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AN EMERGING TREND - ADR MECHANISM IN IPR
CONFLICTS ”
to be submitted to
MEWAR UNIVERSITY, NH-76,

GANGRAR, CHITTORGARH,
RAJASTHAN) INDIA
in partial fulfillment of the requirements
for the degree of LL.M. (Master of Laws)
Compiled by:
Sanjeev Kumar Chaswal

LL.M 2nd year, Roll No.
Enrollement No…………………
Electronic copy available at: https://ssrn.com/abstract=3401259

Declaration
I, Sanjeev Kumar Chaswal a student of LL.M final year of Mewar University of

with roll no ………………….. and enrollment no. ………………………… do
hereby declare that this dissertation paper is an original work of mine and is
result of my own intellectual efforts. I have quoted titles of all original sources
i.e. original documents as this is a LLM resrach research and name of the
authors whose work has helped me in writing this research paper have been
placed at appropriate places and I have not infringed copy rights of any other
author.
Date ------------- ( ………………………… )
Place -

CERTIFICATE
This is to certify that the dissertation entitled “ADR MECHANISM IN IPR

CONFLICTS - AN EMERGING TREND” which is being submitted by Mr. Sanjeev
Kumar Chaswal for the award of the degree of Master of Laws is independent
and original research work carried out by him.
The dissertation is worthy of consideration for the award of LL.M. Degree of

MEWAR UNIVERSITY, NH-76, GANGRAR, CHITTORGARH, RAJASTHAN
INDIA.
Mr. Sanjeev Kumar Chaswal has worked under my guidance and supervision to
fulfill all requirements for the submission of this dissertation.
The conduct of research scholar remained excellent during the period of

research.
Signature

ACKNOWLEDGEMENT
I feel proud to acknowledge the able guidance of our esteemed.. I acknowledge

with pleasure unparallel infrastructural support that I have received from
Law Department, Mewar University. In fact this work is the outcome of
outstanding support that I have received from the faculty members of the
college, in particular Vice Principle Mr. Karun kaushik who has guided me to
finish my research.
I find this opportunity to thank the library staff of the Law Department, Mewar
University. This research work bears testimony to the active encouragement and
guidance of a host of friends and well- wishers. In particular mention must be
made of Hon’ble Mr. Bharat Bhushan
It would never have been possible to complete this study without an untiring
support from my family.
I am greatly indebted to the various writers, jurists and all others from whose
writings and work I have taken help to complete this dissertation “ADR
MECHANISM IN IPR CONFLICTS - AN EMERGING TREND”
Date…………. ………………………………….
Place: (Sanjeev Kumar Chaswal)

PREFACE
Thus, like any other emerging field of law, IP conflict resolution also has a plenty
of debatable issues before it. In this research paper, It will be my endeavor to
delve deep into these issues like ADR: arbitration and mediation can be real
alternative to IP disputes litigation, and further IP right disputes like any other
commercial disputes can be brought under ADR procedure and alternative
dispute resolution procedures can play effective role in resolving IP conflicts.
The subject research work has been divided in six major chapters and further
divided into various sub topics and sub to sub topics. The first topic which is
named as Introduction and this dissertation further consists of eight chapters.
The first and second chapter of this work attempts to defined Alternative Dispute
Resolution and history of ADR- in Indian perspective. The third chapter and
Four Chapter deals with overview of ADR mechanisms and after independence
The fifths and Sixth chapter of this research work is an endeavour to put more
stress on Intellectual Property Enforcement and scope of ADR in IPR disputes
Chapter seventh and eighth Chapter deals in respect to IP disputes for ADR
mechanisms attempts to international disputes. The Ninth chapter of this
dissertation gives final view on The WIPO Arbitration and Mediation Center and
lastly conclusion of the research work and certain valuable suggestions to
manage disputes under ADR mechanism.
Date…………. ………………………………….
Place: (Sanjeev Kumar Chaswal)

ABBREVIATIONS
AIR All India Reports
AGICOA Association of International Collective Management of
Audiovisual Works
ADR alternative dispute Resolution
Cr LJ Criminal Law Journal
C.P.C Civil Procedure Code
CILAS Committee for Implementing Legal Aid Schemes
GATT General Agreement on T ariff s and T rade
ICA International Centre for Arbitration
ICADR International Centre for Alternative Dispute Resolution.
ICANN Internet Corporation for Assigned Names And Numbers
IPR Intellectual Property Rights
LL.M. Master of Laws
NALSA National Legal Services Authority
PWC Price Water house Coopers
SCC Supreme Court Cases
TRIPS Trade Rel ated Aspects of I ntellectual Propert y Ri ght s
UNCITRAL The United Nation Commission on International trade laws
UDRP Uniform Domain Name Dispute Resolution Policy and Rules
Vs. Versus
WLR Weekly Law Reports
WIPO The World Intellectual Propoerty Organistion
WIPO Arbitration and Mediation Center:

TABLE OF CONTENTS
Chapter Page no.
Declaration i
Certificate ii
Acknowledgement iii
Preface iv
Abbreviations v
THE ABSTRACT 1-3
CHAPTER – 1. INTRODUCTION 4-8
1.1. What is Alternative Dispute Resolution 4
CHAPTER – 2 HISTORY OF ADR- IN INDIAN PERSPECTIVE 9 - 15
2.1 Prevalance of justice in ancient india 9 - 13

2.2 The system of ADR under
Briti sh Company Raj 13-15
CHAPTER – 3 OVERVIEW OF ADR MECHANISMS 16 - 36
3.1. What is ADR Mechanism 16-17

3.2. ADR Mechanisms and IP Disputes. 17-20
3.2.1. Arbitration 20-21
3.2.2. Mediation 21-22
3.2.3. Conciliation 22
3.2.4. Negotiation 23
3.2.5. Mini-trial 23- 24
3.3. Early Neutral Evaluation (ENE) 24- 27
3.3.1. What an ENE Covers 27- 28
3.3.2. The Timing and Scope of an ENE 28 -29
3.3.3. The Distinctive Benefits of an ENE 29- 30
3.4. Lok Adalat 30- 32
3.5. How to make ADR system more viable 32- 33
3.6. How to make Arbitration Mechanism truly effective: 33- 36
CHAPTER – 4 ADR SYSTEM AFTER INDEPENDENCE 37 - 71
4.1. The Emergence of ADR system in independent India 42- 46

4.2. Court approach towards ADR mechanism 46- 55
4.3. Legislative efforts in India 55- 57

4.4. Court approach towards legal reform 57- 60
4.5. Need and the purpose of ADR in india 60 -63
4.6. Implementation of ADR in India 63 -71
CHAPTER – 5 OVERVIEW OF IPR AND LITIGATION IN INDIA 72 – 90
5.0. Introduction 72- 74

5.1. Intellectual Property Enforcement 75 -76
CHAPTER – 6 SCOPE OF ADR IN IPR DISPUTES 77 -110
6.1. Mechanism in the intellectual Property regime 77

6.1.1. Commercial Copyright and Software Disputes 77-78
6.1.2. Commercial Patent Disputes 79 -80
6.1.3. Commercial Trade mark and Trade Dress Disputes. 80- 82
6.1.4. Commercial Trade Secret and Unfair Competition Disputes 82-83
6.1.5. Commercial Intellectual Property Licensing Disputes 83-85
6.1.6. A copyright infringement 85
6.1.7. Economic rights 85-86
6.1.8. Moral rights 86
6.1.9. Copyright dispute resolution 87
6.1.10. Copyright litigation 87-88
6.1.11. The current approach: patent litigation 88-90
6.1.12. Domain Name 90-94
6.1.13. International Intellectual Property Disputes 94
6.1.14. Fundamental Problems of International IP Disputes 94-95
CHAPTER – 7 IP DISPUTES FOR ADR MECHANISMS 96 - 118
7.0. The IPR disputes and ADR: 96-101

7.1. Reasons to Consider ADR for IPR Disputes 101-102
7. Certainty as to Forum. 102
7.3. The Relative Speed of ADR. 103
7.4. Arbitration and mediation of IP disputes as alternatives
to litigation. 103 -104
7.5. Initial considerations in selecting Litigation Alternatives: 104-106
7.6. What form of ADR should be pursued 106-107
7.7. The advantages of ADR have been recognized 107-108
7.8. Mediation and Arbitration are different forms of ADR 108
7.9. Other approaches to ADR 108-109
7.10. The value of IPR disputes in ADR mechanisms 109-110
7.10.1. Professional 110-111
7.10.2 Low cost 111-112
7.10.5. Flexibility 112-113

7.11. Confidentiality 113-114
7.12. To maintain beneficial relationships 114-115
7.13. The adequacy of the results 115-116
7.10.6 The specific modalities of intellectual property disputes ADR 117
7.10.7. The specific modalities of IPR comparison of ADR 117
7.10.8. That size and importance of the dispute 117-118
CHAPTER 8 INTERNATIONAL DISPUTES 119-125
8.1. Dispute Scenarios 121

8.2. Research collaboration: ownership dispute 121-122
8.3. Patenting of research outputs from genetic material 122
8.4. Claims based on traditional rights 122-123
8.5. Agricultural products and patents 123
8.6. Rat v. elephant 124
8.7. The Arbitration Option 124
8.8. Arbitration procedure 124- 125
CHAPTER 9 THE WIPO ARBITRATION AND MEDIATION CENTER 126-134
9.1. History of WIPO 126

9.2. Strategic Direction and Activities 126-127
9.3. WIPO Arbitration and Mediation Center (WIPO Center). 127-128
9.4. Tailored ADR services 128-129
9.5. Services of the wipo arbitration and mediation center 129-130
9.6. Trends in WIPO mediation and arbitration 130-131
9.7. A wipo expedited arbitration relating to a banking 131-132
software dispute
9.8. Settlement trends 132-134
10. CONCLUSION 135-136
11. Table of Cases 137
12. Bibliography 138
13. Appendixes 139

TABLE OF CASES
Sitanna Vs Viranna, the Pri vy Council
Raj asthan State Road Transport Corporat ion v. Krishna Kant , 54
The Privy Council Sitanna v. Viranna, AIR 1934 SC 105, 58
Sundaram Fi nance Ltd. v. NEPC India Ltd. (reported in AIR 1999 SC 565)
Salem Advocate Bar Association v. U.O.I AIR 2003 SC 189, 2002
E.Venkatakrishna Vs Indian Oil Corporation Ltd AIR 1989 Kant 35
In PT Thomas vs. Thomas Job 2005 AIR 3575, 2005(2)
In Oil and Natural Gas Commission vs. CCE 104 CTR (SC)
Bhasheer vs. Kerala State Housing Board AIR 2005 Ker 64, 2005
In Deco Mica Ltd Vs UOI 2000 (68) ECC 554
Atari Games Corp. v. Nintendo of Am., Inc., 975 F.2d 832, 837 (Fed. Cir. 1992); see also
Jessica Litman, Copyright As Myth, 53 U. Pitt. L. Rev. 235 (1991).
Atari Games, 975 F.2d at 837-38; See, e.g., Ty, Inc. v. GMA Accessories, Inc., 132 F.3d
1167, 1169 (7th Cir. 1997); Repp and K & R Music, Inc. v. Webber, 132 F.3d 882, 891
(2d Cir. 1997); Grubb v. KMS Patriots, L.P., 88 F.3d 1, 6 (1st Cir. 1996).
Atari Games, 975 F.2d at 844.
Shaw v. Lindheim, 919 F.2d 1353, 1361 (9th Cir. 1990).
Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1464 (Fed. Cir. 1997).
Jay E. Grenig, Alternative Dispute Resolution § 1.2 (2d ed. 1997 & Supp. 1998).
10

