Alternative dispute resolution in India

The Already burdened courts with a huge pile of cases to be heard along with the current COVID-19 induced break to the justice delivery system has made experts to renew the debate on having a robust alternate dispute resolution system in India. The Coming into force of the United Nations Convention on International Settlement Agreements Resulting from Mediation recently has given a shot in the arm to the Alternative Dispute Resolution (ADR) mechanism worldwide.

What is the UN Convention on International Settlement Agreements Resulting from Mediation?

• The UN Convention on International Settlement Agreements resulting from Mediation also known as the Singapore convention Applies to international agreements resulting from Mediation. It establishes a legal framework for the right to invoke settlement agreements and their enforcement.
• Singapore had worked with the UN Commission on International Trade Law (UNCITRAL) and other UN member states and NGOs for the preparation of the convention.
• The UN General Assembly adopted the convention on 20^th December 2018 and was opened for signature on 7^th August in Singapore.
• Forty-Six countries, Including the world’s largest economies, the US, China, India, etc signed the convention on the first day of opening of signature.
• As of 1^st September 2020, there are a total of 53 signatories to the convention with six official parties who have ratified the convention.
• India has signed the convention but is yet to ratify it.

What is the area of application of the Convention?

• The Convention applies to international commercial settlement agreements resulting from mediation.
• There are some exclusions such as the international settlements that are concluded

1. in the course of judicial or arbitral proceedings and which are enforceable as a court judgment and arbitral award;
2. for personal, family, or household purposes by one of the parties as well as settlement agreements relating to family, inheritance, or employment law.

• The courts of a contracting party will be expected to handle applications either to enforce an international settlement agreement which falls within the scope of the Convention or to allow a party to invoke the settlement agreement to prove that the matter has already been resolved, in accordance with its rules of procedure, and under the conditions laid down in the Convention.

What is the significance of the Singapore Convention?

• The Convention will be an important instrument for the facilitation of international trade and the promotion of mediation as an effective method of resolving trade disputes.
• As it is a binding instrument, is expected to bring certainty and stability to the international framework on mediation, thereby contributing to the Goal 16 of the Sustainable Development Goals.
• The harmonized and simplified framework will save time and costs in legal proceedings.
• It addresses the lack of effective means to enforce cross-border commercial mediated settlement agreements.
• Consequently, the businesses can have greater assurance that mediation can be relied on to settle cross-border commercial disputes as the mediated settlement agreements can be enforced more readily by the courts of contracting parties to the convention and may also be invoked by a party as a defense against a claim.
• The Convention will help in facilitating the growth of international commerce and trade and promote the use of mediation around the world.
• For India, the convention means a boost to “Ease of doing business” and improve rankings in the World Bank’s Ease of Doing Business index which emphasizes on enforcement of contracts.
• It will increase investor confidence and shall give confidence to foreign investors about India’s openness and commitment to adhere to international practice on ADR.

What is Alternative Dispute Resolution (ADR)?

• The process by which disputes between the parties are settled or amicably resolved without the intervention of judicial institution and any trial is known as Alternative Dispute Resolution.
• ADR is a mechanism of dispute resolution that is non-adversarial. In ADR competing parties work together cooperatively to reach the best resolution for everybody.
• It is an instrument to reduce the case burdens on the conventional judicial system while delivering a well-rounded and satisfying experience for the parties involved.
• ADR offers to resolve all types of matters including civil, industrial, and family, etc where people are finding it difficult to settle.
• Generally, ADR uses a neutral third party who helps parties to communicate, discuss the differences and resolve the dispute.
• ADR enables individuals and groups to maintain co-operation, social order, and provides an opportunity to reduce hostilities.

What are the types of ADR?

Arbitration

• In this, the dispute is submitted to an arbitral tribunal which makes a decision (called an “award”) on disputes that are generally binding on the parties.
• It is less formal than a court trial and rules of evidence are somewhat relaxed.
• Generally, there is no right to appeal against the arbitrator’s decision.
• Barring a few measures, there is very little scope for judicial intervention in the arbitration process.

