ALTERNATE DISPUTE AND RESOLUTION SYSTEMS IN INDIA

ARBITRATION:
 The Indian law of arbitration is contained in the Arbitration and
Conciliation Act 1996 (Act).

 The Act is based on the 1985 UNCITRAL Model Law on International

Commercial Arbitration and the UNCITRAL Arbitration Rules 1976.

 The Statement of Objects and Reasons of the Act recognizes that

India’s economic reforms will become effective only if the nation’s
dispute resolution provisions are in tune with international regime.

 The Statement of Objects and Reasons set forth the main objectives of
the Act as follows:
“i) To comprehensively cover international and commercial arbitration and
conciliation as also domestic arbitration and conciliation;
ii) To make provision for an arbitral procedure which is fair, efficient and
capable of meeting the needs of the specific arbitration;
iii) To provide that the arbitral tribunal gives reasons for its arbitral award;
iv) To ensure that the arbitral tribunal remains within the limits of its
jurisdiction;
v) To minimize the supervisory role of courts in the arbitral process;
vi) To permit an arbitral tribunal to use mediation, conciliation or other
procedures during the arbitral proceedings to encourage settlement of
disputes;
vii) To provide that every final arbitral award is enforced in the same
manner as if it were a decree of the court;
ARBITRAL AGREEMENT 
An Arbitral agreement is essential point in the law of Arbitration. The
particular form of arbitral agreement is not provided under this Act. but
there must be legal, valid and binding agreement between the parties. This
Act specifically provided that arbitration agreement must be in the form of
document and document must be signed by the parties yo operate as an
arbitration agreement.
 MEANING OF ARBITRAL AGREEMENT-
According to Sec.7(1) of arbitration & conciliation Act 1996 ,
"arbitration agreement” means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise
between them in respect of a defined legal relationship, whether contractual
or not. 
 ESSENTIAL FEATURES OF AN "ARBITRAL AGREEMENT"
The essential features of an arbitration agreement, as defined by clause (b)
of S.2(1) read with S. 7 , are as follows
1) Valid & binding Agreement -There should be a valid and binding
agreement between the parties.
2) Such agreement may be -in the form of an arbitration clause in a contract
or in the form of a separate agreement.
3) Written Agreement -An arbitration agreement shall be in writing.
4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence
of the agreement is alleged by one party and not denied by the other.
5) The reference in a contract to a document containing an arbitration clause
constitutes an arbitration agreement if the contract is in writing and the
reference is such as to make that arbitration clause part of the contract 

 WHO CAN ENTER INTO ARBITRATION AGREEMENT ?

Every person who is competent to contract can enter into arbitration
agreement. In case of partnership a partner can enter into on behalf of
partnership into arbitration agreement.  The directors or other officers of the
company may enter into an arbitration agreement. 
A Karta of Hindu joint family can make a valid reference to the arbitration
and where he acts Bonafide the award binds other members.

A) Minor and lunatics -

contract by minors and lunatics are void and therefore by themselves they
cannot enter into valid agreement of arbitration. however they can enter into
arbitration agreement with their natural or legal guardian's
B) Agent -
Agent recognized agent of a party can enter into an arbitration agreement
on behalf of his principal.

ROLE OF THE COURT:

 One of the fundamental features of the Act is that the role of the court
has been minimized.
 Further, no judicial authority shall interfere, except as provided for
under the Act (Section 5).
 In relation to arbitration proceedings, parties can approach the Court
only for two purposes:
(a) For any interim measure of protection or injunction or for any
appointment of receiver etc. ;
(b) For the appointment of an arbitrator in the event a party fails to
appoint an arbitrator or if two appointed arbitrators fail to agree upon
the third arbitrator.

 In such an event, in the case of domestic arbitration, the Chief Justice

of a High Court may appoint an arbitrator, and in the case of
international commercial arbitration, the Chief Justice of the Supreme
Court of India may carry out the appointment of arbitrator
 A court of law can also be approached if there is any controversy as
to whether an arbitrator has been unable to perform his functions or
has failed to act without undue delay or there is a dispute on the
same.
 In such an event, the court may decide to terminate the mandate of
the arbitrator and appoint a substitute arbitrator.