BIBLIOGRAPHY 125-140
Books
John R. Kahn, Negotiation, Mediation and Arbitration in the Computer Program Industry:
Why play hardball with software, pt. III.B (1989).128
Resolving Intellectual Property Disputes Outside of Court: Using ADR to Take Control of
Your Case By Alan W. Kowalchyk 128
Reports
The Indian Judicial System A Historical Survey By Mr. Justice S. S. Dhavan High Court,
Allahabad 98
News Week, Dec. 19. 1959, Challenge of Communism 55
Articles, Papers and Transcripts
The justi ce dispensati on system in India 1 ICADR88 58
Mr. H. D. Shourie, Founder Director of COMMON CAUSE, continued his exertions to
this end till his last breath. In his letter to Mr. Justice S. M. Raza, Lokayukta, Uttaranchal,
dated June 22, 2005, 58
News papers
Supreme Court chides itself, govt for judicial backlog Dhananjay Mahapatra, TNN Jan
12, 2012, 05.57AM
11

APPENDIXES
The regulation of 1781 22

Regulation of Act 1787 22
Regulation of Act 1793 23
The Madras Presidency Regulation VII of 1816 23
Bombay Presidency Regulation VII of 1827 23
Under the Charter Act of 1833 23
Act IX of 1840. 23
The Act VIII of 1857 24
The Act XIV of 1882 24
The Indian Arbitration Act IX of 1899: 25, 53,
Information Technology Act, 2000 27
Arbitration and Conciliation Act, 1996 15,16,46
The Arbitration Act of 1940 61, 63
Industrial Disputes Act, 1947 53,
Section 23(2) of the Hindu Marriage Act, 1955 53
The Family Court Act, 1984 54
The Legal Services Authority Act,1987
The Code of Civil Procedure, 1908 47
The Geneva Protocol on Arbitration Clauses, 1923, 75
The Geneva Convention on the Execution of Foreign Award, 1927 75
Legal Services Authorities (Amendment) Act, 2002
12

ABSTRACT
India is country habitants having many religion and cultures, since
centuries habitants of India has evolved with several forms of
dispute resolution mechanisms and over period of time, the y have
customized, varied according to needs. Even though Britisher’s
rulers had left Indian shores almost half a century ago, still several
of these laws exist till date without any major changes.
W ide Internet usage has rendered boundaries of the states

meaningless. The people across the globe have realized its
potentiality as an effective tool for communicati on, dissemination of
information and e-commerce and enjoying to unrestricted access to
multifarious interactions, transactions inevitably thereby raising
many new issues in the nature of e-disputes to virtual sale /
purchase of products through e-auctions or otherwi se, domain
disputes, trademark infringement, patents, software infringement,
copyri ght, defam atory writings, fraud, privacy, etc
In this scenari o the Intellectual Propert y Rights are becoming

fundam entally exigent to get in to research collaborations and
thereby making Intellectual propert y rights tool as valuable business
assets for technological entities. The people across world over
frequentl y involve in cross-border transactions having different
backgrounds and different national laws or within different states of
India. Som e time disputable transactions create multi-jurisdictional
disputes between the nationalities of different countries having
different social backgrounds, mindsets. Usually those business
13

entities having familiarity with alternative dispute resolution (ADR)
are able to resolve such conflicts efficiently.
As the determination of commercial or non commercial disputes

before different national courts can result in to high l egal and other
costs as well as conflicting a wards. Therefore, the ADR has a
potential to provide business entities belonging to distinct
nationalities a single unified forum of arbitration thereby havi ng a
final and enforceable award binding across m ultiple jurisdictions.
Hence, increasingly, IP owners and users are approaching to many
of known alternative dispute resoluti on (ADR) procedures like
arbitration and mediation to resolve their IP disputes
In this scenario the W orld Intellectual Propert y Organization (W IPO)

has been playing pivotal role since its inception in strengthening
ADR procedures for IP conflicts and forefront in resolvi ng IP
conflicts through their speci alized ADR procedures. The Intellectual
Propert y conflicts are not that conflicts which cannot be adjudicated
or resolved through ADR. As Intellectual Propert y conflicts being a
specialised in its nature and it require speci alised services of ADR
experts in resolvi ng IP conflicts, mainly due to non availability of IP
experts in India is the main obstacle in resolving IP conflict through
arbitration or through ADR.
Thus, like any other em erging field of law, IP conflict resolution also
has a pl enty of debatable issues before it. In this research paper, It
will be m y endeavor to delve deep into t hese issues like amongst
mainly i) W hether ADR: arbitrati on and mediati on can be real
alternative to IP disputes litigation, ii) whether IP right disputes like
14

any other commercial disputes can be brought under ADR procedure
or not If so, to what extent?. Iii) W hen is ADR to be preferred, when
is it to be avoided; and, if ADR is preferred, what form of ADR
should be pursued? iv) W hether, an alternative dispute resolution
procedure can play effective role i n resolving IP conflicts if so to
what extent? v) W hether the parties to IP conflicts can reap overall
benefits by i nvoking ADR procedures in comparison to traditional
litigation, if so, to what extent? vi) W hether the use of a private
consensual mechanism like arbitration or m ediation procedures
pose any threat to the resolution of such specialised disputes, if so,
to what extent?
15

CHAPTER – 1 INTRODUCTION
A large part of my time during the twenty years of my practice

as a lawyer was occupied in bringing about private
compromises of hundreds of cases. I lost nothing thereby not
even money, certainly not my soul - MAHATMA GANDHI
It is an attorney’s responsibility to “persuade his neighbors to

compromise whenever he can. Point out to them how the
nominal winner is often, a real loser -- in fees, expenses and
waste of ti me. ” - ABRAHAM LINCOLN
1.1 What is Alternative Dispute Resolution:
Every society, every community, every culture has some or the

other form/s of resolving the disputes faced by their
constituents. Of ten, the longer and more prosperous the
lineage, the m ore refined and varied the mechanisms. India is
a country of many cultures and hence several dispute
resolution mechanisms had evolved and been customized over
time.
One of the several benefits of the British rule over India was
that we got some very robust laws. Several of these exist till
date (after over 60 years of Independence) without any major
am endments. However, the flip side was that at the altar of
‘Uniformity’ were sacrificed all the then existing dispute
resolution m echanisms, which were by and large enabling
satisfactory outcomes. W hat was worse was that the system
16

that replaced them soon started showing its col ors - the formal
procedures of the Courts of Law not only took their own time
but also provided umpteen loop-holes to the ingenious lawyers
to stretch that time even further if that suited their clients’
interests. This had a telling effect on the backlogs in court
registries across the nati on. To give an extreme example, the
Bom bay High Court is currently taking up Final Hearing of
Plaints filed in the ‘80s and 90’s. An Appeal from an
Order/Judgment in these cases will take roughly another 5 to 7
years from date of filing and a further Appeal to the Supreme
Court could take an additional 2 years.
Arbitration too has seen its nam e sullied thanks to the Ad Hoc
version adopted by the lawyers drafting their clients’ contracts.
W ith no institution to keep a check on their schedule, the
Arbitrators become masters unto themselves. Arbitral
hearings, when held, are often as prolix as the court hearings
and one can’t blame the Arbitrators for that, as they are
usually retired judges and that’s the only way the y know how
to conduct hearings.
By and large, in the i nitial period, the scheduled hearings are

held only to give fresh dates of hearings on some or the other
ground ranging from non-com pletion of records to the ill-healt h
of someone connected to the proceedings or related to that
someone – and this continues till the parties’ patience is found
to be wearing thin. Thereafter, subst antive work is done at the
arbitral hearings, but they go on for only half a day i.e. 2 t o 3
hours, with considerable time going in recaps and agenda
17

settings for f uture hearings. There are of course exceptions to
this trend; especi ally amongst arbitrators who are either newl y
retired judges, practicing lawyers or those coming from a non-
legal back-ground.
The parties and their lawyers, due to fear of antagonizing their

Arbitrators, refrain from attempti ng to rein them in. Som e
lawyers see this as a ‘win-win’ situation between themselves
and the Arbitrators as they get to charge for the whole day
(plus for the earlier days’ preparati on) for the hour or so of
arbitral hearing on a given da y. And if the hearing is at an out-
of-town location, it’s a paid holiday.
Going further down the line, when an Award is published, one

must expect it to be challenged in Court and it could take
years for it to pass through that channel. Introduction of the
new Arbitration and Conciliation Act, 1996 has not helped
much as the Supreme Court has rolled back the benefit of
limited grounds of Appeal by suggesting a broader
interpretation of the term ‘Public Policy’, which is one of the
few grounds on which an Award can be sought to be
challenged under this new Act.
Alternative dispute resolution has greatly expanded over the

last several years to include m any areas in addition to the
traditional commercial dispute in the form of arbitration;
mediation has become an important first step in the dispute
resolution process. Arbitrators and mediators have an
important role in resolving disputes. Mediators act as neutrals
18

to reconcile the parties’ differences before proceeding to
arbitration or litigation. Arbitrators act as neutral third parties
to hear the evidence and decide the case. Arbitration can be
binding or non-binding.
W hat is ADR? In simple terms it is Alternate Di spute

