MODULE 5

1. What is ADR
2. Different types of ADR
3. Advantages of ADR
4. ADR in varuous matters:-

I. COMMERCIAL, AND FINANCIAL DISPUTES

- Each year, a vast number of business transactions take place. Many of these involve financial institutions. If a
dispute occurs and litigation ensues, the value of a transaction is usually diminished or lost and the business
relationship damaged. Mediation and arbitration, particularly with experienced and highly qualified panel
members, provide a fair and effective process to resolve disputed transactions while, in some cases, preserving the
business relationships. The costs, fees and delays associated with litigation are also substantially reduced.
- Criticism of commercial arbitration has increasingly grown due to long cycle time/duration and high costs.
Criticism of commercial arbitration has increasingly grown due to long cycle time/duration and high costs. What

was initially considered a beneficial alternative to slow and expensive litigation, is now often questioned and

criticized as more of the same: a long and costly process, extensive pleadings, voluminous written statements,

multiple battling experts, high arbitration fees, high expert fees, high attorney fees – and in the end, a ruling which

cannot be appealed. Most of the cost and delay seem to be caused by discovery, motions, and large panels of

experts. Parties have started looking for alternative means of dispute resolution and are turning to mediation; the

ADR vehicle which has taken a reluctant root in Germany and other European countries. Recent European

surveys indicate that between 1997 and 2011, Fortune 1000 companies increased their participation in mediation

and mediation-arbitration.

II. FAMILY AND MATRIMONIAL DISPUTES

INTRO

- Many families with conflicts that require a legal resolution want to stay out of court. This can be especially
important if there are children involved. For that reason, family law attorneys also use ADR to help their clients
resolve disputes.
- The use of ADR in family law disputes (as well as other types of disputes) may also be called "collaborative
law." Courts that use ADR to resolve family law disputes are also sometimes known as "conciliation courts."

ADVANTAGES
1. In some family law cases, ADR can be better than going to court because:-
● you can have more control over what happens to your case
● you can choose how to deal with your case
● it can be faster and cheaper than a court case
● it may be less upsetting than going to court
 ● One can be honest with the other family member, ADR may be a good way for the two to work
out the issues. If possible a lawyer assists in the same.
2. Collaborative family law is usually faster and cheaper than going to court. It is also more relaxed than
court. But it is not a good idea for every couple. It can only work if people respect each other and work
together to solve their problems. Only people who can afford to hire a lawyer can use collaborative
family law

ADR IN FAMILY MATTERS

1. Negotiation

Negotiation can be very informal. You and your former partner talk to try to come to an agreement. You
can speak to each other, or you can hire lawyers to talk on your behalf. Sometimes one person has a
lawyer and the other person does not. Most lawyers will try to negotiate before they decide to take the
case to court. When you negotiate, you may come to a spoken agreement which is written down and
signed by both of you. If the agreement is not in writing, it will be very hard to enforce.

2. Mediation

A mediator helps people talk to each other and come to an agreement. A mediator knows how to deal
with conflicts. Mediators are usually social workers, psychologists or lawyers.

The mediator must be fair. They cannot favour you or your partner in the dispute. They can suggest ways
to solve the conflict, but you do not have to take their advice. They cannot offer legal advice.

If you are not happy with the mediation, you can leave and it will be over. If you cannot reach an
agreement, the mediation will end. Mediation is free. You can also hire a private mediator, if you can
afford it.

3. Arbitration

In arbitration, you and your former partner hire a third person to resolve your conflict. This person is
called an arbitrator. The arbitrator cannot grant a divorce or an annulment, but can decide on custody,
support, access and how to divide property. Arbitrators can only decide on the issues you ask them to
resolve.

INDIAN PERSPECTIVE

1. The Hindu personal law has undergone changes by a continuous process of codification. The process of change in
society has brought changes in law reflecting the changed social conditions and attempts the solution of social
problems by new methods in the light of experience of legislation in other countries of the world. The Muslim
personal law has been comparatively left untouched by legislations.
2. Family Courts Act, 1984- The Preamble to the Family Courts Act, 1984 enacted by the Indian Parliament states
that it is “An Act to provide for the establishment of Family Courts with a view to promote conciliation in, and
secure speedy settlement of disputes relating to marriage and family affairs and for matters connected therewith.”
3. Reconciliation is mandatory under The Hindu Marriage Act, 1955 (HMA)- section 23 and The Special Marriage
Act, 1954 (SMA) - section 29 and 34
4. Lok Adalat system under the Legal Services Authority Act, 1987

