration (ICA) has pioneered the concept of
fast track arbitration in India and under its rules, parties may request the arbitral
tribunal to settle disputes within a fixed timeframe.
2. Mediation:
Mediation is a process in which the mediator, an external person, neutral to the
dispute, works with the parties to find a solution which is acceptable to all of them.
[26] The basic motive of mediation is to provide the parties with an opportunity to
negotiate, converse and explore options aided by a neutral third party, to
exhaustively determine if a settlement is possible.[27]
Mediation In 1996, the Government brought an amendment to Section 89
of the Civil Procedure Code, 1908 which gave scope to the court to
formulate settlements, if it appears to the court that there is a possibility
of settlement between the parties and after receiving the referral from the
parties to make amendments in such settlement and refer the same to
arbitration, Lok Adalat, conciliation or mediation.[24] Mediation in India is
governed by the Mediation Rules of 2003.[25] These proceedings are
more informal in nature as compared to arbitration and conciliation. The
role of the mediator is more of a person who provides guidance and clears
any misunderstanding that arises between the parties. The parties reach
settlement on their own. Mediator regulates the settlement process. At
the end of the process, a settlement is arrived between the parties rather
than a decision. The Law Commission of India suggested establishment of
commercial courts, first, in the form of creating division in the High Court
itself[26] or establishing separate commercial courts[27]. The second
suggestion resulted in the passage of the Commercial Courts Act, 2015. In
2018, the present day Government, in alignment of its policy of improving
the ease of doing business, came up with an amendment to the
Commercial Courts Act, 2015. The President, in May 2018, promulgated
an Ordinance which amended the Commercial Courts Act, 2015. As per
this amendment, the Government introduced pre-litigation mediation for
all the commercial disputes.[28] The provision concerned is Section 12-
A(1) which states that in cases where no interim relief is required, the
matter would be referred to compulsory mediation. Section 12-A(2)
empowers the Central Government, through notification, to authorise the
authorities under the Legal Services Authorities Act, 1987 for pre-
institution mediation....

Mediation is negotiation carried out with the assistance of a third party. The
mediator, in contrast to the arbitrator or judge, has no power to impose an outcome
on disputing parties.

Despite the lack of ‘teeth’ in the mediation process, the involvement of a mediator
alters the dynamics of negotiations.[28] The concept of mediation is not foreign to
Indian legal system, as there existed, different aspects of mediation.
The Village Panchayats and the Nyaya Panchayats are good examples for this. A
brief perusal of the laws pertaining to mediation highlights that it has been largely
confined to commercial transactions. The Arbitration and Conciliation Act, 1996 is
framed in such a manner that it is concerned mainly with commercial transactions
that involves the common man rather than the common man’s interest.

In India, mediation has not yet been very popular. One of the reasons for this is
that mediation is not a formal proceeding and it cannot be enforced by courts of
law. There is a lack of initiative on the part of the government or any other
institutions to take up the cause of encouraging and spreading awareness to the
people at large.

3. Conciliation:
Conciliation is “a process in which a neutral person meets with the parties to a
dispute which might be resolved; a relatively unstructured method of dispute
resolution in which a third party facilitates communication between parties in an
attempt to help them settle their differences”.[29]
This consists in an attempt by a third party, designated by the litigants, to reconcile
them either before they resort to litigation (whether to court or arbitration), or after.
The attempt to conciliate is generally based on showing each side the contrary
aspects of the dispute, in order to bring each side together and to reach a solution.
[30]

