P3 ALTERNATIVE DISPUTE RESOLUTION

PRACTICAL RECORD

Submitted by

ALEX ANTHONY
(Reg. No. 40013049)

Under the Guidance of

Ms. Ashamol .V.

Submitted in partial fulfillment of the requirement for the

award of the degree of
Three Year LL.B

SCHOOL OF LEGAL STUDIES

Cochin 682022, Kerala, India.

2013-2016

DECLARATION

I, Alex Anthony, declare that the project record on Alternative Dispute

Resolution submitted hereby is a bonafide work done by me as
a part of the curriculam of the 5th Semester, 3 year LL.B course at
the School of Legal Studies, CUSAT, Kochi.

Date:
Place: Kochi.
Anthony

Alex

CUL3/LL.B/2015
05.10.2015

CERTIFICATE

This is to certify that, the Project Record on Alternative Dispute

Resolution submitted by Mr. Alex Anthony to the School of
Legal Studies, Cochin University of Science and Technology,
Cochin 22, is a bonafide record of work carried out by him
during the 5th Semester in partial fulfillment of the requirement
for the award of 3 year LL.B Degree.

Ms. ASHAMOL .V.

FACULTY

Dr. N.S. SOMAN

DIRECTOR

ACKNOWLEDGEMENT

My endeavor stands incomplete without dedicating my gratitude to

those who have contributed to the successful completion of my
project.

Most importantly, this could only be achieved by the showers of

blessings bestowed on me by my Lord Jesus Christ.

My sincere thankfulness is hereby expressed to our respected Director

of the School of Legal Studies, CUSAT, Kochi, for providing the
opportunity to accomplish the project and the support imparted
to this regard.

I articulate a heartfelt gratitude to my guide Ms. Ashamol .V. , Faculty,

School of Legal Studies, CUSAT, Kochi, the assistance provided
throughout my work and making it a successful project.

Lastly, I owe a debt of gratefulness to faculty members and friends

who stood as a source of inspiration and for helping me out to
bring this project a splendid success.

Alex Anthony

LIST OF CONTENTS

SL.NO.

DESCRIPTION

PAGE NO.

INTRODUCTION

PREFACE

ORIGIN & DEVELOPMENT OF ALTERNATE

DISPUTE RESOLUTION IN INDIA

INTERNATIONAL ADR FORUMS

13

KINDS OF ADR SYSTEMS

21

LOK ADALAT

24

MERITS OF ADR SYSTEMS

26

DEMERITS OF ADR SYSTEMS

29

ARBITRATION AND CONCILIATION ACT

9

1996

31

10

RECOURSE AGAINST ARBITAL AWARDS

33

11

IMPLEMENTATION OF ADR

34

12

CONCLUSION

43

13

TESTIMONIALS

50

14

PRACTICAL SESSIONS

55

15

GROUP PRESENTATION

58

16

BIBLIOGRAPHY

62

INTRODUCTION

The need for resolving disputes and insufficiency of the traditional

litigative mechanism to adjudicate disputes is obvious. The study
and analysis of reasons of delay, in dispensation of justice, will
continue till the problem is solved. According to a rough
estimate, all pending cases, which approximately go beyond Two
Crores in India, would take a minimum of 324 years for final
disposal, provided no new suit or proceedings is filed. Even if we
assume this as an exaggeration, the staggering cases in the
temples of justice is baffling and the rate of their disposal is very
disappointing. In this context, the mutual blame game and
passing the buck process is natural. However, much more
important an issue is the need for alternatives to be taken note
of with all seriousness by every actor and stake holder the
courts, the state, the lawyers and the clients, for social wellbeing.
Whether dispute management by an individual to case management
by the court, alternative dispute resolution is a continuous
Process, or an individualistic attitude towards dealing with fellow
human beings. The quality of civilisation of a democratic society
is well gauged by the existence of mechanism preventing
disputes and protecting Peace and order. Mere establishment of
hierarchy and huge infrastructure with enough manpower alone
cannot solve every dispute and render justice to the hilt. At every
level, there must be a mechanism or forum to seek information,
secure good counselling and assistance to manage the problems
in the form of conflict of interests or rights.
The alternative to state imposed litigation, ie, adjudication, is generally
projected to be arbitration. The Arbitration and Conciliation Act
1996 has brought in basic reforms in arbitration to reduce the
interference of judiciary and provide more viability to the process
as consensual, voluntary binding, quick and inexpensive. Still,
the judicial interventions are not ruled out and thus arbitration
has grown into such an expensive and complicated mechanism
that it stands ar par with litigation even in terms of time
consumption. Except that arbitration is an exclusive forum to
deal with a particular litigation only at a time, there is no
mechanism better than litigation in all general aspects. Law
equally provided for conciliation, but still after almost a decade
has passed, there is not enough encouragement and peoples

participation in it. The law prefers an arbitrator also to refer to

conciliation and if that fails, to come back to arbitration. The Civil
Procedure Code (1908) is amended to make possible court
annexed, court referred and court encouraged alternative dispute
resolutions. However, the litigant parties and their counsels are
not very enthusiastic to adopt any of these

alternatives, not even inclined to give consent to courts'. suggestion to

go for alternatives. The lok adalat being the state sponsored
conciliation which authoritatively assures settlement is a great
success, but the permanent lok adalats, as contemplated by the
latest amendment to Legal Services Authorities Act, are yet to
come into existence. The reason is the factor of imposition of a
solution which takes away the consensual component which is
the real reason for success of conciliation, in lok adalat. The
moment the process and solution is imposed it is no more an
alternative but the old authoritative adjudication type forum,
which parties and advocates might not prefer. These aspects are
analysed in the chapter about lok adalats.
What is actually left for the disputants is negotiation and mediation,
which 1e.the Pure and real alternatives to dispute resolution
mechanisms directly or indirectly leading to formal adjudication.
To choose one of these real Alternative Dispute Resolutions (ADR)
mechanisms, one has to understand the social context, individual
psychology, emotional issues that complicate the problem,
partys capacity, counsel's interests, long term relations and
several other aspects. To negotiate with the other party, an
individual disputant has convince himself on several emotive
issues and cut down on personal ego and hesitation. He must be
open to offer some concessions and have a positive approach
towards the proposals coming from opposite side. He has to
agree give up some thing or-welcome a third persons assisting in
settlement of the dispute, unless a complicated legal issue is
involved.
There is a need to elaborately discuss the strategies and requirements
of negotiation and mediation with a greater emphasis on ever
lasting solution. The real purport, spirit and power-of negotiation
and mediation cannot be understood without knowing what is
plaguing litigation, and what is wrong with the procedure and
law. Legal literacy, awareness, legal aid and assistance have
become essential requirements of the material world. One should
know the rights, wrongs, procedures and mechanisms with the
forum established to deal with disputes and adjudication, before
he ventures to offer a concession or accept it. Even in criminal
law where there is compoundability there is a possibility of
meaningful solution through ADR. 'Where the crime is not
compoundable, plea bargaining can increase efficiency of
prosecution and improve the conviction rate.

There are certain problems which a court of law cannot comfortably

address and adjudicate. Family disputes, especially child custody,
visitation rights and maintenance disputes, can be effectively
addressed and quickly resolved by mediation and negotiation.
Complete justice is the purpose of rule of law and administration
of justice in a welfare state like India. This can be better achieved
by ADR, rather than by litigation and arbitration.
From international disputes to internal problems, domestic conflicts to
intra-national interests, almost everything can be effectively
addressed by ADR. The benefit of quick disposition of cases
should be extended to middle class and poorer sections of the
society as well. The ADR, more so 'Negotiation and Conciliation,
must offer a solution for the variety of disputes, on various social
problems, whether legal or nor.

