“Discourage
litigation. Persuade your neighbors to compromise whenever you can. Point out
to them how the nominal winner is often a real loser— in fees and waster of
time. As a peacemaker, the lawyer has a superior opportunity of being a good
man. There will still be business enough.”

– 
Abraham Lincoln

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              Arbitration
is a method for settling disputes privately, but its decisions are enforceable
by law. An arbitrator is a private extraordinary judge between the parties,
chosen by mutual consent to sort out controversies between them. Arbitrators
are so called because they have an arbitrary power; for if they observe
submissions and keep within due bounds their sentences are definite from which
there is no appeal. Arbitration offers greater flexibility, prompt settlement of
national and international private disputes and restricted channels of appeal
than litigation.

In the words of Richard Cobden “At all events, arbitration is more rational, just, and humane than the
resort to the sword.”

 

             Arbitration
is a simplified version of a trial involving no discovery and simplified rules
of evidence. Either both sides agree on one arbitrator, or each side selects
one arbitrator and the two arbitrators elect the third to comprise a panel.1
Arbitration hearings usually last only a few hours and the opinions are not
public record. Arbitration has long been used in labour, construction, and
securities regulation, but is now gaining popularity in other business
disputes.

 

Litigation is expensive, time consuming and full of
complexities. ADR is a system whereby disputants resolve their disputes with
minimum outside help.2
The ADR procedure consists of four basic methods of dealing with disputes which
are:

1.     
Negotiation3

2.     
Mediation4

3.     
Conciliation5

4.     
Arbitration6

Alternative dispute resolution is not new to India. The
concept is analogous to the panchayat or similar bodies consisting of
influential and elderly men from the community who were bestowed with power to
manage of religious and social functions and who were called upon to decide the
dispute between parties in the particular village, be it civil or criminal or
revenue.7

 

Arbitration
is an adjudicatory process and remaining four ADR processes are negotiable in
nature (non-adjudicatory processes). Arbitration is governed by the provisions
of the Arbitration and Conciliation Act. For a reference to arbitration under
sec. 89, CPC,8
there must be the consent of all the parties to the suit. The parties to the
suit can agree for arbitration by means of a joint memo, joint application or
joint affidavits before court or the court may record such agreement in the
order sheet signed by the parties. On a reference to the arbitration the case
will go outside the stream of the court permanently and will not come back to
the court.

 

              In
India, to reduce the burdening of the already overburdened courts the
Alternative Dispute Resolution Mechanism has been put into practice and is
gaining its popularity as days are passing by. The importance of Information
and Communication Technology (ICT) for resolving contemporary electronic
commerce (e-commerce) and other disputes. The best example of the same is the
use of Online Dispute Resolution (ODR) for resolving these disputes and
misunderstandings. The swift growth of e-commerce and website contracts has increased
the potential for conflicts over contracts which have been entered into online.
The use of Online Dispute Resolution Mechanism (ODRM) to resolve such
e-commerce and website contracts disputes are crucial for building consumer
confidence and permitting access to justice in an online business environment. These
ODRM are not part and parcel of the traditional dispute resolution machinery
popularly known as judiciary but is an alternative and efficacious institution
known as ADRM. Thus, ADR techniques are extra-judicial in character.

 

          The
legislative sensitivity towards providing a speedy and efficacious justice in
India is mainly reflected in two enactments. The first one is the Arbitration
and Conciliation Act, 1996 and the second one is the incorporation of Section
89 in the traditional Civil Procedure Code (CPC).9

 

          It is an established fact that the
Alternative Dispute Resolution Mechanism (ADR) had done wonders in a number of
western countries such as United States, Canada, U.K., Sweden etc. and it has
now started becoming an important tool for litigants in our country which is
certainly a very positive change over last one decade or so.10

          Although many lawyers believe that
their efforts in settlement of disputes outside the court would adversely
affect their material interest but they may be reminded of the personal
experience of our father of the nation. While emphasizing the significance of
out of court settlement of disputes and based on his own experiences as an
Advocate in South Africa, Mahatma Gandhi so eloquently remarked, “both were happy with the result and both
rose in public estimation. I realised that true functions of a Lawyer was to
unite parties. The lesson was so indelibly burnt into me that a large part of
my time during the twenty years of my practice as a lawyer was occupied in
bringing about private compromises of hundreds of cases. I lost nothing
thereby, not even money; certainly not my soul”.

         The Constitution of India mandates to
ensure speedy justice & equal justice. Further an obligation is also cast
on all institutions by the Constitution to ensure that free legal aid is
provided to all those who are in need of it. The judiciary under the guidance
of Hon?ble Supreme Court of India is making all out efforts to ensure that the
citizens of the country particularly those belonging to the deprived sections
of the society, are extended the benefits of ADR Processes.

        The Alternative Dispute Resolution
(ADR) Mechanism is working well in India. Millions of cases had been disposed
of through Lok Adalats across the country. The National Lok Adalats had
achieved tremendous results in the past and huge money had been realized for
public exchequer. Millions of people got relief in these Lok Adalats where
their long pending cases were disposed off amicably. Wiping out tears from the
eyes of poor litigants, even if it comes after a long time is a great sigh of
relief for the litigant who is in search of the most precious virtue, that is –
justice.

1 Dr. Shraddhakara Supakar, Law of
Procedure and Justice in Ancient India, Deep & Deep Publication, New Delhi,
1986.

2
Deshmukh Raosaheb Dilip, J.
?Efficacy Of Alternative Disputes Resolution Mechanisms In Reducing Arrears Of
Cases?, NYAYA DEEP- Vol. X, Issue: 2, April 2009, pp. 26-27

3 Negotiation is a process by which
parties resolve their disputes. They agree upon course of action and bargain
for advantage. Sometimes, they try to adopt such a creative option that serves
their mutual interests. Because of its mutual advantages, people negotiate in
almost all walks of life, from home to courtroom.

4 Mediation is a process for
resolving disputes with the aid of an independent third person that assists the
parties in dispute to reach a negotiated resolution. Mediation is the
acceptable intervention into a dispute of a third party that has no authority
to make a decision.

5
Conciliation is a process
in which a third party assists the parties to resolve their disputes by
agreement. A conciliator may do this by expressing an opinion about the merits
of the dispute to help the parties to reach a settlement. Hence, conciliation
is a compromise settlement with the assistance of a conciliator.

6
When two or more persons
agree that a dispute or potential dispute between them shall be decided in a
legally binding way by one or more impartial persons in a judicial manner, the
agreement arrived after such settlement is called ‘arbitration agreement. The
process is called the ‘arbitration’ and the decision when made is called the
‘award’

7
Ronald
Berstein Derek Wood in Handbook of Arbitration Practice, 2nd Edn., P.9.

8
The Civil Pocedure Code,
Section 89 reads, “Settlement of disputes outside the Court.

 

 

9
Singh, Dr. Avtar; Law of
Arbitration and Conciliation (including ADR systems) Eastern Book Company.

10
Erich Suter,”The progress
from void to valid for agreements to mediate”, Arbitration 2009, 75(1), 28,
p.31