Alternative Dispute Resolutions refers to processes which are held outside the courtroom that help parties to resolve or settle their disputes without litigation or a trial. People present their case in the competent court but on the wishes of the parties to compromise or settle it by an agreement. The rationale behind this provision is to elude multiplicity of litigation, save valuable time, expenses, etc. Parties come together for settlement which must be lawful in nature and in writing form. It is considered as the voluntary act of the parties.
Section 89 of the Civil Procedure Code, 1908: Settlement of disputes outside the court. This was added by the Civil Procedure Code Amendment Act 1999. The objective of this provision is to assure that the court makes attempt to promote settlement and to resolve the matters through one of the ADR processes before the commencement of the trial in a court.
Methods of ADR
- Arbitration:- It is a formal process in which the dispute is settled by the decision of an Arbitrator (who is qualified as a third person to handle the arbitration ). In the CPC it is established that there is no prior arbitration agreement between the parties. The matter is referred to Section 8 and Section 11 of the Arbitration and Conciliation Act of 1996. Once the matters referred for arbitration then again parties do not come back to resolve their dispute in the courtroom. They will go out permanently from the court. Confidentiality should be maintained under this process. Decisions are binding on both the parties which are involved in disputes.
- Conciliation:- It is a non-adjudicatory process which is governed by the provisions of the Arbitration and Conciliation Act, sections 61 to 81. In this court looks into the matter of the disputes and after getting the nature of the dispute and court has believed that there are elements of the settlement then it goes for the Conciliation. There shall be a Conciliator to settle the dispute. If the matter does not get any settlement then again the matter goes to the court and framing of issues is held and trial takes place.
- Mediation:- It is a well-established process of settlement of disputes under ADR. There is a neutral person known as a mediator who helps to settle the disputes between the parties by their free will and makes them for a common agreement of settlement. It is a voluntary act of the parties and enforceable in a court. Mediation may be applicable in all types of matters. The procedure of mediation follows these steps; opening statements, joint session, separate session and closing.
- Negotiation:- In this process communication occurs between the parties to resolve the disputes. This process is considered as a self-counseling process because mutual understanding plays a vital role for the negotiation. There are no fixed rules for this process.
- Lok Adalat:- It is given under Section 20 of the Legal Service Authority Act,1987. The court determines the nature of the disputes if the issues are not complicated and does not require the litigation or trial of a court after that court refers the dispute to the lok adalat for the settlement. In this process the consent of the parties are not required. As if the lok adalat does not come to an end means compromise does not occur then no award is made then matter is returned back to court through which the reference was made.
It is not appealable in the court of law and the order is binding on the parties.The award is given with the signature and seal of the lok adalat this is an administrative act to consolidate the terms of settlement agreed by the parties in lok adalat.
Table of Contents
Section 89, CPC
The Law Commission, in its 163rd report given on CPC (Amendment bill), 1997 stated that due to overburdening of courts the delay in justice threatened the quality of justice. As time passess evidences & memories of witnesses are weakened. It is difficult to maintain confidence in judicial proceedings.
Section 89 is applicable to the alternative disputes resolution to settle the disputes outside the court but it completely depends on the nature of the disputes. If matter is related to arbitration and conciliation it would come in the domain of the Arbitration and Conciliation Act 1996.
The Legal Services Authority Act, 1987 applicable for the Lok Adalat or judicial settlement and for mediation process the Mediation Rule, 2009 will be applicable.
Constitutional validity of Section 89 CPC
In the Salem Advocates Bar Association case the Constitutional validity of section 89 was challenged on the ground of arbitrariness by the Supreme Court. Arguments framed were as follows:-
- No explanation is given for its implementation.
- Proper guidelines are not provided to reference disputes under the Alternative disputes resolution mechanism.
- No rules & regulation are provided to interpret the Section 89 of CPC.
- Proper management is not provided for handling the mechanism.
In response, the Supreme Court stated that :-
The rationale behind implementing this provision in CPC under section 89 was to provide speedy justice which is required for the protection of fundamental rights of the citizens under Article 21 of the Indian Constitution. The Supreme court also stated that it is required to frame rules, regulations and proper guidelines for the functioning of ADR mechanism.
For the governance of alternative dispute resolution, the High Court passed the rules of governance of these methods under Order X of the Civil Procedure Code. Section 82 of the Arbitration and Conciliation Act, 1996 empowers the High Court to make rules with respect to the proceedings which are governed by the respective Act. These rules and regulations must be followed during proceedings from beginning to an end.
Advantages of ADR
1) To promote access to justice without delay.
2) To provide quick and inexpensive settlement.
3) To remove the burden of a case
4) To promote fair practices in a matter.
5) To promote justice with morals and faith, enhancing the confidence in the judicial system.
Need for the ADR in India
There are a large number of cases which are pending in the court due to the lack of adjudication. And as cases are increasing, day by day it is not possible to look into all the matters in a court specially for petty cases. It is considered that ‘justice delayed is justice denied’ as it is necessary to provide justice quickly as soon as possible. Because of these reasons alternative disputes mechanism came into existence on 4th December, 1993.
Afcons Infrastructure’s Case
A list of matters composed by the court which may or may not be come under the ambit of ADR cases like election petition, cases of fraud, forgery, coercion, etc., suit of title, claim against minor are unsuited for the reference of ADR.
Cases related to trade,commerce, and contract ,tort claims or consumer disputes are suitable under ADR.
Saleem Advocate Bar Association’s Case
With regards to the constitutional validity of Section 89, it was held that all attempts shall be made by the court at the earliest stage of the case to settle their dispute with the help of any mechanism which is given. Therefore, the court can not force any party to involve in an ADR mechanism. It is the free will of the parties and mutually consent of both the parties.
Problems faced in ADR
1) Under CPC, mediators do not have any general or proper guidelines for the participation of the parties which create a problem in power imbalance.
2) CPC composed the mediation at pre- trial and appellate stage but it must be started at the post trial stage which would be more effective.
3) There is no penalty under Section 89A for the party who withdraws the process without any reason.
It is concluded that the basic objective of Section 89 of the Civil Procedure Code is to provide the procedure to adjudication of the disputes in the court of law by the different methods of alternative disputes resolution mechanism. Slowly, the mechanism of alternative dispute resolution is becoming the most desirable mode for the settlement of disputes. The ADR is considered as one of the best mechanisms to reduce the burden on the courts and compromise is dependent upon the will of the parties. It is a really effective method for the administration of justice. It accesses justice without reducing the quality of the justice. But Section 89 of Civil Procedure Code has a lacuna in this provision as judges and advocates do not give proper knowledge to the litigants. Section 89 of CPC provides different modes of ADR and the Supreme Court also provided various guidelines for the modes of ADR in given case laws.
 Law Commission of India 238th Report Amendment of Sec-89 of CPC, 1908 & Allied provision pg – 4
 State of Punjab & Anr. v. Jalour singh & Ors., (2008) 2SCC 660.
 Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co.(P) Ltd, 2010 7 SC 616.
 Salem Advocate Bar Association (II)., (2005) 6SCC 344.
BY AMREEN ANWAR | GALGOTIAS UNIVERSITY GREATER NOIDA