Module A — Introduction to Alternative Dispute Resolution

1.1 Need for Alternatives to the Formal Legal System

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.

1.2 Comparison: Adjudication vs. ADR

1.3 Development & History of ADR/Mediation in India

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:

• 1879: Arbitration recognised in pre-Independence legislation
• 1908: Civil Procedure Code included provisions for arbitration (later in Schedule II)
• 1940: Arbitration Act, 1940 — the first standalone arbitration law; based on English Arbitration Act 1934
• 1947: Industrial Disputes Act — first legislative recognition of mediation (Section 4 conciliators)
• 1987: Legal Services Authorities Act — constituted NALSA; promoted ADR for access to justice
• 1996: Arbitration and Conciliation Act — replaced 1940 Act; based on UNCITRAL Model Law
• 1999: CPC Amendment — inserted Section 89 (in force from 1 July 2002)
• 2002: Ahmedabad Mediation Centre inaugurated — first lawyer-managed mediation centre
• 2005: Chennai Mediation Centre — first court-annexed mediation centre in India; MCPC constituted by CJI R.C. Lahoti
• 2015 & 2019: Major amendments to A&C Act to make arbitration faster and reduce court interference
• 2023: Mediation Act, 2023 — India’s first standalone law specifically governing mediation

1.4 Section 89, CPC — Reference to ADR

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.

1.5 Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. Pvt. Ltd. — (2010) 8 SCC 24

1.6 Online Dispute Resolution (ODR)

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:

• Asynchronous communication: Parties need not be online simultaneously
• Technology-assisted: AI tools can facilitate document review, suggest settlements, and schedule sessions
• Accessible: Eliminates geographical barriers; particularly valuable in India’s vast rural geography
• Cost-effective: No travel, no physical venue costs
• Scalable: Can handle high volumes of low-value disputes

Module B — Communication

2.1 Process of Communication

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).

2.2 Seven Components of Communication

2.3 Verbal & Non-Verbal Communication

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.

2.4 Perception & Interpretation

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:

• Physical factors: Condition of the senses, time of day, general health, age, fatigue, hunger
• Psychological factors: Education, past experiences, assumptions about people, mood, self-concept
• Cultural factors: Worldview, language, customs, rituals. E.g., Americans view direct eye contact as honest; Japanese view it as rude. In Middle Eastern cultures, close conversational distance is normal; Americans find it a violation of personal space.
• Position in space: Where we physically stand or sit changes what we perceive

2.5 Principles of Communication

1. Communication is constant: You cannot not communicate. Even silence and non-action communicate. Non-verbal cues are always present.
2. Communication is irreversible: Once a message is sent, it cannot be fully retracted. A harsh word in mediation can permanently damage the process — “Forget I said that” is rarely effective.
3. Communication is creative: The choice of words, tone, timing, and channel are all creative decisions that profoundly affect the outcome of ADR processes.

Module C — Negotiation

3.1 Introduction to Negotiation

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:

• Voluntary and consensual
• No third-party neutral
• Flexible — parties set the agenda, timeline, and process
• Confidential — no public record unless parties agree otherwise
• Outcome is a negotiated agreement, binding only if reduced to writing and signed

3.2 Negotiation Styles

3.3 Seven Elements of Negotiation (Harvard Negotiation Project)

3.4 Negotiation Strategies & Techniques

Principled / Interest-based Negotiation (Fisher & Ury, Getting to Yes) advocates four principles:

1. Separate the people from the problem
2. Focus on interests, not positions
3. Invent options for mutual gain
4. Insist on objective criteria

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.

3.5 Eight Critical Mistakes in Negotiation

3.6 Being Assertive in Negotiation

Assertiveness in negotiation means standing firm on interests while remaining open on positions. An assertive negotiator:

• States their interests clearly and directly
• Listens without interrupting
• Says “no” with reasons, not apologies
• Does not confuse assertiveness with aggression
• Maintains respect even when disagreeing

Module D — Mediation

4.1 Concept & Definition of 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:

• Neutrality: The mediator must have no interest in the dispute or either party. She must be — and be seen to be — completely impartial.
• Self-determination: Each party makes free and informed choices. The mediator controls the process; the parties control the outcome.
• Confidentiality: All matters in mediation are confidential. The mediator cannot be a witness in subsequent judicial or arbitral proceedings. Parties cannot disclose willingness to accept proposals. This is essential because without confidentiality, parties will not speak freely.
• Fair process: Parties must feel they are being treated fairly and their concerns are being heard.
• Voluntary participation: Mediation is possible only with consent of parties, who are bound once they sign the settlement arrived at.

4.2 Mediation vs. Conciliation vs. Arbitration vs. Litigation

4.3 Mediator’s Skills and Roles

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:

• Active listening: Attending carefully to both verbal and non-verbal content; reflecting back to show understanding
• Reframing: Restating a party’s statement in neutral, forward-looking terms. E.g., “You want to destroy him” → “You want this dispute resolved quickly and fairly”
• Questioning: Open-ended questions to elicit information; probing questions to explore interests; hypothetical questions to open options (“What if…?”)
• Summarising: Periodically summarising what has been said to confirm understanding and show progress
• Generating options: Facilitating brainstorming of possible solutions without evaluating them prematurely
• Reality testing: Helping parties evaluate the feasibility of their demands against likely legal outcomes and practical constraints
• Managing emotions: Allowing parties to vent, acknowledging feelings without endorsing positions, using breaks and caucus to manage high conflict
• Building rapport: Establishing trust with both parties from the opening statement
• Drafting skills: Reducing settlement agreements to clear, enforceable written terms

4.4 Stages of Mediation

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.