Resoluti on the conventi onal Courts use formal system of
redressal applying various rules of law, as we have erstwhile
mentioned that our system is adversial. The concept of
Conflict Management through Alternative Dispute Resolution
(ADR) has introduced a new m echanism of dispute resolution
that is non adversarial. A dispute is basicall y ‘lis inter parties’
and the justice dispensation system in India has found an
alternative to Adversarial litigation in the form of ADR
Mechanism in which two parties contest their case and one
party wins and the other party looses, but in case of alternate
dispute resoluti on (Section 89 – Code of Civil Procedure),
which can be categorized in four broad heads which are-
1. Arbitration;
2. Mediation;
3. Conciliation;
4. Lok Adalat.
It is wi n – win situation and no party wins no party looses,
today the need of time is that we resort to non conventional
systems as well, we should not forget that its not som ething
new to us, we had for ages, like panchayats etc, it was self
sufficient, every village has panchaya t and it was a powerf ul
authority for redressing the disputes. The best part of ADR i s
that since both parties come face to face and they work out
19

the m odalities and reach to an amicable solution, there is no
likelihood of winning or losing the case, i.e. it’s a win – wi n
situation and thereafter no appeal, and thus it reduces the
burden of appellant courts as well, the arbitration an d
conciliation Act, 1996 provides for Arbitration and the award
given by the arbitrator is deem ed to be a decree. It wa s step
towards the ADR.
The purpose of this special provision seems to hel p the litigant

to settle his dispute outsi de the Court instead of going through
elaborate process in the court trial. This is a special procedure
for settling the dispute outside the courts by a simpl er an d
quicker m ethod. The litigants on the institution of the suit or
proceedings may request the Court to ref er the disputes and if
the court feels that there exist any element of settlement
which may be acceptable to the parties; it may refer them to
any of the f orum s abovementioned at any stage of the
proceedings. In fact new rules in Order X were inserted in
consequence to the insertion of the sub secti on (1) of section
89. These new rules nam ely 1A, 1B and 1C have been inserted
by the Amending Act.
The settlem ent can be m ade by adopting any of the modes

specified in the section 89 of the CPC i nserted by the
Amendment Act. As per the Rule 1A the parties to the suit are
given an opti on for settlement of the dispute outside court.
W hen the parties have exercised their option it shall fix the
date of appearance before such person as may be opted by
the parties. As per the Rule 1-B the parties are required to
20

appear before such forum opted by them. Rule 1c provides for
the Presiding Officer of the Forum to refer the m atter again to
the Court in case he feels that in the interest of justice he
should not proceed with the matter.
21

CHAPTER – 2 HISTORY OF ADR - IN INDIAN PERSPECTIVE
2.1 Prevalence of justice in ancient India:

Though the term of ‘ADR’ Alternate Dispute Resolution system
is basically originated and derived from developed countries
and is a recent phenomena but has gained impetus in its
workability, solely in the recent years that to specifically said
to be the resultant of globalisation and liberalisation, though
oldest form of the ADR was very much present and well
organized in the Ancient Indian Legal System more particularl y
the Hindu society. The conflict / disputes as well as its
settlem ent have been going around for m any thousands of
years rather since the evolution of humans bei ng on earth
adding its new workability solution in accordance to
development of the societ y.
The techniques of negotiation best option in resolving the

conflict / disputes and the negotiation have been a basic
techni que being around for m any centuries. It is a fact of life
whether the dispute / conflict between individuals or in entities
is right or wrong but it is most important and relevant how we
are able to manage or handle it with in parameters of
aspirations of both litigant parties.
India is known for having one of the oldest legal systems in

the world and the present modern legal s ystem prevalent in
India can be traced back to the centuries, the roots of the
present day human institutions lie deeply buried in its past as
Indus civilization flourished around 2500 BC known as
22

Harappan culture in the Indus river valley in Indi an sub
continent and rem ained in existence for 1000 years. Another
thousands of years, India’s social and religious society
structures withstood and countered many invasions, famines,
religious persecutions and many other political upheavals,
despite of tyranny of many invasions of other countries our
ancient society have able to m aintained respective regional
identities with such a long, vibrant history.
The definition of law in ancient India was meant in broader

term “Dharma”. The ancient society regarded vedas as source
of divine light and was the ultimate source of authority for all
codes, whi ch contained dharm a as law, the law and Justice
was admi nistered according to the rules provi ded in the
Manusmriti. Its law and jurisprudence stretches back to many
centuries, forming a living tradition, which has grown and
evolved with the lives of its diverse people, in the lat er years,
the Justice was use to be administered by Kings courts and
also through grass root system called Panchayats and which is
still conti nuing, prevalent even today in our villages, where
village el ders of the village or community sit together and
resolve disputes involvi ng of villagers and issue diktats on
many social issues to their comm unity. However, as far as the
legal s ystem in ancient India is concerned, a liberal outlook is
evident in the Indian Puranas and Manu Smiriti.
23

1
According to Brihaspati Smiriti, there was a hierarchy of
courts in Ancient India beginning with the family Courts and
ending with the King. The lowest was the famil y arbitrator. The
next higher court was that of the judge; the next of the Chi ef
Justice who was called Praadivivaka, or adhyaksha; and at the
top was the King’s court. The jurisdiction of each was
determined by the importance of the dispute, the minor
disputes being decided by the lowest court and the most
important by the king. The decision of each higher Court
superseded that of the court below.
Accordi ng to Vachaspati Misra, "The binding effect of the

decisions of these tribunals, ending with that of the king, is in
the ascending order, and each following decision shall prevail
against the preceding one because of the higher degree of
learning and knowledge". It is noteworthy that the Indian
judici ary today also consists of a hierarchy of courts organized
on a similar principle-the village courts, the Munsif, the Civil
Judge, the District Judge, the High Court, and finally the
Supreme Court which takes the pl ace of the King’s Court. W e
are followi ng an ancient tradition without being conscious of it.
The institution of family j udges is noteworthy. The unit of
societ y was the joint family which might consist of four
generations. Consequentl y, the number of the member of a
joint family at any given time could be very l arge and it was
necessary to settle their disputes with firmness combined wit h
sympathy and tact. It was also desirable that disputes should
1
The Indian Judicial System A Historical Survey By Mr. Justice S. S. Dhavan High Court, Allahabad 98 News
Week, Dec. 19. 1959, Challenge of Communism
24

be decided in the first instance by an arbitrator within the
family. Modern Japan has a somewhat similar system of family
Courts. The significance of the family courts is that the judicial
system had its roots in the social s ystem which explains its
success.
The ancient concept of settlem ent of dispute through

mediation, negotiation or through arbitral process known as
"Peoples' Court verdict" or decision of "Nyaya-Panch"
philosoph y is concept ualized and institutionalized in the
present form of Lok Adalat. Some people equate Lok Adalat to
conciliation or m ediation; some treat it with negotiations and
arbitration. Those who find it different from all these, call it
"Peoples' Court". It involves people who are directly or
indirectly affected by dispute resolution.
In ancient times the village elders, other influential individuals

used to sit together and use to hold panchayat calling
interested or disputing parties of that particular village to
come in to conclusion of settling their disputes or with the help
of village elders, other influential individuals, hence it is ADR
in its early form was very much prevalent, well-known tool to
settle disputes to ancient Indian societies. In Ancient India the
disputes were peacefully decided by the intervention of Kulas
(family assemblies), Srenis (guild so men of similar
occupation), Parishad, etc., the primary obj ect of ADR
movement is avoidance of vexation, expense and delay and
promoti on of the ideal of “access of justice” for all.
25

That particularly during the British rule, actual formation of
certain rules for arbitration were incorporated and brought in
the form of the Regulation of Act 1787, empowering the court
to refer suits to arbitration with the consent of parties and
further more the Regulation Act of 1793 authorised the court to
promote references of cases not exceeding Rs. 200 in value to
arbitration and disputes relati ng to partnership account, debts,
disputed bargain and breach of contract. The procedure for
conducting the arbitration proceedings was also stipulated. So
the law and jurisprudence represents the cumulative effect of
generations. It cannot be said that Arbitration as a concept or
Alternate Dispute Resolution is a foreign import on the Indian
legal s ystem.
2.2 The system of ADR under British Company Raj

The system of Alternate dispute redressal was found not onl y
as a convenient procedure but was also seen as a politically
safe and significant in the days of British Company Raj.
Hence, there were several regulations and legislations that
were brought by British Com pany in resulting considerable
changes from 1772. Few am ong them are:
The regulation of 1781: the yea r 1781 regulation had

contai ned a provision that “the judge do recommend, and so
far as he can without compulsion, prevail upon the parties to
submit to the arbitration of one person to be mutually agreed
upon by the parties.” And that “no award of any arbitrator of
arbitrators, can be set aside, except upon full proof made b y
oath of the credible witness that arbitrators have been guilty of
26

gross corruption or partiality t o the cause in which they had
made their awards.”
The Regulation of 1787: It empowered the court to refer suits

to arbitration with the consent of parties.
The Regulation of 1793 : It authorised the court to promote
references of cases not exceeding Rs. 200 in value to
arbitration and disputes relati ng to partnership account, debts,
disputed bargain and breach of contract. The procedure for
conducting the arbitration proceedings was also stipulated.
In the year 1795: the regulation of 1793 was extended to
Benaras and the regul ation of 1802, 1814, 1822 and 1883
extended the limits and jurisdiction of arbitration proceedings
in various m anner.
The Madras Presidency Regulation VII of 1816 : It
authorised the Districts Munsiffs to convene districts
panchayats for the determination of Civil Suits relating to real
and personal property. The Regulati on was repealed by Act VII
of 1870.
Bombay Presidency Regulation VII of 1827: It provided f or
arbitration of civil disputes. The arbitration had to be in writing
to a named arbitrator, wherein the time for making the award
had to be mentioned.
Under the Charter Act of 1833: The Legislative Council for
India was established in 1834.
Act IX of 1840. But the aforesaid Regulations of Bengal,
Madras and Bombay continued to operate till 1859.
The Act VIII of 1857: It codified the procedure of Civil Courts
except those established by the Royal Charter. The sections
27

312 to 325 dealt with arbitration in sui ts. The sections 326 and
327 provided for arbitration without the intervention of the
court. The Act VIII of 1857 was replaced by Act X of 1877.
The Act XIV of 1882: the Code of Civil Procedure was
revised in the year 1882 by the Act XIV of 1882 the provisions
relating to arbitration were reproduced verbatim in sections
506 to 526. No change in the law of arbitration was effected by
the sai d acts of 1877 and 1882.
The Indian Arbitration Act IX of 1899: It was based on the
English Arbitration Act of 1889. Act IX of 1899. It was the first
substantive law on the subject of arbitration but its application
was limited to the Presidency – towns of Calcutta, Bombay and
Madras. Act, however suffered from many def ects and was
subjected to severe judicial criticisms.
28

CHAPTER – 3 OVERVIEW OF ADR MECHANISMS
3.1. What is ADR Mechanism
A dispute is basically ‘lis inter parties’ and the justice

dispensation s yst em in India has found an alternative to
Adversarial litigation in the form of ADR Mechanism in which
two parties contest their case and one party wins and the
other party looses, but in case of alternate dispute resolution
(Section 89 – Code of Civil Procedure), which can be
categorized in f our broad heads which are
1. Arbitration;
2. Mediation;
3. Conciliation;
4. Negotiation
5. Lok Adalat.
6. Early Neutral Evaluation (ENE)
That through ADR means the entering part y is win – win

situation and no party wins no party looses, today the need of
time is that we resort to non conventional syst ems as well, we
should not forget that its not som ething new to us, we had for
ages, like panchayats etc, it was self sufficient, every village
has panchayat and it was a powerf ul authority for redressing
the disputes. The best part of ADR is that since both parties
come face to f ace and they work out the m odalities and reach
to an amicable solution, there is no likelihood of winning or
losing the case, i.e. it’s a win – win situati on and thereafter no
appeal, and thus it reduces the burden of appellant courts as
well, the arbitration and conciliation Act, 1996 provides for
29

