Alternative Dispute Resolution (ADR) refers to all dispute resolution processes and techniques that act as a means for parties to come to an agreement short of litigation. It is an umbrella term for methods of resolving disputes without resort to formal court adjudication.
The need for ADR in India arises from a deep structural crisis in the formal justice system. The Parliamentary Standing Committee on Home Affairs found that as of 2001, there were 35.4 lakh cases pending in 21 High Courts. Over 2 crore (20 million) cases were pending in subordinate courts, many for 25–30 years. Despite this, India had only 12–13 judges per million population, far below the Law Commission's recommended figure of 50 judges per million (120th Report, 1988).
Mario Cappelletti and Bryant Garth, in their comparative study on civil justice systems, identified three "waves" of access-to-justice reform: (1) legal aid, (2) representation of diffuse interests, and (3) the comprehensive access-to-justice approach. The third wave, most relevant to ADR, encourages exploration of informal mechanisms, changes to court structure, and use of lay persons in dispute resolution.
In India, ADR received early support from Justice P.N. Bhagwati (1971 Gujarat Committee on Legal Aid), Justice V.R. Krishna Iyer (1973 Expert Committee), and the joint Bhagwati-Krishna Iyer report of 1977, which explicitly identified ADR, conciliation and mediation as key activities for legal services committees. The introduction of Section 89 CPC through the 1999 Amendment was a landmark step in institutionalising ADR.
| Basis | Adjudication / Litigation | ADR |
|---|---|---|
| Nature | Adversarial — parties are opponents | Collaborative / cooperative — parties are problem-solvers |
| Control | Third party (judge) controls outcome | Parties control outcome (except arbitration) |
| Focus | Past — what went wrong, who is to blame | Future — what is the best solution going forward |
| Cost | High — court fees, lawyer fees, hidden costs | Low — especially negotiation and mediation |
| Speed | Slow — years or decades | Fast — weeks or months |
| Privacy | Public proceedings and records | Confidential |
| Relationship | Destroys relationships | Preserves and sometimes strengthens relationships |
| Outcome | Win-lose; judgment imposed | Win-win possible; settlement by agreement |
| Flexibility | Bound by procedural law and evidence rules | Flexible, informal procedure |
| Enforceability | Decree enforceable as a matter of right | Settlement agreement enforceable (with some differences) |
India has a rich tradition of community-based dispute resolution — panchayats, gram sabhas, kulas, and guild-based arbitration were prevalent before British colonisation. The East India Company arrived in 1600 and by 1775 had established British-style courts that marginalised indigenous adjudication systems.
Key legislative milestones in ADR's development in India:
Court: Supreme Court of India
Facts: The constitutional validity of Section 89 CPC (inserted by 1999 Amendment) was challenged. The Supreme Court appointed a committee chaired by Justice Jagannadha Rao (Law Commission Chairman) to frame model rules for implementation of mediation in civil courts.
Issue: Whether Section 89 CPC was constitutionally valid and how it should be implemented.
Held: Section 89 CPC is constitutionally valid. The Court approved model rules for mediation and directed every High Court to frame their own rules. Civil Procedure Mediation Rules (Rule 11) were formulated, requiring each party to provide a brief 10 days before a mediation session.
Principle: Court-annexed mediation is constitutionally valid and every High Court must frame rules for its implementation.
Section 89(1): Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations, and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for:
Section 89 mandates courts to explore ADR options in civil disputes before proceeding to trial. It reflects the legislative intent to reduce court backlog by diverting suitable disputes to consensual processes. The court must first formulate terms of settlement, share with parties, and only then refer — ensuring judicial oversight of the ADR referral process.
Court: Supreme Court of India | Bench: R.V. Raveendran & J.M. Panchal, JJ.
Facts: A dispute arose between the parties regarding a construction contract. The question was how Section 89 CPC should be interpreted and applied — specifically, which types of disputes are suitable for ADR and how the court should make the reference.
Issue: What is the correct procedure under Section 89 CPC? Which cases are suitable for ADR reference?
