Arbitration vs. Mediation vs. Litigation: What Is the Difference?

Alternative Dispute Resolution

Since our courts were not in position to manage such huge pendency of cases, Alternate Dispute Resolution system was introduced and it helped in managing pendency of cases through to solving the cases outside the court and some time with or without judicial interference.

SHRISHTI PANDEY, 25 August, 2020, 7:30 PM IST

INTRODUCTION

Alternative Dispute Resolution (ADR) had played very vital role in today’s time in reducing  pendency of cases and over-burdened judiciary. The main question arises here is that how does Alternate Dispute Resolution become so popular and comes out to mainstream whenever any cases of trivial nature are concerned. 

While investigating into traditional approach i.e “Indian societal procedure”, for  judicial administration of Justice was totally governed by single individual i.e. head of the village, who was sole arbitrator and has responsibility to take care of the villages and simultaneously act as mediator & conciliator along with being arbitrator and judge.

Later during British era, some statute’s provisions regarding conciliation was adopted for better management of justice. At that time there was very weak & fragile administration of Justice because of which our Indian Penal Code (IPC) was enacted by First Law Commission, headed by Lord Maculae. Different laws were already enforced in order to have proper administration but they varies for the same crime for different caste, creed & color at different location, places as well as varies with time also. This clearly indicates that there was no uniformity of law throughout the India and thus need for common code emerged. Apart from week administration of Justice, Indians were not habitual of moving courts2 for redressal of their dispute rather they prefer resolution of dispute outside the court. 

Soon after constitutional Framework was adopted by our founding fathers, judicial system for resolution of dispute was also improved and the some of them were copied from British Era’s provision to run administration smoothly.  For example- 

  • Civil law or civil Court was constituted for resolution of civil dispute,
  • Special provisions were also mentioned under our constitution regarding high courts for different states excluding Jammu and Kashmir, etc.

Fundamental basis of constitutional approach for resolution of dispute was “Procedure established by law”, which is general way to approach any case and is followed by procedural Court. 

As it is not unknown to us that 3.5 crore cases are pending in our Indian judiciary. Although there are 25 high courts, as of now, along with subordinate courts and one Apex court, then too our judiciary is not able to or not in position to tackle the bundle of cases being filed every single hour. To tackle this issue several statutes were introduced- Family Court Act, Consumer Dispute Act etc., which clearly specify that disputes must be resolved within six months from date on of being filed. 

 Even before Alternative Dispute Resolution, Arbitration and Conciliation Act was also introduced. But after wide consultation and amending constitutional statute, Alternative Dispute Resolution watch successfully introduced as effective mechanism under Section 89 of CPC. This section introduces for ADR mechanisms:

  1. Mediation,
  2. Conciliation,
  3. Arbitration &
  4.  Lok Adalat. 

While proceeding through normal procedure for resolution of dispute where Court act as an institution and serve person, demanding answer for guidance & resolution of issue according to law. And that’s why quotes are also termed as Court of Law.  

Basically, there are two ways for settlement of cases –

1. Settlement of disputes through involvement of court.

2. Settlement of dispute outside the court without its interference.

Since our courts were not in position to manage such huge pendency of cases, Alternative Dispute Resolution system was introduced and it helped in managing pendency of cases through to solving the cases outside the court and some time with or without judicial interference.  

Also Read: RIGHT TO PRIVACY UNDER ARTICLE 21

Muskaan Sharma

ARBITRATION

As per the language of section 89 of CPC, its duty of court to firstly form an opinion with respect to the present case whether that particular case can be referred for arbitration or not. Arbitration could consist of single arbitrator or a panel of three arbitrators, as per the statute which governs arbitration i.e.Alternative Dispute Resolution Act, 1996. Apart from casting opinions,  judges’ duty is also to make sure that there should be pre-determined action between the parties for referring the dispute not only for arbitration but for any of the other three mechanisms of Alternative Dispute Resolution. Their judgement is referred as award. If any of the party is not satisfied they can move to civil Court. The award so passed why arbitration tribunal is considered as decree for all purposes and could be executed subject to its finality. In spite of being little time relieving, it’s expensive procedure because of following reasons –

1. Arbitrator had to be paid their fees separately and

2. Several institutions being involved in delivering award are also to be paid for arbitration procedure.

CONCILIATION

Alternative Dispute Resolution mechanism is the one which is seldomly used in court of justice. It’s sole jurisdiction of judge to conduct trial and also has a power of convincing the parties to go for conciliation in that case instead of going through normal trials which are too time consuming, if that seems fit for the settlement. Apart from these, a judge can also guide them for conciliation, thus this procedure is also known as judge involved conciliation. Even after the attempt made by judge for conciliation between the parties fails to provide any remedy but disagreement is still between them, then it’s duty of judge, who was involved in there conciliation process, to begin a fresh trial of the same case. 

MEDIATION

Important condition for referring the case for mediation is that both the parties should agree that this particular issue is fit for mediation, without their consent court can’t refer the case for mediation. The consent should voluntarily coming from the party that they want to opt mediation for the matter but Court can always ask while forming an opinion. The mediator involved here is a neutral person, who brings parties together and ask them to communicate together and help them in extracting the root cause of the issue.  The aggrieved person brings dispute in court which becomes letigation. In this letigation mediator help the parties to identify the dispute and reaches to the grievance. Once the grievance is identified, matter is sorted out with underline in trust and cooperation of the parties. Final step left here is finding solution of the same, which mediator facilitates while acting as a facilitator and provide remedy.

LOK ADALAT

Lok Adalat is more or less similar to normal trials of the court but with assistance of prominent person in society i.e. retired judges or officer or advocates. Here parties are being called upon for negotiation between them. Although this procedure is not mediation but deeper involvement then mediation. After following procedure, award is passed. But this time award so passed is force of decree and could be challenged only on rare / limited grounds. The reason being, that settlement method used by the parties in Lok Adalat is in front of proceeding members of same communities that is retired judges, offices and lawyers also who are expert in their respective fields. So there is very less chance of-

  • mistake of law or 
  • mistake of facts or
  • there is any suppression of facts or
  • parties are fraudulently deceit.

After coming into force the arbitration act has been amended several times like any other statute. From all the above statements, it could be concluded that arbitration has evolved over the years as perfect and ideal tool for resolution of issues which saves the court’s time and largely instrumental in assisting the parties to resort to quick remedial measures. Overall arbitration has emerged as most preferable platform for general public in order to get quick resolution of dispute especially in those cases which are related to industrial and corporate realm. So far Alternate Dispute Resolution has proved to be effective mechanism for management of pendency of cases which have been accommodated through years. Some cases which are of very trivial nature and does not involve interference of the court and judges, are being sorted out by Alternative Dispute Resolution outside the court without its interference. This mechanism had saved much time and energy of the courts to larger extent. 

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