17 Alternative Dispute Resolution:The Rationale For Adr

Mr Madhav Mallya

1. INTRODUCTION

Delay in adjudication of dispute is bound to create a sense of frustration, loss of faith and dissatisfaction in the justice delivery system. There is a certain societal interest in the speedy and expeditious resolution of disputes: it leads to certainty and the establishment and reinforcement of legal norms and the principles of justice and equity, it works towards the preservation of human relations and it ensures that resources both financial (whether public or private) and human are conserved and also put to better use. Nevertheless, in India litigation is a time consuming and expensive process, which also often leads to physical and emotional trauma for the parties involved. Court procedure in India is cumbersome and lengthy with a long course of appeals which often means that disputes take years to get finally resolved. Not to mention the fact that human ego and psychology is involved and there are concerted efforts to delay and stall proceedings. Considering the fact that India has a huge population, the number of courts is not proportionate to the sheer number of different kinds of disputes which arise in the society.

Following pictorial diagram depicts the true state of affairs of increasing hostility and cost between the parties at disputes:

In this backdrop, therefore, the consent based systems of dispute resolution or Alternative Dispute Resolution (ADR) have emerged as an alternative, litigation-free method of resolving disputes. ADR mechanisms are not new to India and the principles and processes that govern ADR in India today have their roots in procedures which have had existed from time immemorial. In that sense the urgent need for consent based mechanisms in ADR is quite necessary and should not be surprising, given the huge backlog of cases and the burden on the Indian judiciary.

LEARNING OUTCOMES:

(i) Brief historical wisdom of ADR,

(ii) The statutes governing the ADR mechanism,

(iii) General rationale for ADR mechanism , and

(iv) Features of different approach of Mediation,

2.HISTORYCAL RATIONAL: ADR AS EMBODIMENT OF TIME TESTED WISDOM

The dispute settlement mechanisms we know today by the name ADR in some sense represents and are reminiscence of indigenous ancient wisdom. For instance arbitration, that is reference of any particular dispute by consent of the parties to one or more persons with or without an umpire and an award enforceable by the sovereign power were generally unknown in ancient India. Hindus recognized decisions of Panchayats or bodies consisting of wealthy, influential or elderly men of the community and entrusted them with the power of management of their religious and social functions. The sanction against disobedience to their decision was excommunication, or ostracism and exclusion from all religious and social functions of the community. An agreement to abide by the decision of the Panchayat and its decision with regard to the line of boundary, however, was held not to be conclusive, since a reference to arbitration and award properly so called did not exist.1

A study of the history of the judicial system of India from the Vedic age to the advent of the colonial rule in India would reveal a structured and complex system of courts and dispute resolution mechanisms. Often in the matters of disputes between traders, persons specialized in certain professions, trade or guild groups with expertise in that particular area would resolve the dispute.2

Arbitration, for example, (though not in the strict sense) was prevalent from vedic times. In the Bhadranayaka Upanishad, reference to various kinds of arbitral bodies like the Puga, Sreni and the Kula are found. The Puga comprised of people of different sects and tribes but living in the same area, the Sreni comprised of trade and artisan groups and the kula was a group of persons joined by family ties. 3

From a decision of the Kula, there was a system of appeals to the Sreni and from the Sreni to the Puga and beyond Puga to the Pradavivaca. These systems of dispute resolution were informal in nature though appeals went to municipal courts. These bodies dealt with a variety of disputes including land, monetary, matrimonial and criminal disputes. In the landmark decision in Sitanna v Viranna,4 the Privy Council affirmed an award of a Panchayat in a family dispute, forty two years after it was passed. Within Islamic Law, provisions for arbitration of disputes by a person who possesses the qualities of a Kazi- who presided over an official court of law are contained in the Hedayat.

