MODES OF DISPUTE RESOLUTION

&
MEDIATION AS A PREFERRED ADR

ANOOP KUMAR SRIVASTAVA

MODES OF DISPUTE RESOLUTION

Around the world there are four popular modes of dispute resolution, namely:
 Negotiation
 Mediation
 Arbitration
 Adjudication
There are some other recognized modes of dispute resolutions also such as:
 Neutral Evaluation
 Collaborative Settlement
 Facilitation
 Conciliation
MODES OF DISPUTE RESOLUTION

 Negotiation is a process where two

parties in a conflict or dispute try to
reach a resolution or settlement
between themselves that they can
both agree on.
 Negotiations are reached through
discussions made between the parties
or their representatives without the
help of any third party.
MODES OF DISPUTE RESOLUTION

 Mediation is a process where a MEDIATION

neutral person (third party) assists
the parties in dispute, to discuss and
negotiate with each other in order to
reach an amicable resolution.
 The third party is called the Mediator
and he facilitates communication
between the parties.
MODES OF DISPUTE RESOLUTION

 Arbitration refers to the process

where the decision is made by a
neutral third party (Arbitrator).
 The arbitrator hears the case as
presented by the parties in conflict
and makes an award/gives decision,
in the same way as a Judge would.

ARBITRATION
MODES OF DISPUTE RESOLUTION

 Conciliation is a voluntary and interest-

CONCILIATION
based process, where a neutral third-party
(Conciliator), try to assist the disputants
to settle their dispute amicably.
 The main difference between
Conciliation and Mediation is that, at
some point during the proceeding a
Conciliator can also offer settlement
proposal to the parties, on their asking.
MODES OF DISPUTE RESOLUTION

 Adjudication is the most familiar

type of dispute resolution; civil
litigation typically involves a
defendant facing off against a
plaintiff before a judge.
 The judge is responsible for
weighing the evidence and giving a
decision or making a ruling.

ADJUDICATION
 MODES OF DISPUTE RESOLUTION

➢ Let us now try to understand the scope and relative merits of these four modes, namely
Negotiation, Mediation, Arbitration and Adjudication:
DIFFERENCES MEDIATION ARBITRATION NEGOTIATION ADJUDICATION

Process Assisted Negotiation Quasi-Judicial, Negotiation Adjudicatory

Adjudicatory
Decision Parties decides the Arbitrator decides the Parties choose to Third party (Judge)
making terms of settlement dispute negotiate among decides the outcome
themselves
Procedure Procedure and Procedure & decision Strategies are pre- Procedures & decisions
settlement are not are controlled by the formulated game plans, are controlled by the
controlled by any provisions of Arb. and guiding Negotiators to provisions of the relevant
statutory provision Conciliation Act 1996 reach their goals statues
 MODES OF DISPUTE RESOLUTION

DIFFERENCES MEDIATION ARBITRATION NEGOTIATION ADJUDICATION

Outcome A binding settlement Award passed by the Parties reach an Order or judgment is
by the parties on a Arbitrator is binding agreement through binding on the parties
mutually acceptable on the parties consensus, which is
agreement binding on the parties
Nature Collaborative in Adversarial in nature Competitive as well as Adversarial in nature
nature Collaborative nature
Focus Focus is on the Focus is on past event Focus is on the Focus in on past events
present and future and determination of Position, Rights and and determination of
rights and liabilities of Interest of the parties rights and liabilities of
the parties the parties
 MODES OF DISPUTE RESOLUTION

DIFFERENCES MEDIATION ARBITRATION NEGOTIATION ADJUDICATION

Participation Personal appearance Personal appearance Parties are personally Personal appearance is
& active participation is not always required present & actively not always required
of parties is required involved. Negotiators
Proceeding Informal proceeding, Formal proceeding Informal proceeding Formal proceeding held
held in private with held in private with held in private between in public following strict
flexile procedure strict procedure the parties procedure
Finality Not appealable. Award is subject to Parties enter into a Order or judgment is
Order or decree challenge on limited mutual agreement, appealable
passed in terms of ground which is not appealable
settlement is final
 MODES OF DISPUTE RESOLUTION

DIFFERENCES MEDIATION ARBITRATION NEGOTIATION ADJUDICATION

Opportunity Optimal opportunity No opportunity for the Optimal opportunity No opportunity for the
for parties to parties to for parties to parties to communicate
communicate directly communicate directly communicate directly directly

Payment No payment is Involves payment of No payment is involved Involves payment of

involved fees court fees
Time Saves time Takes considerable Saves considerable Time consuming
time time
Our Justice Delivery System

 Justice Delivery System in India

reminds us of the adversarial legal
system prevailing in our country.
 This adversarial legal system was
introduced to us by the British.
 Our thoughts are so embedded in
the court system that we continue
to heavily depend upon it for
redressal of our grievances.
Need For Alternative Dispute Resolution
[ADR]

 People world over are becoming more and more aware about their
human and legal rights. They seek frequent redressal of their
grievances through litigation in the courts.
 The resources at the command of judicial system are inadequate to
meet the demand of growing litigation. It has resulted in backlog of
cases and delay in administration of justice.
 The unwarranted delay in dispensation of justice undermines the
credibility of our judicial system. Thus, sometimes people are forced
to resort to illegal methods of settling their disputes.
Need For ADR

