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Various Kinds of ADR & Types Of Alternative Dispute

Updated: Jul 9, 2021

Various Kinds of ADR & Types Of Alternative Dispute


The most common types of ADR for civil cases are Arbitration, Conciliation, Mediation, Judicial Settlement and Lok Adalat. In India, the Parliament has amended the Civil Procedure Code by inserting Section 89 as well as Order 10 Rule 1-A to 1-C. Section 89 of the Civil Procedure Code provides for the settlement of disputes outside the Court. It is based on the recommendations made by the Law Commission of India and Malimath Committee. It was suggested by the Law Commission of India that the Court may require attendance of any party to the suit or proceedings to appear in person with a view to arrivingat an amicable settlement of dispute between the parties and make anattempts to settle the dispute between the parties amicably. Malimath Committee recommended to make it obligatory for the Court to refer the dispute, after issues are framed, for settlement either by way of Arbitration, Conciliation, Mediation, Judicial Settlement through Lok Adalat. It is only when the parties fail to get their disputes settled through any of the alternate disputes resolution method that the suit could proceed further. In view of the above, new Section 89 has been inserted in the Code in order to provide for alternative dispute resolution.


1. Arbitration

2. Conciliation

3. Mediation

4. Judicial Settlement &

5. Lok Adalat


Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts, where theparties to a dispute refer it to one or more persons – arbitrators, by whose decision they agree to be bound. It is a resolution technique in which athird party reviews the evidence in the case and imposes a decision that is legally binding for both sides and enforceable. There are limited rights of review and appeal of Arbitration awards. Arbitration is not the same as judicial proceedings and Mediation. Arbitration can be either voluntary or mandatory. Of course, mandatory Arbitration can only come from s statute or from a contract that is voluntarily entered into, where the parties agree to hold all existing or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur.

The advantages of Arbitration can be summarized as follows: -

1) It is often faster than litigation in Court.

2) It can be cheaper and more flexible for businesses.

3) Arbitral proceedings and an arbitral award are generally nonpublic, and can be made confidential.

4) In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the competent Court will be automatically applied.

5) There are very limited avenues for appeal of an arbitral award.

6) When the subject matter of the dispute is highly technical, arbitrators with an appropriate degree of expertise can be appointed as one cannot choose judge in litigation.

However, there are some disadvantages of the Arbitration, which may be summarized as follows: -

1) Arbitrator may be subject to pressures from the powerful parties.

2) If the Arbitration is mandatory and binding, the parties waive their rights to access the Courts.

3) In some arbitration agreements, the parties are required to pay for the arbitrators, which add an additional cost, especially in small consumer disputes.

4) There are very limited avenues for appeal, which means that an erroneous decision cannot be easily overturned.

5) Although usually thought to be speedier, when there are multiple arbitrators on the penal, juggling their schedules for hearing dates in long cases can lead to delays.

6) Arbitration awards themselves are not directly enforceable. A party seeking to enforce arbitration award must resort to judicial remedies.

In view of provisions of Section 89 of the Civil Procedure Code, if the matter is referred to the Arbitration then the provisions of the Arbitration and Conciliation Act, 1996 will govern the case.


Conciliation is an alternative dispute resolution process whereby the parties to a dispute use a conciliator, who meets with the parties separately in order to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bring about a negotiated settlement. It differs from Arbitration in that. Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings. These proceedings are rarely public. They are interest-based, as the conciliator will when proposing a settlement, not only take into account the parties' legal positions, but also their; commercial, financial and /or personal interests. The terms conciliation and mediation are interchangeable in the Indian context. Conciliation is a voluntary process whereby the conciliator, a trained and qualified neutral, facilitates negotiations between disputing parties and assists them in understanding their conflicts at issue and their interests in order to arrive at a mutually acceptable agreement. Conciliation involves discussions among the parties and the conciliator with an aim to explore sustainable and equitable resolutions by targeting the existent issues involved in the dispute and creating options for a settlement that are acceptable to all parties. The conciliator does not decide for the parties, but strives to support them in generating options in order to find a solution that is compatible to both parties. The process is risk free and not binding on the parties till they arrive at and sign the agreement. Once a solution is reached between the disputing parties before a conciliator, the agreement had the effect of an arbitration award and is legally tenable in any court in the country Most commercial disputes, in which it is not essential that there should be a binding and enforceable decision, are amenable to conciliation. Conciliation may be particularly suitable where the parties in dispute wish to safeguard and maintain their commercial relationships.


