Alternative Dispute Resolution or ADR refers to an assortment of dispute resolution procedures that primarily serve as alternatives to litigation and are generally conducted with the assistance of a neutral and independent third party. In this article, we shall introduce ourselves with Arbitration. ADR processes are conducted with the assistance of an ADR neutral, who is an unbiased, independent, and impartial third party not connected with the dispute, and helps the disputant parties to resolve their disputes by the use of the well-established dispute resolution processes. Arbitration, Conciliation, Mediation, Negotiation, and Lok Adalats are different methods of ADR. In this article, we shall study arbitration and arbitration tribunal.

Arbitration:

Arbitration is a 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.

Arbitration Tribunal:

Chapter III of the Arbitration and Conciliation Act, 1996 lays down the arrangements for the Composition of an Arbitral Tribunal. 

Number of Arbitrators:

Section 10(1) of the Arbitration and Conciliation Act, 1996 gives provision for the number of arbitrators in the arbitration tribunal. The parties to the dispute are allowed to mutually choose the number of arbitrators that shall establish the arbitral tribunal to adjudicate the dispute. It is, in any case, necessary that the number of arbitrators appointed shall be an odd number and not an even. This provision guarantees that there are no ties.

According to Section 10(2) of the Arbitration and Conciliation Act, 1996, if the parties to the dispute are unable to choose the number of arbitrators, in that case, just a single arbitrator shall be appointed.

Nationality of Arbitrator:

Section 11(1) of the Arbitration and Conciliation Act, 1996, a person of any nationality may be an arbitrator unless otherwise agreed by the parties.

Procedure to Appoint Arbitrator:

According to Section 11(2) of the Arbitration and Conciliation Act, 1996, the parties are free to agree on the procedure of appointment of the arbitrator or arbitrators.

According to Section 11(2) of the Arbitration and Conciliation Act, 1996, if parties fail to appoint arbitrator as specified in Section 10 clause 2, then each party shall appoint one arbitrator and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

Rule 22 of the Rules of Arbitration gives that if the value of the claim made under arbitration is One Crore or less, a solitary arbitrator can resolve the dispute if the parties agree to it. In cases where the claim to the dispute surpasses one Crore, the arbitral tribunal shall be made out of three arbitrators with the agreement of the parties.

Challenge to the Appointment of Arbitrator:

Section 12 of the Arbitration and Conciliation Act, 1996 deals with the circumstances in which the appointment of an arbitrator can be challenged.

1. Circumstances exist that give rise to justifiable doubts as to independence or impartiality on account of any past or present relationship with or interest in any of the parties or in relation to the subject matter in dispute, whether financial, business, professional or other kinds, or
2. He has no time due to his present or future assignments which is likely to affect his ability to devote sufficient time to the arbitration and in particular their ability to complete the entire arbitration within a period of twelve months.
3. He does not possess the qualifications agreed to by the parties.
4. The arbitrator falls in a category mentioned in the Seventh Schedule of the Act
5. The fifth schedule to the Act gives grounds that give justifiable doubts as to the independence or impartiality of the arbitrator.

The arbitrator has to inform parties about the circumstances mentioned above from time to time throughout the proceeding. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Requisite Qualifications of Arbitrator:

• The arbitrator must have requisite qualifications and none of the disqualifications prescribed in the arbitration agreement.
• The arbitrator should possess all the required capacity by law to assume the office of the arbitrator.
• H must be a person of the general reputation of fairness, integrity, and capable of applying objectivity in arriving at settlement in the dispute.
• The arbitrator should be free from any bias
• The arbitrator must be free from any connection with parties and the subject matter.

Reasons for Termination of Mandate of Arbitrator:

Section 14 of the Arbitration and Conciliation Act, 1996, governs the situation of termination of the mandate of the arbitrator because of his failure to act. The grounds for termination of the mandate under Section 14 are as follows:

• The arbitrator becomes de jure or de facto unable to perform his function.
• For some other reasons fails to act without undue delay
• The arbitrator withdraws from office.
• The parties agree to the termination of his authority as an arbitrator.