CONDUCT OF ARBITRATION PROCEEDINGS:

 The arbitrators are masters of their own procedure and subject to
parties agreement, may conduct the proceedings “in the manner they
consider appropriate.”
 This power includes- “the power to determine the admissibility,
relevance, materiality and weight of any evidence”.
  The only restrain on them is that they shall treat the parties with
equality and each party shall be given a full opportunity to present his
case which includes sufficient advance notice of any hearing or
meeting.
 Neither the Code of Civil Procedure nor the Indian Evidence Act
applies to arbitrations.
 Unless the parties agree otherwise, the tribunal shall decide whether
to hold oral hearings for the presentation of evidence or for arguments
or whether the proceedings shall be conducted on the basis of
documents or other material alone.
 The arbitral tribunal shall hold oral hearings if a party so requests
(unless the parties have agreed that no oral hearing shall be held).
 Arbitrators have power to proceed exparte where the respondent,
without sufficient cause, fails to communicate his statement of defence
or appear for an oral hearing or produce evidence.
 The tribunal shall not treat the failure as an admission of the
allegations by the respondent and shall decide the matter on the
evidence, if any, before it.

Setting aside of awards:

 The grounds for setting aside an award rendered in India (in a

domestic or international arbitration) are provided for under Section
34 of the Act.
 These are materially the same as in Article 34 of the Model Law for
challenging an enforcement application.

 An award can be set aside if:

a) A party was under some incapacity; or
b) The arbitration agreement was not valid under the governing law;
or c) a party was not given proper notice of the appointment of the
arbitrator or on the arbitral proceedings; or
d) The award deals with a dispute not contemplated by or not falling
within the terms of submissions to arbitration or it contains decisions
beyond the scope of the submissions; or
e) The composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties; or
f) The subject matter of the dispute is not capable of settlement by
arbitration.
WHAT IS MEDIATION
 Mediation is another of the methods of alternative dispute resolution
(ADR) available to parties.
 Mediation is essentially a negotiation facilitated by a neutral third
party. Unlike arbitration, which is a process of ADR somewhat similar
to trial, mediation doesn't involve decision making by the neutral third
party. 
 ADR procedures can be initiated by the parties or may be compelled by
legislation, the courts, or contractual terms.

 When parties are unwilling or unable to resolve a dispute, one good

option is to turn to mediation. Mediation is generally a short-term,
structured, task-oriented, and "hands-on" process.

 In mediation, the disputing parties work with a neutral third party, the
mediator, to resolve their disputes.

 The mediator facilitates the resolution of the parties' disputes by

supervising the exchange of information and the bargaining process.

 The mediator helps the parties find common ground and deal with
unrealistic expectations.

 He or she may also offer creative solutions and assist in drafting a final
settlement.

 The role of the mediator is to interpret concerns, relay information

between the parties, frame issues, and define the problems.
WHEN TO MEDIATE
 Mediation is usually a voluntary process, although sometimes statutes,
rules, or court orders may require participation in mediation.
 Mediation is common in small claims courts, housing courts, family
courts, and some criminal court programs and neighborhood justice
centers.
 Unlike the litigation process, where a neutral third party (usually a
judge) imposes a decision over the matter, the parties and their
mediator ordinarily control the mediation process -- deciding when and
where the mediation takes place, who will be present, how the
 mediation will be paid for, and how the mediator will interact with the
parties.
AFTER A MEDIATION
 If a resolution is reached, mediation agreements may be oral or
written, and content varies with the type of mediation.

 Whether a mediation agreement is binding depends on the law in the

individual jurisdictions, but most mediation agreements are considered
enforceable contracts.
 In some court-ordered mediations, the agreement becomes a court
judgment. If an agreement is not reached, however, the parties may
decide to pursue their claims in other forums.

 The mediation process is generally considered more prompt,

inexpensive, and procedurally simple than formal litigation.

 It allows the parties to focus on the underlying circumstances that

contributed to the dispute, rather than on narrow legal issues.

 The mediation process does not focus on truth or fault.

 Questions of which party is right or wrong are generally less important

than the issue of how the problem can be resolved.

 Disputing parties who are seeking vindication of their rights or a

determination of fault will not likely be satisfied with the mediation
process.
 DISTINGUISH BETWEEN MEDIATION AND CONCILIATION

BASIS FOR
MEDIATION CONCILIATION
COMPARISON

Meaning Mediation is a process of Conciliation is a alternate

resolving issues between dispute resolution method in
parties wherein a third which an expert is appointed
party assist them in to settle the dispute by
arriving at an agreement. persuading parties to reach
agreement.

Regulated by Code of Civil Procedure, Arbitration and Conciliation

1908 Act, 1996

Basic element Confidentiality, that Confidentiality, whose

depends on trust. extent is fixed by law.

Third Party Acts as facilitator. Acts as facilitator, evaluator

and intervener.

Result Agreement between Settlement agreement

parties

Agreement It is enforceable by law. It is executable as decree of

civil court.