Alternative Dispute Resolution (ADR) System in India

“The courts of this country should not be the places where resolution of disputes begins. they should be the places where the disputes and after alternative methods of resolving disputes have been considered and tries”.

                                                                                          ~ Sandra day O’connor

 It is impossible to remove all contradiction; conflict and dispute in any society and the human society made in contradiction, therefore for the development of the society human try to reduce hostility which helps for maintain peace and serenity in any society. To resolve the conflict between the person, the effective judicial system takes very long time to give justice or for settlement. Sometimes litigation process continues for the life time of litigants or sometimes it carries to the next generation. In our country, justice delivery system is very slow due to expensive litigation and excessive case loads and it has given rise to certain problem like delaying resolving the case, huge pendency and many more.  ADR or alternative dispute resolution is a non binding procedure in which the dispute between parties is resolved by the third party without any judicial intervention. It refers to dispute resolution mechanism outside the realm of court. The most important characteristic of ADR is, it is amicable in nature. In this procedure the parties agree to submit their dispute to an independent neutral third party known as arbitrator who considers both side argument and evidence and make a final decision. ADR provides services to resolve all types of matters including civil, commercial, family etc, this is not applicable for criminal cases because the criminal offence is committed against the state not against any private individual. These mechanisms have the advantage to providing opportunity to the parties to reduce hostility, to resolve conflict in a specific manner. India has extended tradition by the statutory adoption of the UNCITRAL model law for international commercial arbitration. The US and Australia use the term ‘MEDIATION’, while ‘CONCILIATION’ is commonly used in china, Japan, Thailand and Singapore. UNCITRAL made rules for conciliation and not for mediation and the world intellectual property organisation (WIPO) made rules for mediation.

                                           India is also a party to the new York convention (on enforcement of arbitration award) allowing arbitral awards to be enforced by the court in almost any country around the world.ADR procedures can be segregated into two kinds namely (1) adjudicatory and (2) non- adjudicatory. Adjudicatory involves former procedures such as arbitration and binding expert determination and non- adjudicatory procedures includes negotiation, mediation, conciliation .


 ADR is very old  concept in India. Since ancient times, some ADR processes have been used in India. Panchayat system was prevailed in India, it is the place where the chosen people from the area gather to hear the matter and try to settle that in their own way. Even from the time when mughals came in India they were administered the  justice and law in their administrations. In India the history of provisions relating to arbitration began with the regulation’s under  east India company made for the presidency of Bengal madras and Bombay. These regulations were later come in the civil procedure act of 1859. ‘In 1940, an arbitration act was passed India and on January 26th, 1950 the act was extended whole of India. The act was repealed by the ‘Arbitration and Conciliation Act 1996 (act 8 of 1996)’[1]. Modern arbitration law in India was created by the Bengal resolution in 1772 during British rule. It provides for a reference by a court to arbitration.

The Indian contract act 1872 also mention arbitration, in that arbitration agreement is an exception to section 28, which said that any agreement in restraint of legal proceeding is void .post independence, in the constitution of India, under entry 13 of the concurrent list the word “arbitration was included. India is a part of the new York convention (on enforcement of arbitration awards) which allows arbitral awards to be enforced by the courts in almost any country in the world. In 1990’s After liberalisation of the Indian economy, the Arbitration and Conciliation act 1996 was enacted which removed the earlier act of 1940. The arbitration and conciliation act is amended by the arbitration and conciliation (amendment) act, 2015.[2]

Arbitration and conciliation act 1996 explained four things

  1. Domestic arbitration
  2. International commercial arbitration
  3. Enforcement of foreign arbitral award, and
  4. Conciliation


 It is the most important part in ADR system. Section 7 of ‘Arbitration and Conciliation Act ,1996’ gave the definition of arbitration agreement. In this agreement parties will refer their dispute to arbitration. In this agreement intention of the parties to arbitration is necessary. In the case Willington associates ltd V Mr. Kirit Mehta (2000), agreement was made by referred that “we will refer our suits either to the arbitration tribunal or to the court”. Court stated that they have no intention to make an arbitration agreement and here, the court will have the jurisdiction.