Conciliation

• A non-binding procedure in which an impartial third party, the conciliator, assists the parties to try to reach a mutually acceptable resolution of the dispute.
• It is a less formal type of arbitration where parties are free to accept or reject the recommendations of the conciliator.
• If both parties accept the settlement, it is final and binding on the parties.

Mediation

• Here, an impartial person called a “mediator” helps the parties to reach a mutually acceptable resolution.
• The mediator himself does not decide on the dispute but helps the parties communicate so they can try and settle the dispute by themselves.
• Hence, the control of the outcome in mediation is with the parties in dispute.

Negotiation

• This is a non-binding procedure in which discussions are initiated between the parties without the intervention of the third party.
• It is the most common form of ADR.
• The negotiation occurs between friends, families, businesses, non-profit organizations government branches, among nations, etc.

Lok Adalat

• This is an interesting feature of India’s legal system coming from the Legal Services Authorities Act, 1987 to encourage out-of-court settlements.
• Lok Adalat (people’s court) is an informal setting that facilitates negotiations in the presence of a judicial officer where there are no undue legal technicalities.
• The order of a Lok Adalat is final and is deemed as a decree of a civil court. The order is not appealable in a court of law.

History of ADR in India

• Resolution of disputes through ADR has many precedents in Indian culture and history. since the Vedic period, Indians have used non-adversarial methods for resolving their disputes.
• Yajnavalkya and Narada highlighted that Kula (family, community, caste disputes), SRENI (trade disputes) and Puga tribunals (community disputes within a locality) were resolving the disputes in ancient India
• It even continued during the medieval period. Tahkeem is an Arabic word for arbitration and the word for an arbitrator is Hakam. Islamic law mandated that the arbitrator must be neutral and the arbitral award cannot be challenged on merits.
• Britishers had given formal recognition to arbitration through legislation. Arbitration, as a dispute resolution process was accepted as early as 1879 and found its place in the Civil Procedure Code in 1908.
• The Indian legislature enacted The Legal Services Authorities Act, 1987 by constituting the National Legal Services Authority as a Central Authority (Chief Justice of India as its Patron-in-Chief).
• The Law Commission in its 129^th report and Malimath Committee recommended making it mandatory for courts to refer disputes for resolutions through alternate means if the resolution so is possible.
• The Arbitration and Conciliation Act, 1996 makes elaborate provisions for conciliation of disputes arising out of legal relationship, whether contractual or not.
• In 1999, the Civil Procedure Code Amendment Act of 1999 was passed inserting Section 89 in the Code of Civil Procedure 1908, providing for the reference of cases pending in the Courts to ADR which included mediation.
• Procedure for plea-bargaining was included in the Code of Criminal Procedure in 2005. Plea-bargaining means pre-trial negotiation between the accused and the prosecution during which the accused agrees to plead guilty in exchange for certain concessions.
• Recently, in 2015, the amendment to Arbitration and Conciliation Act was affected to bring Indian arbitration closer to international standards such as the model law by UNCITRAL on international commercial arbitration.

Why ADR is important for India?