III. LABOUR AND INDUSTRIAL DISPUTES

INTRO:-
 1. Good relations between the employer and employees are essential for the success of industry. In order to
maintain good relations, it is necessary that industrial disputes are settled quickly and amicably. One of the
efficient methods of resolving industrial disputes and deciding the employment conditions is Collective
Bargaining. Industrial disputes essentially refer to differences or conflicts between employers and employees.
2. Collective Bargaining is a process in which the management and employee representatives meet and negotiate
the terms and conditions of employment for mutual benefit. Collective bargaining involves discussion and
negotiation between two groups as to the terms and conditions of employment. It is termed Collective because
both the employer’s negotiators and the employees act as a group rather than individuals. It is known as
Bargaining because the method of reaching an agreement involves proposals and counter-proposals, offers and
counter offers. There should be no outsiders involved in the process of collective bargaining.
3. Negotiation among the parties ( employer and employee) is the most common type of ADR followed.

INDIAN PRACTISE
- The labour disputes settled acc to Industrial Disputes Act, 1947
- In India, the Arbitration and Conciliation Act, 1996 does not address the question of which categories of
disputes are capable of resolution by arbitration, and those that are not. In recent times,
- there has been little commentary on the specific issue of whether labor and industrial disputes are
arbitrable under the Arbitration and Conciliation Act, 1996.
- there is a rising practice of inserting arbitration clauses in employment agreements and are therefore
instructive for practitioners, thus this issue warrants specific commentary.
- The following HC judgements talk about the same
1. Kingfisher Airlines v. Captain Prithvi Malhotra and others
The court examines the scheme of the Industrial Disputes Act, 1947 and concludes that the Act
provides for a unique process for arbitration of collective labor claims. It therefore concludes
that if there were to be adjudication of labor and industrial claims outside of the courts and
tribunals constituted under the Act, the reference to and resolution by arbitration would have to
be governed by the specific provisions of the Industrial Disputes Act, 1947 (and the attendant
rules made thereunder) and not the Arbitration and Conciliation Act, 1996. The Court therefore
concludes two crucial issues: claims under the Industrial Disputes Act, 1947 are not arbitrable
under Arbitration and Conciliation Act, 1996 and by extension, where it is arbitrable, it must be
in conformity with the requirements and procedure under the Industrial Disputes Act. It is
therefore important to remember that labor and industrial claims are not per se non-arbitrable,
but are instead only arbitrable in the manner and to the extent permitted by the Industrial
Disputes Act, 1947.
2. Rajesh Korat v. Innoviti
In this case, when an application for reference to arbitration was made before the labor courts,
the application was allowed and parties were referred to arbitration in terms of the arbitration
agreement (in contrast to Captain Prithvi Malhotra where the labor court rejected the
application and retained jurisdiction). The Karnataka High Court i Held that that there are
strong and compelling public policy reasons to ensure that labor and industrial disputes are
exclusively resolved by courts and tribunals under the Industrial Disputes Act. In Rajesh Korat,
the Court goes slightly further in concluding that the Industrial Disputes Act is a self-contained
code, and to that extent the Arbitration and Conciliation Act, does not have any application to
matters governed by the Industrial Disputes Act. Although it does not expressly address this
question, Rajesh Korat impliedly endorses the proposition that any arbitration of labor disputes
would have to be in conformity with the procedure under the Industrial Disputes Act, 1947 and
not the Arbitration and Conciliation Act, 1996.

If these cases were decided the other way and labor disputes were held to be arbitrable, it would
mean that individual and collective labor disputes would have to be resolved by way of private
 arbitration where employers would potentially have the sole authority to appoint arbitrators,
employers could refuse to participate in the appointment process forcing employees to follow
the procedure under Section 11 of the Act and/or could also have the power to designate arbitral
institutions, which would beyond the reach and means of industrial workers. In sum, the Courts
seem convinced that holding labor disputes to be arbitrable would place undue burdens on
aggrieved workers in accessing and thereafter participating in private arbitral proceedings under
the Arbitration and Conciliation Act, 1996. The public policy arguments for holding these
categories of disputes non-arbitrable, is then both compelling and on the face of it, accurate.