The arbitrator becomes de jure or de facto unable to perform his function:

De Jure refers to an arbitrator’s legal incapacity to perform his functions under the law and relates to circumstances under which the arbitrator by law is barred from continuing in office. For example: if an arbitrator becomes bankrupt or convicted for a criminal offence, then he becomes de jure unable to adjudicate the case. De Facto refers to factual inability. It relates to a factual happening during the process of arbitration. For example: if the arbitrator falls seriously ill or has some physical incapacity, then he becomes de facto unable to perform his function.

For some other reasons fails to act without undue delay:

In situations where the arbitrator is taking too long to adjudicate the dispute, this provision shall apply. If the arbitrator takes too long to even conduct the first hearing, let alone adjudication of the case; the parties can resort to this provision to terminate the mandate of the arbitrator.

The arbitrator withdraws from office:

For the reasons suitable to the arbitrator, if he withdraws from office, then automatically his mandate is terminated. This can happen because of various reasons and the arbitrator is not bound to give a detailed explanation of the same.

The parties agree to the termination of his authority as an arbitrator

If one of the parties wants removal of the arbitrator, then they must approach the court for the same. However, if both the parties agree to remove the arbitrator, then they can do so pursuant to making an agreement under section 15(1)(b) and terminate the mandate of the arbitrator. A party singularly does not have the power to revoke the authority of the arbitrator. But both/all parties in the agreement can do the same and do not need to approach the court to enforce the termination.

Procedure of Termination of Mandate of Arbitrator:

An arbitrator’s mandate can be terminated:

• by the arbitrator (by recusing themselves from the arbitral tribunal);
• by the parties;
• by the arbitral tribunal;
• by a court order;
• on the death of the arbitrator; or
• because of the arbitrator’s physical incapacity to proceed with the mandate.

If the situation falls within any of the grounds mentioned under section 14, then the party willing to terminate the mandate must approach the Court. An application for removing the arbitrator may be made to the court in whose jurisdiction the contract was executed, or subject matter of the work was performed, or within whose jurisdiction the office of the arbitrator was situated. The power to remove an arbitrator by the court is discretionary in nature. Every application to the court under section 14 is not supposed to be ruled in the affirmative. There might be situations where the court does not feel the need to remove the arbitrator. If the conditions mentioned under section 14 are satisfied, then it is imperative for the court to remove the arbitrator.

However, if both the parties agree to remove the arbitrator, then they can do so pursuant to making an agreement under section 15(1)(b) and terminate the mandate of the arbitrator. A party singularly does not have the power to revoke the authority of the arbitrator. But both/all parties in the agreement can do the same and do not need to approach the court to enforce the termination.

Substitution of Arbitrator:

If termination of mandate of Arbitrator is done under Section 13 or 14 of the Act, he shall be substituted. The procedure of substitution is laid down in Section 15 of the Act. Section 15(2) of the 1996 act allows for arbitrators to be substituted if their mandate has been terminated.

Where the mandate of arbitrator terminates, a substitute shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

Unless otherwise agreed by the parties, where the arbitrator is replaced under subsection 2, any hearing previously held may be repeated at the discretion of arbitral tribunal.

Unless otherwise agreed by the parties, an order of ruling of the arbitral tribunal made prior to the replacement of an arbitrator under section shall not be invalid solely because there is a change in the composition of arbitral tribunal.

Jurisdiction of Arbitral Tribunal:

Chapter IV of the Act contains Sections 16 and 17 that deal with the jurisdiction of an arbitration tribunal. Section 16 of the Act deals with the Competence of arbitral tribunal to rule on its own jurisdiction and conveys that the arbitral tribunal has the independence of choosing its own jurisdiction and freedom from the interference of courts regarding any matter related to arbitration.

Section 16– Competence of arbitral tribunal to rule on its jurisdiction:

The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement and for this purpose,

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract when it’s validity is challenged before the tribunal.