  1. FASTRE RESOLUTION – The court system is overloaded. The justice delivery system is very slow in India, as a result it can take several years for a legal case to go to trial.  Parties are refer ADR system because it has a faster resolution than any other. They can be issued arbitral award within a few weeks or months of filling a lawsuit.
  2. COST EFFICIENT – alternative dispute resolution is usually a lot cheaper than a trial process. The process for going to trial can lead to an high cost that includes fees of reporter, attorney, and the expenses of printing documents.
  3. PARTY AUTONOMY –alternative dispute resolution is private in nature, because parties have the opportunity to exercise greater control over the way their dispute is resolved.  The language and place of arbitration is chosen by the parties.


Section 89, of ‘Code of criminal procedure, 1973’[3] refers to five types of ADR Mechanism

ARBITRATION – arbitration is a quasi judicial adjudicatory process where the arbitrator(s) appointed by the court or by the parties decided the dispute between the parties. The parties to the suit can agree for arbitration by means of a joint memo, joint application or joint affidavit before the court. In arbitration, all the procedure and decision are governed by the provisions of the arbitration & conciliation act, 1996. The award of the arbitrator is binding on the parties and is enforceable as the decree of the court in views of section 36 of the arbitration and conciliation act 1996.

MEDIATION – mediation is not an adjudicatory process, it is a kind of negotiation process. Generally parties participate directly in the resolution of their dispute and decide the term of settlement. In mediation procedure and settlement are not governed by any statutory provisions thereby it allows freedom and flexibility. The dispute gets resolved mutually by the parties with the help of third person. Mediation process is refereed by the most of the parties because it gives an optimal opportunity for parties to communicate directly with each other in the presence of the mediator. In case of settlement, if the court fee of mediation is already paid is refundable according to the rule.

CONCILIATION – Conciliation is voluntary and private dispute resolution process in which third person resolve the dispute between the parties. Conciliator is a neutral third party. The function of the conciliator is more active than the facilitate function of the mediator.  The consent of the  parties is mandatory for referring a case to conciliation. When a matter is referred to conciliation, it does not go outside the stream of the court and according to S. 74 of the arbitrations and conciliation act, such settlement will have the same status and effect as an arbitral award  and if the conciliation fails, the matter will returned to the court for further proceeding. In conciliation, the agreement is enforceable as it is a order of the court as per section 74 of the arbitration and conciliation act, 1996.

JUDICIAL SETTLEMENT – The process of judicial system uses in U.S incredibly. It refers to a settlement of a civil case with the help of a judge, who is not assigned the adjudication of that particular case. Under rule 2(g) Allahabad high court explain judicial settlement. “Judicial settlement means a final settlement, where both the parties should compromise for resolving the dispute between them. The court refers institution or person deemed to be the Lok Adalats under the provisions of the ‘Legal Services Authority Act , 1987(39 of 1987)’[4] and where after such reference, If the dispute was refered to a lok adalat under this act then the provision  of the act shall apply”[5]. If the parties want to resolve the dispute through judicial settlement then they shall apply to the court for the same within thirty days of the direction.

LOK- ADALAT –   Those Lok Adalat is non–adjudicatory in nature which are established under section 19 of the legal services authorities act, 1987. The first Lok Adalat was organized on an experimental basis on march 14, 1982 at Junagarh in the state of Gujrat. If Lok Adalat is established under section 22B of the legal services authorities act, 1987, then this would be  conciliatory and adjudicatory in nature. In Lok Adalat , the presiding officer is a neutral third party and the function of the presiding officer is persuasive. The consent of the parties is not necessary for referring a case to Lok Adalat. ‘The award of Lok Adalat is deemed to be an order of the civil court and is executable as per section 21 of the legal services authorities act , 1987’. The process of Lok Adalat  involves only discussion and persuasion by which the parties dispute gets resolved.


‘The first stage in arbitration is the formation of arbitration agreement with the consent of both the parties. Generally an attorney, judge and the business person become the arbitrator. Hearing will be held, just like court but here, the parties have to present their evidence in informal manner. after the evidence has been presented, the arbitrator make a decision and later send the parties  a written opinion (award) .

The stages in an arbitral process are:

Step 1- the cases are begin when one party submits a demand for arbitration, along with a copy of the arbitration provision. The arbitrator will give notification to the respondent and the deadline will be set by the arbitrator.

