Alternative Dispute Resolution: A Ray of Hope for India’s Justice System

30 Sep Alternative Dispute Resolution: A Ray of Hope for India’s Justice System

Posted at 30 Sep 2025 in Current Affairs by Anshika 0 Comments

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This article covers “Daily Current Affairs” and Topic details “Alternative Dispute Resolution: A Ray of Hope for India’s Justice System”

SYLLABUS MAPPING

GS–2 – Governance – e-Governance, Legal Framework, and Reforms in Justice Delivery

FOR PRELIMS

What is Alternative Dispute Resolution (ADR) and its types (Mediation, Conciliation, Arbitration, Lok Adalats, Negotiation)

FOR MAINS

Examine the challenges in the adoption and enforcement of ADR mechanisms in India.

Why in the News?

The Department of Financial Services (DFS), in collaboration with the Mediation and Conciliation Project Committee (MCPC) of the Supreme Court of India, organized a Mediation Training Programme for Presiding Officers of Debt Recovery Tribunals (DRTs) and senior executives of Public Sector Banks.

What is ADR?

1. Definition: ADR refers to mechanisms outside the traditional court system to resolve disputes in a less adversarial, cost-effective, and time-bound manner.
2. Core Features: It emphasizes consensus-building, flexibility, and party autonomy compared to rigid judicial processes.
3. Types: Includes Mediation, Conciliation, Arbitration, Lok Adalats, and Negotiation.
4. Global Relevance: Used worldwide to decongest courts and promote amicable settlements.
5. Indian Context: Gained momentum through constitutional and legislative support, such as the Arbitration and Conciliation Act, 1996 and Legal Services Authorities Act, 1987.
Examples:
Singapore International Arbitration Centre (SIAC) – Global hub.
Permanent Court of Arbitration (PCA), The Hague – International disputes.
Lok Adalats in India – Quick settlement of crores of cases.

Comparison of ADR types?

Mechanism	Nature	Role of Third Party	Binding Nature	Example
Mediation	Voluntary, facilitative	Mediator facilitates dialogue, does not impose decision	Non-binding unless parties agree	Family disputes, commercial settlements
Conciliation	Similar to mediation but more structured	Conciliator can suggest solutions	Settlement agreement binding under law	Industrial disputes under Industrial Disputes Act
Arbitration	Formal, adjudicatory	Arbitrator acts like judge	Binding decision (Arbitral Award) enforceable in courts	Vodafone vs. India tax dispute (International Arbitration)
Negotiation	Direct discussion between parties	No third party	Non-binding	Business contracts, trade settlements
Lok Adalat	Statutory ADR under Legal Services Act	Judges/mediators facilitate compromise	Binding and non-appealable	Motor accident claims, cheque bounce cases

Importance of ADR

Constitutional Mandate for ADR in India

1. Article 14 – Equality before law requires affordable and quick justice.
2. Article 21 – Right to life and liberty includes the right to speedy justice (Hussainara Khatoon vs. State of Bihar, 1979).
3. Article 39A – Free legal aid and promotion of justice on the basis of equal opportunity.
4. Article 51(c) & (d) – Encourages respect for international law and peaceful settlement of disputes.
5. Section 89 of CPC (Civil Procedure Code), 1908 – Explicitly empowers courts to refer disputes to ADR (arbitration, mediation, conciliation).
6. Legal Services Authorities Act, 1987 – Provides a statutory basis for Lok Adalats.
Example: The Supreme Court in Afcons Infrastructure Ltd. vs. Cherian Varkey Construction Co. (2010) emphasized mandatory reference to ADR where possible.

Why the ADR Mechanism is not Visible in India

1. Lack of Awareness: Surveys show that over 60% of rural litigants are unaware of ADR mechanisms.
Example: Farmers and small traders continue to approach courts for disputes that could be resolved through Lok Adalats.
2. Weak Institutional Framework: India lacks internationally reputed arbitration centres.
Example: In high-profile cases like Cairn Energy vs. India (2021) and Vodafone tax arbitration, parties chose The Hague and Singapore, not India.
3. Judicial Intervention: Courts frequently interfere in arbitral awards, diluting ADR’s independence.
Example: In ONGC vs. Saw Pipes (2003), the Supreme Court expanded grounds for setting aside awards, undermining finality.
4. Quality of Mediators/Arbitrators: Shortage of trained professionals lowers credibility.
Example: In district-level mediation centres, many mediators lack formal certification.
Enforcement Issues:
5. Arbitration awards: though binding, face delays in enforcement due to appeals.
Example: Foreign investors often complain about 2–3 years delay in enforcement of arbitral awards in Indian courts.
6. Cultural Mindset: Litigation is seen as the “real justice route,” while compromise is seen as weakness.
Example: In family disputes, many prefer prolonged court battles over mediation, even if it strains relations.
7. Bureaucratic Resistance: PSUs and government departments often avoid ADR due to audit and accountability fears.
Example: Arbitration clauses in PSU contracts are rarely invoked without lengthy bureaucratic clearances.

Way Forward

1. Strengthen Institutional Arbitration: Develop GIFT City Arbitration Centre as an international hub to rival SIAC and London Court of International Arbitration (LCIA).
2. Mandatory Mediation in Certain Cases: Implement the Mediation Act, 2023, making mediation compulsory for family, cheque bounce, and consumer cases before litigation.
3. Capacity Building: Train at least 10,000 certified mediators/arbitrators by 2030. Example: Supreme Court’s MCPC programme (2025) trained Debt Recovery Tribunal judges and PSU executives in mediation.
4. Public Awareness Campaigns: Launch nationwide ADR Literacy Drives through schools, panchayats, and legal aid clinics.
5. Legislative Strengthening: Effective enforcement of arbitration awards under the Arbitration and Conciliation Act, 1996.
6. Technology Integration: Promote Online Dispute Resolution (ODR) for small-value disputes in e-commerce, digital lending, and insurance claims. Example: NITI Aayog’s ODR policy pilot in 2022 showed faster settlement in fintech disputes.
7. Adopt International Best Practices: Learn from Singapore, which integrates ADR into its commercial law and mandates mediation for certain disputes, making it the top global arbitration hub.

Conclusion

ADR in India has enormous potential to transform justice delivery by ensuring speed, affordability, and inclusivity. Yet, its visibility remains low due to weak institutions, lack of awareness, and over-dependence on courts. By strengthening ADR infrastructure, training professionals, and creating a culture of consensual dispute resolution, India can not only decongest its judiciary but also emerge as a global hub for dispute resolution, attracting both domestic and international stakeholders.

Prelims Question

Q. Consider the following statements about Lok Adalats:
Lok Adalats are organized under the Legal Services Authorities Act, 1987.
The award of a Lok Adalat is binding and deemed to be a decree of a civil court.
Matters relating to divorce and non-compoundable criminal cases can also be settled in Lok Adalats.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3

ANSWER: A

Mains Question

Q. The Indian judiciary is overburdened with millions of pending cases. Examine the role of Alternative Dispute Resolution (ADR) mechanisms in reducing the burden on courts. (250 words)

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