Comparative Study of Different Systems of ADR

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There is a famous proverb “where there are two minds there will be three opinions”. Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods which can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System.

Arbitration:

Arbitration is an ADR procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The decision given by the arbitral tribunal is called an award. In India, the procedure of arbitration is regulated by the Arbitration and Conciliation Act, 1996.

Advantages of Arbitration:

• Liberty to Choose Arbitrator: The parties to the dispute usually agree on the arbitrator, so the arbitrator will be someone that both sides have confidence will be impartial and fair.
• Expert Arbitrator: Unlike in a court trial, where the judge or jury may know very little about the subject matter of the dispute, the parties to the arbitration have the ability to select an arbitrator with expertise in a certain area, which may lead to a more equitable and informed decision.
• Flexibility: There are lesser formalities in arbitration than in the traditional judicial system.
• Speed: As the parties have been given the freedom to determine the procedure, time, and place for the settlement of the dispute, it saves a lot of time compared to traditional courts.
•  Less cost: Traditional Court system is strictly procedural, hence expensive. Arbitration saves a lot of money and cost.
• Privacy and Confidentiality: In arbitration, the process of dispute resolution is within four walls and only in presence of parties and experts.
• Finality: There is a very limited avenue for appeals.  In the case of arbitration because the grounds for challenging an arbitrator’s decision are severely limited by the Arbitration Act.
• Enforceability: The arbitral awards are enforceable which makes arbitration a binding process. Such awards are generally easier to enforce as compared to court verdicts.

Disadvantages of Arbitration:

• Inability to Appeal: There is a very limited avenue for appeals. As a general and practical rule, the arbitrator’s decision cannot be appealed.
• Lack of Formal Evidence: There is a lack of a formal evidence process. The parties have to rely on the skill and experience of the arbitrator to sort out the evidence, rather than a judge or jury.
• Mandatory Arbitration Contracts: Arbitration agreements are sometimes contained in ancillary agreements, or in small print in other agreements, and consumers and employees sometimes do not know in advance that they have agreed to mandatory binding pre-dispute arbitration by purchasing a product or taking a job.
• Possibility of Bias: Arbitrator is presumed to be neutral, impartial. It is also assumed that he has no personal interest in the subject matter before him. But considering human nature we can say that arbitrators may not be unbiased.
• No Interlocutory orders: The process does not provide for the grant of interlocutory measures against a party, making it easier for a party to take steps to avoid enforcement of an award, such as the relocation of assets offshore.
• Execution of Award: Arbitration awards are not directly enforceable; they are executable subject to judicial sanction. A party seeking to enforce an award must resort to judicial remedies.

Conciliation:

Conciliation is a process of persuading parties to reach settlement in existing and ongoing conflict with the help of third impartial party called conciliator with the to preserve the relationship they have with each other. There is no need of pre-agreement for starting the process of conciliation but acceptance to the process by both parties is necessary.

Advantages of Conciliation:

• It offers a more flexible alternative, for a wide variety of disputes, small as well as large;
• It obviates the parties from seeking recourse to the court system;
• No prior agreement is required.
• It reserves the freedom of the parties to withdraw from conciliation without prejudice to their legal position inter se at any stage of the proceedings;
• It is committed to maintenance of confidentiality throughout the proceedings and thereafter, of the dispute, the information exchanged, the offers and counter offers of solutions made and the settlement arrived at.
• It is cost-effective and produces quicker resolution of dispute.
• f) It facilitates the maintenance of continued relationship between the parties even after the settlement.
• There is no scope for corruption or bias.

Disadvantages of Conciliation:

• The process is not binding upon the parties to the dispute.
• There is no avenue for appeal.
• The parties may not achieve a settlement to their conflict.
• Parties may use it as a delay tactics

Mediation:

Mediation is a mode of dispute resolution, where an amicable decision arises with the help of a third party known as a ‘mediator,’ without recourse to the court of law.

Advantages of Mediation:

• Parties have complete control over the settlement.
• Less stress as compared to litigation and arbitration.
• The relationship between the parties isn’t overly damaged.
• Mediation proceedings are confidential.
• The process resolves the dispute quickly.

Disadvantages of Mediation:

• Since the decision is at the discretion of the parties, there is the possibility that a settlement between the parties may not arise.
• It lacks the support of any judicial authority in its conduct.
• The absence of formality- Mediation proceedings are lacking in any procedural formality since they are not based on any legal principle.
• The truth of an issue may not be revealed.
• There is lack of expertise in the issue of the dispute.

Negotiation:

Negotiation is a method of dispute resolution whereby a dispute between two individuals or groups is settled amicably by an impartial third person called as a negotiator, using different techniques. The negotiator, in this form of resolution, uses various communication methods to bring the parties of the dispute to a settlement.

Advantages of Negotiation:

• Flexibility: since negotiation is an informal process, it is relatively flexible.
• Quick resolutions as compared to litigation.
• It facilitates in maintaining a healthy relationship between the disputing parties.
• Takes place in a private environment

Disadvantages of Negotiation:

• The parties to the dispute may not come to a settlement.
• Lack of legal protection of the parties to the conflict.
• Imbalance of power between the parties is possible in negotiation.

Distinguishing Between Arbitration and Conciliation:

Arbitration	Conciliation
Arbitration is a dispute settlement process in which a impartial third party is appointed to study the dispute and hear both the party to arrive at a decision binding on both the parties.	Conciliation is a method of resolving dispute, wherein an independent person helps the parties to arrive at a negotiated settlement.
Arbitration process is done by arbitrator or arbitration tribunal	Conciliation process is facilitated by conciliator.
An arbitrator has the power to enforce his decision.	A conciliator do not have the power to enforce his decision.
Prior agreement for arbitration is required	Prior agreement for conciliation is not required.
It is available existing and future disputes	It is available for existing disputes.
It is governed by the Arbitration and Conciliation Act, 1996.	Process is not governed by the Act.

Distinguishing Between Mediation and Conciliation:

Mediation	Conciliation
Mediation is a process of resolving issues between parties wherein a third party assist them in arriving at an agreement.	Conciliation is an alternate dispute resolution method in which an expert is appointed to settle the dispute by persuading parties to reach agreement.
It is regulated by Code of Civil Procedure, 1908	It is regulated by Arbitration and Conciliation Act, 1996
In mediation the confidentiality depends on trust.	In conciliation the extent of confidentiality is fixed by law.
The third party performing process of mediation is called mediator.	Third party performing process of conciliation is called conciliator.
The mediator acts as facilitator.	The conciliator acts as facilitator, evaluator and intervener.
At the end of successful mediation there is an agreement between the parties in the dispute.	At the end of successful conciliation there is a settlement agreement between the parties in the dispute.
The agreement is enforceable by law.	The settlement agreement is executable as decree of civil court.

Conclusion:

ADR has distinct advantages and it offers a comparatively speedier and inexpensive mode of dispute resolution than conventional litigation. It offers a system with procedural flexibility, a broad range of remedial options, and a focus on individualized justice. The flexibility is available not only in terms of the procedure but also in terms of the solutions to the dispute. ADR, in contradistinction to a judicial adjudication, can provide creative solutions – novel ways of resolving disputes. ADR may not produce the result in each case but it will definitely be helpful in reducing the disputes. Therefore in a country like India, wherein, courts are overburdened with thousands of cases there is a strong case for enhanced use of ADR mechanism for resolution of some disputes.

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