Summary of LARRDIS Research Paper on Alternate Dispute Resolution

In August 2020 Shri Satya Vijay Ram, Additional Director & supervised Km. Manju Jain, Director and Smt Kalpana Sharma, Additional Secretary prepared a research paper on Alternate Dispute Resolution for the Members of Parliament to act as background aid. The paper discusses the Indian judicial system and the ginormous pendency of cases across courts, at all levels. This makes the large scale prevalence of ADR mechanisms a necessity in India in order to ensure that justice is indeed delivered. The paper goes on to discussing various ADR methods currently in use and the strategy undertaken to formalize the Arbitration process in India. A summary of the paper is presented herein.


The present situation of conventional justice redressal machinery- “Courts”

India is a demographically diverse country with almost 17% of the world population. In this situation, the conventional method of dispute resolution has failed to provide justice as needed. To have an effective judicial system includes principles such as accessibility, affordability, and quick delivery of justice. It is often said that justice delayed is justice denied and today this exception to justice delivery is a norm in the Indian landscape. The latest figures by the Supreme Court website and National Judicial Data Grid about the pendency of litigation is as follows:


Pendency of litigation (number of cases)

Supreme Court of India


High Courts

4.47 million approx.

Other Subordinate Judiciary

33.6 million approx.


The solution to this deeply entrenched flaw in the system is Alternative Dispute Resolution. ADR is a global dispute resolution machinery which is not limited by territorial boundaries. It is an alternative to the traditional justice delivery machinery and can effectively reduce the number of cases by its speedy, inexpensive, and time-efficient characteristics. 

Types of ADR mechanisms

There are primarily five types of ADR mechanisms commonly used in India, namely Arbitration, Conciliation, Mediation, Negotiation and Lok Adalats. 


Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. It could be ad-hoc, institutional, statutory, or contractual. An arbitrator is a neutral third party who decides on the dispute and they can mutually be appointed the parties to the dispute. An arbitration can begin only when both the parties agree on pursuing it as a course for dispute resolution. This is generally done by means of an Arbitration Agreement. 


Conciliation is one of the statutorily recognized ADR mechanism in India under the Arbitration and Conciliation Act, 1996. Section 61-81 (Part III) of the Act deals with the procedural aspect of conciliation. Conciliation is an informal process whereby the parties, together with the assistance of the neutral third person or persons, systematically isolate the issues involved in the dispute, develop options, consider alternatives and reach a consensual settlement that will accommodate their needs. As against arbitration, it is neither based nor controlled by the existence of a prior agreement between the parties. That part, recourse to conciliation can be held even after parties have resorted to litigation and the case is pending before a Court. The role played by a conciliator is investigative in nature, they prepare a report based on the facts of the dispute and suggest a suitable method for its settlement. Under conciliation, the parties are left open to derive a settlement based on the report prepared by the conciliator and the suggestions can also be modified if the parties agree to it. Therefore, this process is not binding on the parties.


In a mediation procedure, a neutral intermediary, the mediator, helps the parties to reach a mutually satisfactory settlement of their dispute. The role of a mediator is limited to a facilitator between the two parties. Mediation lays emphasis on the parties own responsibilities for making decisions that affect their lives instead of a third party judging the fate of parties to the dispute. Thus, mediation can be termed as assisted negotiation. Section 30 of the Arbitration and Conciliation Act, 1996 recognizes mediation as a dispute resolution mechanism however, there are no provisions to assist with the procedure to be followed. In 1999, Section 89 was added to the Civil Procedure Code, 1908 via the Civil Procedure (Amendment) Act, 1999. This newly inserted section introduces the concept of „judicial mediation‟, as opposed to `voluntary mediation‟. A court can now identify cases where an amicable settlement is possible, formulate the terms of such a settlement, and invite the observations thereon of the parties to the dispute.


Negotiation is a process where the parties themselves try to resolve the disputes. The process provides the parties an opportunity to exchange ideas, identify the irritant points, find a solution, and get a commitment from each other to reach an agreement. Bargaining is a common feature of the negotiation process. Even if a third party negotiator is involved in the process of negotiation, his role would be limited to inducing the parties to the process of negotiation.

Processes like mediation and negotiation can be desirable for a certain kind of disputes such as family disputes, matrimonial disputes, petty disputes, industrial disputes, etc.