Arbitration and the award given b y the arbitrator is deemed to
be a decree. It was step towards the ADR. The labor
legisl ation has already incorporated conciliation and mediation
system in their enactm ents, to have an amicable solution in
case of tussle between the labor and the m anagem ent.
3.2. ADR Mechanisms and IP Disputes.
As part of the process of specialization, since it is difficult to

get judges experienced in Intellectual Propert y (IP) rights or
matters relating thereto, arbitration has to be a preferred
course for dispute resolution because the parties can choose
an arbitrator knowledgeable and experienced in the field.
However, development in this direction is at an earl y stage,
which does not provide adequate data for any realistic
assessm ent of arbitration in intellectual property related
matters. It must be borne in mind that several intellectual
propert y related matters arise between parties who do not
have an agreement inter se. In all such matters, only Courts
can push the matters to Arbitration.
Managem ent of integrated securitization of IP assets on ADR

/ODR W hile on the subject of use of information & technology
in arbitration and other ADR methods, it woul d be worthwhile
to note that arbitration and ADR can play a meaningful role in
several new avenues, including i ntegrated securitization of all
types of assets (including but not restricted to intellectual
propert y assets) and the management of such integrated
securitization. However, this bei ng a specialized subject , it
30

could be well dealt with independently.ADR i n the new
millennium –Indian Context The most effective initiatives for
implementing ADR have probably been found to be in the
State of California, USA.
There, several m odes of ADR have been implemented, some

of which are nonbinding and som e being of binding nature,
judici al arbitration, private arbitration, settlement conference
(before the Judge assigned to the case), early neutral
evaluation, m ediation and conciliati on. Though some of these
concepts are today alien in the Indian context, one will very
soon find several of them being implemented in varying forms
and degrees in the courts i n India.
Those who have i mplem ented them in several other countries

have already realized the benef its of these available
alternatives and India too shall realize their potentials and
benefit from making these available to the litigating m asses.
Along with popularization of ADR, which has gained statutory
recognition by the introduction of the new Section 89 of the
CPC and the introduction of the new Information Technolog y
Act, 2000,the passage for impl ementati on of ODR too has
been smoothened.
The latter statute extends recognition to generation and

storage of electronic data as also gives recogniti on to
electronic comm unication. This is a real shot in the arm for
implementation of ODR. In the days of “time being money”,
even in games like cricket, we have drifted towards one day,
limited overs m atches instead of the five days, two i nning
matches. Indi a’s business comm unity is becoming more and
31

more conscious of minimizing use of time, mone y and energ y
in dispute resolution processes and therefore, while arbitration
is being preferred to court litigati on, there is also a growing
realization that in the long run it is advisable to perhaps suffer
an adverse award rather than render the entire system of
arbitration and ADR un rem unerative. Law Colleges and
several other Instituti ons have, recognizing the importance of
arbitration and other ADR methods, introduced courses an d
training programm es and one can clearly see the writing on
the wall that in the near f uture in Indi a ADR methods will bring
about amicable settl ement between the disputants thereb y
saving a lot of time, mone y and energy for the business
comm unity as also for the professi onals from legal, accounting
and other disciplines so that they can concentrate more on
constructive work. In this background, conciliation an d
mediation has a very bright prospect in India and it will be
advisable for all professionals, including members of
professions like law and accountancy, to get formal training as
conciliators/m ediators.
firstly, necessary to re-position the provisions contained in

Order X, Rules 1A, 1B and 1C in a manner that the courts are
em powered to refer the matters to mediation as soon as the
same are filed; Another aspect that requires attention is that
although the ADR provisions have been introduced in Section
89 of CPC, one finds practical difficulty in implementing these
provisions. One should understanding to keep i n mind the
dynamics of potent modes of ADR like mediation and
conciliation. Although there is subtle difference between the
32

two, there is no difference in the process undertaken/deployed
for implementation.
There is a growi ng awareness among the masses as well

regarding ADR and people are increasingly using the same for
getting their disputes settled outside the court. This will also
reduce the “backlog problem’ that India is facing. It is now
universally accredi ted that ‘Justice dela yed is Justice denied’.
The existing justice system is not able to cope up wi th the
ever-increasing burden of civil and criminal litigation. There is
growing awareness that in the majority of cases court action is
not an appropriate remedy for seeking justice. W e have to
formulate ef fective ADR Mechanisms to ease the burden of
judici al functioning. The backlog of cases is incre8asing da y
by day but criticizing judiciary for the same is a wrong
practice. It must be noted that the backlog is a product of
“inadequate judge population ratio” and the lack of basic
infrastructure. The government has to play a pro-active role in
this direction.
3.2.1. Arbitration:
This is a procedure in which the dispute is submitted to an
arbitral tribunal which makes a decision (an award) on the
dispute that is bi nding upon the parties. Arbitration generall y
grows when the parties through the contract agrees to resort
to arbitration process, in case of disputes that may arise in
future regarding contract terms and conditions. The process of
arbitration can start only if there exist a valid Arbitration
Agreement betwee n the parties pri or to the em ergence of the
dispute. As per Section 7, such an agreement m ust be in
33

writing. The contract, regarding which the dispute exists, must
either contain an arbitration cl ause or must refer to a separate
docum ent signed by the parties containing the arbitration
agreem ent.
The existence of an arbitration agreement can also be inferred

by written correspondence such as letters, telex, or telegrams
which provide a record of the agreement. Any party to the
dispute can start the process of appointing arbitrator and if the
other party does not cooperate, the part y can approach the
office of Chi ef Justice for appointment of an arbitrator. A sole
arbitrator or panels of arbitrators so appointed constitute the
Arbitration Tribunal. The arbitration tribunal has jurisdiction
over its own jurisdiction. Thus, if a party wants t o challenge
the jurisdiction of the arbitration tribunal, it can do so onl y
before t he tri bunal itself. If the tribunal rejects the request,
there is little the party can do accept to approach a court after
the tribunal makes an award. Section 34 provi des certain
grounds upon which a party can appeal to the principal civil
court of original jurisdiction for setting aside the award. Onc e
the period for filing an appeal for setting aside an award is
over, or if such an appeal is rejected, the award is binding on
the parties and is considered as a decree of the court.
3.2.2. Mediation:
Mediation, aims to assist t wo (or more) disputants in reaching
an agreem ent. The parties themselves determine the
conditions of any settl ements reached— rather than accepting
something imposed by a third part y. The disputes may involve
(as parties) states, organizations, communities, individuals or
34

other representatives with a vested interest in the outcom e.
Mediators use appropriate techniques and/or skills to open
and / or improve dialogue between disputants, aiming to help
the parties reach an agreement (with concrete effects) on the
disputed matter. Normally, all parties must view the m ediator
as im partial. Disputants may use m ediation in a variety of
disputes, such as commercial, legal, diplom atic, workplace,
comm unity and family matters. A third-part y representative
may contract and mediate between (say) unions and
corporations. W hen a workers’ union goes on strike, a disput e
takes place, and the corporation hires a third party to
intervene in attem pt to settle a contract or agreement between
the union and the corporation.
3.2.3. Conciliation:
A non-binding procedure, in whi ch an impartial third party i.e.
the conciliator or the mediator, assists the parties to a dispute
in reaching a m utually satisfactory and agreed settlement of
disputes. Conciliation is a less formal form of arbitration. This
process does not require an existence of any pri or agreement.
Any part y can request the other party to appoint a conciliator.
One conciliator is preferred but two or three are also allowed.
Parties may submit statements to the conciliator describing the
general nature of the dispute and the points at issue. Each
party sends a copy of the statement to the other. The
conciliator m ay request further details, may ask to meet the
parties, or communicate with the parties orall y or in writing.
Parties m ay even submit suggestions for the settlement of the
dispute to the conciliator.
35

W hen it appears to the conciliator that el ements of settlement
exist, he m ay draw up the terms of settlement and send it to
the parties for their acceptance. If both the parties sign the
settlem ent document, it shall be final and bindi ng on both.
3.2.4. Negotiation:
Negotiation is a dialogue intended to resolve disputes, to
produce an agreement upon courses of action, to bargain for
indivi dual or collective advantage, or to craft outcomes to
satisf y various interests. It is the primary method of alternative
dispute resolution. Negotiation occurs in business, non-profit
organizations, and governm ent branches, l egal proceedings,
am ong nations and in personal situati ons such as m arriage,
divorce, parenting, and everyday life. Those who work in
negotiation professionally are called negotiators. Professional
negotiators are often specialized, such as union negotiators,
leverage bu yout negotiators, peace negotiators, hostage
negotiators, or may work under other titles, such as diplomats,
legisl ators or brokers.
3.2.5. Mini-trial
The mini-trial, a development in ADR, is finding its greatest
use in resolvi ng large-scal e disputes involving complex
questi ons of mixed law and fact, such as Product Liability,
massive construction, and antitrust cases. In a mini-trial, each
party presents its case as in a regular tri al, but with the
notable difference that the case is "tried" by the parties
themselves, and the presentations are dram atically
abbreviated.
In a mini-trial, lawyers and experts present a condensed
36

version of the case to top m anagement of both parties. Often,
a neutral adviser sometimes an expert in the subject area sits
with management and conducts the hearing. After these
presentations, top management representatives by now more
aware of the strengths and weaknesses of each side, try t o
negotiate a resolution of the problem. If they are unable to do
so, they often ask for the neutral adviser's best guess as to
the probable out com e of the case. They then resum e
negotiations.
The key to the success of this approach is the presence of

both sides' top officials and the exchange of inform ation that
takes place during the mini-trial. Too often, pre-litigation work
has insulated top management from the true strengths and
weaknesses of their cases. Mini-trial presentations allow them
to see the dispute as it would appear to an outsider and set
the stage for a cooperative settlement.
3.3. EARLY NEUTRAL EVALUATION:

An early neutral eval uation (ENE) is used when one or both
parties to a dispute seek the advice of an experienced
indivi dual, usually an attorne y, concerning the strength of their
cases. An objective evaluation by a knowl edgeabl e outsi der
can sometimes move parties away from unrealistic positions,
or at least provide them with more insight into their cases'
strengths and weaknesses. Of course, the success of this
techni que depends upon the parties' faith in the fairness and
objectivity of the neutral third-party, and their willingness to
compromise.
37