Held: The Supreme Court interpreted Section 89 and classified cases suitable and unsuitable for ADR. The Court held that in almost all cases where there are two or more parties in a civil suit, a reference to ADR should be made, unless the case falls in the excluded category.
Cases NOT suitable for ADR reference:
Principle: Section 89 CPC creates a judicial duty to consider ADR referral in all civil suits, with exceptions only for cases requiring authoritative judicial determination.
Online Dispute Resolution (ODR) is the resolution of disputes, primarily those arising from online transactions, with the assistance of information and communications technology. ODR adapts traditional ADR mechanisms — negotiation, mediation, arbitration — to online platforms, enabling parties in different geographic locations to resolve disputes conveniently.
The NITI Aayog's ODR Policy Plan (October 2021) envisages a comprehensive framework for digital dispute resolution in India. ODR is particularly important for e-commerce disputes, consumer complaints, fintech disputes, and low-value cross-border transactions where physical presence is impractical.
Key Features of ODR:
Communication is the process whereby we create and exchange messages. It is a dynamic, fluid, and continually changing process — not a static event. (Randy Fujishin, Creating Communications, 2009)
Communication is foundational to all ADR processes. A negotiator, mediator, or arbitrator must be an expert communicator to facilitate productive dialogue, manage conflict, build rapport, and guide parties toward resolution. The process has two dimensions: verbal (spoken and written words) and non-verbal (body language, tone, gestures, proxemics, appearance).
Source → Message → Receiver → Encoding → Channel → Context → Decoding
Verbal communication encompasses all spoken and written communication — the words chosen, their arrangement, and the structures formed. It is explicit and direct.
Non-verbal communication includes body type, facial expressions, gestures, movement, clothing, touch, use of distance (proxemics), use of time (chronemics), and the environment. Research suggests that in face-to-face communication, the impact of a message is: 7% verbal content, 38% vocal tone, and 55% body language (Mehrabian's principle).
Para-linguistics refers to vocal cues that accompany verbal communication — tone, pitch, volume, rate of speech, pauses, and vocal fillers ("ah", "um"). In mediation, a mediator's para-linguistic choices signal neutrality, empathy, and authority.
Perception is the process by which we assign meaning to a stimulus — the act of selecting, organising, and interpreting sensory information to give it meaning.
Perception is a three-stage process: Selection (choosing which stimuli to attend to), Organisation (structuring stimuli into a coherent pattern), and Interpretation (assigning meaning to the organised stimuli).
Factors influencing perception:
Perception checking involves three steps: (1) Observe a specific behaviour; (2) Offer two possible interpretations; (3) Request clarification. Example: "I noticed you became quiet after the other party spoke. I wasn't sure whether you disagreed with what was said or needed time to think. What's on your mind?"
Negotiation is a consensual, bilateral (or multilateral) process through which parties in a dispute communicate with each other to reach a mutually acceptable outcome without the intervention of a third party. It is the foundation of all other ADR mechanisms — mediation, conciliation, and even Lok Adalat proceedings incorporate negotiation as their core element.
Negotiation is the art of reaching agreement through communication, compromise, and persuasion. Unlike mediation or arbitration, negotiation involves no neutral third party. The parties themselves — or their representatives — engage directly to resolve the dispute.
Key characteristics of negotiation:
| Style | Characteristics | When Useful | Risk |
|---|---|---|---|
| Competitive / Positional | Win-lose; focuses on positions; aggressive; makes extreme opening offers; uses pressure tactics | One-shot deals; price negotiations; when relationship is unimportant | Damages relationships; may fail entirely |
| Cooperative / Collaborative | Win-win; focuses on interests; problem-solving approach; generates multiple options | Ongoing relationships; complex multi-issue disputes; commercial deals | May be exploited by competitive opponent |
| Principled (Harvard Model) | Separate people from problem; focus on interests not positions; invent options for mutual gain; use objective criteria | Any dispute; especially where relationship matters | Requires training and discipline |
| Accommodating | Yields to the other party; preserves relationship at cost of own interests | When relationship is far more important than the specific outcome | May be seen as weak; poor outcomes |
| Avoiding | Postpones or withdraws from negotiation | When issue is trivial or when more information is needed | Problem may escalate; misses resolution opportunities |
Best Alternative To a Negotiated Agreement. Your BATNA is your walk-away point. A strong BATNA gives you power. A weak BATNA forces concessions. Always know your BATNA before entering negotiation.