Step 2- Selection of arbitrator-  after getting the answer from respondent side, both the parties are to select arbitrator for further proceeding.

Step 3- In this step arbitrator conducted the meeting where both the parties will get opportunity to discuss their issue. Procedural matters such as the exchange of information, list of witnesses, also will be discussed.

Step 4 – In this step, parties are mainly exchange their information and make ready their presentations. the goal of this stage is to arrive at the point of hearing.

Step 5 – Written submission and oral arguments are generally done in this stage. Written submission maybe submitted by the parties to the arbitrator.

Step 6 – At this stage, parties have to present their evidence and information to the arbitrator in order to arrive at resolution. Any question as to the jurisdictional competence of the arbitral tribunal ought to be raised before submitting the first statement.

Step 7 – Parties are mainly provide additional documentation, if allowed by the arbitrator, it is also called as post- hearing submission.

Step 8 – The arbitration makes final decision regarding the case and the arbitral award is passed by arbitrator. It is not mandatory that the arbitrator’s decision contain reasons, sometimes it can be done for the advantage of the parties itself.

Step 9 – the award, after passage, ought to be enforced. Enforcement is in the case of a decree by a civil court.

Step 10- if either party is not satisfied with the decision or the award passed, they can go for an appeal’ [6].

                                                               CASE LAWS

Salem Advocates Bar Association v. Union of India

The Supreme Court directed the setting up of a committee to formulate the manner in which various provision of the CPC including section 89 is to be bought into operation. Court also directed the formation of rules and regulations that are to be adhered to while taking recourse to alternative dispute resolution system’[7].

Babar Ali v. Union of India            

‘The constitutionality of Arbitration and conciliation act, 1996 was challenged . The court held that, the act was not unconstitutional and did not in any way offend the basic structure of the constitution in India’[8].

Smt. Kalpana Kothari vs Smt. Sudha Yadav & ors

‘In this case supreme court held that as long as the arbitration claus exists , a party cannot take recourse to the civil courts for  appointment of receiver or any other requirement , without evincing an intention to start the arbitration proceeding’[9].


ADR is an optimal method of obtaining justice. A lot of disputes are resolving  by ADR nowadays, the reason for its success include low cost, accessibility, speed, amicability and lack of formality etc. Indian judiciary is overburdened due to huge number of cases, because of that, ADR system is rapidly growing in the national level which offer simple method to resolve dispute. In 1999 the union government has amended section 89 of CPC, 1908 and mandated the courts to try out the possibilities of resolving the pending disputes through different arbitral system such as arbitration, mediation, Lok Adalat etc. There are so many scope for improving ADR mechanisms such as ADR training practitioner should held by college, university, private institution etc. Indian constitution is also mentioned ADR system. Article 39-A[10] of the constitution of India provides that the state shall secure the operation of the legal system to promotes justice, on the basis of equal opportunity which shall provide free legal aid, by suitable legislation to ensure that opportunities for securing justice for all citizen. Article 14[11] also mentioned the state should ensure equality before law and a legal system which promotes justice on the basis of equal opportunity to all.

[1] V. Inbavijayan , alternative dispute resolution , TNDALU, ( Apr. 16,2023, 11:09 AM) , .

[2] The Arbitration and Conciliation (Amendment) act, 2015. No. 3 of 2016 (India).

[3] The Code of Criminal Procedure , 1973 , No. 2 of 1974 (India) .

[4] The legal Services Authorities Act , 1987 , No. 39 of 1987 , Acts of parliament (India).

[5] Justice S.U Khan , Judicial Settlement under section 89 of C.P.C , JTRI LUCKNOW , (Apr .21 , 2023, 6:30 AM) , .

[6] V. Inbavijayan , alternative dispute resolution , TNDALU, ( Apr. 16,2023, 11:09 AM) , .

[7] Salem Advocate Bar Association V Union of India {(2003) 1 SCC 49}.

[8] Babar Ali v Union Of India and Ors , JT 1999(10) SC 508 , (2000) 2 SCC 178 .

[9] kalpana Kothari vs Sudha Yadav AIR 2002 SC 404 .

[10] INDIA CONST. art. 39-a.

[11] INDIA CONST . art. 14.

Author: Sumita Patra

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