4.5 Private Session / Caucus

The private session (caucus) is a powerful tool in a mediator’s arsenal. The mediator should use a private session:

• To share private matters and information that cannot be discussed in joint sessions
• To regain control when a party is getting out of hand
• When the parties are near a deadlock or impasse
• To allow parties to vent their emotions productively
• To expose unrealistic expectations through reality-testing
• To shift from positional argument to problem-solving

4.6 Handling Emotions & Impasse

Impasse occurs when parties reach a deadlock — they cannot progress. Techniques to break impasse:

• Taking a break
• Moving to a different issue and returning later
• Reality-testing: “What do you think will happen in court if this doesn’t settle today?”
• Using caucus to probe private interests
• Introducing neutral expert opinion
• Introducing “what if” hypotheticals
• Acknowledging and validating emotions before moving to problem-solving

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.

4.7 Drafting Mediation Settlement Agreement

4.8 Ethical Dilemmas in Mediation

Mediators face complex ethical challenges including:

• Conflict of interest: Prior relationship with one party; financial interest in the outcome
• Power imbalance: When one party dominates — domestic violence cases, employer-employee mediations. Mediator must decide whether to terminate mediation or manage the imbalance
• Confidentiality vs. disclosure: Party reveals a plan to harm someone in caucus — must the mediator disclose?
• Mediator as evaluator: Should the mediator give a legal opinion or assessment? (Evaluative vs. facilitative mediation)
• Pressure to settle: Courts referring matters with implicit pressure to settle — this may undermine voluntariness
• Informed consent: Ensuring parties understand what they are signing

4.9 Criminal Law & Mediation

4.10 Mediation Act, 2023 — Overview

4.11 Singapore Convention on Mediation, 2018

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.

Module E — Arbitration

5.1 Introduction & Overview of Arbitration & Conciliation Act, 1996

Structure of the A&C Act, 1996:

• Part I (Sections 1–43): Domestic arbitration and international commercial arbitration held in India
• Part II (Sections 44–60): Enforcement of foreign awards (New York Convention and Geneva Convention)
• Part III (Sections 61–81): Conciliation
• Part IV (Sections 82–86): Supplementary provisions

5.2 Arbitration Agreement

Essential elements of a valid arbitration agreement:

1. Agreement between the parties (consensus ad idem)
2. In writing (Section 7)
3. Refers to a defined legal relationship (contractual or non-contractual)
4. Covers present or future disputes
5. Intent to arbitrate must be clear

5.3 Composition of Arbitral Tribunal — Sections 10–15

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.

5.4 Jurisdiction — Kompetenz-Kompetenz (Section 16)

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.

5.5 Interim Measures — Sections 9 & 17

5.6 Arbitral Procedure

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.

5.7 Arbitral Award — Sections 28–33

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.

5.8 Challenging the Award — Section 34

5.9 Enforcement — Section 36

5.10 International Commercial Arbitration

5.11 Foreign Awards — New York Convention & Geneva Convention

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.

5.12 Key Amendments — 2015 & 2019

5.13 Drafting Arbitration Clause

A well-drafted arbitration clause should specify:

1. Scope: All disputes, or specific categories? “Arising out of or relating to” (broad) vs. “arising from” (narrow)
2. Number of arbitrators: Sole arbitrator or three arbitrators (never even numbers — Section 10)
3. Seat of arbitration: Critical for determining which court has supervisory jurisdiction (e.g., Delhi, Mumbai)
4. Rules: Ad hoc (A&C Act default) or institutional (ICC, SIAC, DIAC, MCIA)
5. Language: English, Hindi, or other specified language
6. Governing law: Which substantive law governs the contract
7. Confidentiality: Whether proceedings and award are confidential

5.14 Duties of an Arbitrator

An arbitrator’s duties flow from both the A&C Act and general principles of fairness:

• Duty of impartiality: No financial, personal, or professional interest in the dispute or parties; must disclose any circumstances under Section 12 Fifth Schedule
• Duty of independence: No relationship with any party or their counsel that could influence the award
• Duty to act fairly (natural justice): Hear both parties; give opportunity to present case; no ex parte communications with one party on the merits
• Duty of confidentiality: Proceedings and award are private
• Duty to act with expedition: Section 29A — award within 12 months
• Duty not to exceed jurisdiction: Award only on matters referred; not beyond scope of submission
• Duty to apply the applicable law: Section 28

Module F — Lok Adalat & Legal Services Authorities Act, 1987

6.1 Legal Services Authorities Act, 1987

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):

• Members of Scheduled Castes or Scheduled Tribes
• Women and children
• Persons with disabilities
• Persons in custody
• Victims of mass disasters, ethnic violence, caste atrocities, floods, droughts, earthquakes, industrial disasters
• Industrial workmen
• Persons below the income limit set by the State government

6.2 Lok Adalat — Concept, Powers & Procedure

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):

• Every award made by a Lok Adalat shall be deemed to be a decree of a civil court and final and binding between the parties
• No appeal shall lie from the award of a Lok Adalat
• If settlement is not reached, the case is returned to the court or parties may take their dispute to court
• Court fee paid when filing the case is refunded if the dispute is settled through Lok Adalat

6.3 Permanent Lok Adalat

📝 Important Questions for Exam

A. Short Answer Questions (2–5 Marks)

B. Long Answer / Essay Questions (10–15 Marks)

C. Problem-Based / Applied Questions (with Model Answer Hints)

D. MCQ Practice (20 Questions)

⚡ Quick Revision Summary

These notes are prepared for LB-602: Alternative Dispute Resolution, LL.B. VI Term, Faculty of Law, University of Delhi. For educational purposes only.

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