Principled / Interest-based Negotiation (Fisher & Ury, Getting to Yes) advocates four principles:
Positional Bargaining is the traditional approach where each side takes a position, argues for it, and makes concessions to reach compromise. It is inefficient, endangers relationships, and may produce poor agreements.
Anchoring: Making the first offer establishes the "anchor" around which negotiations revolve. Research shows first offers have a powerful effect on final outcomes.
ZOPA (Zone of Possible Agreement): The range between the minimum acceptable to Seller and maximum acceptable to Buyer. If no ZOPA exists, no deal is possible.
Assertiveness in negotiation means standing firm on interests while remaining open on positions. An assertive negotiator:
Mediation is a voluntary, disputant-centred, non-binding, confidential, and structured process controlled by a neutral and credible third party (the mediator) who uses special communication, negotiation, and social skills to facilitate a binding negotiated settlement by the disputants themselves.
Singapore Convention (Article 2(3)): "Mediation means a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons (the mediator) lacking the authority to impose a solution upon the parties."
Mediation Act, 2023 (Section 4): Mediation means a process whether referred to by the expression "mediation", "conciliation" or an expression of similar import, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a mediator, and includes pre-litigation mediation and online mediation.
Mediation is fundamentally different from adjudication because the mediator has no power to impose a decision. The outcome is entirely party-driven. The focus is on the future — building or preserving relationships — rather than fixing blame for the past.
Ground rules / Principles of Mediation:
| Basis | Mediation | Conciliation | Arbitration | Litigation |
|---|---|---|---|---|
| Third party role | Facilitates only; no proposals unless asked | Active — makes recommendations and proposals | Adjudicates — makes binding award | Judge adjudicates — binding judgment |
| Binding nature | Non-binding until settlement agreement signed | Non-binding until settlement agreement signed | Binding award, enforceable as a decree | Binding judgment, enforceable as decree |
| Party control | High — parties control outcome entirely | Medium — conciliator may propose terms | Low — arbitrator decides | None — judge decides |
| Confidentiality | Strictly confidential | Strictly confidential | Largely private but award may be public | Public proceedings |
| Governing law (India) | Mediation Act, 2023; Sec 89 CPC | A&C Act 1996 (Part III) | A&C Act 1996 (Part I) | CPC / CrPC / specific laws |
| Cost | Lowest | Low | Moderate-high | High |
| Speed | Fastest | Fast | Faster than courts | Slowest |
| Relationship preservation | Best suited | Good | Poor | Worst |
The mediator is not a judge, not a lawyer for either party, and not an arbitrator. The mediator is a process-manager, a communication facilitator, and an emotion-manager.
Core Skills of a Mediator:
The mediator should: maintain neutral body language; use neutral, plain words; use words of mutuality that apply to all parties; maintain appropriate eye contact; use a calm, moderate, businesslike tone; have an attentive posture. Seating arrangement should ensure closeness, eye contact, and audibility.
Sessions can be joint (all parties together) or private (caucus — mediator meets with one party separately). In a joint session, parties present their perspectives; in a private session (caucus), parties can share information they are not ready to reveal to the other side.
The private session (caucus) is a powerful tool in a mediator's arsenal. The mediator should use a private session:
Information shared in a private session is confidential to the mediator unless the party expressly authorises the mediator to share it with the other side. The mediator must always ask: "Is there anything you have told me that you do NOT want me to share with the other party?"
