Alternative Dispute Resolution In India


Judiciary is one of the most important branches of government along with legislature and executive. The main function of the judiciary is to give justice and to punish the wrongdoer.  In India, the judiciary is said to be the people’s protector. It is the only organ the people trust the most because it dispenses justice and acts as a neutral entity between the government and the people. Judiciary also has the power to declare a law made by the legislature as unconstitutional if it violates the basic structure of the constitution. This is termed Judicial Review. But in today’s time judiciary is completely exhausted because of the number of pending cases in front of the courts. There are millions of cases pending in different courts of India, many of which are pending for more than a decade. The people are having another option where they can settle their disputes mutually and in simple words, it is a process of settling disputes without litigation. The purpose of law according to Gandhi was that the main function of a lawyer was to unite the parties. Basically, the main advantages of the Alternative Dispute Resolution System over Litigation are the long-drawn court procedures, heavy cost, and wastage of time. Alternative Dispute Resolution is a win-win situation for both parties as it resolves disputes between the parties without going to court in less time and also saves court time.

Alternative Dispute Resolution In India


The dispute resolution process is not a new process rather an old and ancient non-judicial method to resolve disputes. Only the extensive promotion and accumulation of the ADR model and wider use of it as a means for the settlement of a specific dispute is new. ADR has been popular in India since time immemorial. In the past, men had been experimenting to find a cheap and convenient method to get justice.

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

At the time of the Mughal Dynasty, most villagers resolved their disputes in the village courts themselves and appeal to the caste courts, the arbitration of an impartial umpire.

The Panchayats were established by Maratha Empire; they were the first instrument of the civil administration of justice under the Marathas to adjudicate disputes of simple and minor nature. [1]

With the arrival of the British Raj, these traditional institutions of dispute resolution started and the formal legal system introduced by the British started to rule. Alternate Dispute Resolution in the present form was established in the country, with its creation by the Bengal Regulations. Various Regulations incorporating provisions relating to Arbitration Act VIII of 1857 codified the process of Civil Courts except those started by the Royal Charter, which included sections dealing with the arbitration in suits as well as sections which comprised 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. In 1908 the procedure was re-enacted of Code of Civil Procedure. The Code made no major changes in the law of arbitration. The Arbitration Act of 1940 was enacted replacing the Indian Arbitration Act of 1899 and few 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 Republican India until 1996.[2]

Further, bodies such as the Village Panchayat; a group of eminent persons in a village deciding the dispute between villagers are not uncommon even today. In 1982, LokAdalats was established for the settlement of disputes outside the court.

 The old Arbitration Act of 1940 was replaced by the new Arbitration and Conciliation Act, 1996 to keep pace with the globalization of commerce. In 1996 Arbitration and Conciliation Act was passed which was based on United Nations International Trade Law (UNCITRAL) Model. Section 30 of this act encourages arbitrators with the agreement of the parties to use mediation, conciliation, negotiation, or any other procedure to encourage settlement.[3]

Alternative Dispute Resolution In India



Arbitration is a technique that is used to resolve a dispute outside the court wherein both the parties mutually present their case to an individual who is known as an Arbitrator. The decision of the Arbitrator is final and both the parties are bound to accept it. When an arbitration clause is there, then any party to a contract can invoke the arbitration clause either himself or through their authorized agent which presents the dispute directly to the arbitration as per the Arbitration clause. Here, arbitration clause means a clause that mentions the course of actions, number of arbitrators, language, seat or legal place of the arbitration to be taken place in the event of any dispute arising between the parties.


Conciliation is a technique where both the parties to a dispute present their case before a Conciliator. A Conciliator is a person who meets both the parties separately to resolve their dispute. It is a voluntary process in which parties are free to agree and resolve the dispute.  There is no need or condition of prior agreement and cannot be forced on a party who is not intending for conciliation.


Mediation is a voluntary, informal, party-centered, and structured negotiation process. In this technique, there is a neutral third party who assists both the parties in resolving their disputes in a peaceful manner who is known as a Mediator. The Mediator only helps both the parties to reach the settlement. He makes no decision on his own but only assists the parties. This process is totally controlled by the parties. Mediator’s work is just to help the parties to reach a settlement of their dispute and a fair decision. Mediator’s decision or views are not binding on the parties.


