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Arbitration and Conciliation act (ADR) : Meaning, Importance

Arbitration and Conciliation act (ADR)

“Justice delayed is justice denied.”
This is the phrase related to Indian Judiciary to which I have been introduced much before I joined my law school. To some extent it is correct also, why it should not be when we have 18 judges on 10 lakh people[1]. With such an amount of cases pending it is almost impossible to settle the matters filed in the courts quickly. In order to serve as a shock observer nowadays we have something called the Alternate Dispute Resolution (ADR) mechanism, which has been used all over the world and is more effective, faster and less expensive. Within ADR we have four different types of methods:

(a) Negotiation
(b) Mediation
(c) Arbitration
(d) Conciliation

In this article I am going to focus on arbitration in India. Arbitration in Indian has been there since time immemorial[2]. When the British started to regulate the judicial system in India, a catena of regulation and acts were passed to formulate the arbitration system back in 18th century in India. Arbitration is recognised by many Indian Acts like Indian Contract Act, 1872 and Specific Relief Act, 1878. The first act related to arbitration was passed in the year 1899 which was replaced by Arbitration Act, 1940 which was finally replaced by Arbitration and Conciliation Act, 1996 and now we have an amendment to it in 2015, the Arbitration and Conciliation Act, 2015.

Arbitration has been defined as the way of settling disputes through the intervention of the third person. There are also options of settling these disputes through permanent arbitral institutions like, Chamber of Commerce or Indian Council of Arbitration etc.

There are many advantages of pursuing your matter in arbitration, the first and foremost is privacy, the parties doesn’t have to face the public criticism and embarrassing moments that they usually have to face in public. The parties to the arbitration have independence to choose their arbitrator and also the place of arbitration as per their convenience. The parties can also choose their own language of arbitration. Also arbitration is cheaper than court proceedings as there is no a court fee, process fees, or incidental fees. In court proceedings the courts have to follow the Code of Civil Procedure, 1908 and the Rules of the Indian Evidence Act, while in arbitration proceedings can be informal and the parties themselves can act as the arbitrators and the proceeding is based on natural justice principles. Also once the award is made it cannot be challenged, only the procedure of the arbitration can be challenged[3].

However there are certain matters that cannot be decided in arbitration like matters of divorce, disputes regarding the matter of appointment of guardian, matters of criminal proceeding, industrial disputes, mill disputes, disputes of illegal contracts and this list is exhaustive. An amendment to the 1996 act was made in order to keep it to the international level following the UNCITRAL laws[4].

Recently Srikrishna Committee submitted its report on “Institutional Arbitration in India” which is one of government’s optimistic steps towards arbitration in India. The arbitration in India will speed up the process of resolving the disputes and will also motivate the parties to settle their disputes without any intervention of the court. .
[1]India has 18 judges per ten lakh people: Law Ministry
[2] There were Panchayats in every community and every village and all disputes were settled by those panchayats. It was the easiest, cheapest and quickest system of settlement of disputes.
[3] Section 34, Arbitration and Conciliation Act, 1996.
[4] UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006.

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