Now, worldwide mediation settlement is a voluntary and informal process of resolution of disputes. It is a simple, voluntary, party centered and structured negotiation process, where a neutral third party assists the parties in amicably resolving their disputes by using specified communication and negotiation techniques. Mediation is a process where it is controlled by the parties themselves. The mediator only acts as a facilitator in helping the parties to reach a negotiated settlement of their dispute. The mediator makes no decisions and does not impose his view of what a fair settlement should be. In the mediation process, each side meets with a experienced neutral mediator. The session begins with each side describing the problem and the resolution they desire – from their point of view. Once each sides’ respective positions are aired, the mediator then separates them into private rooms, beginning a process of “Caucus Meeting” and thereafter “joint meetings with the parties”. The end product is the agreement of both the sides. The mediator has no power to dictate his decision over the party. There is a win – win situation in the mediation.

The chief advantages of the mediation are: -

1. The agreement which is that of the parties themselves;

2. The dispute is quickly resolved without great stress and expenditure;

3. The relationship between the parties are preserved; and

4. The confidentiality is maintained.


Section 89 of the Civil Procedure Code also refers to the Judicial Settlement as one of the mode of alternative dispute resolution. Of course, there are no specified rules framed so far for such settlement. However, the term Judicial Settlement is defined in Section 89 of the Code. Of course, it has been provided therein that when there is a Judicial Settlement the provisions of the Legal Services Authorities Act, 1987 will apply. It means that in a Judicial Settlement the concerned Judge tries to settle the dispute between the parties amicably. If at the instance of judiciary any amicable settlement is resorted to and arrived at in the given case then such settlement will be deemed to be decree within the meaning of the Legal Services Authorities Act, 1987. Section 21 of the Legal Services Authorities Act, 1987 provides that every award of the Lok Adalat shall be deemed to be a decree of the Civil Court .There are no written guidelines prescribed in India as to judicial settlement. But in America, ethics requiring judicial settlement has been enumerated by Goldschmidt and Milford which are as under:


The following are guidelines for judicial settlement ethics:

1. Separation of Functions: Where feasible, the judicial functions in the settlement and trial phase of a case should be performed by separate judges.

2. Impartiality and Disqualification: A judge presiding over a settlement conference is performing judicial functions and, as such, the applicable provisions of the code of judicial conduct, particularly the disqualification rules, should apply in the settlement context.

3. Conference Management: Judges should encourage and seek to facilitate settlement in a prompt, efficient, and fair manner. They should not, however, take unreasonable measures that are likely under normal circumstances


The concept that is gaining popularity is that of Lok Adalats or people’s courts as established by the government to settle disputes through conciliation and compromise. It is a judicial institution and a dispute settlement agency developed by the people themselves for social justice based on settlement or compromise reached through systematic negotiations. The first Lok Adalats was held in Una aim the Junagadh district of Gujarat State as far back as 1982. Lok Adalats accept even cases pending in the regular courts within their jurisdiction. Section 89 of the Civil Procedure Code also provides as to referring the pending Civil disputes to the Lok Adalat. When the matter is referred to the Lok Adalat then the provisions of the Legal Services Authorities Act, 1987 will apply. So far as the holding of Lok Adalat is concerned, Section 19 of the Legal Services Authorities Act, 1987 provides as under: -

Section 19 Organization of Lok Adalats . (1) Every State Authority or District Authority or the Supreme Court Legal Services Committee or every High Court Legal Services Committee or, as the case may be, Taluka Legal Services Committee may organise Lok Adalats at such intervals and places and for exercising such jurisdiction and for such areas as it thinks fit.


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