ADR in India
The resolution of disputes between members of a particular clan or
occupation or between members of a particular locality-by kulas
(assembly of the members of a clan), srenis (guilds of a
particular occupation), and pugas (neighbourhood assemblies),
was in vogue in ancient days. In rural India, panchayats
(assembly of elders and respected inhabitants of a village)
decided almost all the disputes between the inhabitants of the
village, while disputes between the members of a clan continued
to be decided by the elders of the clan.
One of the main characteristic of these traditional institutions is that
they were recognized systems of administration of justice and
not merely 'alternatives' to the formal justice system established
by the sovereign, feudal lords, kazis, adalats system introduced
by the British, and the existing court system. The two systems
continued to operate parallel to each other. However as regards
the procedure and the nature of proceedings, these institutions
were similar to the ADR procedures; being simple, informal,
inexpensive and quick, and the decisions were based not on
abstract notions of justice, but on the prevent norms of expected
behaviour. The procedure followed by the traditional institutions
was that of arbitration and conciliation, depending on the nature
of dispute, except that decision makers were not chosen by the
parties.
The formal systems of administration of justice introduced during the
British rule replaced the -old system of dispensing justice
through feudal set up. However, the traditional institution, such
as kula, srenis and, pugas continue, to play their role of dispute
resolution, though no longer known by their old names. Thus, the
disputes between members of a clan or biradari are still settled
by the biradari, traders and other commercial associations
provide for settlement of the disputes of their members, interse,
which is similar to srenis, and panchayats resolve disputes
between those residing within its territorial limits. However,
these traditional modes of disputes resolution were not suited for
settlement of commercial and other contractual disputes
involving high monetary claims founded on statutory laws. At the
same time, the traders could ill-afford the luxury of time involved
in normal litigation in courts.

Over the years, largely due to the development of trade and

commerce, arbitration came to be recognised as an effective
alternative to formal judicial system. Due to its own merit of
being adjudicatory in nature resulting in binding decision, it
became a widely practiced alternative to court system. The legal
profession was soon attracted by the popularity and volume
of arbitration in

India. The result was obvious. The arbitral proceedings tended to be

more formalised on the pattern of judicial adjudication in courts.
The litigious nature of parties, and the judge-arbitrators who are
rained only in the judicial process, further contributed to
judicialisation of arbitral process. Court intervention, before,
during, and after arbitration, made arbitration as dilatory as the
court system.
NYAYA PANCHAYATS AND PANCHAYATS
Nyaya Panchayat is an indigenous institution. The Law Commission
tried to revive it as peoples court. India has an age old tradition
of encouragement of dispute resolution outside the formal legal
system. Disputes were decided by the intervention of elders, or
assemblies of learned men and other such bodies. Nyaya
Panchayats existed at the grassroots level even before the
advent of British system of justice.
Panchayat literally means the coming together of five persons' of
village to judge disputes or determine group policy community
panchayats and village pachayats were functioning with great
vigour in the villages. With time, the hierarchy of courts was
gradually introduced. In panchayats, consensus continued to be
the basis of decisions. Parties used to agree to abide by the
decision to be given by the panchayat. There also existed visible
division of urban and rural society, as the urban population was
guided by the British system of justice, and the rural society was
guided by Dharrnashastras and Neeti Sutras. Gradually, the
urban court system gained more royal patronage and
prominence, while the rural panchayats were reduced to caste
panchayats only. With hierarchy of courts setting in, the village
decisions were appealed against and simply overruled which
eventually undermined the rural dispute resolution mechanisms
based on consensus and conciliation.

Initially the British, as a matter of prudent policy, did nor tamper these
village bodies from deciding their own disputes, while organising
a hierarchy of courts in the urban areas and the cities.
There was no unified central national legal system in force throughout
the country. Although the colonial rulers imposed some codified
laws, the local traditions and customs remained in force in local
areas. As Marc Galanter and Upendra Baxi observed, in preBritish India there were innumerable, overlapping local
jurisdictions, and many groups enjoyed some degree of
autonomy in administering law to themselves. Disputes in
villages and even in

cities would not be settled by royal courts, but by tribunals of the

locality of the caste within which the dispute arose, or of guilds
and association of traders or artisans, or by panchayat of the
locally dominant caste, or landowners, government officials or
religious dignitaries. Panchayats used to enforce customary
rules, fixed body of law, and sometimes created new rules for the
situation at hand. The process was formal and quick. While
panchayat had some standing bodies and formal mechanism, the
caste tribunals and other forums were not formal. However, they
used to bring informal and social pressure to resolve the dispute
via the process of negotiation or arbitration. These groups
enjoyed the power of creating new Precedents, and establish
them as customs for future application. These groups created
new obligatory usages as well. The sovereigns generally
supervised these bodies. While royal courts were exercising the
power of imposing severe punishments in serious wrongs like
crimes, the panchayats were empowered to issue decrees and
pronounce other settlements. The sanctions imposed were in the
nature of ex-communication, which forced the wrong-doers to
abide by the decision.
With the establishment of nyaya panchayats, the village panchayats
lost their adjudicatory powers. Efforts to reorganize the rural self
government through village panchayats were made in the British
era through the Mayo Resolution of 1870 on decentralisation.
This was supported by Lord Ripons Resolution in 1882, Report of
the Royal Commission on Decentralisation, Government of India
Resolution of 1915, and Montagu-Chelmsford Report of 1918.

The development of village government from the period 1920 to 1947

consisted primarily of the creation of panchayat bodies blending
municipal, administrative and judicial functions.
Article 40 enjoins the State to organise village Panchayats, art 50
directs it to take steps to separate the judiciary from the
executive. Mysore, Madras and Kerala have Nyaya Panchayat
system at the time of adoption of Constitution. Madhya Pradesh,
Uttar Pradesh states implemented art 50. By introducing the
Nyaya Panchayat system, stare made an attempt to replace the
existing dispute processing institution like caste institutions and
other secular or special institutions by some social workers like
Rangpur Peoples Court.
The membership of nyaya panchayatwas fixed, and was based on
popular election rather than social standing, their constituencies
were territorial units rather than functional or ascriptive groups,
they decide by majority vote rather

than by rule of unanimity they were required to conform to and to

apply statute law, they are supported by the government in the
compulsory execution of their decrees.
Nyaya Panchayat which is existing even today, is established for a
group of villages, usually an area covering 7 to 10 villages. It
usually covers a population of 14000 to 15000. A member of a
nyaya panchayat must be able to read and write the state
language, must not suffer from any disqualification described in
the statute, and must not hold office of sarpanch or be a member
in the samiti, parishad, or state or union legislature. The rules
regarding appeals in disputed elections are the same as those,
which apply to gram panchayats. The nyaya panchayat has a
chairman and secretary elected by its members, one-third of its
members retire every second year. Almost all states have
adopted election as a method of constituting nyaya panchayat.
Each gram panchayat, elects members for nyaya panchayar,
some states combine the method of elections with nominations.
UP Members of panchayats nominate a person from among
themselves to membership of the nyaya panchayat. Such
nomination may also be by consensus. A sub-divisional officer
then screens the nominations, and forwards to the district
magistrate, who as the chairman of the advisory committee
established for the purpose, should ultimately appoint members

of JP. Infact, the district magistrate relies on the advice of subdivisional officer, who in turn depends on the advice of minor
government officials such as the village accountant, and the
panchayat secretary. However, it is seen that such a procedure
may result in favouritism.
DECISION OF KARTA OR HEAD OF JOINT FAMILY
The joint family as practiced and established in Hindu religious society
absorbs the disputes within the family by its own internal dispute
resolution mechanism. It incorporates the systems of
negotiation, counselling and mediation. The final decision is left
to the decision of the karta or the head of the family.
COMMUNITY HEADS
The elderly personalities of the kula, ie, community or caste, enjoy
enormous power because of their knowledge and practice of
religious traditions. It is in the form of a court, where the decision
of the community head determines the decision.