Early neutral evaluation is a process, both in court and out of
court, in which an experienced lawye r gives an indication, as
strong and as detailed as the disclosure and representation at
that stage allows, of what woul d be the outcome if the matter
were to be finally adjudicated in court.
Early neutral evaluation in court incl udes the FDR hearing at

which the j udge is required by the rules to predict what would
happen if the matter were to go to a final hearing. It has its
limitations for example because of time. Nevertheless there is
a very high success rate. It is acknowledged as one of the
primary achievements of the ancillary relief procedure. To a
lesser extent, the process at the First Appoi ntment is an earl y
neutral evaluation as the judge is required to consi der the
points in dispute with a view to narrowing the issues.
Early neutral evaluation out of court is much l ess frequent and

prevalent. Indeed, there is almost only apocryphal knowledge
of what is going on. In this regard, it is also, perhaps
confusingly, described sometimes as private judging.
The working party felt that it was now time to encourage earl y
neutral evaluation yet to have better definition, boundaries and
safeguards including within the prof essional context.
Moreover the working party f ound a delightful coincidence of
the collaborative law group of the ADR committee
independently considering the sam e issue at the same time.
Our recomm endations do not conflict with any
recommendations they m ake but it is hoped that the use of
38

earl y neutral evaluation can build together, solicitors both as
client representatives and as collaborative lawyers.
The anecdotal evidence is that over the past 15 years or more,

from time to time opposi ng solicitors in a case have j ointly
consulted senior members of the profession, often senior
barristers but also senior solicitors in other firms, on a
complex issue causing a stumbling block towards a settlement.
Som etimes this has been the whole of the case, for instance
on quantum. Sometimes it has been discreet, perhaps
interlocutory, issues or one single issue separating the
parties. It is believed that often the opinion has been given in
conference but sometimes in writi ng. It is beli eved that on
occasions it has been given on a privileged basis so that
issues do not arise about the status of t he evaluation, the
weight to be given in the court process and similar. It is not
believed that any of these early neutral evaluations or private
judgings have com e before the courts for consideration of their
status.
Specifically it is believed that when there was an incredibl e

backlog of work due to the wardships being terminated under
the Children Act by a specific date and many financial cases
were taken out of the list and relisted for at least six months
later, m any cases in fact settled incl uding a num ber through
the assistance of early neutral evaluation.Private judging is
sometimes used as an informal expression of early neutral
evaluation. In some instances, it is identical. However earl y
neutral evaluation is technically evaluati on at an early stage in
the case. Private judging has often occurred on a joint
39

instruction to a senior prof essional towards the l ater stages of
the case and as an alternative to a court adjudication. In this
docum ent we are referring to early neutral evaluation although
private judging could also be incorporated in our
recommendations.
3.3.2. What an ENE Covers

Favorable and unfavorable facts Favorable and unfavorabl e
law, as well as important but unsettled legal issues Strengths
and weaknesses of each part y’s case Likely successful or
meritless claims and defenses Considerations of the cl ient’s
business needs, and the impact of an outcome on that
Possible litigation strategies (such as the feasibility of
dispositive m otions) Possible end-game strategies, including
mediation, settlement, and attendant dem ands or offers
Possible legal costs and expenses, including which costs or
initiatives are most worthwhile.
It is quite possible that an ENE will show that the dispute is

best resolved through full litigation or arbitration. The ENE
may then be used as a road map for case strategy. The client
can em phasize the most effective claims or defenses, thereb y
avoiding expenditures of valuable resources on less justified
positions. The ENE thus leads to a more sharply focused case
one that will have maximum impact on the judge, jury, or
arbitrator.
To perform the ENE, the neutral could revi ew relevant

contracts; review internal and party communicati ons; interview
the client’s personnel involved in the transaction; discuss with
40

managem ent the transaction’s place in the client’s overall
business operations and strategies (both long-term and short-
term); review applicable legal authority; talk with in-house or
outside legal counsel about the dispute; and research or
investigate the opponent’s business. The quality of the ENE
will be proportional to the val ue and volum e of the information
received and analyzed by the neutral.
An ENE can be done for virtually any type of case, and

especiall y for commercial disputes. For most contractual and
business disputes, a neutral with general but broad decision-
making experience is fine. After all, the actual judge will likely
be a generalist too. W here the subject matter of the dispute is
technical – such as patents – the neutral should have
experience in that area.
3.3.2. The Timing and Scope of an ENE

An ENE is, by definition, done “early” in the case, before all of
the facts are known. But, even then, it is widely believed (by
this author too) that the parties already know or can readily
access 80 percent of all of the i nformation t hat exists for the
case or will be offered at the hearing. Because the cost to
obtain increm ents of evidence sometimes outweighs the value
of those increments, there is good reason to perform an ENE
at the outset, even if the information is incomplete. Indeed,
judges frequently make very important i nterim decisi ons –
such as injunctive relief – at the case’s beginning based on
less than full information.
41

“Early” can be even before the complaint or arbitration is filed.
Once a party knows of a potential dispute, such as by recei pt
of a demand letter from the opponent, ENE is fairly t ri ggered.
Indeed, it is often best to assess a dispute before the parties
are entrenched in pleadings. Also, as a private process, ENE
can be done even while the client, with the aid of counsel,
engages in pre-litigation or early-litigation posturing with the
other side.
Nonethel ess, if the client prefers, the neutral evaluation can

instead be done l ater, and it can also be done more than once
during the case. A neutral reassessment can also be used to
prepare submissions for mediation and even pre-trial briefs.
ENE therefore can be, but need not be, one and done.
The scope and breadth of the ENE can be determined together

by the client and neutral. Obviously, a small-budget ENE may
be l ess helpful than a more expansive one. The chosen scope
can be based upon the com plexit y of the dispute, the volume
of evidence, and the timing for the project. Given the purpose
of ENE – an important guide for making critical risk analyses
earl y in a dispute – clients should be willing to give the neutral
wide latitude in order to m ake the best evaluation. A more
truncated ENE can, however, contain a list of unexplored or
undeveloped issues or points that the client can later
authorize for analysis.
3.2.3 The Distinctive Benefits of an ENE

For very important reasons, this “neutral” assessment is
qualitatively different from the analysis of the dispute by the
42

client’s lawyer. First, the neutral has no ongoing
representation i n that dispute (e.g., continuing f ees). Rather,
the neutral com pletes the discrete task quickly without any
prospects for long-term work. That absence of any economic
conflict ensures complete candor in the anal ysis. Second, the
neutral also will not likel y have any ongoing rel ationship with
the client generally, and therefore the neutral is not concerned
about rendering “bad news” about the case and possible
outcom es. In this way also, candor is ensured. Thus, the
neutral is able to provide a totally i ndependent and unbiased
evaluation – exactly the approach that should be taken by the
actual judge.
An ENE can also complement or supplem ent an independent

expert’s financial anal ysis. Thus, the client can learn even
more when the ENE is coupl ed with a financial consultant’s
damage anal ysis that separately gauges risk. This com bined
evaluation provides case projections with even more rigor. The
ENE adds t he factual and legal assessments, too, thereby
making the overall analysis m uch more com plete.
An ENE can be treated as an attorney/client comm unication or

attorney work product. Thus, the ENE can remain confidential,
even though the neutral may not be the client’s counsel in the
dispute
3.3.4. Lok-Adalat :
The Lok-Adalat system contributed under National Legal
Service Authority Act, 1987 is a uniquely Indi an approach. The
Constitutional dut y of the State to provide legal aid, prompted
43

by the decisions of the apex court, led to the formation of a
Committee for Implem enting Legal Aid Schem es (CILAS). The
legal legitimacy of Lok Adalat flows from the Legal Services
Authorities Act, 1987. It roughly m eans “People’s court”. Thi s
is a non-adversari al system, where by mock courts (called Lok
Adalats) are held by the St ate Authority, District Authority,
Supreme Court Legal Services Com mittee, High Court Legal
Services Committee, or Taluk Legal Services Committee,
periodically for exercising such jurisdiction as they thinks fit.
These are usually presided by retired judge, social activists, or
members of legal profession. It does not have jurisdiction on
matters related to non-compoundable offences. There is no
court fee and no rigid procedural requirem ent (i.e. no need to
follow process given by Civil Procedure Code or Evi22dence
Act), which makes the process very fast. Parties can directly
interact with the judge, which is not possible in regular courts.
A case can be transferred to a Lok Adalat if one party applies
to the court and the court sees some chance of settlement
after giving an opportunity of being heard to the other part y.
The focus in Lok Adalats is on compromise. W hen no
compromise is reached, the matter goes back to the court.
However, if a compromise is reached, an award is m ade and i s
binding on the parties. It is enf orced as a decree of a civil
court. An important aspect is that the award is final and cannot
be appealed, not even under Article 226 because it is a
judgm ent by consent. All proceedings of a Lok Adalat are
deemed to be judicial proceedings and every Lok Adalat is
deemed to be a Civil Court . Mai n condition of the Lok Adalat is
that both parties in dispute should agree for settlem ent. The
44

decision of the Lok Adalat is binding on the parties to the
dispute and its order is capable of execution through legal
process. Lok Adalat is very effective in settlement of money
claims. Disputes like partition suits, damages and matrimonial
cases can also be easily settled before Lok Adalat. Lok Adalat
is a boon to the litigant public, where they can get their
disputes settled fast and free of cost.
3.4. How to make ADR system more viable

W e cannot stop the inflow of cases because the doors of
justice cannot be closed, but we can increase the outflow of
cases either by strengthening (both qualitatively and
quantitatively) the capacity of the existing system or by way of
finding som e additional outlets.
In this situation ADR mechanism im plem entation can be such

a drastic step for which three things are required most:
• Mandatory ref erence to ADRs

• Case management by Judges
• Committed teams of Judges and Lawyers
Equal justice for all is a cardinal principle on which entire
system of administrati on of justice is based. W e cannot
conceive justice which is not fair and equal. W e should aim to
achieve earlier and more proportionate resolution of legal
problems and disputes by increasi ng advice and assistance t o
help people resolve their disputes earlier and more effectively;
increasing the opportunities for people involved in court cases
to settle their disputes out of court; and reducing delays in
resolving those disputes that need to be decided by the courts.
45

To im plem ent the noble ideas and to ensure the benefits of
ADR to common people, the four essential players
(governm ent, bench, bar litigants) are required to coordinate
and work as a whole s ystem. Case managem ent includes
identif ying the issues in the case; summ arily disposing of
some issues and deciding in which order other issues to be
resolved; fixing time tables for the parties to take particular
steps in the case; and limiting disclosure and expert evidence.
3.5. How to make Arbitration Mechanism truly effective:

