“Discourage Litigation. Persuade neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fees, expense and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will be business enough.” – Abraham Lincoln
In today’s fast-paced India, traditional lawsuits can be slow, costly, and stressful, with over one crore high-value civil cases pending, and 10% stuck for over a decade. Fortunately, India is increasingly adopting ADR (Alternative Dispute Resolution) methods, offering quicker, cheaper, and more agreeable ways to resolve disputes, giving parties more control.
This blog explores ADR (Alternative Dispute Resolution) in India, focusing on the key laws: the Arbitration and Conciliation Act, 1996, and the recent Mediation Act, 2023. These laws create a system for quicker ways to solve disputes outside of traditional courts.
Before we explore the legal framework, let’s briefly understand the key players in the ADR arena:
* Arbitration: Arbitration is a private and legally binding dispute resolution process where the parties appoint a neutral arbitrator whose decision (called an ‘award’) is final and enforceable like a court decree.
* Negotiation: Negotiation is the simplest way to solve disputes: the parties talk directly to each other and try to find an agreement that works for everyone. No outside help is generally involved.
* Conciliation: Conciliation uses a neutral helper (conciliator) to guide discussions and help the disagreeing parties find their own voluntary solution. The conciliator doesn’t decide anything but helps them communicate and explore options together.
* Mediation: Mediation also uses a neutral helper (mediator) to help parties talk and negotiate. The mediator focuses on their real needs and helps them find their own voluntary agreement. How the mediator guides the conversation can vary.
Now, let’s examine how the Arbitration and Conciliation Act, 1996, and the Mediation Act, 2023, shape the ADR landscape in India:
The Arbitration and Conciliation Act, 1996: A Foundation for Arbitration and Conciliation
This Act provides a comprehensive legal framework for both domestic and international commercial arbitration and conciliation in India. Its key features include:
- Parties’ Choice: The law lets parties decide how their arbitration will work (rules, number of arbitrators, location, applicable law).
- Less Court Involvement: Courts generally stay out of the arbitration process to keep it quick and efficient, intervening only when specifically allowed.
- Easy Award Enforcement: Decisions made in arbitration are easily enforced like court orders. Foreign arbitration decisions are also enforceable under international agreements.
- Organized Conciliation: The law sets out a clear process for conciliation, including how conciliators are appointed and ensuring confidentiality. While conciliation can be used before litigation or arbitration, it is not legally required as a pre-condition unless contractually agreed.
The Mediation Act, 2023: Making Mediation a Priority
India passed the Mediation Act in 2023 to strongly encourage mediation, especially through organized centers, for solving all kinds of disputes. Key points include:
- Mediation First: In certain civil and commercial matters, the Mediation Act, 2023 mandates parties to attempt pre-litigation mediation unless the case is excluded under the Act’s Schedules.
- Mediation Councils: Councils will be set up at the national and state levels to oversee mediation, approve mediators, and set standards.
- Legal Agreements: Settlements reached in mediation are legally binding. Under the Mediation Act, 2023, settlements reached in mediation become legally enforceable once authenticated in accordance with the Act.
- Private and Protected: Mediation talks are confidential, and mediators have some legal protection.
- Online Option: Mediation can be done online, making it easier to access.
When ADR Might Not Be the Answer: Key Exceptions
Here’s a concise, point-wise summary of when ADR might not be suitable, combining previous points:
- Serious Criminal Offences: Cases needing formal prosecution (Mediation Act excludes).
- Public Interest/Policy Matters: Issues affecting the wider public or fundamental laws (Mediation Act excludes).
- Cases Involving Minors/Unsound Minds: Protecting those with limited capacity (Mediation Act excludes).
- Title Claims Against Government: Disputes over government property (Mediation Act excludes).
- Need for Legal Precedent: Landmark cases setting legal rules.
- Serious Fraud/Forgery: Disputes involving serious fraud, as defined and interpreted by courts or under applicable statutes, are excluded from mediation under the Act.
- Certain Regulatory Matters: Issues under specific government rules (Mediation Act’s Second Schedule).
- Unwilling Parties: Lack of genuine participation.
- Complex Abuse/Safety in Family Cases: Divorce/custody with significant safety concerns.
- Child Welfare Concerns: Custody battles where a child’s safety is at risk.
- Need for Formal Legal Status Change: Mediation cannot grant legal status changes like divorce or annulment, but it can help resolve related issues such as maintenance or custody.
- Illegal/Nuisance Tenancy: Eviction for unlawful occupation or public harm.
- Interpretation of Specific Laws: Tenancy issues needing application of rent control acts.
- Need for Coercive Orders: Situations requiring court-ordered injunctions.
Working Together: A Better Way to Solve Disputes
The old Arbitration Act (1996) and the new Mediation Act (2023) together build a stronger system for solving disagreements outside of court in India. The old law was strong for arbitration and structured conciliation, while the new one pushes mediation to be a more common and easier choice.
Making mediation mandatory before court in some cases can reduce the workload on courts and help settle things early. the new Mediation Councils will make mediation more professional and ensure quality.
Why Choose ADR?
ADR methods, supported by these laws, offer great benefits:
- Cheaper: Usually costs less than going to court.
- Faster: Can resolve disputes much quicker.
- Private: Keeps your issues confidential.
- More Control: You have more say in the process and outcome.
- Better Relationships: Especially mediation and conciliation can help you maintain or improve relationships with the other party.
Conclusion
As India grows, good ways to solve disputes are important. These laws help create a culture of ADR, allowing people and businesses to resolve conflicts peacefully and efficiently, leading to a more harmonious society. It’s time to consider options beyond the courtroom.
Author
Mr. Rohit Jadhav
Article Intern
Pavan Goyal and Associates (Chartered Accountants)
Office No. B212, GO Square, Mankar Chowk, Wakad, Pune 411057
Email – office@goyalca.com
Contact – 9762763351