Impasse occurs when parties reach a deadlock — they cannot progress. Techniques to break impasse:
Role of Silence: Silence is a powerful mediation tool. After asking a difficult question, the mediator should remain silent and allow the party to think and respond. Filling silence prematurely undercuts the reflective process.
Role of Apology: In many disputes — particularly matrimonial, workplace, and community disputes — a sincere apology resolves the emotional core of the conflict more effectively than monetary compensation. The mediator can invite parties to consider whether an acknowledgment or apology might help.
Under the Mediation Act, 2023, a mediation settlement agreement is final and binding on the parties. It may be enforced in the same manner as if it were a decree of a civil court under the CPC. Under the Singapore Convention, international commercial mediation settlement agreements can be directly enforced across signatory states, analogous to the New York Convention for arbitral awards.
Mediators face complex ethical challenges including:
Court: Delhi High Court (Division Bench)
Facts: A reference was made by the Metropolitan Magistrate under Section 395 CrPC regarding whether criminal compoundable cases (including Section 138 NI Act complaints) could be referred to mediation. The High Court considered the legality and scope of mediation in criminal matters.
Issue: Can criminal compoundable offences be referred to mediation? Can the High Court quash non-compoundable offences after settlement?
Held: Criminal compoundable cases can be referred to mediation. For non-compoundable offences, the High Court may exercise its inherent power under Section 482 CrPC to quash proceedings if: (i) the dispute has a predominantly civil character; (ii) the parties have genuinely settled; (iii) continuation would cause manifest injustice. This principle applies to commercial, financial, matrimonial, and family disputes.
Principle: Mediation is permissible in criminal compoundable cases; in non-compoundable cases, settlement may enable High Court to quash under Section 482 CrPC if the offence has a civil flavour.
Court: Supreme Court of India
Facts: Question arose regarding the scope of the High Court's power under Section 482 CrPC to quash criminal proceedings in non-compoundable cases upon settlement between the parties.
Held: The High Court can quash criminal proceedings in non-compoundable offences where the wrong is essentially private in nature — arising from commercial, financial, civil, partnership transactions or matrimonial/family disputes — and where the parties have completely settled. Heinous crimes (murder, rape, dacoity) cannot be quashed as they affect society.
Principle: Section 482 CrPC power to quash extends to non-compoundable offences with a predominant civil character, upon genuine settlement.
Court: Supreme Court of India
Facts: Wife filed a complaint under Section 498A IPC (cruelty) against husband and his family — a non-compoundable offence. Parties wanted to settle their matrimonial dispute through mediation.
Held: Even for non-compoundable offences like Section 498A, criminal courts should refer parties to mediation centres if elements of settlement exist and parties are willing. High Court can quash the complaint upon settlement if genuine. Direction issued that all mediation centres must set up pre-litigation desks for matrimonial disputes.
Principle: Mediation should be the first recourse in matrimonial criminal disputes; courts should refer to mediation centres at the earliest stage.
India's first standalone legislation exclusively governing mediation, enacted to give mediation a robust statutory framework and to enable enforcement of mediation settlement agreements.
Adopted: UN General Assembly, 20 December 2018. Open for signature: 7 August 2019, Singapore. Entered into force: 12 September 2020.
Purpose: To create an enforceable framework for international commercial mediation settlement agreements, analogous to the New York Convention for arbitral awards — enabling cross-border enforcement without the need to re-litigate the dispute.
Article 1 — Scope: Applies to settlement agreements resulting from mediation that are: (a) in writing; (b) resolve a commercial dispute; (c) international in character (parties from different states, or performance/subject matter in a different state).
Exclusions (Article 1(2)): Does not apply to: consumer disputes; family, inheritance, or employment law disputes; agreements approved by a court; agreements enforceable as arbitral awards.
Article 4 — Requirements for enforcement: Party seeking enforcement must provide: (a) the signed settlement agreement; (b) evidence that the agreement resulted from mediation (mediator's signature, mediator's attestation, institutional attestation, or other evidence).