W ith a very laudable objective of speedy disposal of cases,
Alternative Dispute Resolution Mechanism (ADR) is m ooted.
Among the modes of Alternative Dispute Resolution
Mechanism, Arbitration is most discussed issue always as
many agreem ents or contracts contain an Arbitrati on Clause
now-a-days. The difference between Arbitration Mechanism
and the adjudication through Civil Court etc. issues can be
summ ed up as follows:
There is no need of payi ng court fee when a dispute is

adjudicated b y an Arbitrator. Arbitrator is less burdened
compared to Civil Court and the parties have the liberty of
choosing their own judge. Arbitrator need not follow the
procedure prescribed under Civil Procedure Code, 1908
though he will follow the pri nciples of natural justice.
The procedure, the fees, the place of Arbitration etc. can b e

mutually agreed by the Parties and in the absence of any
consensus, the Court or the Arbitrator will take a decision on
the issues. Despite so m uch relaxation in the established civil
procedure, the adjudication before the Arbitrator or the issue
46

of getting an Arbitrator appointed is delayed very often. The
general issues or challenges to the adj udication through
Arbitrator are as follows:
Even when there is no real lis between the parties, one party
to an agreement containing Arbitration cl ause, m ay initiate
Arbitration proceedings with untenable claim. The issue is
settled to som e extent now in view of the recent development
that the Court entertaini ng an application under section 11 of
Arbitration and Conciliation Act, 1996 discharges judicial
function and can l ook into the issues as to whether there is
any existing agreement prim a facie, whether there is any lis
between the parties and whether the subj ect matter is capable
of being arbitrated.
W hen there exist a special mechanism dealing with certain

issues, the adjudicati on before the Arbitrator m ay not appear
to be effective. For example, Rent Control Laws provide many
reliefs to the tenants and also the landlords. There is a
provision for deposit of rent by the tenant when the landlord
refuses to receive the rent under the Rent Control Laws. W hen
it comes to depositing rent, the Arbitrator may not be
effectively deal with the issue.
W hen there is no specific provisi on under the Arbitration and

Conciliation Act, 1996, litigants who wants to drag the case
may file many interim applications. W hen an interim
application is filed, the sam e can be rejected by the Arbi trator
when it is found that the i nterim applicati on is unnecessary
and motivated to drag the case. But, in many cases, the
Arbitrator entertains the interim applications and disposes the
47

same in accordance with law and it consum es tim e as is the
case before the Civil Court. Against the order in the Interim
Application, an aggrieved party tends to approach the High
Court under section 34 as we see practically.
W hen hearing fees is fixed or agreed to the Arbitrator, then, at

times, the Arbitrator ma y feel it convenient to grant so m any
adjournments and it is happening as we wee.
Even, when a fixed fee is ordered to pay to the Arbitrator or

agreed upon, the parties usually not pay the entire fee in the
beginning. Till the fee is paid the Arbitrati on proceedings will
go on at times, though the Arbitrator can exercise his right of
lien over the award until his agreed rem uneration or fee is
paid.
Looking at the pendency of cases before vari ous courts in

India, if we think about the time to be taken for disposing all
the pending cases, it is recentl y reported that it will take som e
320 years to dispose of the pending cases or to clear th e
backlog.
Arbitration mechanism is always Alternative, but, still we

depend on the Civil Courts and the procedure lay down under
the Code of Civil Procedure, 1908 for getting the civil disputes
adjudicated. W e need many reforms in our judicial system in
India to ensure speedy disposal of cases and it will certainl y
take years to bring the proper reforms.
Simultaneous to bringing the proper reforms or initiating

measures to bring the reforms in our Indian Judiciary aiming at
speedy and effective disposal of cases, we also need to
48

concentrate as to how make the Arbitration Mechanism trul y
effective.
The m easures to make the Arbitration Mechanism truly

effective, as I think, are as follows: Rather practicing to
appoint retired judges as Arbitrators, it is better to have panel
of Arbitrators who are talented and with very good legal
knowledge. There is nothing wrong if a practicing legal
advocate is appointed as an Arbitrator when he is willing to act
as such.
W hen it comes to the f ee or the remuneration to be paid to the

Arbitrator, it is better to fix lum p sum remuneration for
deciding an issue and having mechanism that the entire fee is
paid to the Arbitrator at once. It is better to avoid the practice
of paying sitting fees to the Arbitrators if one needs to make
the adjudication through arbitration really speed y. Applications
under section 34 of Arbitration and Conciliation Act, 1996 to
be carefully gone into and the im plicati ons of entertaining an
application under section 34 on the main Arbitrati on claim
before the Arbitrator to be carefully considered.
Present legal position with regard to appointment of

Arbitrators to be continued and the process of appointment of
arbitrators to be judicial always. I am of the strong opinion that
with few reforms, Arbitrati on Mechanism can be m ade truly
effective and I don’t think that the mechanism is truly effective
as of now for the few among many reasons referred to above.
49

CHAPTER – 4 ADR- AN INDIAN PERSPECTIVE
Alternative Dispute Resolution was conceived of as a dispute

resolution mechanism outsi de the courts of law established by
the Sovereign or the State. In this sense, it included
arbitration, as also conciliation, mediation and all other forms
of dispute resoluti on outside the courts of law, which would all
fall within the ambit of ADR. However, with passage of time,
the phrase “Arbitration and ADR” came in vogue, which implied
that arbitration was distinct from other ADR forms. In
arbitration, there is a final and binding award, whether the
parties consent to it or not, but in other forms of ADR (which
came to be m ore commonly associated with phrase “ADR”)
there would be no finality except with the consent of the
parties. The protagonists of ADR in this sense claimed that,
whereas in arbitration one party ma y win and the other(s) may
lose – m ay be both may lose-as in a court case, in ADR it is a
“win-win” situation because the parties woul d agree to a
disposal of the matter on terms comfortable to each of them;
In ADR, in this sense, it is not the “dispute” or “difference”

between the parties that is addressed, but the mindset of the
parties, so that with gradual change in the mindset eventuall y
both sides come to a meeting point. The most practiced forms
of ADR, in this sense, are “conciliation” and “mediation”. In
western countries, neutral evaluation is also frequentl y
resorted to but in India this or other forms of ADR have not yet
come in vogue.
Conciliation and mediation are often used as interchangeable

terms although there is a subtle difference between the two. In
50

both the forms, the conciliator or m ediator (often known as
“neutral”) endeavors to bring both sides closer to each other,
but in one he plays a more proactive role whereas in the ot her
his role is only to enable the parties to com e closer to each
other and for that purpose, at times, the word “facilitator” is
used instead of the word “neutral”; In India, ADR has an
important place because of historical reasons.
If one bears in mind our heritage, tradition and culture, one

fails to understand as to why arbitration and other ADR
methods should not succeed admirably i n India. To think of
challenging the Panchas’ decision was considered a sacrilege
and t o suspect or to even think of the Panchas being partial
was like blasphemy. W ith this background, it should not be
difficult to identif y the areas, which are obstacles in our goal
to once again reach the ideals of ADR.
ADR in global perspective The international busi ness

comm unity reali zed that court cases were not only time
consuming but also very expensive businessmen always want to
make best use of their time, money and energy, with the result
that arbitration was pref erred to court litigation. Besides, in
arbitration, the parties to the dispute usually got a person of
their choice to decide the m atter and thereby the parties
avoided decision-m aking at the hands of a judge, who m ay not
be conversant with the subject matter of the dispute. However,
in course of time, even arbitration proceedings becam e
protracted, with the result that the m an of commerce
internationally resorted to other forms of ADR, viz.
conciliation, mediation or neutral evaluation. Throughout the
51

world, efforts are being made to bring about disput e resolution
in as informal a m anner as possible speedily and with least
expense. In certain areas even such ADR was avoided. For
exam ple, in insurance, a good part of the risk is passed on to
the reinsurer. In som e cases, whether the insurer of one
insured had to bear the loss or the insurer of the other insured
made little difference because both risks were largely covered
the sam e reinsurer. This brought about the concept of knock-
for-knock, which one finds in vogue even in India – at least in
car i nsurance where it is not the insurer of the insured whose
driver is negligent who bears the loss but the loss is borne
where it falls.
Emerging trends in preventing court litigation at the beginning

of the British regime, when the courts were established, there
were few cases and the concepts like “courts dela ys” were
unknown but by the time the British left us there were arrears
in courts which resulted in elongati on of the lifespan of any
matter in court. Further, with our achi evi ng independence, our
legisl ators kept on passing laws, at times, in a language that
was neither simple nor clear, which brought about a spate of
litigation contributing to congestion of courts. In 2-3 decades,
a stage was reached when everyone started apprehending that
our judicial s ystem would collapse because of the arrears and
unduly l ong time taken for disposal of any matter. W ith high
rates of interest, the non-claimant always had a vested
interest in delayi ng the disposal of court cases because the
rate of interest to be awarded by the courts in normal
circumstances was only 6% simple interest per annum
52

whereas trade and industry had to borrow at two to three times
that rate of interest and that too on quarterly com pounded
basis. Recent amendments in the Code of Civil Procedure,
1908 (“CPC” for short) and provisions for pushing commercial
matters to arbitration or other forms of ADR coupled with
formation of tribunals for handling specific types of cases has
resulted i n arresting further elongation of time for disposal of
court cases but it will take a few years before the full impact of
these changes is known.
As of date, trends in online, ADR/ODR there have been

several Internet service providers who have provided platforms
for Online resoluti on of disputes by parties, which they can
pursue irrespective of their geographical locations. Quite a few
of these have closed down, m ay be due to their’s being a bad
business m odel or probabl y due to their system/platform not
living up to the expectations of the end user. But this certainly
does not reflect on the popularity or utility of the concept of
ODR (On line Dispute Resolution), in some places also
referred to as “e ADR”(electronic Alternative Di spute
Resoluti on). This is evident from the fact that the num ber of
service providers has increased this year to over a hundred.
The benefits of ODR are manifold. Being accessible online,
the dispute resolution platform can be availed of sitting in
one’s own of fice or residence or even while being on the
move.
In addition, the process, being conducted online, affords the

parties an opportunity to appoint neutrals from anywhere in the
world. This widens their CHOICE rather than restricts it;
53

Though not wi dely heard today, even in most m etropolitan
cities in India, ODR is an idea whose time has com e. But we
must understand that it cannot be implemented unless we first
popularize the different modes of ADR, as also remove the
stigmas that arbitration (especially ‘ad hoc’ arbitration) is
gathering. But the night is not too long.
Already the Bom bay High Court has taken i nitiatives in that
direction. It has not only i nitiated training programmes for
lawyers and judges It is too early to assess Courts behavioral
pattern on this count because am endments in the CPC are
recent. in several parts of Maharashtra and has even started
an ADR course j ointly with the Mumbai University(the first
batch of which is nearing completion but it is also chalking out
plans for implem enting m ediation, conciliation and arbitration
at several courts in Maharashtra. The Bombay High Court
itself has separate Panels of Arbitrators and Mediators whose
fees are stipulated at very nominal rates;
W ith India having its own uni que place in informati on &
technology and the younger generation being computer-savvy,
ODR has already started. Several Arbitration Institutions have
framed Rules in this behalf and vi deo-conferencing has been
accepted as a workable solution for minimizing the cost. Here
again, it is som ewhat prem ature to make any realistic
assessm ent. One can only say with confidence that the use of
technology i n arbitration and ADR has already m ade a good
start and the trend is that in the near future, it would be
utilized to expedite arbitration and other ADR m ethods as also
to minimize the cost.
54