 According to National Judicial Data Grid (NJDG) figures, as released

by the Supreme Court of India in the year 2021, approximately over
4.0 Crore cases are pending in the various courts of India.
 Out of these 4.0 Crore cases over 3.6 Crore cases are pending only in
subordinate courts.
 These figures do not take into account the pendency of cases before
Labour Courts, various Tribunals and other quasi-judicial forums.
 We are clogging our judicial system. It is under great stress and
crumbling under its own weight.
Need For ADR

 Therefore we need to handle this Docket Explosion by de-cluttering

the dockets of the courts.
 It is necessary to change our mindsets and consider viable
alternatives, which can complement our judicial system and help it
unclog itself.
 There is a need to resort to rapid and effective methods of dispute
resolution, in addition to the traditional methods.
 Thus, the need for Alternative Dispute Resolution mechanism.
Amendment in CPC, 1908

 ADR is gaining popularity throughout the world, mainly because it is

private, affordable and prompt, in comparison to the adversarial
process which is public, expensive and time consuming.
 The Government of India has taken a proactive measure for reducing
the court cases by introducing an amendment in the Code of Civil
Procedure, 1908 in the year 1999, it came into effect on 01.07.2002.
 Section 89 was incorporated in CPC by the above amendments which
provides for Alternative Dispute Resolution (ADR) forums.
Amendment in CPC, 1908

 Much before the amendments of 1999 in CPC, the concept of and

provisions for ADR was present in some of the statutes of our
country. Such as in:
 Arbitration Act, 1940
 The Industrial Dispute Act, 1947
 The Legal Services Authorities Act, 1987
 Arbitration and Conciliation Act, 1996
Statutory Provisions on ADR & Mediation

Code of Civil Procedure, 1908

• Section 89 – Settlement of disputes outside court. (ADRs)
• Section 89(1) (a) Arbitration, (b) Conciliation, (c) Judicial Settlement
and Lok Adalat, (d) Mediation.
• Section 89(2) Reference of dispute to (a), (b), (c), (d).
• Order X of CPC – Examination of parties by the court.
• Rule 1-A Direction of the court to opt for any ADR
• Rule 1-B Appearance before conciliatory forum
• Rule 1-C Appearance before court consequent to failure
Statutory Provisions on ADR & Mediation

Alternative Dispute Resolution Rules 2009 (Total 9 Rules)

• Relevant Rule 6 – Procedure for reference by the court to different
modes of settlements.
Civil Procedure Mediation Rules 2009
• Total 29 Rules, dealing with various aspects of mediation process,
including panel of mediators, their qualification and disqualification.
• Procedure, time limit of maximum 90 days, role of mediators and
ethics to be followed during mediation process.
Relevant Case Laws on ADR

Salem Advocate Bar Association v. Union of India I

(2003)1 SCC Pg 49
• In the above case a challenge was made to the amendments made in the
CPC in the year 1999 (including newly added S. 89). The amendments
were upheld by the Hon’ble Supreme Court.
• A High Powered Committee was constituted, for framing modalities for
the effective implementation of Section 89 and to frame model rules
and regulations for ADR and Mediation.
• [Chairman of the Committee was J. Jagannath Rao, other members were Arun
Jaitely, Kapil Sibal, C. S. Vaidyanathan (all Sr. Advs.) & the Chairman of BCI]
Relevant Case Laws on ADR

Salem Advocate Bar Association v. Union of India II

(2005) 6 SCC Pg 344
• The Hon’ble Supreme Court again heard the case, for the purposes of
screening the reports submitted by the HPC, in respect of the Model
Rules framed by the Committee for ADR and Mediation, in terms of
the newly introduced provisions of section 89 in CPC.
• ADR and Mediation Rules were accordingly framed and finalized
thereafter in the year 2006.
Relevant Case Laws on ADR

• A complete guideline on the mechanism of ADR is given by the Hon’ble

Supreme Court in the leading case of:
M/s Afcon Infra Ltd. & Another v. M/s Cherian Varkey Construction Co.
Ltd. [(2010) 8 SCC Pg 24]
• Relevant Paragraphs are;
Para 9 & 25 – Anomaly in section 89 and its correct interpretation.
Para 27 & 28 – Suitable cases and non suitable cases for reference to ADR.
Para 29 to 36 – How to decide for appropriate ADR process.
Para 43 & 44 – Summary of procedure to be adopted under S - 89.
Mediation As A Preferred ADR

 After the Afcon’s judgment, mediation is gradually becoming the most

effective and a preferred ADR forum to other adversarial system,
especially in matrimonial and family disputes.
 Mediation is preferred as a mode of dispute resolution because it
carries several benefits for the disputants, they are namely:
1. Mediation process is Simple and Flexible.
2. It is Participative, Confidential and Voluntary in nature.
Mediation As A Preferred ADR

3. Parties have total control over its outcome.

4. The procedure is Speedy, Efficient and Economical.
5. The process is conducted in an Informal, Cordial and Conducive
environment.
6. Mediation helps to maintain, restore and improve relationships
between the parties.
7. It promotes mutually beneficial Settlement that attains Finality.
Mediation As A Preferred ADR

 Hon’ble Supreme Court has been the biggest promoter of ADR

especially Mediation, by highlighting the benefits of mediation in its
various judgments and further enlarging its scope by giving some
path-breaking judgments.
 The importance of Mediation has been very well summed up in the
words of Joseph Grynbaum;
An ounce of Mediation is worth a pound of Arbitration
and a ton of Litigation