Under colonial rule, regulations introducing substantial changes in the panchayat system of presidency towns were issued which included provisions that judges could prevail upon parties to submit to arbitration under the aegis of a mutually appointed arbitrator. The Bengal regulations of 1787, 1793 and 1795, introduced certain procedural changes by empowering courts to refer suits to arbitration with the consent of the parties and further authorizing the court to promote references of cases not exceeding Rs. 200 in value for arbitration and disputes relating to partnership accounts and breaches of contract. The regulations also laid down the procedure for conducting the arbitration. In the Presidency Town of Bombay, the Regulation VII of 1827, provided for the settlement of civil disputes and also laid down that arbitration shall be in writing to a named arbitrator, wherein the time for making the award had to be stated. The Code of Civil Procedure 1859 provided for arbitration in suits as well as arbitration without court intervention. There were mutatis mutandis reproduced in the Code of Civil Procedure 1877 and 1882. The aforementioned regulations continued to remain in force in the Presidency Towns until the Civil Procedure Code was extended to the Presidency Towns in 1862.

The Indian Arbitration Act 1889, based on the British Arbitration Act of 1889 was the first substantial legislation of arbitration in India. Prior to the Act of 1889, arbitration was confined only to subsisting disputes governed by the Indian Contract Act, the Code of Civil Procedure and the Specific Relief Act. The schedule to the Code of Civil Procedure 1908 also provided for arbitration with and without court intervention. The Arbitration (Protocol and Convention) Act 1937 was enacted to give effect to the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 and the Geneva Protocol on Arbitration Clauses 1927. This Act applied only to matters considered “commercial” under the law in force in India. The operation of this Act was based on reciprocal arrangements and was mainly concerned with the procedure for filing foreign awards.

The Arbitration Act 1940 provided for arbitration with court intervention (where no suit was pending before the Court) and arbitration without court intervention and arbitration in suits. The Arbitration Act 1940 made provision for protecting an agreement from being vitiated because of some lacuna in it. It empowered the Court to remove an arbitrator or umpire and substitute them in case of any misconduct. It conferred powers on the arbitrators and umpire to facilitate effective discharge of their powers. It enabled the Court to deal judicially with the award after it had been passed and filed before it, enabling it to pass its judgment, including the discretion to modify, remit or set aside the award. These provisions applied primarily to non court intervention cases. The Foreign Awards (Recognition and Enforcement Act), 1961 was passed to give effect to the provisions of the New York Convention on the Recognition and Enforcement of Foreign Awards 1958. With the economic liberalization of India in 1991, the need for reforms in the arbitral law and procedure was felt. The 1940 Act with its unnecessary reliance on an inefficient judicial process was not conducive to the needs of the business and the need for India to become a business friendly destination for international commercial arbitration and dispute resolution. Therefore, the present Arbitration and Conciliation Act 1996 was enacted by the Parliament.

Keeping in view the huge quantum of pendency of criminal cases, in its 142nd and 154th Report, Law Commission of India recommended the introduction of ‘plea bargaining’ as an alternative method to deal with huge arrears of criminal cases, which found a support in Malimath Committee Report on Criminal Justice System Reform 2003. In the same year Chapter XXIA was added in the Code of Criminal Procedure 1973 giving effect to these reports.

3. GENERAL RATIONALE FOR ALTERNATIVE DISPUTE RESOLUTION.

Speedy and expeditious resolution of disputes: One of the main aims of arbitration, mediation and conciliation is the speedy resolution of disputes with an emphasis on conciliatory moves. Section 30 of the Arbitration and Conciliation Act, 1996 provides for an arbitral tribunal trying to have a dispute settled by mediation or conciliation. Therefore even in arbitration, which most closely resembles litigation out of the three mechanisms, there is an attempt to settle the dispute as quickly as possible. Given the huge backlog and pendency in our courts at present, quick settlement is the need of the hour and also serves wider interests of the society.

