INTRODUCTION
The problems of overburdened courts and exorbitant litigation costs inspired Congress to enact the Administrative Dispute Resolution Act of 1990 (ADR Act). In 1994, 26 federal agencies pledged to use ADR to resolve disputes. In 1996, Congress permanently restored the about-to-be lapsed ADR Act of 1990 when it passed Public Law 104 to 320, or the ADR Act of 1996.
Alternative Dispute Resolution (ADR) is a term that embraces several processes that have emerged to cope with disputes. It has been used by many groups for many years due to its effectiveness in resolving disputes. Each year more companies are choosing to use arbitration to resolve business disputes. Because of the above, the scope and uses of ADR have also expanded. It is now more cost-effective and practical for managing various types of workplace conflicts. Each company’s reasons for opting for arbitration may vary.
Mediation and arbitration can both be effective forms of ADR. Mediation is a negotiation that a neutral third party will facilitate. The mediator will not make a decision; they help the interested parties come to an amicable agreement. Mediation helps the involved parties find common ground. In contrast, in Arbitrations, the Arbitrator will decide for the parties as a judge would in court. Based upon the facts and circumstances of the particular case it may appear to the parties that in certain cases Arbitration is the preferred mode of ADR and in certain other cases mediation is the more appropriate model.
Benefits of ADR
Courts and tribunals encourage parties in civil proceedings to use alternative dispute resolution to reach an agreement between themselves, and so to avoid the expense and time of a court case. Promoting alternative dispute resolution allows court time to be concentrated on intractable disputes that cannot be resolved by agreement. Many courts and tribunals provide alternative dispute resolution measures to assist parties, and in some civil matters can require parties to attempt to resolve their disputes through some form of alternative dispute resolution before the matter proceeds to a hearing before the court or tribunal. For example, the Supreme Court can refer cases to mediation or neutral evaluation without the consent of the parties.
There are numerous benefits to using alternative dispute resolution, such as:
• An early resolution of the dispute
• Lower costs to the parties involved
• A faster result
• Greater flexibility in resolving the dispute
• Greater ‘ownership’ of the resolution of the dispute by the parties.
ADR can be beneficial even if a resolution is not achieved and the dispute proceeds to court. The ADR process can help to define the real issues in dispute so that when the dispute reaches the court the court and parties can concentrate on those issues, and not waste time on matters that they do not disagree about.
ADR vs Litigation
Litigation and alternative dispute resolution are often paired in legal education. Litigation may be a formal, generally public process that resolves disputes through a court with a judge. It’s subject to strict rules imposed by the law governing the conduct of the proceeding, like formal rules of evidence. Arbitration is a private process whereby parties work with a neutral third party to listen to each side and make a final and binding decision, using agreed-upon rules governing how the method will work. Mediation may be a negotiation facilitated by a neutral third party. The mediator doesn’t impose a decision but helps the parties come to an amicable resolution. Mediation is beneficial to assist the parties to find common ground, while arbitration is used as an alternate to litigation when the parties cannot resolve their dispute and need a third party to impose a decision.
Flexibility and control: Parties can set terms in their arbitration contract governing how the method will work. This includes establishing rules regarding discovery, hearings, time limitations, and other matters. Additionally, parties can schedule hearings and deadlines to accommodate their needs.
Speed: Consistent with statistics of the American Arbitration Association, on average, U.S. District Court cases took 12-16 months longer to argue to trial than cases using arbitration.
Low cost: Less time spent to resolve a dispute means lower costs for attorneys’ fees. additionally, discovery is far limited in arbitration, and appeals are very limited, so those costs are all saved.
Simplified rules of evidence and discovery: Typically, there are limits on the nature and scope of discovery and deadlines on how long the method can take. Issues are handled through a phone call instead of multiple hearings, subpoenas, depositions, interrogatories, and therefore the like. And, the strict rules of evidence don’t apply.
Privacy and confidentiality: Arbitrations are private with only designated parties attending and therefore the proceedings are strictly confidential. In contrast, litigation is open to be public.
Arbitrator selection: Parties can choose an arbitrator with subject matter expertise as against being assigned a judge randomly. This is particularly important in complex cases requiring specialized knowledge.
Finality: Appeal rights are very limited in arbitration, so disputes are finally resolved more quickly
Latest Judgement
Chief Justice of India N V Ramana emphasized the alternate dispute resolution mechanism like mediation and arbitration, saying going to courts should only be the last resort by the parties. He said that “My advice, after participating in the legal profession for over 40 years in several capacities, is that you simply must keep the choice of going to courts as a last resort. Use this last resort only after exploring the choice of ADR- arbitration, mediation, and conciliation.”
The CJI was speaking at the curtain riser and Stakeholders’ Conclave of International Arbitration and Mediation Centre, Hyderabad. Maintaining that arbitration and mediation are efforts at restoring a relationship, Justice Ramana said, “I think that the foremost important factor behind the resolution of any dispute has the right attitude. By right attitude, I mean we should leave aside our ego, emotions, impatience and embrace practicality. But, once these conflicts enter a court, much gets lost within the practice and procedure.”
Observing that nobody can imagine a world without conflicts, he said arbitration and mediation are the well-liked modes of dispute resolution now. He said these methods mean fewer delays, less expense, more involvement of the parties Within the process, greater party choice, more control, more comfort, and an amicable environment for both parties.
CONCLUSION
Standing today, almost four and a half crore litigations are pending in all the courts combined in India. The picture itself shows the grim reality faced by the litigants. It also goes on to show the huge amount of time and money invested by such litigants to conduct the lengthy process of litigation which could have been used more constructively had they opted for the alternative dispute resolution mechanisms which have been put in place through several statutes applicable in India. ADR not only allows the parties to resolve their dispute amicably but also enables the parties to save up on time and money spent in litigation.
The observations made by the Chief Justice of India represents the values and ethos that the legislators originally intended for while adapting the UNCITRAL Model Law into our Arbitration and Conciliation Act, 1996 which paved the way for a more effective regime of Alternative Dispute Resolution in the Indian context and ushered the way for better investment prospects for the foreign investors as well as giving a well-defined redressal mechanism to Indian as well as foreign players. But in reality, we have been strayed away from the ideals which were enshrined in the UNCITRAL model law and have in reality moved towards the age-old avenue of litigation which is reflected in the number of litigations pending for disposal.
References:
• https://www.netlawman.co.uk/ia/alternative-dispute-resolution
• https://attny.com/gcin/gci04982.html
• https://www.barandbench.com/news/courts-last-resort-after-alternate-dispute-resolution-cji-nv-ramana
• https://www.news9live.com/india/courts-should-be-last-resort-for-dispute-resolution-cji-n-v-ramana-138442