RELIGIOUS GROUPS
During pre-Independence days the religious heads used to resolve the
disputes and decide controversies pertaining to the members of
their religion. Persons, family community and other civil claims
were settled by these religious bodies. Some of the crimes were
also enquired into and punished.
The Supreme Court recently (16 August 2005) issued notices5 to AII
India Muslim Personal Law Board (AIMPLB) and Islamic Seminary
Darul Uloom, Union of India and seven state governments to
explain whether the 'Islamic Court' is parallel judiciary. The
Supreme Court admitted a petition challenging the alleged
'adjudication by religious body. In response, the AIMPLB tried to
seek legal recognition as Family Settlement Bodies, claiming that
they were not parallel courts. As long as these bodies settle the
disputes, which do not fall under exclusive domain, they are not
illegal. These developments indicate functioning of religious
'dispute' settlement bodies.
BUSINESS GROUPS AND PROFESSIONAL ASSOCIATION
Srenis, were active in settling the disputes among the people in
occupation. Next were Pugas the assemblies of the
neighbourhood which took more interest in resolution of conflicts
which could not be tackled by either Kula or srenis etc. As time
advanced, the caste associations and caste heads lost their
significance and credibility. Gradually the new walks of life and
new kinds of business gave rise to new groups' The Chamber of
Commerce' NGO's Association,-Government employees Unions,
Trade Unions, Industrial Units Associations wielded more power
within their groups. Even today certain disputes are brought over
to these associations and the executive committee or sub-group
or an elderly personality with experience and wisdom hears the
parties and place the observations in a broad platform of
executive which may take a final decision based on the majority
resolution. Such an order is imposed on members at the
consequence of losing membership or deposited amount.

MERITS OF ADR SYSTEM

The god of an egalitarian society can be achieved by self-reliant
management systems even in dispute resolution. It can infuse
accountability in public institutions. The entire effort can be
looked into as an action for social good. The goals of equality
justice, and every other fundamental rules of fairness can be part
of ADR, especially the mediation process. It helps the poor to
empower themselves and secure justice, although they do not
have enough resources to seek it. Article 14 of the Constitution
guarantees to every citizen equality before the law and equal
protection of the laws. However, the system of justice in India
today is adversarial in character. It is resources-based. The
participants in the justice system can never be equal if one has
dl the resources at his command, and the other, has none. The
rich and the poor can never be equal before law as administered
in our legal system. Yet art 14 mandates such an equality, 'Is it a
vain aspiration? In DK Sampaths view much of the wealth today
takes the form of rights that do not fall within the traditional
common law concept of property. Society today is built around
entitlements. Do our courts protect such entitlements of the
poor? There is a need for structural change if the institution of
courts is to respond to the needs of the poor. There are
processual dimensions to the problem of access to courts. The
broad guarantees in the Constitution have to be read in
conjunction with the more specific provisions which ensure the
legal rights of the poor. For instance, arts 14 and 2l have a
supportive role for enforcement of the right to legal aid under art
39-A. All methods of dispute resolution, litigative and nonlitigative alike, have to be seen as part of the legal aid. Viewed
thus, mediation can be perceived as an implementation of the
values underlying our Constitution.
Innovative Methods
The democratic society helped in the emergence of the consensual
decision making process.
Dispute resolution is of two kinds-ltigative and non-litigative. The nonlitigative method is considered to be the widely adopted method
in recent times, as mechanisms outside usual processes of
litigation are considered more beneficial.

Being a creative dispute resolution process it can be formal or informal.

The early neutral evaluation, summary jury trial, mini-trial, court
annexed processes such as judicially hosted settlement, judicial
arbitration, temporary judging, are some of the variations of the
alternatives. They are useful because of their creative

methods.
These
methods
evolved
as
simple
and
direct
communications, and as highly structured settlement strategies
involving panels of neutrals and sophisticated procedures. Their
advantages include flexibility, capacity to mould itself to needs of
disputants etc. It is an art to select a process, and modify it to
address dispute.
There are several ADR methods. However, some of them are basic in
nature, giving rise to different kinds of resolution mechanisms' A
mediator or negotiator may adopt more than one method, or mix
two or three methods, depending upon needs and strategies. The
following are a few examples of dispute resolution methods:
= Arbitration: It is a private determination of a dispute referred to by
an
impartial third party.
=

Mediation: It is a structured negotiation Process' Mediation is a

means to achieve a conciliated settlement.

= Conciliation: It is a process of mediation used in agencies under law.

Mediation is one of the methods by which conciliation is
achieved.
=

Expert Appraisal: It involves a process whereby an expert is

appointed to investigate and deliver non-binding opinion.

Mini-trial: It is a condensed version of cases by two sides to senior

executives.

Early Neutral Evaluation: It is a non-binding reasoned evaluation.

Hybrid Arbitration: It involves both mediation and conciliation.

Negotiation with or without assistance.

In ADR, the goal decides the type of process to be adopted. In other

words, the parties have to first recognize their requirements, and
then choose the appropriate ADR method' For instance:

If the parties want finality of decisions: Any ADR method.

If the parties want to protect their relationship: Mediation.

If the parties wanr to i".kl. the powe-r imbalance: Negotiation.

= If the parties want to face cultural difference: Direct negotiation.

= If the parties want to save time and avoid costs constraints: Any
ADR method.
=

If parties are seeking remedies in Payment of money: Any ADR

method.

= If parties want to secure confidentiality: Any ADR method.

Management
ADR, in fact, is 'dispute management' with resolution potential.
Managing a conflict is an essential component in running a
successful organization. The in-house legal departments arc now
trying to regain control over their expenses and strategies to
resolve inter-personal conflicts, employer-employee relationship,
and business dealings establishing policies. Preventive strategy
is important in dispute resolution.
Cofidentiality and Relations
Parties to a dispute can protect confidentiality. In public trial,
reputation and trade secrets could be affected. Court litigation is
discouraged because it generates more litigation, To preserve
future working relationships ADR mechanisms are preferred, as
there is less public exposure, and agreements reached pursuant
to these mechanisms would be more lasting.

DEMERITS OF ADR SYSTEM

There are certain disadvantages. The unfamiliarity of process is a
hampering factor. It is, therefore, imperative that dispute
resolution procedure is incorporated into the contracts, which
govern relationships between the parties. ADR is a difficult task
despite co-operation, because of unequal bargaining power, as
the weaker parry may need court's protection. Apart from lack of
familiarity another demanding aspect is investment of time and
energy in an ADR process.
Generally the legal community and disputing parties try to compare
ADR procedure with judgments delivered by the courts, and
reject the former as having several drawbacks. Although
inordinate delay is a consistent complaint with the courts of law,
it is considered a preferable route because there is a possibility
of obtaining an urgent or-parte interim order from a court,
compelling the opposite party to do or desist from doing some
kind of act, which will be binding on the other party, which,
perhaps, gives the concerned parry scope for strengthening their
interests. Whereas, ADR process is slow, as that requires consent
of other party, and the settlement might not result in a binding
solution.
It is also pertinent to note that the contesting claimants would use the
court litigation as a strategy to know the strength or otherwise of
the other party through pleadings (written statement in response
to plaint), and then decide to go for ADR if the case of the
opposite party is strong, and a settlement would be beneficial in
such circumstances. Moreover, where the case depends heavily
on the expert evidences and opinion, the party may wait and see
what the court examined expert witness say the settlement
outside of court. Sometimes the witnesses of opposite side to
come forward, and disclose evidence.
The ADR serves no purpose where the parties require to establish a
particular right, or require a precedent from an authority by way
of determining the case in desired manner. Where the party
considers that he has a very strong case, and is confident of
forcing the other to concede his rights through court of law, he
does not wish to settle, which amounts to sacrificing some of
those considered interests.

In a waft ADR, unless both the parties are equally interested in

settlement, is nor quick or cheap. This may happen parties and
their lawyers are interested in using the settlement process as
strategy, and are not sincere about settling the issues for their
own reasons. Thus weak parties might prefer ADR to litigation in
order to secure a settlement which may nor reflect the merits.

Difficulties
It is apprehended that the non cooperative party can sabotage the
success of dispute resolution process leading to trial de novo.
The parties may create difficulties by using this process as a strategy
to delay the resolution, and further prolong the possibility of
litigation. Absence of positive attitude and trust can create lot of
problems. It may not preclude later litigation, and may not also
discourage future claims.