(b) a decision by the arbitral tribunal that the contract is null and void shall not mean that the arbitration clause invalid.

If there is a plea that the arbitral tribunal does not have jurisdiction, it cannot be raised after the submission of the statement of defence. Even an arbitrator may raise such a plea. However, if there is any delay and if such a delay is justified, the arbitral tribunal may admit a later plea according to sub section 4 of section 16 of the Act.

A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal shall decide on a plea referred to above and, where the arbitral tribunal takes a decision rejecting the plea, it shall continue with the arbitral proceedings and make an arbitral award. A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34 of the Act which deals with ‘Application for setting aside arbitral award’.

Power of Arbitration Tribunal to Order Interim Measures:

Section 17 of the Act deals with arbitral tribunal’ power to order interim measures.

A party may, during the arbitral proceedings or at any time after the making of the arbitral award but before it is enforced apply to the arbitral tribunal for the appointment of a guardian for a minor or person of unsound mind for the purposes of arbitral proceedings or as an interim measure of protection in any of the following matters;

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken, or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the arbitral tribunal to be just and convenient.

The arbitral tribunal shall have the same power for making orders, as the court has for the purpose of, and in relation to, any proceedings before it.

Powers of Arbitral Tribunal:

• The arbitrator has a power to administer an oath to the parties. It is necessary for him to act as a quasi-judicial authority
• Power to take interim measures
• According to section 25, an arbitrator has an power to proceed to ex-parte
• Power to appoint an expert
• Power to make awards

Duties of Arbitral Tribunal:

• To fix a time and place for arbitration, which is convenient to the parties
• Duty to disclose
• Duty to efficiently resolve the dispute
• Duty to determine the rules for the procedure

Reasons to Terminate Mandate of Arbitral Panel:

1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.
2. The arbitrator currently represents or advises one of the parties or an affiliate of one of the parties.
3. The arbitrator currently represents the lawyer or law firm acting as counsel for one of the parties.
4. The arbitrator is a lawyer in the same law firm which is representing one of the parties.
5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.
6. The arbitrator’s law firm had a previous but terminated involvement in the case without the arbitrator being involved himself or herself.

Distinguishing Between Section 9 and 17 of the Act.

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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:

Distinguishing Between Mediation and Conciliation:

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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India has one of the oldest legal systems and practices in the world. Its law and jurisprudence stretch back to many centuries, forming a living tradition which has grown and evolved with the lives of its diverse people. India is a land of diversified culture, local customs, and various religions. People of different religions, as well as traditions, are regulated by all the different sets of personal laws in order to relate to family affairs. Due to a high number of married persons, marital disputes increase. Family courts have a very crucial role to play in reducing the load of disputes on an overburdened judicial system, providing relief to litigants, who are forced to suffer prolonged delays in getting justice. Counseling and conciliation are the two pillars on which the whole structure of family courts is built. In this article, we shall deal with the origin and development of family courts in India. Family Court of Mumbai in Maharashtra is at BKC Bandra.

Family courts are specialized courts that were established with the goal of preserving the welfare of the family through the use of a multi-disciplinary approach to resolving family problems within the framework of the law. These courts aim to protect individuals’ legal rights on the one hand, and to serve as a guide, helper, and counselor on the other, to help families deal with problems and restore family harmony.

The environment of family courts expected to be different from regular courts. The atmosphere is supposed to be quiet informal and relaxed. And the judges need not put on robes and judges need not set on raised platform.

Historical Background:

The need to establish the family courts was first emphasized in India by the late Smt. Durgabai Deshmukh, after a tour of China in 1953, where she had an occasion to study the working of family courts. She discussed the subject with certain judges and legal experts and then made a proposal to set up family courts in India to Prime Minister Jawaharlal Nehru. Another reason for setting up of family courts was the mounting pressures from several women’s associations, welfare organizations, and individuals for establishment of such courts with a view to provide a forum for speedy settlement of family-related disputes. Importance was laid on a non-adversarial method of resolving family disputes and promoting conciliation and securing speedy settlement of disputes relating to marriage and family affairs.