Article 5 — Grounds for refusing enforcement: Incapacity of a party; agreement null and void; agreement not binding or not final; obligations performed or incomprehensible; granting relief contrary to settlement agreement terms; serious breach by mediator of applicable standards; mediator's failure to disclose conflict of interest; granting relief contrary to public policy.
India signed the Singapore Convention on 7 August 2019 but has not yet ratified it as of 2026. Once ratified, it will dramatically enhance the enforceability of Indian commercial mediation settlements internationally, making mediation a more attractive option for cross-border commercial disputes.
Arbitration is a process of dispute resolution by a neutral third party (arbitrator) whose decision (award) is binding on the parties. Unlike mediation, the arbitrator adjudicates the dispute. It is a private, contractual, and consensual process.
The Arbitration and Conciliation Act, 1996 (A&C Act) is the primary legislation governing arbitration in India. It is based on the UNCITRAL Model Law on International Commercial Arbitration (1985) and replaced the Arbitration Act, 1940 (which was based on the English Arbitration Act 1934 — a fundamentally more court-supervised model).
Structure of the A&C Act, 1996:
An arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
An arbitration agreement shall be in writing. It is in writing if it is contained in: (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams, or other means providing a record of agreement; (c) an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.
A reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the reference is such as to make that clause part of the contract.
Essential elements of a valid arbitration agreement:
"Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be settled by arbitration in accordance with the Arbitration and Conciliation Act, 1996. The seat of arbitration shall be New Delhi. The language of arbitration shall be English. The arbitral tribunal shall consist of three arbitrators."
The parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Failing the determination by the parties, the arbitral tribunal shall consist of a sole arbitrator.
Section 11 — Appointment of Arbitrators: A person of any nationality may be an arbitrator, unless the parties agree otherwise. Parties are free to agree on a procedure for appointing the arbitrator(s). If a party fails to appoint an arbitrator within 30 days of receiving a request, or if the two appointed arbitrators fail to agree on the third within 30 days, the Supreme Court (for international commercial arbitration) or High Court (for domestic arbitration) shall appoint the arbitrator.
Grounds for challenge (Section 12): An arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or if he does not possess the qualifications agreed to by the parties. The 2015 Amendment inserted Fifth and Seventh Schedules listing specific situations creating ineligibility or grounds for challenge.
The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement. For this purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
The doctrine of Kompetenz-Kompetenz (competence-competence) means the arbitral tribunal has the power to determine its own jurisdiction. This is essential for the autonomy of the arbitral process — parties cannot avoid arbitration by simply challenging the validity of the underlying contract.
The doctrine of separability (also in Section 16) means the arbitration clause is treated as an agreement independent of the rest of the contract. Even if the main contract is found void, the arbitration clause survives and the arbitral tribunal can rule on the dispute.
A party may, before or during arbitral proceedings or at any time after making of the arbitral award but before it is enforced under Section 36, apply to a court for interim measures for: (a) appointment of guardian for a minor; (b) preservation, interim custody, or sale of goods; (c) securing the amount in dispute; (d) detention, preservation, or inspection of any property; (e) interim injunction or appointment of receiver; (f) any other interim measure.
The arbitral tribunal may, at the request of a party, order interim measures of protection as it considers necessary in respect of the subject matter of the dispute. After 2015 Amendment, orders under Section 17 are enforceable as if they were orders of the court under Section 9.
The arbitral tribunal is not bound by the CPC or the Indian Evidence Act. Parties are free to agree on the procedure. If no agreement, the tribunal prescribes the procedure. However, the procedure must conform to principles of natural justice (audi alteram partem and nemo judex in causa sua).
Section 24: The tribunal shall decide whether to hold oral hearings or proceed on documents. The parties must be given sufficient advance notice of any hearing. All statements, documents, and information supplied to the tribunal shall be communicated to the other party.
Section 26: The tribunal may appoint one or more experts. Section 27 allows the tribunal to seek assistance from courts for taking evidence.