Arbitration and Conciliation Act, 1996 a Complete Code in itself

The 1996 Act is a self-contained and exhaustive Code in itself. The
Statement of Objects and Reasons contains the basic reasons
and the objects of the Arbitration and Conciliation Act, 7996. The
reasons as set out in the statement of the Bill for the 1996 are as
follows:
"It is widely felt that the 1940 Act, which contains the general law of
arbitration, has become outdated. The Law Commission of India,
several representative bodies of trade and industry and experts
in the field of arbitration have proposed amendments to this Act
to make it more responsive to contemporary requirements. It is
also recognised that our economic reforms may not become fully
effective if the law dealing with settlement of both domestic and
international commercial disputes remain out of tune with such
reforms. Like arbitration, conciliation is also getting increasing
worldwide recognition as an instrument for settlement of
disputes. There is, however, no general law on the subject in
India.
The United Nations Commission on International Trade Law (UNCITRAL)
adopted in 1985 the Model Law on International Commercial
Arbitration. The General Assembly of the United Nations has
recommended that all countries give due consideration to the
said Model Law, in view of the desirability of uniformity of the law
of arbitral procedures and the specific needs of International
Commercial Arbitration Practice. The UNCITRAL also adopted in
1980 a set of Conciliation Rules. The General Assembly of the
United Nations has recommended the use of these Rules in cases
where the disputes arise in the context of international
commercial relations and the parties seek amicable settlement of
their disputes by recourse to conciliation. An important feature of
the said UNCITRAL Model Law and Rules is that they have
harmonised concepts on arbitration and conciliation of different
legal systems of the World and thus contain provisions which are
designed for universal application.

Though the said UNCITRAL Model Law and Rules are intended to deal
with International Commercial Arbitration and Conciliation, they
could, with appropriate modifications, serve as a model for
legislation on domestic arbitration and conciliation. The present
Bill seeks to consolidate and amend the law relating to domestic
arbitration, international commercial arbitration, enforcement of
foreign arbitral awards and to define the law relating to
conciliation, taking into account the said UNCITRAL Model Law
and Rules.

The main objectives of the Act are as follows:

(i) to comprehensively cover International Commercial Arbitration and
Conciliation as also domestic arbitration and conciliation;
(ii) to make provision for an arbitral procedure which is fair, efficient
and capable of meeting the needs of the specific arbitration;
(iii) to provide that the arbitral tribunal gives reasons for its arbitral
award;
(iv) to ensure that the arbitral tribunal remains within the limits of its
jurisdiction;
(v) to minimise the supervisory role of courts in the arbitral process;
(vi) to permit an arbitral tribunal to use mediation, conciliation or other
procedures during the arbitral proceedings to encourage
settlement of disputes;
(vii) to provide that every final arbitral award is enforced in the same
manner as if it were a decree of the court.
(viii) to provide that a settlement agreement reached by the parties as
a result of conciliation proceedings will have the same status and
effect as an arbitral award on agreed terms on the substance of
the dispute rendered by er', arbitral tribunal; and
(ix) to provide that, for purposes of enforcement of foreign awards,
every arbitral award made in a country to which one of the two
International Conventions relating to foreign arbitral awards to
which India is a party applies, will be treated as a foreign award.
In short, the object of the Act is to secure expeditious resolution of
disputes.

RECOURSE AGAINST ARBITAL AWARDS

Section 34(1) of the Arbitration and Conciliation Act, 1996 provides for
the recourse to a Court against an arbitral award by an
application for setting aside such award on the grounds set out in
sub-section (2) and on the procedures laid down in sub-section
(3) of section 34 of the Act. Sub-section (2) provides that an
arbitral award may be set aside by the Court only if-(a) the
aggrieved Party makes an application furnishing proof that (i) a
party was under some incapacity, or (ii) the arbitration
agreement is not valid under the law to which the parties are
subjected, or (iii) the party making the application was not given
Proper notice of the appointment of arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or (iv)
the arbitral award deals with a dispute not contemplated by or
not falling within the terms of the submission to arbitration or it
contains decision on matters beyond the scope of submission to
arbitration, but in such case if the decisions on matters are
severable from those not so submitted, only that part of the
arbitral award which contains decisions on matters not submitted
to arbitration may be set aside; or (v) the composition of the
arbitral tribunal or the arbitral procedure was not in accordance
with the agreement of the parties unless such agreement was in
conflict with a provision of Part 1 of the Act which the parties
cannot derogate, or failing such agreement, was not in
accordance with this part-I; or (b) the Court finds that (i) subject
matter of the dispute is not capable of settlement by arbitration
under the law for the time-being in force, or (ii) the arbitral award
is in conflict with the public policy of India. To avoid any doubt
regarding "award in conflict with the public policy of India" this
expression has been defined by an explanation to sub-clause (ii)
of clause (b) of sub-section (2) of section 34 of the Act that the
making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or 81 of the Act.
Section 75 of the Act deals with confidentiality of matters
relating to conciliation proceedings; and section 81 of the Act
deals with admissibility of evidence in arbitral proceedings from
other proceedings. Sub-section (3) of section 34 of the 1995 Act
lays down that an application for setting aside an award shall be
made within three months from the date on which the applicant
had received the arbitral award or if a request had been made
under section 33 of the Act, then from the date on which the
request had been disposed by the arbitral tribunal. But, if the

Court is satisfied that the applicant was prevented by sufficient

cause from making the application within, the said period of
three months, it may entertain the application within a further
period of thirty days, and not thereafter. Sub-section (4) of
section 34 of the Act provides that on receipt of an application
for setting aside an award, the Court may where it is appropriate
and it is so requested by u party, adjourn the proceedings for a
period of time determined by it in order to give the arbitral
tribunal an opportunity to resume the arbitral proceedings of to
take such other action as the opinion of arbitral tribunal will
eliminate the grounds for setting aside the arbitral award.

KINDS OF ADR SYSTEMS

What is Alternative Dispute Resolution(ADR)?

Alternative dispute resolution (ADR) is a means of addressing and
settling parties disputes outside of courts traditional adversarial
setting. Today, alternative out-of-court mechanisms for settling
disputes are so effective that courts often require parties to pursue
these alternatives before litigating. For example, both mediation and
arbitration, the two most common ADR procedures, may be courtordered. Settling ones disputes through mechanisms external to the
court system may save you time and money.
What are the Different Types of Alternative Dispute Resolution
(ADR)?
There are many different ADR types that may involve third partys help
and that may be binding as well as non-binding. The two most common
types of ADR are mediation and arbitration; however, each has its own
variations, too.
1. Mediation involves the help of a go-between third party, called a
"mediator," whose job is to help parties reach some mutual agreement.
A mediator cannot force parties to agree and is not even permitted
decide the outcome of a dispute. Therefore, while mediating, both
parties retain significant control over the course of mediation.
Mediation is fully confidential and agreements are usually non-binding,
so parties may still pursue litigation following the mediation process.
2. Arbitration also involves the help of a neutral third party. During
arbitration, an "arbitrator" acts a bit analogously to a trial judge by
listening to the parties grievances. Unlike a mediator, an arbitrator is
not a passive go-between facilitator. After listening to the parties, an
arbitrator (often a professional in the partys subject of dispute)
actually pronounces a decision. Arbitration is still less formal than a
full-blown trial because many rules of evidence dont apply to
arbitration. Arbitration can either be binding or non-binding.
3. Med-Arb is a mixture of arbitration and mediation that combines
the benefits of these two methods. Basically, parties commence with
mediation, and if an agreement had not been reached, they move on
to arbitration. The same or different third-party neutral may conduct
the mediation and the arbitration sessions of Med-Arb.

4. Mini-trial is a mechanism for the parties to test their case and shed
light on settlement discussions. In a mini-trial, each partys attorney
presents an abridged version of the case. The information is presented
to a panel of representatives chosen by both parties. The panel
representatives actually decide a mini-trial outcome. Unlike other ADR
mechanisms, mini-trial is unique in that it often occurs after
commencement of formal litigation.
5. Summary Jury Trial (SJT) is essentially a mock trial with a neutral
jury that produces a verdict. It is similar to a mini-trial but is ordered by
the court rather than being stipulated by the parties. After hearing the
verdict, the court usually requires parties to attempt settling their case
before litigating in court.
6. Early Neutral Evaluation (ENE) usually occurs when a case has
just been filed. The early neutral evaluation may be conducted by a
judge-appointed evaluator from whom provides parties learn insights
about the case. For example, after case examination, an evaluator may
educate parties about their arguments' relative strengths, chances of
winning, and settlement options.
7. Negotiation is exactly what it sounds like: parties negotiate with
each other to achieve a compromise. Although obvious, this form of
ADR is often overlooked. Negotiation does not typically involve any gobetween neutrals and is as informal and open-ended as parties wish to
make it.
CONCILIATION
What is Conciliation?
A process that attempts to resolve disputes such as labor disputes by
compromise or voluntary agreement. By contrast with arbitration, the
mediator conciliator, or conciliation commissioner does not bring in a
binding award, and the parties are free to accept or reject the
recommendation. The conciliator is often a government official whose
report contains recommendations and is made public. Conciliation is a
prerequisite to legal strike/lockout action. The mediator is usually a
private individual" appointed as a last resort, after conciliation has
failed to prevent or put an end to a strike.
Conciliation is generally used as a synonym for mediation, though
there is a slight difference between them. If a third parry is involved
informally but without, being provided by for any law that can be called
mediation. Mediation may be called a non-statutory conciliation.

