All You Need to Know About Alternative Dispute Resolution (ADR)
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All You Need to Know About Alternative Dispute Resolution (ADR)

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1. Introduction

The Indian judiciary is renowned as one of the oldest judicial systems in the world. However, in recent times, it has become increasingly inefficient in dealing with the backlog of pending cases. Despite the establishment of thousands of fast track courts, the number of pending cases continues to rise. In such a situation, Alternative Dispute Resolution (ADR) can serve as a helpful mechanism to resolve conflicts in a peaceful manner, where the outcome is accepted by both parties.

ADR has gained popularity due to its cost-effectiveness, time efficiency, and ability to produce desired results. 

2. Understanding Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) is a mechanism that provides a substitute to conventional methods of resolving disputes. It offers a way to resolve various types of matters, including civil, commercial, industrial, and family disputes, where parties are unable to negotiate and reach a settlement. ADR typically involves the use of a neutral third party who assists the parties in communicating, discussing their differences, and ultimately resolving the dispute. This method enables individuals and groups to maintain cooperation, social order, and provides an opportunity to reduce hostility.

3. Importance of ADR in India

In India, ADR plays a significant role in reducing the burden on the courts and dealing with the issue of pending cases. The diverse techniques provided by ADR have helped in the efficient and effective resolution of disputes. ADR offers various modes of settlement, including arbitration, conciliation, mediation, negotiation, and Lok Adalat. While negotiation does not have statutory recognition in India, it is still considered a vital part of the ADR process.

ADR is founded on fundamental rights, such as Article 14 (equality before the law) and Article 21 (right to life and personal liberty). Its motive is to provide social, economic, and political justice as enshrined in the preamble. ADR also strives to achieve equal justice and free legal aid, as provided under Article 39-A relating to the Directive Principles of State Policy (DPSP).

4. Various Modes of Alternative Dispute Resolution


Arbitration is a process that requires a valid arbitration agreement prior to the emergence of a dispute. In this technique, parties refer their dispute to one or more arbitrators who make a binding decision called an "Award." The objective of arbitration is to obtain a fair settlement of the dispute outside of court, without unnecessary delay and expense.

The procedure for arbitration involves several steps:

  1. The applicant initiates the arbitration by filing a statement of claim that specifies the relevant facts and remedies, along with a certified copy of the arbitration agreement.
  2. The respondent then files an answer to the arbitration claim, providing relevant facts and available defenses.
  3. The parties select arbitrators from a list of potential candidates.
  4. There is an exchange of documents and information in preparation for the hearing, known as "Discovery."
  5. The parties meet in person to conduct the hearing, where they present their arguments and evidence.
  6. After the hearing, the arbitrator gives an "Award" that is binding on the parties.

It is important to note that the intricacies of arbitration proceedings may vary depending on the arbitration agreement. Section 8 of the Arbitration and Conciliation Act, 1996, allows one party to apply to a court for a referral to arbitration if the other party disrespects the arbitral agreement.


Mediation is an alternative dispute resolution process where a neutral third party, known as a mediator, assists two or more disputants in reaching an agreement. It is a party-centered negotiation process where the mediator facilitates the resolution of the dispute through appropriate communication and negotiation techniques. The mediator does not impose his views or make decisions about what a fair settlement should be.

The mediation process typically involves the following stages:

  1. Opening statement: The mediator provides information about their appointment and declares their impartiality.
  2. Joint session: The mediator gathers information and understands the facts and issues of the dispute by allowing both parties to present their case without interruption.
  3. Separate session: The mediator conducts individual sessions with each party to understand the dispute at a deeper level and gather specific information.
  4. Formulating issues and creating options: The mediator formulates issues for resolution and works with the parties to create settlement options.
  5. Reality check: If negotiation fails, the mediator discusses the alternative outcomes and consequences, such as the best alternative to a negotiated agreement (BATNA), most likely alternative to a negotiated agreement (MLATNA), and worst alternative to a negotiated agreement (WATNA).
  6. Conclusion: The mediator helps the parties reach a settlement by facilitating communication and negotiation.