An arbitral award must be in writing and signed by the members of the arbitral tribunal. It must state the reasons upon which it is based unless: (a) the parties have agreed that no reasons are to be given; or (b) the award is an arbitral award on agreed terms under Section 30. The award must state the date and place of arbitration.
Section 28 — Rules applicable to the substance: The arbitral tribunal shall decide the dispute in accordance with the substantive law (including international law) designated by the parties. Failing agreement, it applies the law of India (for domestic) or rules of law it considers appropriate (for international commercial). Ex aequo et bono (equity) applies only if parties expressly authorise.
Section 30: With the agreement of parties, the arbitral tribunal may use mediation, conciliation, or other procedures at any time during arbitral proceedings to encourage settlement. If parties settle, the tribunal shall record the settlement in the form of an arbitral award on agreed terms.
Recourse to a court against an arbitral award may be made only by an application for setting aside the award. An award may be set aside only if the party making the application furnishes proof that:
The court may also set aside if: (f) the subject-matter of the dispute is not capable of settlement by arbitration; or (g) the award is in conflict with public policy of India.
After the 2015 Amendment, "public policy" for Section 34 purposes means: (i) the making of the award was induced or affected by fraud or corruption; (ii) it is in contravention of the fundamental policy of Indian law; (iii) it is in conflict with the most basic notions of morality or justice. This narrowing of public policy was to prevent awards from being freely challenged.
Court: Supreme Court of India
Held: Section 34 of the 1996 Act is based on Article 34 of the UNCITRAL Model Law. The scope for setting aside an award under the 1996 Act is far less than under Sections 30 or 33 of the Arbitration Act, 1940. The arbitrator is the final arbiter of the dispute. Courts cannot re-appreciate evidence or substitute their own conclusions.
Principle: Section 34 provides extremely limited grounds for challenging an award; courts cannot act as appellate courts over arbitral tribunals.
Held: The arbitrator is the final arbiter of a dispute between the parties. It is not open to challenge the award on the ground that the arbitrator has drawn his own conclusions or failed to appreciate the facts. The arbitrator is the sole judge of the quality and quantity of evidence.
Principle: Courts cannot review the merits of an arbitral award under Section 34.
Court: Supreme Court of India
Facts: A dispute arose between two foreign parties in arbitration proceedings held under ICC Rules outside India. The question was whether Part I of the A&C Act applied to international commercial arbitrations held outside India.
Held: Part I of the 1996 Act applies to international commercial arbitrations held outside India unless the parties have expressly or impliedly excluded it. Courts in India may grant interim relief under Section 9 even for arbitrations seated abroad. (Note: This position was substantially modified by Bharat Aluminium Co. v. Kaiser Aluminium — BALCO — (2012) 9 SCC 552, which held that Part I applies only to arbitrations seated in India.)
Principle: (Pre-BALCO) Part I of A&C Act had extra-territorial application to foreign-seated arbitrations unless excluded.
Where the time for making an application under Section 34 has expired, or where such application has been made and refused, the award shall be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the court.
After the 2015 Amendment: Filing an application under Section 34 does not automatically stay the enforcement of the award. The court must be specifically approached for a stay, and the stay is conditional on the applicant satisfying that a prima facie case exists.
An arbitration relating to disputes arising out of legal relationships considered commercial under the law in force in India, where at least one of the parties is: (a) a foreign national or individual habitually resident outside India; (b) a body corporate incorporated outside India; (c) a company or association whose central management and control is in a country other than India; (d) the Government of a foreign country.
Part II, Chapter I deals with New York Convention Awards (arbitrations in countries that are parties to the NY Convention). India ratified the New York Convention in 1960 with two reservations: (i) reciprocity — will enforce awards only from other NY Convention states; (ii) commercial — will enforce awards only in commercial matters.
Section 48 — Conditions for enforcement of foreign awards: An award may be refused enforcement only on the grounds listed, which mirror Article V of the New York Convention: incapacity, invalid agreement, lack of notice, exceeding submission, irregular tribunal composition, non-arbitrability, public policy.