As already stated, conciliation even under the stature can be a nonbinding Process. Mediation is basically a non-binding procedure in
which an impartial third party, the conciliator, assists the parties to a
dispute in reaching a mutually agreed settlement. In USA the
procedure is described 'mediation' in which, it is said that emphasis is,
in comparison with conciliation' on a more positive role to be played by
the neutral mediator in assisting the parties to arrive at an agreed
settlement. Viewed from their outcome' conciliation and mediation are
inter-changeable expressions. The dispute resolution process being the
same, a successful completion of the proceedings, in both conciliation
and mediation, results in a mutually agreed settlement.
Conciliation and mediation are generally interchangeable expressions.
'Wherever the statute provided for some sort of assistance to parties,
to a dispute, the name of conciliation has been used. Being an assisted
or structured negotiation, the mediation offers a multifaceted proactive role in understanding, focusing and finalising the issues and
then providing all help for finding our a negotiated settlement. A third
party, other than the parties involved in conflict, is expected to play an
indefinable role with his fairness, objectivity, unbiased stand, neutrality
and much needed independence. It is basically yet another nonbinding process of resolution, yet more viable than any other method
of ADR. Because, negotiation as a measure is totally dependent on
willingness, initiative and efficiency of the parties or their
representative negotiator, and arbitration is more akin to adjudication
process despite that being freed from rigid rules of CPC 1908 and
Indian Evidence Act 1872. Mediation provides multiple options and
multifarious means to achieve consensus between conflicting parties.

LOK ADALAT
Back ground
Article 39A of the Constitution of India provides that the State shall
secure that the operation of the legal system promotes justice, on the
basis of equal opportunities, the State shall, in particular, provide free
legal aid, by suitable legislation or scheme or in any other way, to
ensure the opportunities for securing justice are not denied to any
citizen by reason of economic or other disabilities. With that end in
view the Government of India had, by u Resolution dated September
26,L980 appointed the "Committee for implementing Legal Aid
Schemes" (CILAS) under the Chairmanship of Mr. ]ustice P.N. Bhagwati
(as he then was) to monitor and implement legal aid programmes on a
uniform basis in
all the States and Union territories. CILAS evolved a model scheme for
legal aid and programme applicable throughout the country by which
several legal aid and advice Boards have been set-up in the States and
Union territories. Before the commencement of the Legal Services
Authorities Act, 1987 under which Lok Adalat received statutory
recognition, it was constituted at various places in the country and was
disposing a number of disputes summarily through Process of
arbitration with cheaper costs. At that time, the institution of Lok
Adalat was functioning as voluntary and conciliatory agency without
any statutory recognition of its decision. This institution of Lok Adalat
had at that time growing popularity in different parts of India; (See
Statement of Objects and Reasons of the Bill of the Legal Services
Authorities Act,1987, Gazette of lndia, dated 24-8-L987, Pt. II, Sec. 2,
Ext. p. 28).
Meaning and Importance of Lok Adalat
Section 2(1)(d) of the Legal services Authorities Act, 1987 does not
specifically define the expression "Lok Adalat" but has given broad
outline to mean Lok Adalat as organised under Chapter VI of the said
Act. Chapter VI of the Legal Services Authorities Act, 1987 under the
heading of "Lok Adalats" contains sections L9, 20, 21 and 22. Section
L9 deals with organisation of Lok Adalats, section 20, empowers Lok
Adalats to take cognizance of some cases. Section 2L deals with the
effect and status of onwards made by Lok Adalats. Section 2L confers
powers on Lok Adalat while determining disputes under this Act. But,
some of these sections lay down any concise or precise definition of
Lok Adalat.

Lok Adalat generally means people's court. It is not a court in the strict
sense of the term, but it is a forum where voluntary efforts are made
for settlement of disputes between parties. Its mechanism is simply
conciliatory and persuasive in
nature. In other words, Lok Adalat is a forum for Alternative Dispute
Resolution (ADR) Lok Adalat has very deep and long roots in the Indian
history and culture. It has emerged as a jurisprudence of peaceful and
amicable settlement of personal disputes with mediation of third party.
Abraham Lincoln has observed: "Discourage litigation Persuade your
neighbours to compromise wherever you can. Point out to them how
the nominal winner is often a real loser in fees, expenses and waste of
time. As a peace-maker, the lawyer has a superior opportunity of being
a Goodman. There will still be business enough." Mahatma Gandhi has
said: "I realised that the true function of a lawyer was to unite parties
given as under. The lesson was so indelibly burnt unto me that the
large part of any time, during the twenty years of my practice as a
lawyer, was occupied in bringing about private compromises of
hundreds of cases. I lost nothing thereby not even money, certainly not
my soul."
Organisation of Lok Adalats in India
Under section L9 of the Legal Services Authorities Act, 1987 the State
or District Authorities may organise Lok Adalats, (i) at such intervals
and places and (ii) for exercising such jurisdiction, and (iii) for such
areas, as they think fit. Every Lok Adalat organised for an area shall
consist of such judicial officers of an area as may be specified by the
State or District Authorities organizing the Lok Adalat and such other
members possessing such qualifications, and experience as may be
prescribed by the State Government. A Lok Adalat shall have
jurisdiction to determine and arrive at a compromise or settlement
between the parties to a dispute in respect of any matter falling within
the jurisdiction of any civil, criminal or revenue court or any tribunal
constituted any law for ttre time being in force in the area for which
the Lok Adalat is organised. According to practice followed in different
parts of India where the Lok Adalats are organised, senior judicial
officers, members of the Bar, people from different walks of life
commanding respects are called upon to participate{n this process of
settlement Of disputes. The members are called conciliators.

INTERNATIONAL ADR FORUMS

International arbitration is a leading method for resolving disputes
arising from international commercial agreements and other
international relationships. As with arbitration generally, international
arbitration is a creation of contract, i.e., the parties' decision to submit
disputes to binding resolution by one or more arbitrators selected by or
on behalf of the parties and applying adjudicatory procedures, usually
by including a provision for the arbitration of future disputes in their
contract. The practice of international arbitration has developed so as
to allow parties from different legal and cultural backgrounds to resolve
their disputes, generally without the formalities of their respective
legal systems.
Main Features of International Arbitration
International arbitration has enjoyed growing popularity with business
and other users over the past 50 years. There are a number of reasons
that parties elect to have their international disputes resolved through
arbitration. These include the desire to avoid the uncertainties and
local practices associated with litigation in national courts, the desire
to obtain a quicker, more efficient decision, the relative enforceability
of arbitration agreements and arbitral awards (as contrasted with
forum selection clauses and national court judgments), the commercial
expertise of arbitrators, the parties' freedom to select and design the
arbitral procedures, confidentiality and other benefits.
International arbitration is sometimes described as a hybrid form of
dispute resolution, which permits parties broad flexibility in designing
arbitral procedures. As one example, consider the International Bar
Association (IBA)'s Rules on the Taking of Evidence in International
Commercial Arbitration, revised in 2010. These rules adopt neither the
common law jurisdictions' broad disclosure procedures (Discovery), nor
follow fully the civil law in eliminating entirely the ability to engage in
some disclosure-related practices. The IBA Rules blend common and
civil systems so that parties may narrowly tailor disclosure to the
agreement's particular subject matter.
David Rivkin, who chaired the committee that drafted the rules, has
noted that the wide adoption of these rules in international arbitration
has led in practice to an unexpected use by common law practitioners
to limit disclosure and by civil law practitioners to expand it. With a
possibly more intuitive cause and practical effect, arbitral tribunals will
often read party election of the IBA Rules as an election most akin to
US-style Discovery. This is hardly surprising given the Rules' language

