Press Information Bureau

08.02.2024

Civil

Government of India at forefront to promote Alternative Dispute Resolution Systems

MANU/PIBU/0157/2024

The Government has been at the forefront of promoting Alternative Dispute Resolution Systems. The enabling legal framework for resolution of disputes through Alternative Dispute Resolution (ADR) has been provided under Section 89, Civil Procedure Code, 1908. Section 89 recognises, Arbitration, Conciliation, Mediation and Judicial Settlement including settlement through Lok Adalat. It provides for the court to refer a dispute for settlement by either of these modes, where it appears that there exist elements of a settlement, which may be acceptable to the parties.

Further, section 6 of the Mediation Act, 2023 enables the court to refer for mediation, if deemed appropriate, any dispute relating to compoundable offences including the matrimonial offences which are compoundable and pending between the parties. However, the outcome of such mediation shall be further considered by the court in accordance with the law for the time being in force. Therefore, the provisions of the Mediation Act, 2023 enable and recognise settlement of compoundable offences in terms of the provisions contained therein.

The disposal of pending cases in courts including those which are compoundable lies within the exclusive domain of the judiciary. The Government has no direct role in the disposal of cases in courts. The Government, however, has been making constant endeavors to provide an ecosystem for faster and efficient disposal of cases by the judiciary.

It has been constant effort of the Government to reduce litigation in courts. A number of efforts over the years, have been initiated in the country with the vision to faster dispensation of Justice. The National Mission for Justice Delivery and Legal Reforms was set up in August, 2011 with the avowed objectives of increasing access by reducing delays and arrears in the system and enhancing accountability through structural changes and by setting performance standards and capacities.

ADR mechanisms including arbitration and mediation are less adversarial and are capable of providing a better substitute to the conventional methods of resolving disputes. The use of ADR mechanisms is also expected to reduce the burden on the judiciary and thereby enable timely justice dispensation to citizens of the country.

Some of the major initiatives take by the Government over the years in this regard include; the enactment of the Arbitration and Conciliation Act, 1996 with a view to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith. To keep pace with current developments in the arbitration landscape and to enable arbitration as a viable dispute resolution mechanism, the arbitration law has undergone significant changes in the years 2015, 2019 and 2021. The changes are enabled to signal a paradigm shift for ensuring timely conclusion of arbitration proceedings, minimizing judicial intervention in the arbitral process and enforcement of arbitral awards.

The Arbitration and Conciliation (Amendment) Act, 2015 provided for expeditious, fast track and time bound arbitral proceedings, neutrality of arbitrators and cost effective delivery mechanism. This was followed by the Arbitration and Conciliation (Amendment) Act, 2019 with the main objective of giving boost to institutional arbitration and to reduce the share of ad-hoc arbitration in the country. Further, Section 34 of the Act was amended vide the Arbitration and Conciliation (Amendment) Act, 2021, which provides for unconditional stay of enforcement of arbitral awards where the underlying arbitration agreement, contracts or making of the arbitral award are induced by fraud or corruption.

The Commercial Courts Act, 2015 was amended in the year 2018 to provide for Pre-Institution Mediation and Settlement (PIMS) mechanism. Under this mechanism, where a commercial dispute of specified value does not contemplate any urgent interim relief, the parties have to first exhaust the mandatory remedy of PIMS before approaching the Court. This is aimed at providing an opportunity to the parties to resolve the commercial disputes through mediation.

The India International Arbitration Centre Act, 2019, was enacted to provide for the establishment and incorporation of India International Arbitration Centre (Centre) for the purpose of creating an independent, autonomous and world class body for facilitating institutional arbitration and to declare the Centre to be an institution of national importance. The Centre, which has since been established is equipped with necessary infrastructure and professional management offering quality legal and administrative expertise and empaneling reputed arbitrators for conduct of arbitration under its aegis. The Centre shall be providing world class arbitration related services at its facilities in a cost effective manner for both domestic and international commercial disputes including requisite administrative support, in the smooth conduct of arbitral proceedings.

The Mediation Act, 2023, lays down the legislative framework for mediation to be adopted by disputing parties, especially institutional mediation where various stakeholders have been identified to establish a robust and efficacious mediation ecosystem in India. Mediation law will prove to be a pivotal legislative intervention towards providing comprehensive recognition to mediation and enabling the growth of a culture of amicable settlement of disputes, out of court.

Lok Adalats have come up as a viable Alternative Disputes Resolution Mechanism available to common people. It is a forum where the disputes/ cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably. Under the Legal Services Authorities (LSA) Act, 1987, an award made by a Lok Adalat is deemed to be a decree of a civil court and is final and binding on all parties and no appeal lies against thereto before any court. Lok Adalat is not a permanent establishment.

Tags : ADR Systems Disputes Settlement

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