Alternative Dispute Resolution (ADR) refers to a range of methods used to resolve disputes outside of the traditional courtroom litigation. These methods are aimed at providing faster, more cost-effective, and less adversarial means of resolving disputes. Common ADR mechanisms include Arbitration, Mediation, Conciliation, and Negotiation.
In the context of the Civil Procedure Code (CPC), ADR plays a vital role in promoting alternative dispute mechanisms as an efficient way to reduce the burden on the judicial system and to help litigants resolve their disputes amicably without the lengthy and often costly litigation process.
ADR and the Civil Procedure Code (CPC)
While ADR mechanisms are not specifically detailed in the CPC, the Code recognizes and encourages the use of such methods. Some provisions within the CPC facilitate the use of ADR, such as Order 32-A which deals with mediation and settlement, and Section 89, which lays down the framework for referring disputes to ADR.
Key Provisions of CPC Related to ADR
1. Section 89 of the CPC (Settlement of Disputes outside the Court)
- Section 89 is a significant provision in the CPC that promotes the use of ADR mechanisms. It requires courts to explore the possibility of settlement of disputes through ADR before proceeding with litigation. The section mandates that if both parties agree, the court can refer the matter to ADR.
- The section reads:
“Where it appears to the court that there exists an element of settlement which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the parties to appropriate ADR process such as arbitration, conciliation, mediation, or judicial settlement.” - Section 89(1) empowers the court to refer the matter to one of the following modes of ADR:
- Arbitration
- Mediation
- Conciliation
- Judicial Settlement
- Section 89(2) provides the procedure for referring cases to ADR and the duties of the court in facilitating this process.
- Section 89(3) states that when a dispute is referred to ADR, the parties are required to appear before the chosen forum, and if no settlement is reached, the matter is returned to the court for further proceedings.
2. Order 32-A (Mediation and Settlement)
- Order 32-A provides specific rules for the mediation process. It allows the court to refer disputes to mediation, where a mediator is appointed to help the parties reach a settlement. This rule was inserted into the CPC by the 2002 Amendment to promote alternative dispute resolution, particularly mediation.
- Under this order, the court may appoint a mediator to facilitate the settlement of the dispute. If the mediation is successful, the mediator submits the settlement agreement to the court, which then passes an order in accordance with the agreement.
- The main objective of Order 32-A is to reduce the burden on courts by resolving disputes through mediation instead of full-fledged litigation.
ADR Mechanisms under CPC
1. Arbitration
- Arbitration is a form of ADR where a neutral third party, known as the arbitrator, hears both sides of the dispute and makes a binding decision. The Arbitration and Conciliation Act, 1996 governs arbitration in India, but CPC provisions also support arbitration in various ways.
- Under Section 89 of the CPC, if the dispute is referred to arbitration, the parties must agree to abide by the decision of the arbitrator. The court only intervenes to enforce the arbitral award when required.
- Order 8A of the CPC deals with the arbitration clause and ensures that the court respects the arbitration process. If an arbitration clause exists, courts usually stay the proceedings of the suit and refer the matter to arbitration.
2. Mediation
- Mediation is a voluntary and confidential process in which a neutral mediator helps the parties find a mutually acceptable solution to their dispute. The mediator does not impose a decision but facilitates communication between the parties.
- Order 32-A specifically focuses on mediation. The court may refer the matter to a mediation center, and the mediator tries to help the parties reach a settlement. If a settlement is reached, it is submitted to the court for approval.
- Mediation is encouraged for family law cases, commercial disputes, and other civil matters where the parties are willing to negotiate.
3. Conciliation
- Conciliation is a process similar to mediation but typically involves a more active role of the conciliator. The conciliator suggests possible solutions and may assist the parties in resolving the dispute.
- Like mediation, conciliation is governed by the Arbitration and Conciliation Act, 1996, but it is also referenced under Section 89 of the CPC. If the dispute is resolved through conciliation, the settlement can be recorded by the court.
4. Judicial Settlement
- Judicial settlement refers to cases where the court itself, or a judge, may take steps to settle the dispute through informal negotiations or dialogues between the parties.
- This mechanism can be used in various types of cases, and the court acts as a mediator in facilitating an agreement between the parties involved.
Benefits of ADR in the Context of CPC
- Reduces Court Backlog: The use of ADR mechanisms under CPC helps reduce the heavy burden on courts, leading to faster resolution of disputes and less congestion in the judicial system.
- Cost-Effective: ADR methods like arbitration and mediation are generally less expensive compared to full-fledged litigation, making them more accessible for individuals and businesses alike.
- Faster Resolution: ADR mechanisms typically provide quicker resolutions as compared to lengthy court trials, saving both time and resources.
- Preserves Relationships: ADR, particularly mediation and conciliation, focuses on collaborative solutions, which can help preserve business and personal relationships.
- Confidentiality: ADR processes like mediation and conciliation are generally confidential, meaning that the dispute resolution process is private and not part of the public record.
Challenges of ADR in CPC
- Reluctance to Adopt ADR: Many litigants and lawyers still prefer traditional litigation due to the lack of trust in ADR mechanisms and concerns about enforceability.
- Implementation of Awards/Agreements: Though ADR mechanisms are intended to be binding, the implementation of agreements or arbitral awards may be delayed if either party resists compliance.
- Limited Awareness: There is a lack of awareness among the general public and sometimes legal professionals regarding the benefits and procedures of ADR, particularly mediation and conciliation.
Conclusion
The Civil Procedure Code (CPC) promotes the use of Alternative Dispute Resolution (ADR) methods to facilitate quicker and more amicable resolution of disputes. By including provisions under Section 89 and Order 32-A, the CPC encourages courts to explore ADR mechanisms such as Arbitration, Mediation, Conciliation, and Judicial Settlement. While the adoption of ADR has many advantages, such as cost-effectiveness and reduced court congestion, challenges related to awareness, implementation, and trust in the system still exist.
Incorporating ADR under the CPC reflects a progressive approach to dispute resolution and ensures that the judicial process remains accessible, efficient, and just for all parties involved.