Conciliation In 1987, prior to the enactment of the Arbitration and

Conciliation Act, 1996, the Government enacted another legislation for
resolving disputes i.e. the Legal Services Authorities Act, 1987[8]. The
proceedings under this Act are in the nature of conciliation and the sitting
Judge does not perform any adjudicatory function or there is no
determination of rights.[9] In P.T. Thomas v. Thomas Job[10], the Court
highlighted the benefits of the legal Services Authorities Act, 1987 as
following: No court fee is charged and if any fee is already deposited, it is
given back on settlement of disputes.[11] It is very elastic as far as
procedural law is considered and speedy in resolution of dispute. There is
no application of rigid traditional procedural laws like the Civil Procedure
Code, 1908 and the Evidence Act, 1872.[12] The Act enables the parties
to directly interact with Judges (retired Judges who are appointed by the
authorities concerned).[13] The proceedings cannot be conducted in an
adversarial manner similar to what is done in courts.[14] The most
important part of this Act is that if the dispute is settled; it is equivalent to
a decree and enforceability of a court. The settlement arrived at by the
parties is not appealable.[15] No civil appeal can be made from this
settlement.[16] In Bhargavi Constructions v. Kothakapu Muthyam Reddy,
[17] the Court ruled that the settlement can be challenged on limited
grounds i.e. challenge on the grounds of fraud, through writ jurisdiction
under Article 226 or Article 227 of the Constitution of India.[18] [19] The
idea behind bringing the Legal Services Authorities Act, 1987 was “legal
technicalities” does not get precedence over the resolution proceedings.
[20] The Arbitration and Conciliation Act, 1996 is another legislation which
formally provides for the conciliation process. The conciliation process is
mentioned in Part III of the legislation. The legislation also adopted as its
rule the United Nation Commission on International Trade Law (UNCITRAL)
Conciliation Rules. Section 66 of the Arbitration and Conciliation Act
provides that the proceedings would not be bound by the Civil Procedure
Code, 1908 and the Evidence Act, 1872[21]; no doubt this provision (and
many other provisions) is for streamlining the conciliation procedures.
Section 18 of the Micro, Small and Medium Enterprises Development
(MSME) Act, 2006, also provides for mandatory conciliation process by
referencing the dispute with regards to payment due under Section 17 of
the MSME Act.[22] Section 18(2) provides that Sections 65 to 81 of the
Arbitration and Conciliation Act, 1996 should apply to seek conciliation as
referred under Section 18(1) of the Micro, Small and Medium Enterprises
Development (MSME) Act, 2006....
Section 61 of the 1996 Act provides for conciliation of disputes arising out of legal
relationship, whether contractual or not and to all proceedings relating thereto.
After its enactment, there can be no objection, for not permitting the parties to
enter into a conciliation agreement regarding the settlement of even future
disputes.

There is a subtle difference between mediation and conciliation. While in

meditation, the third party, neutral intermediary, termed as mediator plays more
active role by giving independent compromise formulas after hearing both the
parties; in conciliation, the third neutral intermediary’s role, is to bring the parties
together in a frame of mind to forget their animosities and be prepared for an
acceptable compromise on terms midway between the stands taken before the
commencement of conciliation proceedings.[31]
4. Negotiation:
Negotiation-communication for the purpose of persuasion-is the pre-eminent mode
of dispute resolution. Compared to processes using mutual third parties, it has the
advantage of allowing the parties themselves to control the process and the
solution.[32]
Essentials of Negotiation are:

1. It is a communication process;
2. It resolves conflicts;
3. It is a voluntary exercise;
4. It is a non-binding process;
5. Parties retain control over outcome and procedure;
6. There is a possibility of achieving wide ranging solutions, and of
maximizing joint gains.[33]
In India, Negotiation doesn’t have any statutory recognition. Negotiation is self
counseling between the parties to resolve their dispute. Negotiation is a process
that has no fixed rules but follows a predictable pattern.

5. Lok Adalats:
Lok Adalat was a historic necessity in a country like India where illiteracy
dominated other aspects of governance. It was introduced in 1982 and the first Lok
Adalat was initiated in Gujarat. The evolution of this movement was a part of the
strategy to relieve heavy burden on courts with pending cases. It was the
conglomeration of concepts of social justice, speedy justice, conciliated result and
negotiating efforts.