IV CONSUMER DISPUTES;

INTRO
- consumer protection is a group of laws and organisations designed to ensure the rights of consumers as
well as fair trade, competition and accurate information in the marketplace.
- The Consumer Protection Act, 1986 was sanctioned with a goal of giving better assurance of the interests
of consumers and for the snappy and simple settlement of customers’ question.
- Consumers can cheer as the Consumer Protection Act, 2019 has recently replaced the three decade old
Consumer Protection Act, 1986.
- The Act gives compelling, economical, straightforward and rapid redressal of customers’ grievances,
which the common courts are not ready to give. This Act is another case of ADR for the compelling
meditation of consumers’ debate.
- The Act accommodates three-level fora, that is, District Forum, State Commission and the National
Commission for redressal of grievances of consumers.
- Extensive quantities of consumers are drawing nearer these fora to look for speedy redressal of their
grievances.
- From the preamble of the Consumer protection act, 1986, it is apparent that the main objective of the act
is to protect the rights and interest of the consumer by providing mechanism through which cheaper,
expeditious, easier and effective redressal is made available to the consumers. Supreme court held and
observed that "The preamble of the Act declares that it is an Act to provide for better protection of the
interest of consumers and for that purpose to make provision for the establishment of Consumer
Councils and other authorities for the settlement of consumer disputes and matters connected therewith.
NEED FOR ARBITRATION IN CONSUMER PROTECTION REGIME

- The consumer fora that were once created for speedy and effective resolution of disputes have, in turn, come to
match normal courts. Despite only 14%of India’s internet users shopping online, the consumer courts were unable
to keep up with the case load. With an expected increase in online consumers from 60 million in 2016 to 475
million by 2026, this is a serious cause for concern as far as dispute resolution is concerned.
- To counter this, the government has taken initiative, but this has been far from successful. One such initiative is
the recently launched Online Consumer Mediation Centre that saw a slow start in the past year. One of the major
reasons cited for this slow start was the non-cooperation of the e- commerce vendors, which arises because of the
non-binding nature of mediation as a dispute settlement mechanism.
- In the wake of the meteoric rise in e-commerce, it is essential that India begins the process of institutionalisation
of online dispute resolution in time.21 The transition to online dispute resolution is necessary to avoid a situation
wherein the consumers are left without any real remedy, which is worth its weight in gold, even if it is a leap of
faith.22 This is because if India starts to facilitate online arbitration that consumers can resort to by virtue of a
binding arbitration agreement, the same, unlike the Online Consumer Mediation Centre, will not be toothless to
force the vendors to come for dispute resolution.
- It is interesting to note that the Indian courts have recognised the validity and enforceability of individual online
arbitration agreements, even the ones concluded over e-mail, thereby laying down the foundation for online
arbitration. In simple terms, online arbitration is drawn out on similar schematics as traditional arbitration, the
only difference lies in the manner the two are conducted. Unlike traditional arbitration which is costly, online
arbitration proceedings happen online, saving time and cost. For instance, under online arbitration, evidence can
be uploaded, and the parties can present their cases in a chatroom, saving the millions of dollars spent on hotel
rooms.24 Such a model provides for time and cost efficiency, the quintessential need in consumer disputes. Due to
the advantages that it has to offer, there exists a pressing need for an

V. ACCIDENTS CLAIMS
1. In 1988 a new Motor Vehicle Act was introduced and in new Motor Vehicle Act's Chapter 10 provides for
interim award. Chapter 11 provides for insurance of motor vehicle against third party risk and Chapter 12 provides
for the constitution of Claims Tribunal and adjudication of claim and related matters.
2. In order to prevent the menace of road accidents; the central government has amended the Motor Vehicle 1988 by
the Motor Vehicles (Amendment) Bill 2019. This new act is being passed by the Lok Sabha on Jul 23, 2019 and
by Rajya Sabha on Jul 31, 2019.
3. The Supreme Court in august 2019recommended measures, including mediation, to speed up settlement of motor
accident claim cases so that victims can receive compensation without having to wait endlessly.
4. A bench led by justice AK Sikri also asked the government to consider amending the Motor Vehicles Act (MVA)
and include the suggestions made by the court. The suggestions were made on propositions advanced by senior
advocate Arun Mohan who argued a compensation case. The petitioner moved the top court after a Delhi high
court order refused to grant him sufficient compensation for an accident he had suffered in 1988.
5. Asking the Centre to enact the Indian Mediation Act, the court said mediation must be offered as an alternative
dispute resolution (ADR) in motor accident claims cases. “Mediation is here to stay. It is here to evolve. It is
because of the advantages of mediation as a method here to find new grounds,” the court said, asking the Centre to
examine the feasibility of setting up an authority under the MVA.
6. The court said there may be a possibility of reducing the number of road accidents, but occurrence cannot be
totally eliminated. A large number of fatal accidents has given rise to a phenomenal quantum jump in claim cases,
the court said, while underlining need to have mediation as an ADR in such matters.
7. Till the time an amendment is made by Parliament, the National Legal Services Authority (NALSA) should take
up the work as a project, the court said. The NALSA has been directed to prepare a report about the functioning of
the motor accident mediation cell (MAMC). The exercise should be completed within two months, after which the
project can be shared with all state legal services authorities, which will implement the same through their
respective district legal services authorities.