Held: An award is "foreign" not merely because it is made on the territory of a foreign state, but because it is made in such territory on an arbitration agreement not governed by the law of India.
Principle: "Foreignness" of an award is determined by the law governing the arbitration agreement, not merely the seat of the award.
A well-drafted arbitration clause should specify:
"Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by [Institution] under its [Applicable] Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."
An arbitrator's duties flow from both the A&C Act and general principles of fairness:
The Act provides for the constitution of legal services authorities (national, state, district, and taluka level) to provide free and competent legal services to the weaker sections of society. It gives legislative basis to Lok Adalats as a formal dispute resolution mechanism.
Article 39A, Constitution of India: The State shall secure that the operation of the legal system promotes justice, on the basis of equal opportunity, and shall provide free legal aid to ensure that opportunities for securing justice are not denied to any citizen by reason of economic or other disabilities.
National Legal Services Authority (NALSA): Constituted under Section 3; Patron-in-Chief is the Chief Justice of India. Functions include: encouraging settlement through negotiation, arbitration, and conciliation; laying down policies for legal services; undertaking research; developing legal education programmes.
Eligibility for free legal aid (Section 12):
A Lok Adalat (People's Court) is a forum constituted under the Legal Services Authorities Act, 1987 to settle disputes through negotiation and conciliation. It is a unique ADR mechanism deeply rooted in India's democratic and egalitarian traditions.
Key features: No court fees; no strict application of procedural laws or evidence rules; parties interact directly; no appeal against Lok Adalat award; award has the status of a decree of a civil court.
Jurisdiction of Lok Adalat (Section 19): Every Lok Adalat shall have jurisdiction to determine and arrive at a compromise or settlement between parties to a dispute in respect of: (a) any case pending before any court; (b) any dispute at pre-litigation stage (before it is brought before any court).
Award of Lok Adalat (Section 21):
| Basis | Lok Adalat Award | Court Decree |
|---|---|---|
| Nature | Consensual — based on party agreement | Adversarial — imposed by judge |
| Appealability | No appeal lies (Section 21) | Appeal lies as of right |
| Court fee | Refunded on settlement | Not refunded |
| Speed | Same-day settlement possible | Years to decades |
| Enforceability | Enforceable as civil court decree | Enforceable as decree |
| Legal representation | Not required; parties speak directly | Lawyers typically required |
Permanent Lok Adalats (PLAs) are constituted for disputes relating to public utility services (transport, postal, telegraph, insurance, supply of power, water, hospitals, educational institutions). A PLA has the power to pass an award even if the parties do not reach a settlement — unlike regular Lok Adalats. This makes it a hybrid adjudicatory-conciliatory body.
No suit can be filed in a civil court in respect of a dispute which is considered by a PLA for adjudication.
| Term | Source | One-Line Definition |
|---|---|---|
| ADR | General | All dispute resolution processes that operate outside formal court litigation |
| Negotiation | General | Bilateral consensual process where parties communicate to reach agreement without a third party |
| Mediation | Singapore Conv.; Mediation Act S.4 | A voluntary, confidential, party-controlled process where a neutral mediator facilitates settlement |
| Arbitration Agreement | A&C Act, S.7 | A written agreement to submit present or future disputes to arbitration |
| Arbitral Award | A&C Act, S.31 | Written, signed, reasoned decision of the arbitral tribunal, enforceable as a court decree |
| BATNA | Harvard Model | Best Alternative to a Negotiated Agreement — the walk-away point |
| Kompetenz-Kompetenz | A&C Act, S.16 | The arbitral tribunal has the power to determine its own jurisdiction |
| Lok Adalat | LSA Act, 1987 | A People's Court that resolves disputes through compromise; award is a final court decree |