They cater the need of weaker sections of society. It is a suitable alternative

mechanism to resolve disputes in place of litigation. Lok Adalats have assumed
statutory recognition under the Legal Services Authorities Act, 1987. These are
being regularly organized primarily by the State Legal Aid and the Advice Boards
with the help of District Legal Aid and Advice Committees.[34]
Legal Services Authorities Act, 1987:
The Legal Services Authorities Act, 1987 was brought into force on 19 November
1995. The object of the Act was to provide free and competent legal services to the
weaker sections of the society to ensure that opportunities for securing justice are
not denied to any citizen. The concept of legal services which includes Lok Adalat
is a revolutionary evolution of resolution of disputes.

Though settlements were affected by conducting Lok Nyayalayas prior to this Act,
the same has not been given any statutory recognition. But under the new Act, a
settlement arrived at in the Lok Adalats has been given the force of a decree which
can be executed through Court as if it is passed by it. Sections 19, 20, 21 and 22 of
the Act deal with Lok Adalat. Section 20 provides for different situations where
cases can be referred for consideration of Lok Adalat.

Honorable Delhi High court has given a landmark decision highlighting the
significance of Lok Adalat movement in the case of Abdul Hasan and National
Legal Services Authority v. Delhi Vidyut Board and Others[35]. The court passed
the order giving directions for setting up of permanent Lok Adalats.

SUGGESTIONS FOR
IMPROVING MECHANISMS
The evolution of ADR mechanisms was not of that much success. Thereby, the
trend is the imposition of responsibility and duty on Court
i) Courts are authorized to give directives for the adoption of ADR mechanisms by
the parties and for that purpose Court has to play important role by way of giving
guidance. Power is also conferred upon the courts so that it can intervene in
different stages of proceedings. But these goals cannot be achieved unless requisite
infrastructure is provided and institutional frame work is put to place.

ii) The institutional framework must be brought about at three stages, which are:

1. Awareness: It can be brought about by holding seminars, workshops,

etc. ADR literacy program has to be done for mass awareness and
awareness camp should be to change the mindset of all concerned
disputants, the lawyers and judges.
2. Acceptance: In this regard training of the ADR practitioners should be
made by some University together with other institutions. Extensive
training would also be necessary to be imparted to those who intend
to act as a facilitator, mediators, and conciliators. Imparting of
 training should be made a part of continuing education on different
facets of ADR so far as judicial officers and judges are concerned.
3. Implementation: For this purpose, judicial officers must be trained to
identify cases which would be suitable for taking recourse to a
particular form of ADR. [36]
iii) ADR Mechanisms to be made more viable: The inflow of cases cannot be
stopped because the doors of justice cannot be closed. But there is a dire need to
increase the outflow either by strengthening the capacity of the existing system or
by way of finding some additional outlets.

iv)Setting up of Mediation Centres in all districts of each state with a view to

mediate all disputes will bring about a profound change in the Indian Legal system.
These Mediation centres would function with an efficient team of mediators who
are selected from the local community itself.

v) Not many Indians can afford litigation. This kind of state of affairs makes
common people, especially rural people, cynical about judicial process. We must
take the ADR mechanism beyond the cities. Gram Nyayalayas should process 60
to 70 percent of rural litigation leaving the regular courts to devote their time to
complex civil and criminal matters.

vi) More and more ADR centres should be created for settling disputes out-of-
court. ADR methods will achieve the objective of rendering social justice to the
people, which is the goal of a successful judicial system.[37]
vii) The major lacuna in ADR is that it is not binding. One could still appeal
against the award or delay the implementation of the award. “Justice delayed is
justice denied.” The very essence of ADR is lost if it is not implemented in the true
spirit. The award should be made binding on the parties and no appeal to the court
should be allowed unless it is arrived at fraudulently or if it against public policy.
[38]

CONCLUSION
With the advent of the alternate dispute resolution, there is new avenue for the
people to settle their disputes. The settlement of disputes in Lok Adalat quickly has
acquired good popularity among the public and this has really given rise to a new
force to ADR and this will no doubt reduce the pendency in law Courts. There is
an urgent need for justice dispensation through ADR mechanisms.