Cost effective: Apart from being time consuming, traditional judicial process is expensive and has been known to have consumed people’s savings. While litigation is unavoidable in a number of circumstances, wherever possible there should be an attempt at settlement of the dispute. The desire to continue litigation and not arrive at a settlement is often fueled by human ego and psychology, not to mention the systemic and institutional drawbacks of our litigation system. But the greatest drawback of litigation is that one would have to keep paying huge sums of money to lawyers to keep fighting the case, which in case of most people is not viable. Reduces the burden on public finances in a country where resources are already strained: As observed above, there is huge pendency and backlog in our courts. There is huge public expenditure to keep the clock ticking. Given the fact that we have limited public resources in this country, a slightly concerted effort at reducing the backlog in the courts by opting to settle disputes through mediation and conciliation, might pave the way towards a certain proportion of resources being put to better use.

Fewer traumas to the people involved: A legal dispute involves acrimony and bad feelings which does take a toll on people, emotionally, physically and mentally. Mediation and conciliation and even arbitration to a degree aims at reducing such acrimony and aims to help parties to sit down and deal with their disputes, identify issues and try to work out an amicable settlement with benefits to either side. It involves keeping aside one’s ego and trying to work out a balanced solution.

Confidentiality: Another important aspect of the three main alternative dispute resolution procedures is confidentiality, unlike court proceedings. Matters of business or family interest, which is meant to be discussed in a discretionary manner, can be kept private without the outside world knowing the intimate nuances of the dispute. The overall aim of ADR mechanisms is to resolve disputes in an amicable manner and without there being too much acrimony. As such, measures of confidentiality help in personal disputes being kept private and help in conserving delicate human relationships.

Harmonious resolution of disputes and interest to society at large: There is a certain greater interest to be considered in the facilitation of the harmonious resolution of disputes by ADR mechanisms. No doubt, disputes do arise in the course of business or personal relationships. With increased economic activity and the changing of the social fabric as well as the attitudes and perceptions of people, the numbers of disputes are bound to increase. Given the contemporary drawbacks of the litigation systems in India, mechanisms which seek to resolve differences in an amicable way and with a balanced solution are beneficial to the socio economic structure in the long run, even if one does not realize the immediate benefits.The rationale of ADR can be understood with the help of following diagram:

4. RATIONALE BEHIND DIFFERENT STYLES OF MEDIATION AND THERAPEUTIC JURISPRUDENCE.

As seen in the related module a conciliator plays a more facilitative role than a mediator. While the distinction between the two concepts is blurred in India, both mediation and conciliation involve certain common skills of trying to bring about an amicable resolution of the dispute, which is one of the key rationales of alternative dispute resolution. In fact, even arbitration encourages settlement and this has been imbibed in the Arbitration and Conciliation Act 1996. There are different approaches to mediation (here used interchangeably with conciliation) depending on circumstances and the nature of the dispute. It is equally important to examine the logic between different mediation techniques and understand the requisite qualities of a mediator. Mediation is considered to be the pivot of the ADR umbrella5 and therefore the techniques and the role fulfilled by mediation is important.

Styles of Mediation:6

Evaluative: In evaluative mediation, the mediator decides what the case is worth and advises how it should be settled. The evaluative mediator assumes the parties want and need the mediator to provide direction as to how and why the case should settle a certain way or for a certain sum. Evaluative mediation can be effective in a case where the neutral mediator has tried many similar cases or otherwise knows the cases well.

Facilitative Mediation: The facilitative mediator works with the parties, downplaying his or her expertise. A facilitative mediator does not offer options, solutions or opinions about the outcome. He may be energetic in urging the parties to re-evaluate their positions and legal analysis, but a facilitative mediator would not give his or her opinion on the merits of the claims or defenses, or the likely outcomes of the case.

Therapeutic and Transformative: In therapeutic mediation, mediation is a form of communication in which the parties are encouraged to engage in a full expression of their feelings and attitudes. Therapeutic mediators claim authority based on expertise on managing personal relationships and use mediation to help people reach mutual understanding through collective agreements. The therapeutic model emphasizes emotional concerns.

The transformative approach to mediation rejects problem solving as a goal. Instead, it seeks party empowerment and recognition. Transformative mediation aims at changing the parties. Transformative mediators view disputes, not as problems, but as opportunities for moral growth and transformation.

