Alternate Dispute Resolution (ADR) is a process of resolving disputes outside of traditional judicial proceedings, using methods such as mediation, arbitration, and negotiation. In India, ADR has become an increasingly popular method for resolving disputes, particularly in commercial and business contexts. ADR mechanisms have been established at various levels of the Indian legal system, including the national and state levels. These mechanisms provide a more efficient and cost-effective way of resolving disputes, while also promoting greater participation and collaboration between parties.

Evolution and Codification of ADR Mechanisms in India

The roots of ADR in India can be traced back to ancient times, where communities would gather to resolve disputes through the mediation of elders and respected community members. In the modern era, the first formal ADR mechanism to be introduced in India was arbitration, which was recognized as a legitimate means of resolving commercial disputes in the Indian Arbitration Act of 1940. However, this legislation was limited in scope and did not provide for any other forms of ADR.

Arbitration and Conciliation Act, 1996: It was not until the 1990s that the use of ADR began to gain momentum in India, due in large part to the advocacy of legal professionals and the judiciary. In 1996, the Indian government established the Committee on ADR, which recommended the introduction of mediation and conciliation as alternative dispute resolution mechanisms. Following this, The Arbitration and Conciliation Act was passed by the Parliament in 1996, which aimed to provide a legal framework for ADR mechanisms.

The Commercial Courts Act, 2015: The Commercial Courts Act, 2015 sought to streamline the adjudication of commercial disputes in India by providing for the establishment of commercial courts and the use of ADR mechanisms. The act required parties to attempt to resolve their disputes through mediation or conciliation before resorting to litigation, and provided for the appointment of court-affiliated mediators and conciliators.

The Code of Civil Procedure was also amended in 2018 to encourage the use of ADR in civil cases, by requiring parties to submit to court-affiliated mediation before a case can be referred to a judge for adjudication.

Today, ADR has become an integral part of the Indian legal system, and is widely used by businesses and individuals to resolve disputes in a timely and cost-effective manner. The evolution and codification of ADR in India has been a positive development, as it has helped to reduce the burden on the courts, improved access to justice, and promoted the use of non-adversarial methods of resolving disputes.

Types of Alternative Dispute Resolution

ADR is generally classified into the following types:

Arbitration

• Arbitration involves submitting the dispute to an arbitral tribunal, which issues a decision (an “award”) regarding the dispute that is typically binding on the parties. 
• It is generally less formal than a trial, and the rules of evidence are often more lenient. 
• Typically, there is no option to appeal the decision made by an arbitrator. 
• Except for a few interim measures, the potential for judicial involvement in the arbitration process is quite limited.

Conciliation

• Conciliation is a non-binding process in which an impartial third party, known as the conciliator, helps the disputing parties achieve a mutually acceptable agreement. 
• Conciliation is generally a less formal type of arbitration. 
• The parties have the freedom to accept or dismiss the conciliator’s recommendations. 
• However, if both parties agree to the settlement document drafted by the conciliator, it becomes final and binding for both.

Mediation

• Mediation involves an impartial individual called a “mediator” who assists the parties in seeking a mutually agreeable resolution to the dispute.
• The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves.
• Mediation leaves control of the outcome with the parties.

Negotiation

• It is a non-binding process where discussions among the parties begin without any third party’s intervention, aimed at arriving at a negotiated settlement. 
• Mediation is the most widely used method of alternative dispute resolution. 
• Negotiation takes place in various settings, including businesses, non-profit organizations, governmental sectors, legal proceedings, among nations, and in personal circumstances such as marriage, divorce, parenting, and everyday life.