STRUCTURE, POWERS, FUNCTIONS UNDER LSA ACT

Structure Powers and Functions of the Authorities under the Legal Services Authority Act, 1987
INTRODUCTION

The Legal Services Authority Act, 1987 (`LSA’) was enforced with effect from 9th
November,1995 after certain amendments were introduced by the Amendment Act
of 1994 to the main act. The Act provides for scope of legal aid support for the
economically weak, backward section and disabled persons . Legal Aid scheme was
introduced by Justice P.N.Bhagawati under the Legal Aid Committee formed in 1971.
Justice R.N. Mishra, Chief Justice of India contributed to the enforcement of LSA and
the establishment of the National Legal Services Authority on 5th December, 1995
for enforcement of LSA. ‘Legal aid’ has been defined and includes provision for legal
assistance to the poor, illiterate, physically challenged persons who do not have
access to courts due to ignorance of law and financial handicap. The Act provides
that any one who is eligible to avail of legal aid as per S 12 of LSA can seek
assistance under the enactment. LSA owes its origin to the Constitution. 9th
November, 2009, the day the Act came to be enforced has been declared National
Legal Service Day (`NLSD’). The Act is meant to imbibe re-dedication to ensure equal
opportunity and justice to all by provision of legal aid through the State, District and
Taluk Legal Service Authorities/ Committees formed through out the country. NLSD
symbolises equal opportunity and justice to all by imparting legal aid and assistance
through different forms of legal service authorities across the country. 2. Vision of
LSA reads that ‘no one shall be denied of access to Justice for the reasons of
economic or other disabilities.
2. Definitions - (aa)
“Central Authority” means
the National Legal Services
Authority constituted
under section3
LEGAL AND JUDICIAL SANCTION OF ADR

Judicial sanction in ADR

By Indian Legal Solution Legal Articles 0 Comments

Judicial sanction in ADR

Author: Santoshi Karasi
Alternative dispute resolution was at one point of time considered to be a voluntary
act on the apart of the parties which have obtained statutory recognition in terms of
Code of Civil Procedure Amendment Act, 1999, Arbitration and Conciliation Act,
1996, Legal Services Authorities Act, 1987 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 a 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 Article 14 and 21.

Civil Procedure (Amendment) Act 199

 The Code of Civil Procedure (Amendment) Act 1999 has introduced a new
provision in the Code in order to provide for court-annexed ADR
mechanisms.
 Under Section 89, the court is empowered to direct the parties to choose
among different ADR modes provided therein for the resolution of their
dispute outside the court.
 This provision is based on the recommendations made by the Law
Commission of India and the Malimath Committee.
 The reason for the incorporation of Section 89 is to see that those cases,
which do not require the court intervention, may be settled by alternative
means, thereby reducing the burden of the courts.
Further Section 89 has to be read with Rule 1-A of Order 10, which runs as
follows: –
 Order 10 Rule 1-A direction of the Court to opt for any one mode of
alternative dispute resolution.
 Order 10 Rule 1-B appearances before the conciliatory forum or authority.
 Order 10 Rule 1-C appearances before the Court consequent to the
failure of efforts of conciliation.
The Arbitration Act of 1940:
 The Arbitration Act, 1940, dealt with only domestic arbitration. Under the
1940 Act, the intervention of the court was required in all the three stages
of arbitration in the tribunal, i.e. prior to the reference of the dispute, in
the duration of the proceedings, and after the award was passed.
 This Act made provision for- a) arbitration without court intervention;
b) Arbitration in suits i.e. arbitration with court intervention in pending suits and

c) Arbitration with court intervention, in cases where no suit was pending before the
court.

