• Law Perspective


Updated: Nov 16, 2019

Today, there is huge pendency of litigation, cases in all the Courts in India. Reasons for which, are well-known to all. Today instead of thinking about problems, one should emphasise on finding the best solutions. Alternate Dispute Resolution mechanism is best solution for the problem of delayed and costly justice system.

ADR mechanism gives importance to speedy resolution of disputes. Today, time is very important factor. We tend to solve our problem quickly and also without spending much money. So, most of the Corporate sector relies on ADR system. We all know that, many problems can be solved just by explaining and hearing each other, making negotiation etc. And these simple proven tricks and techniques are used in ADR mechanism to resolve the dispute. There are many components of ADR mechanism like Arbitration, Mediation,

Conciliation, Negotiation etc.

What is 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.

Its principal characteristics are:

• Arbitration is consensual

Arbitration can only take place if both parties have agreed to it. In the case of future disputes arising under a contract, the parties insert an arbitration clause in the relevant contract. An existing dispute can be referred to arbitration by means of a submission of agreement between the parties. In contrast to mediation, a party cannot unilaterally withdraw from arbitration.

• The parties choose the arbitrator(s)

The parties can select a sole arbitrator together. If they choose to have a three-member arbitral tribunal, each party appoints one of the arbitrators; those two persons then agree on the presiding arbitrator. Alternatively, the Center can suggest potential arbitrators with relevant expertise.

• Arbitration is neutral

In addition to their selection of neutrals of appropriate competence, parties are able to choose such important elements as the applicable law, language and venue of the arbitration. This allows them to ensure that no party enjoys any extra advantage.

• Arbitration is a confidential procedure

• The decision of the arbitral tribunal is final and easy to enforce

What is Mediation?

Mediation is another of the methods of alternative dispute resolution (ADR) available to parties. Mediation is essentially a negotiation facilitated by a neutral third party. Unlike arbitration, which is a process of ADR somewhat similar to trial, mediation doesn't involve decision making by the neutral third party. ADR procedures can be initiated by the parties or may be compelled by legislation, the courts, or contractual terms.

Is Mediation Right for You?

When parties are unwilling or unable to resolve a dispute, one good option is to turn to mediation. Mediation is generally a short-term, structured, task-oriented, and "hands-on" process.

In mediation, the disputing parties work with a neutral third party, the mediator, to resolve their disputes. The mediator facilitates the resolution of the parties' disputes by supervising the exchange of information and the bargaining process. The mediator helps the parties find common ground and deal with unrealistic expectations. He or she may also offer creative solutions and assist in drafting a final settlement. The role of the mediator is to interpret

concerns, relay information between the parties, frame issues, and define the problems.

After Mediations-

If a resolution is reached, mediation agreements may be oral or written, and content varies with the type of mediation. Whether a mediation agreement is binding depends on the law in the individual jurisdictions, but most mediation agreements are considered enforceable contracts. In some court-ordered mediations, the agreement becomes a court judgment. If an agreement is not reached, however, the parties may decide to pursue their claims in other


The mediation process is generally considered more prompt, inexpensive, and procedurally simple than formal litigation. It allows the parties to focus on the underlying circumstances that contributed to the dispute, rather than on narrow legal issues. The mediation process does not focus on truth or fault.

Questions of which party is right or wrong are generally less important than the issue of how the problem can be resolved. Disputing parties who are seeking vindication of their rights or a determination of fault will not likely be satisfied with the mediation process.

What is Conciliation?

As per Oxford Dictionary, conciliation means; ‘The action of stopping someone from being angry.’ As mentioned above, it is important to solve Business disputes while maintaining the cordial relation between the parties involved.

It has been derived from the word ‘concile.’ Conciliate and reconcile are both employed in the sense of uniting men’s affections but under different circumstances.

Conciliation means ‘bringing of opposing parties or individuals into harmony to settle the dispute.’ Conciliation can easily solve the following types of disputes: commercial, financial, family, real estate, employment, intellectual property, insolvency, insurance, service, partnerships, environmental and product liability. Apart from commercial transactions, the mechanism of conciliation is also adopted for settling various types of disputes such as labor disputes, service matters, antitrust matters, consumer protection, taxation, excise, etc. It is a confidential, voluntary and private dispute resolution process in which a neutral person helps the parties to reach a negotiated settlement. This method provides the parties with an opportunity to negotiate, converse and explore options aided by a neutral third party, the conciliator, to exhaustively determine if a settlement is possible. In conciliation proceedings, the parties are free to withdraw from conciliation, without prejudice to their legal position, at any stage of the proceedings. Parties are directly engaged in negotiating a settlement. The conciliator, as a neutral third party, can view the dispute objectively and can assist the parties in exploring alternatives which they might not have considered on their own.

The parties may carefully choose conciliators for their knowledge and experience.

Conciliation enhances the likelihood of the parties continuing their amicable business relationship during and after the proceedings. These are three main components of ADR. We will see other components and techniques of ADR and also various important statutes and Acts in India that govern ADR mechanism.


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