| Caucus | Mediation practice | A private session between the mediator and one party, held in confidence |
| Separability | A&C Act, S.16 | The arbitration clause is independent of the main contract and survives its invalidity |
| Public Policy | A&C Act, S.34 | A ground for setting aside an award if it violates fundamental policy of Indian law or basic morality |
| Section 89 CPC | CPC, as amended 1999 | Mandates courts to refer civil disputes to ADR where elements of settlement exist |
| Section | Subject | Key Rule |
|---|---|---|
| S.7 | Arbitration Agreement | Must be in writing; covers present or future disputes |
| S.8 | Power to refer to arbitration | Court must refer parties to arbitration when valid agreement exists |
| S.9 | Interim measures — Court | Court can order interim measures before, during, or after arbitration |
| S.10 | Number of arbitrators | Must not be an even number; default is sole arbitrator |
| S.11 | Appointment of arbitrators | Parties appoint; failing that, High Court/Supreme Court appoints within 60 days |
| S.12 | Grounds for challenge | Justifiable doubts as to independence/impartiality; Fifth Schedule categories |
| S.16 | Kompetenz-Kompetenz; Separability | Tribunal rules on own jurisdiction; arbitration clause survives invalid contract |
| S.17 | Interim measures — Tribunal | Tribunal can order interim measures; post-2015, enforceable as court orders |
| S.28 | Applicable law | Parties choose governing law; failing that, Indian law (domestic) or appropriate rules (international) |
| S.29A | Time limit for award | Award within 12 months from completion of pleadings; extendable to 18 by consent |
| S.31 | Form of award | In writing, signed, reasoned (unless agreed otherwise) |
| S.34 | Setting aside award | Very limited grounds; public policy narrowly defined post-2015 |
| S.36 | Enforcement | Award enforced as court decree; no automatic stay post-2015 on Section 34 application |
| S.48 | Foreign award enforcement | Conditions for refusing enforcement of NY Convention awards |
| Case Name | Year | Court | Key Principle |
|---|---|---|---|
| Salem Bar Association v. Union of India | 2005 | Supreme Court | S.89 CPC constitutional; High Courts must frame mediation rules |
| Afcons Infrastructure v. Cherian Varkey | 2010 | Supreme Court | Categories of cases unsuitable for ADR under S.89; judicial duty to refer |
| Olympus Superstructures v. Meena Vijay Khetan | 1999 | Supreme Court | Scope of S.34 review far narrower than under 1940 Act |
| Sudershan Trading Co. v. Govt of Kerala | 1989 | Supreme Court | Arbitrator is final arbiter; courts cannot re-appreciate evidence |
| Bhatia International v. Bulk Tradings | 2002 | Supreme Court | (Pre-BALCO) Part I applies to foreign-seated arbitrations unless excluded |
| NTPC v. Singer Company | 1993 | Supreme Court | Award is "foreign" based on law governing arbitration agreement, not just seat |
| Gian Singh v. State of Punjab | 2012 | Supreme Court | S.482 CrPC enables quashing non-compoundable offences with civil character upon settlement |
| K. Srinivas Rao v. D.A. Deepa | 2013 | Supreme Court | Mediation in matrimonial S.498A cases; mediation centres must have pre-litigation desks |
| Dayawati v. Yogesh Kumar Gosain | 2017 | Delhi High Court | Criminal compoundable cases can be referred to mediation |
| Union of India v. Popular Constructions | 2001 | Supreme Court | Time limit under S.34 is absolute; Limitation Act S.5 does not apply |
| Krishna Bhagya Jala Nigam v. G Hari's Chandra Reddy | 2007 | Supreme Court | Participation in arbitration amounts to acquiescence; cannot challenge jurisdiction later |
Negotiation → Mediation → Conciliation → Arbitration → Lok Adalat
(In order of increasing third-party intervention power)
Interests, Options, Alternatives (BATNA), Legitimacy, Communication, Relationship, Commitment
Opening statement → Problem understanding → Needs & interests → Defining the problem → Issues identification → Options identification → Options evaluation → Settlement drafting
Incapacity of party | Not valid agreement | Absence of proper notice / unable to present case | Past scope of reference exceeded | Irregular tribunal composition or procedure | Dispute non-arbitrable | Public policy violation