and the IBA's close ties through the years to the American Bar
Association (ABA).
Rules of evidence represents just one example of the different practice
that applies to international arbitration, and which distinguishes it from
provincial forms of arbitration rooted in the procedures of a particular
legal system. There are a variety of approaches to international
arbitration at the national level, even where model laws have been
adopted. These approaches can be further impacted by arbitral
rulesthat may be agreed between the parties. Similarly, international
arbitral practice has given rise to its own non-country-specific
standards of ethical conduct which are believed to apply in
international proceedings and, more to the point, to the arbitrators who
are appointed to conduct them.
Differences with Domestic Arbitration and Mediation
International arbitration is a significant variant of the practice in many
countries of arbitration, from which it is derived and shares many
features. It is not just the fact that international arbitration arises in the
context of international contracts that makes it different. In the
international dispute resolution community, it is widely accepted to be
a different animal entirely, involving different practices and rules, and
being represented by a different community of arbitrators and legal
practitioners
It
is
essential
to
draw
a
firm
distinction
between Arbitration andMediation or Conciliation, which are both
sometimes characterized as forms of ADR (Alternative Dispute
Resolution). In countries where mediation is new or struggling to be
introduced as a concept, this association has given rise to the
misleading impression that mediation is a form of non-binding
arbitration, with the arbitrator proposing or suggesting outcomes
based on an assessment of the parties' rights. In fact, arbitration and
mediation or conciliation are fundamentally different: the former is a
binding determination of legal rights, the latter two forms of dispute
resolution involve facilitated negotiation which aims at producing a
consensual settlement. The one leads to a binding determination
(arbitration), the other only in the event the parties agree to settle
their dispute on mutually satisfactory terms (mediation).
The Advantages of International Arbitration
For international commercial transactions, the parties may face many
different choices when it comes to including a mechanism for resolving

disputes arising under their contract. If they are silent, they will be
subject to the courts of wherever a disaffected party decides to initiate
legal proceedings and believes it can obtain jurisdiction over the other
party. This may not sit well with parties that need to know at the time
of entering into their contract that their contractual

rights will be enforced. The alternative to silence is to specify a method

of binding dispute resolution, which can be either litigation before the
domestic tribunal of one of the parties or arbitration. If the parties
choose to resolve their disputes in the courts, however, they may
encounter difficulties.
The first is that they may be confined to choosing one or the others'
courts, as the courts of a third country may decline the invitation to
devote their resources to deciding a dispute that does not involve any
of that country's citizens, companies, or national interests. An
exception to that rule is New York State, which will not entertain a
forum non convenience motion when the dispute concerns a contract
that is worth one million dollars or more and in which the parties
included a choice-of-law clause calling for application of New York
law. The second, and perhaps more significant difficulty, is that judicial
decisions are not very "portable" in that it is difficult and sometimes
impossible to enforce a court decision in a country other than the one
in which it was rendered.
Neutrality and Enforceability of Arbitration Awards
The ability to resolve disputes in a neutral forum and the enforceability
of binding decisions are often cited as the main advantages of
international arbitration over the resolution of disputes in domestic
courts. And there is solid legal support for this view. The principal
instrument governing the enforcement of commercial international
arbitration agreements and awards is the United Nations Convention
on the Recognition and Enforcement of Foreign Arbitral Awards of 1958
(the "New York Convention"). [ The New York Convention was drafted
under the auspices of the United Nations and has been ratified by more
than 140 countries, including most major countries involved in
significant international trade and economic transactions ] The New York
Convention requires the states that have ratified it to recognize and
enforce international arbitration agreements and foreign arbitral
awards issued in other contracting states, subject to certain limited
exceptions. These provisions of the New York Convention, together with
the large number of contracting states, has created an international
legal regime that significantly favors the enforcement of international
arbitration agreements and awards.
As a practical matter, what that means is that an international award
originating in a country that is a party to the New York Convention may
be enforced in any other country that is also a signatory, as if that
award were actually rendered by the domestic courts of that second
country. Here is an example of this important concept: assume that

parties from countries A and B have agreed to resolve their disputes in

country C, and all three countries are parties to the New York

Convention. This will mean that even though the arbitration will take
place in country C, the resulting award can be enforced in countries A
or B, as if it were a court decision rendered in the domestic courts of
that country. (By contrast, there is no equivalent treaty for the
international recognition of court decisions, although a draft treaty, the
Hague Convention of 30 June 2005 on Choice of Court Agreements,
was concluded in 2005, but had as of 2013 not entered into force.
Similarly, no equivalent treaty exists so far for the international
recognition of settlements achieved in mediation or conciliation: So far,
a meeting of the UNCITRAL Working Group II in New York has taken
place in February 2015 subsequent to a U.S. proposal for that working
group to develop a convention on the enforcement of conciliated
settlement agreements for international commercial disputes; within
the EU, the enforceability of mediation agreements is ruled by
Directive 2008/52/EC.)
Thus, parties to international contracts can decide to site their disputes
in a third, neutral country, knowing that the eventual award can be
easily enforced in any country that is a signatory to the New York
Convention, which has been ratified by a significant majority of
commercial nations (with notable exceptions like Iraq, which, not
having ratified the New York Convention, cannot be assumed to give
effect to arbitration decisions rendered in other countries). An
international award therefore has substantially greater executory
(legal) force than a domestic court decision.
Under the New York Convention, if a party to arbitration commences
legal proceedings in breach of an arbitration agreement against
another contracting party, the court is obligated to stay the
proceedings. Chapter 2 of the Federal Arbitration Act sets forth the
statutory basis for an American court to issue a stay in connection with
contracts falling within the ambit of the New York Convention.
Time and Cost of Arbitration Versus Litigation
As there are no appeals in international arbitration disputes should, on
average, be faster than domestic court proceedings with multiple
levels of appeals. Since disputes do not take as long to resolve they
should also, in theory, be less expensive than domestic litigation. In
practice, whether international arbitration will be faster and less
expensive depends significantly on the domestic jurisdiction that will
be hearing a case and other factors. The ICC and other arbitration
institutions have proposed a variety of measures that Parties may take
to ensure that the time and cost of international arbitration remains

reasonable.
The rapid
boutiques by

development

of

international

arbitration

some of the most well-known arbitrators and lawyers over the past five
years has been largely ascribed to a desire to modify the cost structure
for the resolution of disputes via international arbitration The more
recent advent of international arbitration legal networks between
boutique law firms also clearly targets a reduction in the average cost
of international arbitration.
Other Advantages of International Arbitration
Other advantages of international arbitration over domestic litigation
that are frequently cited include:
= Industry experts can be chosen as arbitrators rather than more
generalist
judges.
=
International arbitration can be more flexible that domestic
litigation.
= International arbitration can be confidential, which is useful if the
parties wish
to continue their business relationship.
= International arbitration can provide better-quality justice than
many domestic
court systems, which are overburdened or, at times, corrupt.
International Commercial Arbitration
The resolution of disputes under international commercial contracts is
widely conducted under the auspices of several major international
institutions and rule making bodies. The most significant are the
International Chamber of Commerce (ICC), JAMS International, the
British Columbia International Commercial Arbitration Centre (BCICAC,
Canada), the International Centre for Dispute Resolution(ICDR), the
international branch of the American Arbitration Association,
the London Court of International Arbitration (LCIA), the Hong Kong
International Arbitration Centre, and the Singapore International
Arbitration Centre (SIAC). Specialist ADR bodies also exist, such as the
World Intellectual Property Organisation (WIPO), which has an
arbitration and mediation center and a panel of international neutrals
specialising in intellectual property and technology related disputes.
A number of arbitral institutions have adopted the UNCITRAL Rules for
use in international cases.
The most salient feature of the rules of the ICC is its use of the "terms
of reference." The "terms of reference" is a summary of the claims and
issues in dispute and the particulars of the procedure, and it is