Mediation allows parties to express themselves freely without fear of legal consequences. It also provides an opportunity for the restoration of relationships and the preservation of the parties' best interests.


Conciliation is a less formal form of arbitration that focuses on facilitating an amicable resolution between the parties. It involves the use of a conciliator who meets with the parties separately to settle their dispute. Unlike arbitration, there is no need for a prior agreement, and conciliation cannot be forced upon a party who is not interested in the process.

Section 62 of The Arbitration and Conciliation Act, 1996, clarifies that a conciliation agreement can only be entered into after the dispute has arisen. Parties are also permitted to engage in the conciliation process while arbitral proceedings are ongoing.

Lok Adalat

Lok Adalat, also known as "People's Court," is presided over by a sitting or retired judicial officer, social activists, or members of the legal profession. Lok Adalats are conducted by the National Legal Service Authority (NALSA) and other Legal Services Institutions at regular intervals. Any case pending in a regular court or any dispute that has not been brought before a court of law can be referred to Lok Adalat.

Lok Adalats follow a fast and informal process, with no court fees or rigid procedures. If a case pending in a regular court is transferred to Lok Adalat and subsequently settled, the court fee originally paid is refunded to the parties. In Lok Adalats, parties have direct interaction with the judge, which is not possible in regular courts. The role of the persons deciding the cases is to persuade the parties to come to a conclusion and settle the dispute outside the regular court.

It is important to note that Lok Adalats do not have jurisdiction to deal with cases of non-compoundable offenses.

5. Advantages of Alternative Dispute Resolution

Alternative Dispute Resolution offers several advantages over traditional litigation, including:

  1. Less time-consuming: Disputes can be resolved in a shorter period compared to court proceedings.
  2. Cost-effective method: ADR saves a significant amount of money compared to the expenses involved in litigation.
  3. Informal process: ADR is free from the technicalities of courts, allowing for more informal ways of resolving disputes.
  4. Freedom of expression: Parties are free to express themselves without fear of legal consequences, allowing them to reveal the true facts without disclosing them to a court.
  5. Efficient way of resolving disputes: ADR provides an opportunity for parties to restore their relationship as they discuss their issues together on the same platform.
  6. Prevention of further conflict: ADR helps maintain good relationships between parties and prevents the escalation of conflicts.
  7. Preservation of parties' best interests: ADR focuses on finding solutions that preserve the best interests of the parties involved.

6. The Role of Legal Services Authorities Act, 1987

The Legal Services Authorities Act, 1987, has played a significant role in the development of ADR in India. The Act has had a positive impact on the Indian Alternative Dispute Resolution regime, providing effective and efficient implementation. It has contributed to reducing the burden on the courts and promoting access to justice for all sections of society.

7. Important Provisions Related to ADR

Several important provisions govern Alternative Dispute Resolution in India:

  1. Section 89 of the Civil Procedure Code, 1908, allows the court to refer the parties to arbitration, conciliation, mediation, or Lok Adalat if it appears that there are elements of settlement outside the court.
  2. The Arbitration and Conciliation Act, 1996, and The Legal Services Authority Act, 1987, are the primary acts that deal with Alternative Dispute Resolution.

8. Conclusion

Alternative Dispute Resolution (ADR) provides a valuable alternative to traditional litigation and plays a crucial role in resolving disputes in a peaceful and efficient manner. It offers several advantages, including time and cost savings, informality, and the preservation of relationships between parties. The Legal Services Authorities Act, 1987, and other relevant provisions provide a legal framework for the implementation of ADR in India.

To stay updated with the latest developments in the field of law and Alternative Dispute Resolution, make sure to follow LegalStix Law School for the latest updates and insights.

Note: This article is for informational purposes only and does not constitute legal advice. Consult a qualified legal professional for advice on specific legal matters.

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