Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution or ADR refers to any means of settling disputes outside of the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. Arbitration and Conciliation Act, 1996 lays down certain rules related to resolution of disputes using ADR mechanism in India.

Advantages of ADR

• ADR often saves money and speeds settlement.
• It eases the burden on courts by reducing the number of cases that are regularly filed in courts.
• In ADR processes such as mediation, parties play an important role in resolving their own disputes. It often results in creative solutions, longer-lasting outcomes, greater satisfaction, and improved relationships.

Types of ADRs 

There are many forms of alternative dispute resolution mechanisms. Some of the most common ADR methods are mentioned below –

• Arbitration:

• It is an adjudicatory process in the nature of adversarial proceedings wherein parties submit their disputes to a neutral third party (arbitrator) for a decision.
• The proceedings, similar to litigation are however, faster, cheaper, confidential and more flexible in procedure and application of rules of evidence.
• The parties have the independence to chalk out the same in the agreement to arbitration. The said agreement which must necessarily precede arbitration, should be a valid one as per the Indian Contract Act, 1872.
• The parties to an arbitration agreement must have the capacity to enter into a contract in terms of Sections 11 and 12 of the Indian Contract Act, 1872.
• Arbitral decisions are final and binding on the parties with very limited scope of objecting to them.

• Mediation:

• It is a voluntary, disputant-centered, non-binding method of dispute resolution wherein a neutral and credible third party facilitates a settlement between the parties.
• It is a confidential and structured process where the mediator uses special communication, negotiation and social skills to assist the disputants in arriving at a mutually acceptable solution themselves.
• The parties thereto must be willing to iron out the creases in their relation by a little outside help as the focus in mediation is on the future.
• It is ideal where the emphasis of the parties is on building relationships, rather than ascertaining the party at fault for what has already transpired.
• The outcome of a successful mediation is a settlement agreement, and not a decision.
• The objective of mediation is not to evaluate guilt or innocence but to promote understanding, focus the parties on their interests, and encourage them to reach their own agreement.

Way Forward 

ADRs have proved to be one of the most effective methods in dispute resolution. Provisions of Arbitration and Conciliation Act, 1996 must be implemented in letter and spirit to strengthen the resolution of disputes using ADR methods in India.

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