4.1 The emergence of ADR system in independent India:
That are bound to happen in group of peopl e and human are
adaptable to such situations in finding out and devising novel
ways and means for amicable resolution of conflicts. The
human have been em bodied with rationality to solve adverse
situations with ease and the human nature has been
constantly evolving in establishment of a congenial
atm osphere as such the dispute resolution is one of the major
tool, which is being always used by a stable societ y.
In India, intricacies of the form al legal system has

continuously emanated dissatisfaction for citizens of Indi a,
wherein the disputes were got involved in the legal wrangling
resulting to dissatisfaction and criticism of the Courts firstly,
due to the unsavory conduct of legal professionals , secondly,
sometimes due to i nordinate delay of delivery of justice by the
courts has lead to a sense of alienation of litigants from the
whol e judicial system, thus a need was felt for initiation of
ADR system to resolve many trivial pending disputes, some of
trivial disputes or on the pending cases, which can be resolved
through intervention of ADR techniques, thereby lessening the
crumbling j udicial system as well as over burdened Courts with
cases.
That the Arbitration Act of 1940 was enacted repl acing the
Indian Arbitration Act of 1899 and section 89 and clauses (a)
to (f) of section 104(1) and the Second Schedule of the Code
of Civil procedure 1908. It amended and consolidated the law
relating to arbitration in British India and remained a
55

comprehensive law on Arbitrati on even in the Republican India
until 1996.
Though, i n early years the industrial Disputes Act, 1947

provided the provision both for conciliation and arbitration for
the purpose of settlement of disputes. That in Rajasthan State
Road Transport Corporation v. Krishna Kant, the Supreme
Court had observed: “The policy of law emerging from
Industrial Disputes Act and its sister enactments is to provide
an alternative dispute-resolution mechanism to the workmen, a
mechanism which is speedy, inexpensive, informal and
unencumbered by the plethora of procedural l aws and appeals
upon appeals and revisions applicable to civil courts. Indeed,
the powers of the courts and tribunals under the Industri al
Disputes Act are far more extensive in the sense that they can
grant such relief as they think appropriate in the
circumstances for putting an end to an i ndustrial dispute.”
The section 23(2) of the Hindu Marriage Act, 1955 also

mandated or casted the duty on the courts that the Court shall
in the first instance must make an endeavor to bring about
reconciliation between the parties of the case, where it is
possible according to nature and circumstances before
granting relief under this Act. For the purpose of reconciliation
the Court may adj ourn the proceeding for a reasonabl e period
and refer the matter to person nominated by court or parties
with the direction to report to the court as to the result of the
reconciliation, section 23(3) of t he Act.
The Family Court Act, 1984 was also enacted to provid e

avenues for the establishment of family Courts with a view to
56

promote conciliation and secure speedy settlement of disputes
relating to marri age, family affairs and for matter connected
therewith by adopting an approach radically different from the
ordinary civil proceedings. The section 9 of the Family Courts
Act, 1984 has further lays down the duty of the family Court to
assist and persuade the parties, at first instance, in arriving at
a settlement in respect of a dispute. The family Court has also
been conferred with the power to adjourn the proceedings for
any reasonable period to enable attem pts to be made to effect
settlem ent if there is any reasonable possibility of settlement.
Shri M.C.Setalvad, former Attorney General of India has

observed: “….equality is the basis of all modern systems of
jurisprudence and administration of justice… in so far as a
person is unable to obtain access to a court of law for having
his wrongs redressed or for def ending himself against a
criminal charge, justice becomes unequal …Unl ess som e
provision is made for assisting the poor men for the payment
of Court fees and lawyer’s fees and other incidental costs of
litigation, he is denied equality i n the opportunity to seek
justice.”
To check and to cope up with its enormous l oad of growing

cases, the Constitutional duty of the State to provide legal aid,
prompted by the decisions of the apex court, led to the
formation of a Committee for Implem enting Legal Aid Schemes
(CILAS) and the National Legal Service Authority Act, 1987
was adopted as a uniquely Indian approach for creation of
Lok-Adalat s ystem. The legal legitimacy of Lok Adalat flows
from the Legal Services Authorities Act, 1987. It roughl y
57

means “People’s court”. This is a non-adversarial system,
where by m ock courts (called Lok Adalats) are held by the
State Authority, District Authority, Supreme Court Legal8 8
Services Committee, High Court Legal Services Committee, or
Tal uk Legal Services Committee, periodically for exercising
such jurisdiction as they thinks fit.
These are usually presided by retired judge, social activists, or

members of legal profession. It does not have jurisdiction on
matters related to non-compoundable offences. There is no
court fee and no rigid procedural requirem ent (i.e. no need to
follow process given by Civil Procedure Code or Evidence
Act), which makes the process very fast. Parties can directly
interact with the judge, which is not possible in regular courts.
A case can be transferred to a Lok Adalat if one party applies
to the court and the court sees some chance of settlement
after giving an opportunity of being heard to the other part y.
The f ocus in Lok Adalats is on compromise.
Usually when no compromise is reached, the matter goes back

to the court. However, if a compromise is reached, an award is
made and is binding on the parties. It is enforced as a decree
of a civil court. An important aspect is that the award is final
and cannot be appealed, not even under Article 226 because it
is a judgment by consent. All proceedings of a Lok Adalat are
deemed to be judicial proceedings and every Lok Adalat is
deemed to be a Civil Court . Mai n condition of the Lok Adalat is
that both parties in dispute should agree for settlem ent. The
decision of the Lok Adalat is binding on the parties to the
dispute and its order is capable of execution through legal
58

process. Lok Adalat is very effective in settlement of money
claims. Disputes like partition suits, damages and matrimonial
cases can also be easily settled before Lok Adalat. Lok Adalat
is a boon to the litigant public, where they can get their
disputes settled fast and free of cost.
4.2. The court approach towards ADR mechanism:

That for last two decades not only in India but remote in ot her
corner of the world rather everywhere rapid development in
the societies as whole is creating an multiplying human urges
as well as expectations, as a result this, the conflict of
interests bound to increase day by day all over the world over,
no exception to India, in India due to slackness of judicial
disci pline in courts and litigating parties having litigation in
Indian courts has over burdened the judicial mechanism and
the said judicial mechanism finding extremely difficult to
manage to cope up with its enormous load of pending cases,
which has furt her compounded and eroded judici al
creditability.
In current scenario the Alternative Dispute Resolution (ADR)

refers to a variety of streamlined resolution techniques
designed specifically to resolve issues in controversy more
efficiently and in better m anner, wherein the normal bilateral
negotiation process fails. In view of the fact, presently, the
third party alternative dispute resolution (ADR) is being touted
and being thought as effective alternative for the contesting
parties to the litigation, who are hotl y involved to the formal
legal intricacies.
59

W ith wide spread implementation of ADR techniques in the
developed and developing world. The usage and penetration of
ADR systems techniques are proving to m uch viable option in
reducing cost factor in Litigation and delays. The success of
ADR systems in bringi ng resolution of their conflicts in
amicable m anner, thus due to success of it, The ADR system
has entered in to many untouched subjects or issues of laws,
as of now, ADR penetration is being increases in legal battle
and many new cases are added day b y da y under ADR system
for its resolution. Hence due to successful resolution of legal
conflicts / disputes through ADR systems, due to successful
resolution of l egal conflicts / disputes through ADR systems
has improved the lives of as such individuals and their
business entities thus ADR s ystems have been able to achieve
broad social / societal goals to the large extent.
That the Privy Council 2 affirmed the decision of the Panchayat

and Sir John W allis observed that the reference to a village
panchayat is the time-honoured method of deciding disputes.
It avoids protracted litigation and is based on the ground
realities verified in person by the adj udicators and the award
is fair and honest settlement of doubtful claims based on legal
and moral grounds.
3
The justice dispensation system in India has come under
great stress for several reasons; chief reason of them being
the huge pendency of cases i n Courts. The denial of justice
through delay is the bi ggest mockery of law, but i n India it is
2
The Privy Council Sitanna v. Viranna, AIR 1934 SC 105,
3
ICADR88
60

not limited to mere mockery; t he delay in fact kills the entire
justice dispensation system of the country. In India, the
number of cases filed in Courts has shown tremendous
increase in recent years for a variety of reasons resulting in
pendency and delays underlining the need for alternative
dispute resolution methods. The justice dispensation s ystem in
India has hit rock bottom. The system crawls in its rotten rut of
ineptitude and corruption. This has led to people settling
scores on their own, resulting in a growing number of criminal
syndicates in the country and reflect ing the loss of people's
confidence in the rule of law.
That Late H.D Shourie wrote in Letter Mr. Justice S. M. Raza 4,

he wrote, "W e believe that there is need of bringing about the
judici al ref orms which would deal with huge pendency of cases
in the courts of the country. The figures presently bein g
mentioned are that there are 2.27 crore ca2ses in the District
and Subordinate Courts; 35 lakhs in High Cou5rts and 25000
in the Supreme Court. There are about 2 crores cases pending
in the courts of India. If there are 4/5 members of the family on
one side and 4/5 members on the other side, almost about 12
to 15 crores persons are involved in pending cases. At the last
count the backlog of cases in the courts of Indi a had gone up
t88o nearl y 3 crore cases, including more than 37 lakh cases
pending i n the High Courts and over 46,000 cases awaiting
disposal by the Supreme Court.
4
Mr. H. D. Shourie, Founder Director of COMMON CAUSE, continued his exertions to this end till his last breath.
In his letter to Mr. Justice S. M. Raza, Lokayukta, Uttaranchal, dated June 22, 2005,
61

Drawbacks and suggested amendm ents in Arbitration and
Conciliation Act, 1996 (i) Arbitration, as practiced in India,
instead of shortening the lifespan of the dispute resolution,
becam e one more “inning” in the gam e. Not only that, the
arbitrator and the parties’ lawyers treat ed arbitration as “extra
time” or overtime work to be done after attending to court
matters. The result was that the norm al session of an
arbitration hearing was always for a short duration and a part
of the time, at the beginning, was taken for recapitulating what
had happened till that point of time and at the end for fixing
the next date of hearing. Absence of a full-fledged Arbitration
Bar effectively prevented arbitrations being heard continuousl y
on day-to-day basis over the norm al working hours, mviz. 4-5
hours every da y. This resulted in elongation of the period for
disposal. Besi des, most of the arbitrations were ad hoc as
there were no Arbitration Institutions.
W ith the establishment of such Institutions (for example the

