Alternative dispute resolution (ADR) entails various ways through which people can resolve disputes without a trial. ADR regroups all processes and techniques of conflict resolution that occur outside of any governmental authority. The most common ADR processes include arbitration, mediation/conciliation, and negotiation. ADR processes are generally confidential, less formal, and less stressful than traditional court proceedings. They are often time and cost effective.
The concept of the Alternative Dispute Resolution (ADR) mechanism is capable of providing a substitute to the conventional methods of resolving disputes, including civil or commercial disputes. Generally, ADR uses a neutral third party who helps the parties to communicate, discuss the differences and resolve the dispute. It is a method which enables individuals and groups to maintain co-operation, social order and provides an opportunity to reduce hostility. In India, the Arbitration and Conciliation Act, 1996 governs the ADR ecosystem along with Section 89 of the Civil Procedure Code, 1908 which empowers the courts to refer disputes for Arbitration, Conciliation, Mediation or Lok Adalat.
Arbitration is one of the methods under Alternative Dispute Resolution ("ADR") processes. In arbitration, parties have their disputes determined by independent and impartial dispute resolution practitioners (known as "arbitrators" or "tribunal"). The tribunal makes a binding determination of the problems in dispute. The arbitral tribunal can include legal and/or technical experts of the parties' own choosing, and use procedures which the parties can select and influence.
International commercial arbitration is arbitration of disputes between parties from different countries, without recourse to the courts of a specific country. The resulting award is final and binding on the parties and is quickly enforceable throughout the globe. In a global economy, international arbitration could be a vital a part of doing business effectively.
Once a dispute is referred to Arbitration, the following process is followed for its quick disposal:
Issuance of Notice of Arbitration Invocation U/S 21 To Other Party for Referring the Disputes
Appointment and Acceptance of Arbitrator.
Filing of Pleadings (Proof Submission).
Interpretation of Proof by Arbitrator for Upcoming Hearings.
Hearing Session (Can be Multiple).
Filing of Evidence & Cross-Examination (Rejoinder).
Final Argument & Filing of Written notes of Arguments.
Award
Conciliation is a non-binding informal dispute resolution process in which both parties agree to the appointment of a neutral third-party intermediary who assists the parties to objectively understand and evaluate their positions, with the aim of reaching a negotiated settlement.
The essence of Conciliation is a consensus-based resolution with a Mediator/Conciliator acting as a facilitator. Generally, only the mediator/conciliator, the parties and counsel would be present. The Conciliation is normally held in a private meeting room or online through electronic mediums or boardroom and no transcripts or records are kept of the meeting and discussions themselves. Conciliation can usually be completed in one or two days or less.
The mediator/conciliator’s role is solely to assist the parties in their negotiations by identifying barriers to settlement and to guide the parties in developing appropriate strategies for overcoming them.
An Arbitration Centre is a specialized institution that provides alternates to court rulings through Alternate Dispute Resolution (ADR) process. These centres facilitate and assist in conduction of ADR proceedings by instilling their own set of rules, including for enforcement of awards made in the proceedings, and sometimes a selection of experts or arbitrations. These rules provide a framework for the arbitration proceedings along with a venue for their conduction.
Any dispute coming to these centres is referred through a specific clause in documents or an agreement between the parties in conflict, which mutually choose the said centre for conduction of the ADR proceedings. Therein the dispute in question is decided as per the rules and regulations of the said centre. The centre does not arbitrate the dispute but it is the arbitral panel which resolves the dispute in accordance with the rules.