All the above techniques emphasise different approaches which mediators need to adopt in order to reach an effective settlement of a dispute. No two disputes are alike; parties’ attitudes and perceptions would always differ. A mediator needs to take into account cultural backgrounds and temperaments, economic positions and mindsets while attempting to negotiate a settlement. Given the present overburdened position of India’s litigation system, with its accompanying disadvantages both materially and emotionally, the ADR has a great therapeutic and preventive value and as an alternative the lawyers and clients concerned should emphasise the following:

• Identify issues where there might be psychological concern.
• Determine the legal procedure most likely to have positive therapeutic effects.
• Analyze future legal procedures through a preventive law lens and choose procedures that maximize the opportunity for positive effects and minimize the risk of negative effects.
• Establish a system for dealing with unanticipated events in order in order to avoid non therapeutic legal procedures.

The issues and approaches provided by Therapeutic Jurisprudence and Preventive Law are consistent with many of the goals of alternative dispute resolution.8 Because settlements are within the control of the parties, parties can address broad issues as opposed to more narrow litigation issues.9 Negotiation and mediation, however can implement ideas from preventive law by looking beyond the specific litigation issue. If the goal is to prevent further disputes between the parties, then the ability of mediation to deal with these issues is more likely to work to the clients’ benefit than litigation. Settlements can be structured so that all of the elements of the dispute are discussed, evaluated and dealt with in a final agreement. There are other rationales to the therapeutic approach. The strength of mediation lies in providing the client the opportunity to tell her story in a setting that is safe and helpful. The opportunity to be heard is cathartic for many clients.10

On the other hand, arbitration provides lesser opportunity for preventive law techniques and individual arbitrators frequently feel constrained to keep to the dispute at hand and not look down the road. This however should not prevent parties from doing so by widening the scope of the questions presented to the arbitrator or perhaps give the arbitrator broader remedial powers. This would enable the arbitrator to employ preventive law ideas in crafting the decision in examining the future interactions between the parties.11

Status of the disputes referred and settled through mediation in different district courts of Delhi:

5. SUMMARY

ADR is technically geared towards the settlement of a dispute and all its mechanisms function in a direction that eventually leads to settlement. It is unfortunate that today, in India , ADR is viewed as a mere alternative to litigation and that once ADR processes fail, parties return to Court instead of trying to pick up the pieces.

India is a nation which epitomises a subtle mix of the modern and the ancient. The preservation of the best of both is what Indians are best at. Keeping in mind the same spirit of India, the common Indian of today should get the best of all the dispute resolution mechanisms in India

Settlement should be encouraged at all stages of the litigation process subject to it being just and in accordance with the principles of equity and good conscience. It is necessary for students of alternative dispute resolution to understand its nuances not only from the point of view of ‘dispute resolution’ per se, but to also appreciate the broader role it could play in ensuring societal harmony and welfare, especially at a time when we do not have resources to waste in this country

The ADR movement needs to be carried forward with greater speed. While systems of Alternative Dispute Resolution might have their merits, it is evident that they might not apply to all kinds of situations and discretion would have to be exercised by a judge as to whether a civil dispute could be referred to mediation or a criminal trial to be referred to plea bargaining keeping in mind the nature of the dispute, willingness of the parties to settle etc.

Web Sources:

• Andrea Kupfer Schneider, ‘Building Pedagogy of Problem Solving: Learning to choose among ADR Processes’ (2000) < http://ssrn.com/abstract=1295585>.
• ShahidPervez,‘DevelopmentofArbitrationLawinIndia’(2009)
• <http://ssrn.com/abstract=1502812>
• http://supremecourtofindia.nic.in/MEDIATION%20TRAINING%20MA NUAL%20OF%20INDIA.pdf
  http://www.arbitrationindia.org/htm/overview.htm
• http://lawcommissionofindia.nic.in/adr_conf/concepts%20med%20ra o%201.pdf