prepared by the tribunal and signed by the parties near the beginning
of the proceedings.
In a more recent development, the Swiss Chambers of Commerce of
Industry of Basel, Berne, Geneva, Lausanne, Lugano, Neuchtel and
Zurich have adopted a new set of Swiss Rules of Commercial Mediation
that are designed to integrate fully with the Swiss Rules of
International Arbitration that were previously adopted by these
chambers to harmonize international arbitration and mediation
proceedings across Switzerland.
Drafting International Arbitration Clauses
Most arbitral institutions have promulgated model clauses for parties to
use to authorize the institution to oversee the arbitration. A number of
specialized publications regarding the drafting of international
arbitration clauses are available.
A number of essential elements should be included in almost all
international arbitration agreements. These include the agreement to
arbitrate, a definition of the scope of disputes subject to arbitration,
means for selecting the arbitrator(s), a choice of the arbitral seat and
the adoption of institutional or ad hoc arbitration rules. A number of
other provisions can also be included in international arbitration
clauses, including the language for the conduct of the arbitration,
choice of applicable law, arbitrator qualifications, interim relief, costs,
procedural matters and the like.
In order to bridge the gap when parties to an international agreement
have difficulty in agreeing upon an arbitral institution, some
international arbitration specialists recommend using an arbitration
clause that authorizes two arbitral institutions in the same city. Those
clauses generally empower the party commencing the arbitration to
select the arbitral institution
Writing in the Business Law Today of the American Bar Association, Eric
Sherby (Israel) suggested a mnemonic device BLINC LLC designed
to enable the draftsman to remember a checklist for quickly drafting
an international arbitration clause: Broad, Law, Institutional, Number,
Costs, Location Language, and Carve-out.
International Arbitration Institute (IAI)
The International Arbitration Institute, headed by Emmanuel Gaillard,
was created in 2001 under the auspices of the Comit Franais de
lArbitrage (CFA) to promote exchanges and transparency in the
international commercial arbitration community.

The Association for International Arbitration (AIA)

The Association for International Arbitration is a non-profit
organization, founded in Paris in 2001 by Johan Billiet. The Association
for International Arbitration has an increasing number of members
among arbitrators and mediators of international backgrounds.
The Association was established with the aim of facilitating arbitration,
mediation and general forms of dispute resolution internationally.
Today, the AIA has developed into an organization dealing in the
private international law field to meet the needs of the fast-growing
evolution of dispute resolution within the international community. AIA
provides information, training and educational activities to expand the
promotion of arbitration and ADR globally by means of securing
partnerships with various organizations and parties to get involved in
the life of the association. The association constantly works to develop
partnerships in the international realm and to provide the international
community of arbitrators and ADR professionals with continuous
exposure to the latest international developments, activities and
opportunities in the field. AIA continually encourages the participation
and contribution of its members in the pursuit of the associations
goals.
International Investment Arbitration
The legal protection of Foreign Direct Investment is guaranteed by a
network of more than 2750 Bilateral Investment Treaties (BITs),
Multilateral Investment Treaties, most notably the Energy Charter
Treaty and number of Free Trade Agreements containing chapter on
investment protection through Investor-state dispute settlement, such
as NAFTA. The majority of these International Investment Agreement
provides foreign investors with a substantive legal protection and
direct means for redress against states for breaches of such treaties,
usually before the International Centre for the Settlement of
Investment Disputes (ICSID) or before an ad hoc tribunal established
pursuant to UNCITRAL Rules. The overall number of concluded cases
reached 244. Of these, approximately 42% were decided in favour of
the State and approximately 31% in favour of the investor.
Approximately 27% of the cases were settled.

Interstate Arbitration
Arbitration has been used for centuries, including in antiquity, for the
resolution of disputes between states and state-like entities. After a
period of relative disuse, Jay's Treaty between the United States and
Great Britain revived international arbitration as a means of resolving
inter-state disputes. The 1899 and 1907 Hague Conferences addressed
arbitration as a mechanism for resolving state-to-state disputes,
leading to the adoption of the Hague Conventions for the Pacific
Settlement of International Disputes. The Conventions established
the Permanent Court of Arbitration and a rudimentary institutional
framework for international arbitration of inter-state disputes. In recent
years, international arbitration has been used to resolve a number of
disputes between states or state-like entities, including Eritrea v.
Yemen, the Abyei Arbitration, the OSPAR Arbitration and the Iron Rhine
Arbitration.

CONCLUSION AND SUGGESTIONS

Alternative Dispute Resolution mechanisms are in addition to courts
and complement them. The traditional system of dispute resolution is
afflicted with inordinate delays. However the backlog and delay appear
to be more accentuated than in modern-day India. ADR mechanisms
play an important role in doing away with delays and congestion in
courts. The Indian civil justice system serves the interests of a diverse
and exploding population, the largest democracy and the seventh
largest national market in the world. This formidable responsibility,
combined with the recent drive toward greater political accountability
in the public administration and post-1991 market reforms, places
ever-greater pressure on the civil justice system. An estimated backlog
of 25 million cases and reported delays in some urban areas in excess
of twenty years, currently undermine the effective enforcement of the
substantive civil and commercial rights. Backlog and delay have broad
political and economic implications for Indian society. If India fails to
face and meet these challenges, it will not be able to realise fully its
legal commitment to democratic and liberal economic policies. In cases
such as motor accident claims, the victims may require the
compensation to be paid without delay in order to meet medical and
other expenses. In matters such as these, Alternative Dispute
Resolution mechanisms like Lok Adalat can help victims obtain speedy
relief.
In the ultimate analysis it may be concluded that the widening gap
between the common people and the judiciary is indeed a serious
cause of concern for all those who deal with the judiciary is indeed a
serious cause of concern for all those who deal with the administration
of justice. The effective utilization of ADR systems would go a long way
in plugging the loophole which is obstructing the path of justice. The
concepts of alternative modes of dispute resolution should be deeply
ingrained in the minds of the litigants, lawyers and the judges so as to
ensure that ADR methods in dispensation of justice are frequently
adopted. Awareness needs to be created amongst the people about
the utility of ADR and simultaneous steps need to be taken for
developing personnel who would be able to use ADR methods
effectively with integrity.

In the Preamble, the words justice, liberty, equality and fraternity

these four pillars form the infrastructure, supporting the whole Indian
system to be built. Breaking or damaging or weakening any one of
these pillars will damage the entire structure since everyone is a
fundamental pillar and each is tightly interlinked to each other and
these four forms a single interdependent reality.
The system of dispensing justice in India has come under great stress
for several reasons mainly because of the huge pendency of cases in
courts. In India, the number of cases filed in the courts has shown a
tremendous increase in recent years resulting in pendency and delays
underlining the need for alternative dispute resolution methods.
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 alternate dispute
resolution and this will no doubt reduce the pendency in law Courts.
The scope of alternate dispute resolution system (ADR) has been
highlighted by the Honble Chief Justice of India in his speech in the
joint conference of the Chief Ministers of the State and Chief Justice of
High Courts, held at Vigyan Bhavan, New Delhi on September 18, 2004
and insisted the Courts to try settlement of cases more effectively by
using alternate dispute resolution system so as to bring down the large
pendency of cases in law Courts.
Alternate Dispute Resolution is rapidly developing at national and
international level, offering simpler methods of resolving disputes.
Increasing trend of ADR services can easily be inferred from the growth
of Arbitration clause in majority of contracts. There has been a
significant growth in number of law school courses, diplomas,
seminars, etc. focusing on alternate dispute resolution and
rationalizing its effectualness in processing wide range of dispute in
society.
Lastly, the importance of ADR mechanism can be aptly put in the
words of Abraham Lincoln:
Discourage litigation persuade your neighbours to compromise
whenever you can point out to them how the nominal winner is often a
real loser, in fees, expenses, waste of time
After studying the topic it is observed that member country responses
domestic frameworks for consumer dispute resolution and redress
provide for a combination of different mechanisms. Although not
available in all countries, three clear categories of mechanism were
identified in this report: mechanisms for consumers to resolve their
individual complaints; mechanisms for consumers to resolve collective

