Alternative Dispute Resolution (ADR) refers to a wide range of methods of conflict resolution which help the parties reach an agreement without being tried or contentious. These methods typically involve a third party who assists them in resolving disputes. In often instances, both ADR and the court authorization methods are applied in connection with the litigation process. The 222nd report by the Indian Legal Commission states that, primarily through Article 39A, equal opportunities for each individual to obtain justice are ensured, and that they cannot be negated by any citizen because of the economic or other disability of any kind.

Many people, like India, continue to live in poverty in developing countries. When their rights are violated, they frequently lack the financial resources to fight lengthy legal battles. They do not have sufficient funds to hire a lawyer. They are unfamiliar with the legal system and procedures. As a result, they frequently perceive the court system as an inconvenience.

Many countries share these types of inefficiencies and therefore ADR is investigated. The courts also have an excessive number of pending cases, and these cases can drag on for many years, putting a significant strain on the system.

Advantages of ADR:

  • The process is also very flexible, according to what suits the parties.

  • It is less expensive and takes less time.

  • ADR is better suited to multi-party disputes because all parties can express their views in the same place and at the same time, rather than going to court again and again.

  • There are a wider range of issues and the common interests of the parties in the future are protected.

  • The parties often have a say in the ADR method. They may also have the option of selecting the individuals or bodies who will resolve the dispute.

Disadvantages of ADR:

  • If the case is complicated, the adjudicating body may require expert advice and suggestions to investigate minor details. ADR is unlikely to be effective in this situation.

  • If implementation is necessary, ADR is less appropriate.

  • When a court or interim order is required, ADR is ineffective.

Important provisions:

Section 89 of the Civil Procedure Code of 1908 gives the people that opportunity; if it appears to the court that there are elements of settlement outside the court, the court formulates the terms of the possible settlement and refers it to Arbitration, Conciliation, Mediation, or Lok Adalat.

The Arbitration and Conciliation Act of 1996 and the Legal Services Authority Act of 1987 are the acts that deal with Alternative Dispute Resolution.

Types of ADR methods:


A third neutral party helps to reach an agreement through mediation with two or more contestants. The mediator is a third party. The mediator must effectively communicate with both parties and use suitable negotiating methods through empathy and dialogue, so that one party is fully aware of the views of the other. This procedure is the responsibility of the parties.

The Mediator shall seek to enable parties to voluntarily resolve their conflict and to communicate their views, to help them determine problems and reduce misunderstandings, to clarify priorities, to explore areas of compromise and to generate options in order to resolve the dispute he shall not impose any terms of settlement on the parties. The mediator shall not impose any decision on the parties. The solution is reached by mutual agreement, which is generally not compulsory. The mediation process is strongly influenced and strictly confidential by the parties.

The prime objective of the mediation process is not to make a decision but to foster relations. It is more a friendly settlement of differences with the potential for future business of the parties.


The Arbitration and Conciliation Act of 1996 governs arbitration in India. It is a way of settling disputes where the dispute is settled by one or more parties It makes the dispute effective because it takes less time for the parties to resolve and costs less money. The procedure is informal. As a result, parties often choose to arbitrate, especially in business circles, when disputes arise.

Before the arbitration process begins, an arbitration agreement needs to be established. This agreement sets out the terms and conditions of the arbitration process. This agreement stipulates how the process is made less costly and efficient and how, among other things, the rules of evidence are applied.

This agreement must be valid in accordance with the Indian Contract Act, 1972 and the parties must be able to sign contracts in accordance with Articles 11 and 12.

The parties' final and binding arbitral decisions, which have only a limited number of appeal alternatives. The parties can also request a trial in non-binding arbitrations where the decision of the arbitrator is not met

Types of arbitral proceedings:

  • Ad Hoc Arbitration:

Ad hoc arbitration is the decision by the parties concerned as to how the arbitration process itself is to be conducted rather than by an arbitral institution. If the parties cannot agree on an arbitrator or if one of the parties refuses to appoint that arbitrator, the other party shall refer to Section 11 of the Arbitration and Conciliation Act, 1996.

If there is domestic arbitration, the Chief Justice or his designate shall appoint the arbitrator.

The Chief Justice of India or his appointment appoints the arbitrator when the arbitration is international. The arbitrator's fee is mutually agreed upon by the parties and the arbitrator in ad hoc arbitration.

  • Institutional Arbitration:

In this arbitrage, the parties themselves decide that the arbitrate will be administered by an arbitration institution. The Indian institutions are the International Center for Dispute Resolution and the Indian Arbitration Council. These institutions draw up rules for arbitration because of their experience in arbitral proceedings and situations and are prepared to deal in future arbitration cases with any possible situation.


In conciliation, a third party, known as the conciliator, talks to each of the parties separately in order to facilitate talks between the parties in order for them to reach a mutually acceptable solution. In India, the 1996 Act concerning Arbitration and Conciliation regulates conciliation. Conciliation in the context of legal relationships, whether contractual or otherwise, shall be provided pursuant to Section 61.


A negotiation is a form of dispute resolution as well, but because there is no third party to adjudicate the matter, the parties work together to find a mutually acceptable solution or a compromise. During the negotiations, the parties may elect to be represented by their lawyers. There are no legal negotiations in India. There are no stringent rules when it comes to negotiation. It is a communication process that contributes to conflict resolution.

The parties benefit from the fact that they have control of the outcomes and the procedure and that the process is conducted for their best interests. It is voluntary and the result is not legally binding.


The concept of Lok Adalats is essential in a country like India, where many people are illiterate. This concept was developed with various factors such as social justice in mind, with the primary goal of reducing the burden of pending cases on the courts.

Lok Adalat is governed by the Legal Services Authorities Act, 1987. Specifically addressed in Sections 19, 20, 21 and 22, are locomotives. The State Legal Aid and Advisory Boards organised them with support from the District Legal Aid and Advice Committee. These have helped people with low incomes to avoid litigation inefficiencies. The Legal Services Authorities Act's aim was to ensure access to justice for everyone, rich or poor This access was further enhanced by the decisions by various courts, including the Delhi High Court in the Abul Hasan cases and the Delhi Vidyut Board & Ors The National Legal Services Authority is in charge of providing legal services to the public. AIR 1999 Del 88, a permanent locomotive adalats is ordered. Furthermore, the Lok Adalat's decision is binding, as is the ruling of the Civil Court, enhancing the Lok Adalat's authority.


In Renusagar Power Co Ltd vs. General Electric, AIR 1985 SC 1156[S1]

The Supreme Court says that this legislation was intended to facilitate international trade by ensuring that commercial disputes were resolved promptly by means of arbitration. It has been stated that usually, unless parties have expressly given such authority, an arbitrator has no authority to assign himself the power to decide his own jurisdiction.

The Court further found that the Court, rather than the arbitrator, decided on the contract's validity under Section 33. If at the time of entry of the arbitrators in their duties the arbitration clause was not present, the entire procedure is incompetent.


There are numerous other dispute resolution methods available, such as med-arb, mini-trial, summary jury trial, and so on. However, arbitration, mediation, and Lok Adalat, among other ADR techniques, are the most commonly used in India. ADR is gradually becoming the preferred choice for parties around the world, but India still relies heavily on litigation. However, with the advancement of these ADR methods and the desire to improve access to justice, ADR is becoming a necessity. All ADR methods, including negotiation, should be given legal recognition because they are viable and convenient, and it would help to reduce the burden on the courts.





  4. Renusagar Power Company Ltd vs General Electric Company And Anr on 16 August, 1984 1985 AIR 1156, 1985 SCR (1) 432

~Authored by Simran Karamchandani

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