Alternative Dispute Resolution in India

Alternative Dispute Resolution

History of Alternative Dispute Resolution in India

Alternative Dispute Resolution (hereinafter referred to as “ADR”)  is a term for describing process of resolving civil disputes in place of litigation and includes arbitration, mediation, conciliation, expert determination and early neutral evaluation by a third person.[1] As the name suggest, it simply refers to an alternate way to settle conflicts which a person or corporate entity might encounter.

The National Alternative Dispute Resolution Advisory Council (“NADRAC”) of Australia has defined ADR as “an umbrella term for processes, other than judicial determination, in which an impartial person assists those in a dispute to resolve the issues between them.”In fact, ADR is increasingly referred to as ‘appropriate dispute resolution’, in recognition of the fact that such approaches are often not just an alternative to litigation, but may be the most optimum way to resolve a dispute.[2]

The formal justice system was a comparatively latter development in a legal landscape where dispute resolution, was an age old method to resolve conflicts routinely practised world-over across various societies and communities. What isnewly emerging today however is the extensive preferment and proliferation of Alternative Dispute Resolution modelsin the domestic and international market over traditionally redressing it to a court of law.

There are numerous reasons for the advent of Alternative Dispute Resolution; primarily, the lay man is daunted by the court and its formal procedure. He would rather live with his problems by reaching a compromise than approach a court of law to seek justice especially when the path to achieve the same is littered with various obstacles including overburdened judges, complex legal procedure which is time-consuming and the sky high expenses that come with bringing a matter before the court.

The greatAbraham Lincoln, 16th President of the United States of India had himself said –

“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 and waster of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.”

The ‘Alternative Dispute Resolution Timeline’ in the early pages of the book begins in 1800 BC when dispute resolution was practiced by the Phoenicians, the Greeks, the Indians and the Irish. The rich traditions of Chinese mediation and Muslim tahkim, different as they are from modern conceptions of Alternative Dispute Resolution, necessarily receive shorter shrift than they deserve. Among the intriguing historical illustrations of ‘Alternative Dispute Resolution’ phenomena are the role of Mohammed in averting war over the reconstruction of Kaaba, and the use of symbolic contests to resolve land disputes in West Francia in the middle ages.

Thus, as pointed out above, the Alternative Dispute Resolution system is not a new experience for the people of this country also. It has been prevalent in India since time immemorial. Legal history indicates that down the ages man has been experimenting with procedure for making it easy, cheap, unfailing and convenient to obtain justice. Procedure for justice is indicative of the social consciousness of the people.

The Gupta Empire had a separate and distinct judicial system. At the lowest level of the judicial system was the village assembly or trade guild. These were the councils appointed to settle the disputes between the parties that appear before them. There were separate councils appointed todecide various matters that came before them. Thus, if people could not reach to any amicable settlement, it was resolved by the councils.

During the Mughal Dynasty, most villagers resolved their cases in the village courts itself and appeal to the caste courts, the arbitration of an impartial umpire (“Salis”), or by a resort to force.

The Maratha Empire established Panchayats; they were the first instrument of the civil administration of justice under the Marathas to adjudicate cases of simple and minor nature. The disputing parties were to sign an agreement regarding the abiding of the rules and regulations of the Panchayat. It was up to the Panchayat to study the case and pass its judgement impartially or without any bias to any party. A “Mamlatdar”, the higher officer in the succession of judicial administration was to confirm the judgement. Generally, the Mamlatdarand the Panchayat used to adjudicate the cases, which were upheld by the Maratha Government.

With the advent of the British Raj these traditional institutions of dispute resolution somehow started withering and the formal legal system introduced by the British began to rule. Alternate Dispute Resolution in the present form picked up pace in the country, with its creation by the Bengal Regulations. The Bengal Regulations were designed to encourage arbitration. After several Regulations containing provisions relating to arbitration Act VIII of 1857 codified the procedure of Civil Courts except those established by the Royal Charter, which contained Sections dealing with arbitration in suits as well as sections which provided for arbitration without the intervention of the court. Thereafter,the Indian Arbitration Act, 1899 was passed which was based on the English act by the same name. It was the first substantive law on the subject of arbitration but its application was limited to the Presidency – towns of Calcutta, Bombay and Madras.

In 1908 the Code of Civil Procedure was re-enacted. The Code made no substantial changes in the law of arbitration. The Arbitration Act of 1940 was enacted replacing the Indian Arbitration Act of 1899 and certain parts of the Civil Procedure Code, 1908. It amended and consolidated the law relating to arbitration in British India and remained a comprehensive law on Arbitration even in the Republican India until 1996.

Further, bodies such as the Village Panchayat; a group of elders and influential persons in a village deciding the dispute between villagers are not uncommon even today. The Panchayat has, in the recent past, also been involved in caste disputes. In 1982, settlement of disputes out of courts started through LokAdalats. The first LokAdalat was held on March 14, 1982 at Junagarh in Gujarat and now it has been extended throughout the country. Initially, LokAdalats functioned as a voluntary and conciliatory agency without any statutory backing for its decisions. By the enactment of the Legal Services Authorities Act, 1987, the institution of LokAdalats received statutory status.

To keep pace with the globalization of commerce the old Arbitration Act of 1940 is replaced by the new Arbitration and Conciliation Act, 1996. Settlement of matters concerning the family has been provided under the amendment of the Code of Civil Procedure in 1976. Provisions are made under the Special Marriage Act, 1954 and the Hindu Marriage Act, 1955 for making efforts for reconciliation. Under Family Courts Act, 1984 it is the duty of family court to make efforts for settlement between the parties. Introduction of Section 89 by way of the 1999 Amendment in the Code of Civil Procedure, 1908 is a radical advancement made bythe Indian Legislature in embracing the system of “Court Referred Alternative Disputes Resolution”.

The Arbitration and Conciliation Act, 1996 also contains provision relating to conciliation in contractual matters arising out the legal relationship, the arbitral proceedings being informal, less expansive and relatively speedier, have proved to be an efficient alternative means for the redressal of disputes and differences between the parties.[3] Like arbitration , conciliation and mediation as an alternative means of settlement of disputes also needs to popularized commenting on this point, the former Chief Justice of IndiaMr. Justice A.M.Ahmadi observed, –

“while we encourage Alternative Dispute Resolution mechanisms, we must create a culture for settlement of disputes through these mechanisms, Unless the members of the Bar encourage their clients to settle their disputes through negotiations, such mechanisms cannot succeed.”


[1] Law Times Journal, Alternative Dispute Resolution

[2]National Alternative Dispute Resolution Advisory Council, Dispute Resolution Terms (2003)

[3] on 03/06/2017 at 15:27 p.m.