Comprehensive Notes on Alternative Dispute Resolution (ADR)
Module 1: Alternative Dispute Resolution (ADR)
1. Definition & Purpose
Alternative Dispute Resolution (ADR) provides mechanisms to resolve disputes outside of
traditional court litigation. ADR is designed to be faster, cost-effective, and less adversarial
than litigation.
2. Types of ADR
1. Negotiation: Direct communication between parties to resolve disputes.
2. Mediation: A neutral mediator facilitates discussion but does not impose decisions.
3. Conciliation: Similar to mediation, but the conciliator can suggest solutions.
4. Arbitration: A formal process where an arbitrator makes a binding decision.
3. Advantages and Disadvantages of ADR
Advantages:
✔ Faster and cost-effective.
✔ Confidential process.
✔ Allows parties to control the resolution process.
✔ Helps maintain relationships.
Disadvantages:
❌ May not always be binding.
❌ Limited appeal options.
❌ Not suitable for criminal matters.
4. ADR in India
ADR was first introduced in India through the Industrial Disputes Act, 1947, and is now
encouraged under Section 89 of the Civil Procedure Code (CPC). The Supreme Court has
emphasized ADR in cases like Food Corporation of India v. Jogindarlal Mohindarpal (1989).
Module 2: Arbitration
1. Definition
Arbitration is an ADR process where a neutral arbitrator gives a binding decision (award),
replacing court judgment.
2. Types of Arbitration
1. Domestic Arbitration: Both parties are Indian, governed by Indian laws.
2. International Arbitration: At least one party is foreign; may follow foreign laws.
3. Institutional Arbitration: Managed by arbitral institutions (e.g., ICC, SIAC, LCIA).
4. Ad hoc Arbitration: Parties themselves decide procedures without institutional oversight.
3. Process of Arbitration
1. Arbitration Clause in Contract.
2. Arbitration Notice (if a dispute arises).
3. Appointment of Arbitrator(s).
4. Statement of Claim & Counterclaim.
5. Hearing of Parties.
6. Arbitral Award (Binding Decision).
7. Enforcement of Award (Court assistance if needed).
4. Setting Aside an Arbitral Award (Section 34, Arbitration and Conciliation Act, 1996)
An arbitral award can be set aside by a court if:
- Fraud, corruption, or undue influence is involved.
- Violates Indian public policy.
- Contradicts principles of natural justice.
Module 3: Conciliation
1. Definition
Conciliation is a flexible and voluntary ADR method where a neutral conciliator assists
parties in reaching an amicable settlement.
2. Types of Conciliation
1. Facilitative Conciliation: Conciliator guides discussions without offering solutions.
2. Evaluative Conciliation: Conciliator assesses legal positions and suggests solutions.
3. Transformative Conciliation: Focuses on empowering disputants to resolve conflicts.
4. Court-Mandated Conciliation: Courts order parties to attempt settlement before litigation.
3. Conciliation Process
1. Initiation: Written invitation to conciliate.
2. Appointment of Conciliator(s).
3. Submission of Statements & Evidence.
4. Meetings & Settlement Proposals.
5. Settlement Agreement (legally binding like an arbitral award).
6. Termination of Proceedings (if no agreement is reached).
Module 4: Negotiation
1. Definition
Negotiation is a process where two or more parties discuss their differences to reach an
agreement. It is aimed at finding a compromise or a mutually beneficial outcome while
avoiding disputes.
2. Stages of Negotiation
1. Preparation: Gather facts, define goals, and anticipate objections.
2. Discussion: Exchange viewpoints, listen actively.
3. Clarification of Goals: Identify common interests and focus on core concerns.
4. Negotiating Towards a Win-Win Outcome: Find mutually beneficial solutions.
5. Agreement: Define clear and fair terms.
6. Implementation: Enforce and follow the agreement.
3. Types of Negotiation
1. Distributive Negotiation: Win-Lose approach where one party gains at the expense of the
other.
2. Integrative Negotiation: Win-Win approach where both parties benefit.
3. Management Negotiation: Employer-employee negotiations like salary discussions.
Module 5: Mediation
1. Definition
Mediation is a non-binding ADR process in which a neutral third party (mediator) assists
disputing parties in reaching a mutually satisfactory settlement.
2. Principles of Mediation
1. Voluntary Participation: No party can be forced into mediation.
2. Confidentiality: Information cannot be used in court.
3. Impartiality of Mediator: Mediator must remain neutral.
4. Mutual Agreement: Both parties must accept the settlement.
5. No Prejudice to Legal Rights: Parties retain the right to approach the court.
3. Stages of Mediation
1. Opening Statement: Mediator introduces the process.
2. Statement of the Parties: Each party presents their side.
3. Summarizing & Agenda Setting: Identify key issues.
4. Exploration of Issues: Mediator helps in clarifying misunderstandings.
5. Private Sessions (Caucuses): Separate meetings with each party.
6. Joint Negotiation Session: Discuss possible solutions.
7. Agreement & Conclusion: Settlement is finalized or referred to court.