Lok Adalat is also known as the people’s court. 1ST Lok Adalat was held on 14th March, at Junagarh in Gujarat 1982. It is established by the government on the ground level to settle disputes through conciliation and compromise. They have been given statutory recognition under the Legal Services Authorities Act, 1987. There is no court fee for settling the matter in Lok Adalat. If any dispute is pending in regular court or any dispute which has not been brought before any court of law then that can be produced to Lok Adalat. If any matter pending in the court is referred to the Lok Adalat and is settled subsequently, the court fee originally paid in the court when the petition filed is also refunded back to the parties.  


To deal with the problem of pending cases in courts of India, ADR plays an important role by its diverse methods. Scientifically developed techniques are provided through the ADR mechanism to the Indian judiciary which helps in reducing the burden on the courts. There are various modes of ADR for settlement including, arbitration, conciliation, mediation, negotiation, and Lok Adalat. Here, negotiation means self-counseling between the parties to resolve their dispute but there is no statutory recognition in India.

ADR is also based on fundamental rights i.e. article 14 and 21 which deals with equality before law and right to life and personal liberty respectively.[4] ADR’s motive is to provide social, economic, and political justice and maintain integrity in the society guaranteed in the preamble. ADR also attempts to achieve equal justice and free legal aid provided under article 39-A relating to the Directive Principle of State Policy. (DPSP)

Alternative Dispute Resolution In India

Section 89 of the Code of Civil Procedure which is also known as judicial settlement gives power to a judge to refer any civil matter like family matters, matters relating to finance, business, insolvency, etc for resolving disputes through arbitration, conciliation, mediation, etc.[5]

The Acts which deal with Alternative Dispute Resolution is the Arbitration and Conciliation Act, 1996 and the Legal Services Authority Act, 1987



It is correctly said that the road to justice is a long and expensive one. Parties are charged heavy fees by a lawyer who aims to earn money by extending the case rather than providing justice.  However, ADR is usually cheaper than litigation.


ADR is a time saving method compared to litigation, average pendency of any case in high court is 3 years & 1 month whereas if a case is pending in a subordinate court, average pendency is 6 years whereas in ADR, the dispute is settled in very less time.


Arbitral proceedings are held behind closed doors and are not part of the public records. The arbitrator keeps all the information confidential regarding the case. Thus this makes this whole process private and confidential.


  • Decisiveness

If an arbitrator has made a major mistake, it can sometimes result in an unfair decision because the decision of the arbitrator is binding on both parties.

  • No Jury

For most people having a jury is an important right that is not easily given up. ADR does away with the jury by leaving the matter in the hands of an Arbitrator.

  • Transparency

Even after taking up ADR proceedings in private rather than in a court, this may be considered as an advantage by some people but this lack of transparency can make this method impartial and troublesome.

Alternative Dispute Resolution In India


Law Commission of India in its 176th report amended the 1996 Arbitration and Conciliation Act which provided domestic arbitration between the Indian states only. Therefore by this act, certain difficulties arose. Thus Law Commission gave its recommendation for bringing an amendment to the Arbitration and Conciliation Act.

Law Commission in its 221st report of 2009 stated that there is a need for speedy justice and suggested solutions for the same.        

Law commission in 230th and 240th report made certain amendments to section 35A(2), section 95(3) order XX Rule 6A(4), order XXV(5), and order XLI (6). [6]

In its 247th report which was submitted in August 2014, it encouraged more people to settle their disputes through ADR since litigation in court is a time-consuming and expensive method of getting justice.[7]


Both the Alternative Dispute Resolution and the government should work simultaneously because both are dependent on each other. Both judiciary and ADR play a vital role in the development of each other. The judiciary should continue to promote the ADR system more and more because it reduces the burden on the court. The scenario is that even after setting up more than a thousand fast-track courts that have successfully settled millions of cases the problem is far from being solved as pending cases are still piling up. To deal with such a situation Alternative Dispute Resolution (ADR) can be a helpful mechanism, it resolves conflict in a peaceful manner where the outcome is accepted by both parties. India is a developing country and the Indian judiciary is one of the most powerful judiciaries in the world and should continue to provide a platform to ADR. On the other hand, the arbitrators must be given proper training so that they can settle the dispute easily. ADR method is a boon for the judiciary and has proved to be an asset for the whole country.

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