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2024-02-07

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An Overview of Challenges in the ADR Mechanism in India

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Introduction

Alternative Dispute Resolution (ADR) has emerged as a fast-track system for dispensing justice and reducing the burden on the Indian judiciary. In India, ADR encompasses various methods such as arbitration, negotiation, conciliation, mediation, and Lok Adalat. These methods aim to provide efficient and speedy resolution of disputes, in line with the Directive Principles of State Policy under the Indian Constitution. However, despite its potential, the ADR mechanism faces several challenges in its development and implementation.

Origin and History of ADR

ADR has a long history in India, with systems similar to it existing in ancient societies. For instance, the Panchayat system, which is now redeveloped into Lok Adalat, has been a prevalent method of dispute resolution in Indian society. Over time, ADR methods have evolved and gained recognition under Indian law.

Meaning and Purpose of ADR

The Indian legal system recognizes five types of ADR methods: arbitration, negotiation, conciliation, mediation, and Lok Adalat. These methods offer parties alternatives to litigation and provide them with greater control over the resolution process. While arbitration involves a binding decision by an arbitrator, negotiation, conciliation, and mediation facilitate mutual agreements between parties. Lok Adalat, on the other hand, promotes voluntary actions to resolve disputes in a cost-effective and amicable manner.

Advantages of ADR over Litigation

ADR offers several advantages over traditional litigation, making it a preferred choice for many disputing parties. Firstly, ADR is more cost-effective compared to litigation, which involves significant court fees and legal expenses. Secondly, ADR processes are generally faster than litigation, which often suffers from long delays due to the backlog of cases. Additionally, ADR allows parties to reach mutually satisfactory agreements, avoiding the imposition of court decisions that may leave one party feeling dissatisfied. Lastly, ADR is less formal and procedural, reducing the stress and exertion experienced by parties involved in litigation.

Major Challenges in the ADR Mechanism in India

Despite the benefits of ADR, its growth in India is hindered by various challenges. These challenges can be categorized into circumstantial factors, legal factors, and party-related factors.

Circumstantial Factors

Lack of Government Support: ADR has received limited support from the government, particularly in less developed areas. The lack of funding has resulted in a scarcity of ADR centers, especially in small cities and towns. This lack of infrastructure hampers the accessibility and effectiveness of ADR mechanisms.
Lack of Infrastructure and Credible Arbitral Institutions: The inadequate number of ADR centers in India, even after the passage of the Arbitration and Conciliation Act, 1996, is primarily due to the lack of funding. As a result, parties often need to travel to larger cities to access ADR facilities, defeating the purpose of cost-effective dispute resolution.

Legal Factors

Court's Intervention in Arbitral Proceedings: Courts in India frequently interfere in arbitral and ADR proceedings, limiting the autonomy of the ADR mechanism. While this interference aims to ensure justice, it hampers the effectiveness and efficiency of ADR.
Execution Proceedings: After an award is passed in an ADR process, parties often need to approach the courts for execution purposes. This reliance on court intervention undermines the intended bypassing of the adversarial litigation process.
Lack of Professionally Skilled Lawyers: India faces a shortage of skilled arbitrators, negotiators, and mediators due to the general theoretical education system. The absence of proper institutions for skill development and awareness in this field leads to the failure of many ADR settlements.
Setting Aside of Award and Limited Appeal: Courts can set aside arbitration awards on certain grounds, leading to further complications and delays. The scope for appeal after an ADR award is narrow, limiting the parties' remedies.

Parties

Lack of Awareness: Many sections of Indian society lack awareness about ADR mechanisms due to poor living conditions and limited access to legal education. This lack of awareness acts as a significant hindrance to the growth of ADR.
Preference for Conventional Judicial System: Indian society has more faith in the traditional judicial system, which hampers the widespread acceptance of ADR as a viable alternative. However, there are instances where courts themselves refer parties to pursue arbitration, highlighting the need for acceptance of the new dispute resolution methods.
Power Imbalance: In cases where one party holds more influence than the other, there is a risk of coercion and injustice. This power imbalance undermines the fairness and effectiveness of the ADR mechanism.
Inability to Reach Mutual Agreement: Despite the efforts of negotiators, mediators, and arbitrators, parties may be unwilling to resolve their disputes through mutual agreement. This failure to reach an agreement extends the overall duration of the dispute settlement process.

Other Factors

Increasing Cost: The lack of skilled professionals in the field of ADR has led to retired judges and senior lawyers charging exorbitant fees. This makes the ADR system expensive and inaccessible to financially weaker sections of society.
Inapplicability in Criminal Cases: ADR mechanisms are not suitable for all types of cases, particularly those involving heinous crimes, serious fraud, and matters of national or societal importance. While this ensures the preservation of justice, it limits the effectiveness of ADR in certain situations.

Solutions to the Hindrances in the Growth of ADR

To address the challenges faced by the ADR mechanism in India, various solutions can be implemented:

Minimal Court Intervention: Courts should limit their interference in the ADR process to preserve the autonomy and effectiveness of ADR while ensuring the interest of justice.
Building Infrastructure: There is a pressing need to establish ADR tribunals in every district of the states to make ADR more accessible to all citizens.
Creating Awareness in Society: Legal education should be integrated into the school curriculum to raise awareness about rights and legal remedies among all citizens.
Regulation of Fees: To make ADR more accessible and affordable, there should be regulations on the fees charged by arbitrators, negotiators, and conciliators.
Proper Training Programs: There is a need for comprehensive training programs for legal professionals interested in providing ADR solutions. These programs would equip professionals with the necessary skills to make ADR more successful.

Conclusion

ADR has the potential to provide efficient and timely resolution of disputes in India. However, the growth of the ADR mechanism faces significant challenges that need to be overcome. By addressing circumstantial, legal, and party-related factors, and implementing solutions such as minimal court intervention, infrastructure development, awareness campaigns, fee regulation, and professional training, India can unlock the full potential of ADR. Embracing these solutions will pave the way for a more accessible and effective dispute resolution system in the country.