Before the establishment of family courts, the family matters fell within the jurisdiction of the ordinary civil courts of the country. Where other civil matters were also litigated. The Law Commission in its 59th report (1974) had also stressed that in dealing with disputes concerning the family, the court ought to adopt and approach radical steps distinguished from the existing ordinary civil proceedings and that these courts should make reasonable efforts at settlement before the commencement of the trial. Gender-sensitized personnel including judges, social workers and other trained staff should hear and resolve all the family-related issues through elimination of rigid rules of procedure. The Code of Civil Procedure was amended to provide for a special procedure to be adopted in suits or proceedings relating to matters concerning the family.

After a lot of debate and discussion, the Family Courts Act came into force on 14.9.1984. The whole idea behind the Act is to ensure speedy and inexpensive relief with the least formality and technicalities.

The Family Courts Act, 1984:

The Family Courts Act, 1984 extends to the whole of India. The President gave his assent to the Family Courts Act on September 14, 1984. Under Section 20 of the Act, the Act has been given an overriding effect and its provisions are to have effect notwithstanding anything inconsistent therewith contained in any other law in force in India. The declared aim of the Family Courts Act was ‘settlement of disputes relating to marriage and family affairs and for matters connected with it’, the disputes other than the categories of proceedings relatable to matrimonial affairs, such Court will have no jurisdiction. The concept of adoption is outside the purview of the Family Courts Acts.

Purpose of Setting Up of Family Courts:

The immediate reason for setting up of family courts was the mounting pressures from several women’s associations, welfare organzsations and individuals for establishment of special courts with a view to providing a forum for speedy settlement of family-related disputes. Emphasis was laid on a non-adversarial method of resolving family disputes and promoting conciliation and securing speedy settlement of disputes relating to marriage and family affairs.

Establishment of Family Courts:

Section 3 of the Act lays provision for the establishment of one Family Court. The State must establish a Family Court for every area in the State comprising a city or town whose population exceeds one million in consultation with the High Court by giving notification in Official Gazette. Similarly, the State Government, after consultation with the High Court, must specify, by notification, the local limits of the area to which the jurisdiction of such Court shall extend and may, at any time, increase, reduce or alter such limits. State Government can establish Family Court for other areas in the State as the State Government may deem necessary.

In Gangadharan v. State of Kerala, AIR 2006 SC 2360 case, the Supreme Court observed that the State Governments should establish Family Courts not only because it is so provided in the Act, but also to discharge its social obligation to provide a less formal platform for resolving family disputes. 

Appointment of Judges in Family Courts:

Section 4 of the Act provides for the appointment of judges of FamilyCourts. The appointment of the Judges in such Courts is made by the State Government, which may appoint one or more Judges for each such Court. Persons who are appointed Judges must have the necessary qualifications prescribed by the Act. Additionally, they must be committed to the need to protect and preserve the institution of marriage and to promote the welfare of children. Preference is to be given to women when making such appointments.

Qualification Required to Be Judge of Family Court:

• a person should have, for at least seven years’ experience as a Judicial officer in India or office of a Member of a Tribunal or any post under the Union or a State requiring special knowledge of law or
• the person has been an Advocate of a High Court or two or more such Courts in succession for seven years or
• the person possesses such other qualifications as prescribed by Central Government in consultation with Chief Justice of India.
• The person must be less than sixty-two years.
• The person is devoted to protecting and preserving: the institution of marriage, welfare of children and conciliation and counseling as techniques for settling disputes

However, no person can be so appointed if he has attained the age of sixty-two years. When such Court consists of more than one Judge, each Judge can exercise any or all of the powers conferred on the Family Courts by the Act.

Next Article: Jurisdiction of Family Court

Indian Legal System > Civil Laws > Family Laws > The Family Courts Act, 1984 > Establishments of Family Courts

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