 This Act did not fulfill the essential functions of ADR. The extent of Judicial
Interference under the Act defeated its very purpose. It did not provide a
speedy, effective, and transparent mechanism to address disputes arising
out of foreign trade and investment transactions.
Arbitration and Conciliation Act, 1996:
 The government enacted the Arbitration and Conciliation Act, 1996 in an
effort to modernize the 1940 Act. And this Act repealed the previous
statute.
 In 1978, the UNCITRAL Secretariat, the Asian African Legal Consultative
Committee (AALCC), the International Council for Commercial Arbitration
(ICCA) and the International Chamber of Commerce (ICC) met for a
consultative meeting, where the participants were of the unanimous view
that it would be in the interest of International Commercial Arbitration if
UNCITRAL would initiate steps leading to the establishment of uniform
standards of arbitral procedure.
 The preparation of a Model Law on arbitration was considered the most
appropriate way to achieve the desired uniformity and its primary
purpose was to encourage arbitration as a cost-effective and quick
mechanism for the settlement of commercial disputes.
 It covers both domestic arbitration and international commercial
arbitration.
Legal Services Authorities Act, 1987:
  The concept has been gathered from system of Panchayats which are
maily adopted in villages.
 The Legal Services Authorities Act, 1987 was brought into force on 19
November 1995. The object of the Act was to provide free and competent
legal services to the weaker sections of the society to ensure that
opportunities for securing justice are not denied to any citizen.
 The concept of legal services which includes Lok Adalat is a revolutionary
evolution of resolution of disputes and Sections 19, 20, 21 and 22 of the
Act deal with Lok Adalat. Section 20 provides for different situations
where cases can be referred for consideration of Lok Adalat.
 In the case of Abdul Hasan and National Legal Services Authority v.
Delhi Vidyut Board and Others, the court passed the order giving
directions for setting up of Permanent Lok Adalats.
Abdul Hasan and National Legal Services Authority v.Delhi Vidyut Board
and Others.
The petitioner filed a writ petition before Delhi High Court for restoration of
electricity at his premises, which was disconnected by the Delhi Vidyut Board (DVB)
on account of non-payment of Bill. Interalia, the grievances of the citizens were not
only confined to the DVB but also directed against the State agencies like DDA,
Municipal Corporation, MTNL, GIC and other bodies, Court notices were directed to
be issued to NALSA and Delhi State Legal Service Authority.

Judgment Held- Hon’ble Mr. Justice Anil Dev Singh passed the order giving
directions for setting up of Permanent Lok Adalats. The scholarly observations of Mr.
Justice Anil Dev Singh deserve special commendations and are worthy of note. It will
be profitable to reproduce the important text and abstract from this judgment, which
should be an eye-opener for all of us. It should also steer the conscience of all, as
there is an increasing need to make the Lok Adalat movement a permanent feature.
 U/S 19 of the Legal Services Authorities Act, 1987 Lok Adalats can be
organized. Matters, such as Matrimonial/Family Disputes, Criminal
(Compoundable Offences) cases, Land Acquisition Cases, Labour
Disputes, Workmen’s Compensation cases, Bank Recovery cases, Pension
cases, Housing Board and slum clearance cases.
 These Lok Adalat courts decide the various matters right from petty cases
to civil, criminal, and commercial cases & Housing Finance cases.
Consumer Grievance cases, Electricity matters, disputes relating to
Telephone Bills, Disputes with Cellular Companies. etc
Case laws on Scope of ADR
In ONGC v. Collector of Central Excise 1995 SCC 541, the dispute was between
the government department and PSU. The report was submitted by the cabinet
secretary pursuant to the Supreme Court order indicating that an instruction has
been issued to all departments. It was held that public undertakings to resolve the
disputes amicably by mutual consultation in or through or good offices empowered
agencies of govt. or arbitration avoiding litigation.
In Chief Conservator of Forests v. Collector(2003) 3 SCC 472, it was said that
state/union govt. must evolve a mechanism for resolving interdepartmental
controversies- disputes between the department of Government cannot be contested
in court.
In the judgment of the Supreme Court of India in Salem Bar Association vs. Union
of India( 2005) 6 SCC 344 the Supreme Court has requested to prepare model
rules for Alternative Dispute Resolution and also draft rules of mediation under
section 89(2)(d) of Code of Civil Procedure, 1908.
In Sundaram Finance Ltd. v. NEPC India Ltd. (AIR 1999 SC 565; 1999 (1)
Arb. LR 305 (SC)), 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