• According to the National Judicial Data Grid (NJDG), there are a total of 51,86,664 (both criminal and civil) cases pending in High courts in India. Also, in the District and Taluka Courts, the number is 3,51,31,137 as of now.
• This pendency of cases is burdening Judiciary into the pressure of hurried justice delivery hurting the idea of justice itself. This is the classic case of justice delayed is justice denied.
• To deal with this situation, ADR is a significant instrument that provides diverse techniques away from formal courts.
• ADR provides scientific techniques that make them legitimate and helps in taking up the burden of the courts.
• It is less time-consuming and more cost-effective as compared to the formal courts.
• There is a possibility of getting specialized expertise on the tribunal in the person of the arbitrator, mediator, or neutral advisor.
• ADR mechanisms are free from courtroom technicalities, informal in nature so the large part of common people can confidently make their case.
• It is non-adversarial so have the advantage of providing parties with the opportunity to reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict peacefully, and achieve a greater sense of justice.
• ADR encourages the participation of people in the process of dispute resolution and creates legal awareness among them. It also creates respect for the rights of others and promotes self-reliant development.
• One of the foremost advantages of the Alternative Dispute Resolution process is that the dispute remains under the control of the parties themselves and any settlement entered into is their own and does not represent a dictate from an outsider.
• ADR is founded on the constitutional principles of justice and free legal aid under article 39-A (Directive Principles of States policy).
• ADR helps the enforcement of Fundamental Rights, articles 14 and 21 which deals with equality before law, and right to life and personal liberty respectively.
• It has proven its ability to deliver justice beyond formal courts with Lok Adalats alone disposing more than 50 lakh cases every year.
• ADR has assumed greater importance during the pandemic times as many experts are demanding a more robust ADR mechanism in India to speed up the justice delivery system.

What are the issues regarding the ADR mechanism in India?

• The mains issue is the lack of awareness among the people about the availability of mechanisms.
• The success of ADR depends upon the good faith of the parties and their attorneys; however, unrepresented and/or uninformed parties are at a disadvantage of succeeding in an ADR.
• There is skepticism among parties about the process and result of ADR. Many of the litigants who have tried ADR are not satisfied and invariably dissociate themselves and go to formal courts.
• Parties cannot be compelled to go in for ADR unless they sign an agreement or mutually agree to resolve their disputes by ADR. So, it is a voluntary procedure to start with. Making all the parties agree to an arbitration agreement is a difficult task.
• There is an issue of finding a neutral arbitrator as the unsatisfied party invariably blames the arbitrator for bias and non-fairness.
• With the exception of arbitration, which results in a binding decision, the ADR process may not always yield a resolution.
• ADR cannot pass injunctions (ordering parties to do or not do something).
• the Arbitration and Conciliation Act, 1996 has lost its basic structure and identity and is no longer what its legislators intended it to be.
• Though there is a mandate to transfer cases to arbitration and conciliation, there is a lack of awareness among the lawyers and judicial officers also which bars the use of such provision.

Way forward

• The COVID-19 pandemic which saw shut down of majority of court proceedings is an important opportunity for India to build a strong ADR mechanism.
• Efforts have to be taken by the judiciary, lawyers, government, and litigants to create an ecosystem conducive for mediation.
• There needs to be an attitudinal change among people to make them go for ADR mechanisms with confidence and trust.
• More speedy and successful ADR solutions will build confidence in the litigants and make them opt for ADR mechanisms.
• There is a dearth of professional ADR organizations in the country. The government is trying to build such centers through bills such as the New Delhi International Arbitration center Bill (2018). More efforts are needed in this aspect.
• The government can play the role by actively promoting ADR mechanisms by creating trained arbitrators, mediators, laying down procedures and terminologies, and incorporating required legal support.
• Given the governments are the most prolific litigants in the courts, they can lead the way by unburdening the courts and build a culture of ADR and opt for ADR mechanism.
• There is a need to build infrastructure for ADR procedures, Skilling of lawyers in ADR, providing required manpower, etc.
• The ADR can now ride the digitization revolution and bring ADR to the doorsteps of the litigants.
• The Department of Justice has compiled a list of twelve organizations that provide online mediation services. More such organizations will be required to increase the frequency with which mediation is used.

Conclusion

Alternative dispute resolution is an important tool to unburden the judiciary and fulfill the constitutional mandate of justice delivery and making it free and easily available. India needs to capitalize on the international experience and prevailing pandemic condition to usher in a revolution in the scheme of justice delivery in the country. The Singapore Convention and UNCITRAL can be a guiding light to India’s domestic ADR scheme.

Practice Question for Mains

What is Singapore Convention? Explicate the importance of alternative dispute resolution for India for speedy and universal justice delivery. (250 words)