complaints; and mechanisms for government bodies to take legal

action and obtain monetary redress on behalf of an individual
consumer or group of consumers. These different categories serve
distinct yet complementary functions, responding to the varying nature
and characteristics of consumer complaints.
Increased mobility and the growth of the online marketplace have
significantly increased the possibility for consumers and businesses to
engage in transactions over great distances and without regard to
geographic borders, local cultures and legal frameworks. Such benefits,
however, raise challenges as to how potential disputes can be resolved
in an accessible, effective, and fair way. Arbitration is considered to be
an essential part of dispute resolution among commercial parties these
days. Even in non-commercial cases, arbitration and other alternative
dispute resolution mechanisms are used these days. However,
gradually even ADR mechanisms have become time consuming and
expensive nowadays. Therefore, commercial world is looking towards
information and communication technology (ICT) for a better opinion
than ADR.
The ongoing development of information and communication
technologies, especially internet-based communications (e.g. message
boards, email, chat rooms, and video conferencing), have permitted
ADR services to move into an online virtual arena known as online
dispute resolution.
Many of the initial ODR service providers focused on resolving disputes
stemming from e-commerce transactions, such as online retail or
auction (e.g. e-Bay) purchases. Consequently, the majority of the
research and discussion on ODR is primarily focused upon the context
of resolving such disputes. Recently, ODR practitioners have begun to
provide services intended to resolve more complex types of dispute
(e.g. child custody and divorce settlements as well as complex, multiparty international employment disputes).

Online dispute resolution (ODR) has emerged as an alternative to ADR

that is primarily technology driven. Perry4 Law and Perry4 Law Techno
Legal Base (PTLB) have been working in the direction of legal
enablement of ICT systems in India and worldwide and legal
enablement of e-governance in India and abroad. To strengthen the
initiatives and projects of Perry4 Law and PTLB, they have thought of
taking some crucial and immediate steps for the development of ECourts, E-Judiciary, ODR India, and Online Arbitration and so on. It has
many advantages over traditional litigation methods and even over
ADR methods. However, online dispute resolution (ODR) in India is still
evolving. Perry4Law and PTLB suggest that India must speed up the

process of adoption of ODR for resolving e-commerce and international

commercial disputes. E-commerce disputes resolutions in India may be
resolved using ODR in the near future. Electronic delivery of justice in
India has failed. There is no second opinion that e-delivery of justice in
India is needed. Further, e-courts and ODR in India are also required to
be strengthened.
Suggestions:
There may be some restrictions in the existing arbitration laws on the
development of online arbitration, but these restrictions are not
substantial obstacles. With the development of laws about the Internet,
e-commerce and arbitration, there is spacious room for the
development of e-commerce and online arbitration all over. By taking
appropriate precautions, arbitration agreements can be concluded by
electronic means and arbitration proceedings can be conducted by
electronic means, within the framework of existing national laws and
international treaties. Though it is contended above that the online
arbitration and its utility is a possibility without any law reform and
people do not feel secure unless it is placed in proper legal frame
work. Hence law reform in this regard is the urgent need. Jurisdictional
issues in cyberspace have always been the matter of great
concern. There is a close connection of this issue with the success of
online arbitration. As online arbitration is more suitable and often
resorted to in resolution of cross border disputes, no amount of law
reform at national level would be the answer to the menace. At
international level the suitable law reform is recommended.

Online dispute resolution system presents a realistic and practical

solution to the growing needs of the Internet community. Furthermore,
it provides speedy resolution, is convenient, eliminates complex
jurisdictional and choice of law problems and has the potential to be
economically viable. As the number of people using the World Wide
Web grows, so will the disputes. The existing services are trying to
come up with the demand but there are certain problems that must be
addressed first like jurisdiction, confidentiality, enforcement of
decisions, etc. there is an urgent need to address these issues to
maximize the benefits and to provide a better system of resolution for
new breed of technology led disputes. The world today acknowledges
the accomplishment of WIPO online dispute resolution system. It has
extended to thousands of internet users easily accessible and reliable
means of dispute resolution and delivered substantial justice in a very
short span of time. There are a number of cases of domain name
disputes which have been successfully resolved online. A land mark
case in the Indian context is the TATA case wherein WIPO Arbitration
and Mediation centre in its administrative panel decision held that the
domain name "tata.org "standing in the name of the Advanced
Information Technology Association, Mumbai should be transferred to
the complainant being Tata Sons Ltd. As it was a bad faith registration.
Another recent case decided by WIPO is the Maruti Udyog Limited v.
Maruti Software Pvt. Ltd. wherein it was held that the respondents
domain name "marutionline.com is identical to trademark name
MARUTI in which complainant has rights, the respondent has no
legitimate interest in domain name and it is a bad faith registration.
The panel decided that the domain name "marutionline.com" should
be transferred to the complainant. In this way many e-disputes in the
present times are being amicably settled without having to resort to
cumbersome process of litigation and the same is done expeditiously
at more convenience and at reduced costs.
The various possible steps that can be taken for the bringing in the
concept and practice of Online Dispute Resolution worldwide. Advances
in technology can be used in a variety of ways to help decrease the
discrepancy that often exists between parties to a commercially-based
alternative dispute resolution. The first, and arguably most important,
use of technology would be the use of strict formats for online dispute
resolutions and the creation of in-depth tutorials to guide parties to
an online dispute resolution through the entire process.

Technology can also serve a purpose beyond making the format of an

online dispute resolution site more understandable. Advances in
technology can also be used to simplify the negotiation process for
different segments of the countryor for that matter the world. In
addition to the benefits of new technology, the current system of
online dispute resolution would benefit greatly from increased
governmental involvement. This involvement can come in a variety of
ways including the creation of model rules, the creation of a
certification board for online dispute resolution providers, and
legislation that regulates contractual clauses requiring consumers to
enter into mandatory arbitration of commercial disputes.
It is definite that this journey from ADR to ODR has been extremely
fascinating. While it invokes an ever challenging thought process in
each one of us, it stimulates us to ponder over certain issues that are
currently emerging and will very soon aid in improvisation and
extension of ODR system application to new areas worldwide. Law
which exists as of today in its binding force can be categorized in three
layers. The basic layer which can be said to constitute the first layer is
the domain of National/domestic law which is bound by
territorial/physical boundaries. The third layer can be said to comprise
of International legislative texts which serve as model laws and help
nations modernize adapt or adopt or amend or make more uniform
their domestic laws e.g UNCITRAL has framed laws on procurement of
goods, construction and services, law on International credit transfers
and laws that are more procedural laws by nature as that of
International commercial arbitration. The second layer is a new and
emerging layer that has helped bring about uniformity of laws
worldwide and has a binding force and is enforceable everywhere such
as the Uniform dispute resolution Policy adopted by ICANN for
resolution of domain name disputes.
With the world becoming closer and free of physical boundaries
through the virtual world of cyberspace and internet, there is certainly
a great scope of bringing about uniformity in laws and their application
and uniformity in procedures adopted to resolve disputes between
individuals across the globe. Apart from success of ODR mechanisms, it
would not be a farfetched idea to conceive of an online International
Court of justice to meet the demands of

e-disputes though it would require political reconciliation between main

trading blocks and will take some time. Within European Union there
have been already developments to examine provision of mediation
and arbitration services for electronic commerce through National
Chambers of Commerce. In some time, an organization or system of
law could find its way to regulate and determine the bulk of e-disputes
through uniform means. Considering the effectiveness and desirability
of ODR, online arbitration/mediation should be introduced in all model
international legislative texts, national laws as an internationally
accepted uniform method of dispute resolution. Governments should
consider their regulatory role and seek to encourage the development
of effective trust mark programs standards and dispute resolution
processes. Governments should also consider an accreditation process
to ensure that policy goals and consumer protection are achieved.
Governments should work towards international cooperation and the
development of international standards and codes of best practice.
Lastly, it can be concluded by saying that as the importance and
necessity of ADR along with ODR is increasing in the society both in
national and international, initiatives should be taken in every way for
the development in these fields so that society can be benefited and
the pendency of the cases in the courts may be reduced to zero. If
India wants to be a hub for international commercial dispute resolution
and online commercial arbitration, then it must start investing in ODR
and e-courts as soon as possible.
ODR system in essence not only offers a promising mechanism of
dispute resolution worldwide, but serves as a facilitator of global
harmony and a wholesome e-commerce interaction and growth.