Lok Adalats:

Lok Adalat’s translates to ‘people’s court’ in English. It is a unique forum where voluntary effort at bringing about a settlement of disputes between the parties is made through conciliatory and persuasive means. It uses mediation, negotiation, and conciliation as tools to reconcile the differences amongst the parties. Lok Adalats have been given the powers of a civil court under the Code Civil Procedure. One of the unique features of Lok Adalat is that a number of disputes between different parties can be settled at one go without wasting much time.  

Under Section 19 of the Legal Services Authorities Act, 1987 anyone can get the dispute referred to a Lok Adalat. Once a settlement is made, the award given by the Lok Adalat acquires the force of a decree of a civil court. The Act forbids filing of an appeal to any court against such an award except on the ground of fraud. The Lok Adalats can settle all civil cases and compoundable criminal cases. There are also permanent Lok Adalats operating for the settlement of cases relating to Public Utility Services.4

Institutionalization of Arbitration in India



Pros & Cons of Alternative Dispute Resolution Mechanisms

There are various reasons for which ADR is preferred over the conventional way of resolving the disputes:

  1. Speedy and economic disposal of cases: Court proceedings in India go on for time immemorial and often don’t satisfy the parties involved due to the lengthy nature of proceedings. ADR helps to curb this problem because of its flexible nature. It also has the potential to deliver justice to the economically weaker strata by being cost-effective.
  2. Fewer technicalities: Courts resolve disputes by referring to binding procedural laws which makes the process rigid and technical. On the contrary, ADR procedures are not afflicted with such rigorous rules of procedure. In the case of arbitration, however, the rules of an arbitration institution, which are fixed, are sometimes applied. Otherwise, the parties may meet and fix the procedures for themselves with the help of a mediator. It is the substantive justice and not procedural justice that gets prominence in ADR. The ADR thus facilitates access to justice in an effective and convenient way.
  3. Parties autonomy: The parties have autonomy with respect to the choice of arbitrator/mediator/ conciliator, fixation of date and place of settlement, etc. This autonomy can play an effective role in the settlement process.
  4. Confidential nature: The ADR proceedings and awards are kept private and confidential. Even in the case of conciliation, Section 75 of the Arbitration and Conciliation Act, 1996 states that all the proceedings should be conducted in a confidential manner. This gives the parties an incentive to resort to such mechanisms.
  5. Involvement of parties in the dispute settlement: Under ADR mechanisms the parties to the dispute are actively involved in settlement proceedings. ADR processes create legal awareness and respect for the rights of one another and promote self-reliant development. They provide parties with the opportunity to reduce hostility, regain a sense of control, gain acceptance of the outcome, resolve conflict in a peaceful and cordial manner, and achieve a greater sense of justice in each individual case.


Despite the fact that the Indian legal system encourages dispute settlements through ADR mechanisms, our masses have yet to embrace it whole-heartedly. The reasons being:

  1. Lack of awareness amongst lawyers: The foremost reason for underutilization of ADR methods in India because of the lack of awareness in the members of the Bar. There is a big difference between the number of non-litigating lawyers in developed countries as compared to developing countries like India.
  2. Missing enforceability of decisions: Often it has been noticed that parties don’t enforce the decisions owing to its non-binding nature, except arbitration. This eventually paves way for the parties to go to court.
  3. Lack of dedicated practitioners: The speedy disposal of cases through ADR also requires sincere and dedicated persons administering it. However, in India, we do not have a separate group of people who are skilled and devoted only to the resolution of disputes through ADR. Given this fact, the people who administer ADR in India are busy legal practitioners, having cases in courts almost every day.
  4. Not an affordable option for poor: There are free legal aid services provided for those in need. However, that is not the case with ADR. It involves making payments to the arbitrators, mediators, negotiators for their services.



There is an emergent need to strengthen and promote ADR mechanisms throughout the country. With the number of pendency of cases almost rising on a daily basis, there is a lack of access to justice. In order to ensure timely and effective delivery of justice, there need to be alternative mechanisms of dispute resolution or expeditious and effective disposal of justice within the framework of the rule of law. As Abraham Lincoln has rightly said “Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them how the nominal winner is often a real loser – in fees, expenses, and waste of time”