Indian Council of Arbitration which was established in 1965),
institutional arbitrations made a beginning but it was difficult
to bri ng about an y effective change in the culture and mi ndset
of the arbitrators or the lawyers appeari ng before them.
Besides, with long delays in court matters, and consequent
vested interest in the non-claimant to delay matters for as long
as possible, pending the arbitration, the m atter was often
taken to the court for taking arbitration off the track on
technical grounds.
In m any cases, the court gave an interim injunction restraining

the arbitrators from continuing with the arbitration and took a
62

long time to dispose of the matter finally. Even when
applications objecting to the continuation of arbitration on the
ground of there being no jurisdiction were dismissed, appeals
from such orders of dismissal resulted in further delay.
Several technical objections were being taken by the lawyers,
which eventually led the Suprem e Court of India to observe in
Guru Nanak’s case on 29th Septem ber, 1981, as under (ii)
W ith the apprehension of courts collapsing under pressure of
work, and India’s decision to liberalise, it became absolutely
necessary to amend or replace its Arbitrati on Law so as to
qualify India to sit in the global village. This led to a m eeting
of the Prime Mi nister of India and the Chief Ministers of all the
States, on 8th Decem ber, 1993, where a W orking Group was
constituted to suggest a new Arbitration Law for Indi a. The
result of that W orking Group’s efforts was the Bill which
eventually became The Arbitration and Conciliation Act, 1996,
which was on the UNCITRAL (United Nations Commission on
International Trade Law) Model and was wi dely acclaimed the
world over as being an ideal piece of legislation. However, due
to absence of Arbitral Institutions and the bulk of arbitrations
being ad hoc, even the provisions of the new Act did not show
any immediate results because the mindset of the arbitrators
and lawyers continued as before; (iii) In the Indian Arbitration
Act, 1940, there was a provision for time period, viz. f our
months, for giving the award. Experience showed that this
period of four months was illusory because in almost every
case extension was given and the very act of getti ng such
extension became time-consuming and expensive. The
W orking Group therefore suggested the deletion of time-fram e
63

for giving award but considered it to be a matter of culture and
suggested effective steps to be taken in that direction.
However, since m ost of the arbitration matters were ad hoc
there was little possibility of any substantial change in
handling arbitrations, particularly because the arbitrators,
many of whom were retired judges, continued to oblige the
parties and their lawyers by giving adjournments under an
erroneous apprehension that if they did not do so they would
not get new arbitration cases. For this purpose, it is suggested
that i nstitutional arbitrations should be encouraged and a full-
fledged Arbitrati on Bar should come into existence so that
arbitration proceedings can be heard on day-to-day basis with
at l east 4-5 hours working on every day.
(iv) Apart from this, the judiciary’s approach to the 1996 Act
is not consistent. To illustrate, in Sundaram Finance Ltd. v.
NEPC India Ltd. (reported in AIR 1999 SC 565) the Supreme
Court said: “The 1996 Act is very different from the Arbitratio n
Act, 1940. The provisions of this Act have, therefore, to be
interpreted and construed independently and in fact reference
to 1940 Act may actually l ead to misconstruction. In ot her
words the provisions of 1996 Act have to be interpreted being
uninfluenced by the principles underl ying the 1940 Act. In
order to get help in construing these provisions it is more
relevant to refer to the UNCITRAL Model Law rather than the
1940 Act.”
Unfortunately, later on, even the Apex Court forgot this

replacement of statute and its avowed objects, with the result
that the judicial mindset continued to remain as it was under
64

the Arbitration Act, 1940; (v) It is trite to say that once the
parties have removed the lis (dispute) from the courts of law
and agreed that the same would be decided by arbitration and
that such decision would be final and binding, it was for the
courts to compel the parties to adhere to their agreement and
to interf ere with the award not to “do justice” between the
parties but only for the purpose of ensuring that such private
administration of justice did not contravene t he basic ethos of
the societ y, viz. “public policy” so that transactions like money
laundering, drug trafficking, flesh trading and the like are not
able to get the support of such private disposal of justice.
Instead, the courts (or at least som e of them in some cases)
forgot this aspect of the matter and, obsessed by the mindset
which was prevalent under the Arbitration Act, 1940, looked at
the matter as if it was the courts’ bounden duty to ensure that
“justice is done” according to the courts assessm ent and
inclination. This is an entirely erroneous approach. The matter
woul d be clear if one looks at it as a game of cricket. Earlier,
we were playing five days’ cricket m atch with two innings but
then we evolved a single day, limited (normally 50) over
match. Supposing in such a match, on a given occasion, a
batsm an is wrongly given out by the umpire, then neither the
batsm an nor, for that matter, the entire cricket community can
bring about a reversal of the decision on the ground that
injustice was done to the batsman and that he will not get
another chance to bat because it is only a singl e day, single
inning match.
65

Consider what would be the chaotic effect if reversal on such a
ground were permitted. The onl y course is that while even a
wrong decision is acquiesced into, such umpire is not again
appointed as an um pire. Applying the same analogy, an
arbitrator’s (apparently) wrong decision should be accepted
and the injustice between the parties should be tolerated and
acquiesced into but such person m ay not be appointed as an
arbitrator thereafter and since this is the function of the
parties, the parties would obviously, in their own i nterest,
follow the course of avoi ding such an arbitrator. This approach
is not only logicall y concomitant with accepti ng arbitration as
an effective justice delivery system as an alternative to the
judici al process by the courts but is the very essence of
arbitration and if this essential principle is overlooked,
arbitration, as also the other ADR methods, can never be
successful.
Even modern international commercial trend not onl y

recogni zes this but also practices it in the l ong-term interest of
the international busi ness community. The choice is between
having protracted delays and heavy expenses for resolving
each and every dispute and difference on the one hand or
some members of the commercial com munity having (perhaps)
to suffer wrong decisions on the other. It is in the long term
interest of the business community as a whole that in such
indivi dual cases the decisions appearing to be wrong are
suffered i nstead of making the entire system of effective
alternative dispute resolution m ethod lose its very purpose and
reaching a level requiring its rejection. Prudence demands that
66

one should not throw away the baby with the bath water; (vi) It
is in the interest of the society, com munity and business that
counter-productive dispute resolution process, or for that
matter, an y process, which does not ensure “value for money”
in terms of time, money and energy, i s to be avoided, even at
the possible cost of suffering some wrong decisions in
indivi dual cases. Once this aspect is clearly perceived and
understood, it will not be difficult to put arbitration and other
ADR methods on the ideal pedestal to which they bel ong; (vii)
The Supreme Court, despite having recognized this sea
change in the law, in ONGC v. Saw Pipes (reported in (2003) 5
SCC 705) read the phrase “public policy of India” in a m anner
which upset the apple cart.
There has been serious criticism of this judgment as it is

putting the clock back. However, the Supreme Court itself is
reconsidering t his view and in the meantime an am endment
has been proposed whereby the rigorous impact of this
judgm ent would stand largely undone.
Commercial arbitration in India Before the advent of the

British, while at the village level “Panchas” would dispose of a
matter as soon as any difference or dispute arose, at the level
of towns and cities, the trade bodies effectively dealt with the
disputes and differences arising between men of comm erce.
However, with the growth of trade and commerce, and there
being many occasions when all the parties were not from the
same locality, disposal of differences and disputes in an
informal way becam e impossible and form al commercial
arbitration cam e into vogue in India. Even today, in Commodity
67

Exchanges, disputes are resolved almost within hours an22d
in some Exchanges, like for example the Cotton Exchange of
Mumbai, even appeals are disposed of in 2-3 days.
This is so because the m atters are decided by men of

comm erce having rich experience in the trade and its different
aspects and enjoying a reputation for their long standing in the
business. It is often sai d that arbitration is as successf ul as
the arbitrator. Since the arbitrators in Commodity Exchanges
are men having a quick grip on the subject, the disposal of
arbitrations in such exchanges is quick and i nexpensive - with
almost no likelihood of challenge in court. In m atters not so
simple as disputes and differences between the mem bers of a
Commodity Exchange, well-experi enced arbitrators, even
today, bring about a quick result in an inexpensive manner but
it is the need of the day to have trained arbitrators because
with the court matters being pushed to arbitrati on there is
bound to be a greater demand for good arbitrators available at
reasonable fees.
4.3 Legislative efforts in India

Article 21 5 of the Constitution of India declares in a mandatory
tone that ‘ no person shall be deprived of his life or his
personal liberty except according to procedure established by
law.’ The words “life and liberty” are not to be read narrowly in
the sense drearily dictated b y dictionaries; they are organic
terms to be construed meaningfully. Further, the procedure
mentioned in the Article is not some sem blance of a procedure
but it should be “reasonable, fair and just”. Thus, the Right to
5
Constitution of India88
68

Speedy Trial has been rightly held to be a part of Right to Life
or Personal Liberty by the Supreme Court of India. The
Supreme Court has allowed Article 21 to stretch its arms as
wide as it legitimately can. The reason is very simple. This
liberal interpretation of Article 21 is to redress that mental
agony, expense and strain which a person proceeded against
in criminal law has to undergo and which, coupled with delay,
may result in impairing the capability or ability of the accused
to defend himself effectively. Thus, the Supreme Court has
held the Right to Speedy Trial a m anifestation of fair, just
a8nd reasonable procedure enshrined in Article 21.
This is obviously a m atter which needs a very serious

consideration f or determining as to what judicial reform s can
be made effective for meeting the requirem ents of reducing
pendency of cases in the court of India. 6 Anguished over the
state of affairs of the justice delivery system, the Supreme
Court has said people's faith in judiciary was dwindling at an
alarming rate, posing a grave threat to constitutional and
democratic governance of the country.
The Constitutional philosoph y propounded as Right to Speedy

Trial has though grown in age by almost two and a half
decades; the goal sought to be achieved is yet a far-off peak.
The failures of prosecuting agencies and executive to act and
to secure expeditious and speedy trial have persuaded th e
Supreme Court in devising solutions which go to the extent of
almost enacting by judicial verdict bars of limitation beyond
which the trial shall not proceed and the arm of law shall lose
6
Supreme Court chides itself, govt for judicial backlog Dhananjay Mahapatra, TNN Jan 12, 2012, 05.57AM IST
69

its hold. The validity or justness of those decisions is not the
matter to be decided88 but the seriousness of delay in the
conclusi on of criminal and civil matters must be appreciated at
the earliest. This seriousness was appreciated and accepted
by m any , including the Constitutional Courts , l ong before.
The sam e has got recognition from the “legislature” as well in
the form of introduction of “Alternative Dispute Resolution”
(ADR) Mechanism (ADRM) through various statutes.
There is a growi ng awareness among the masses as well

regarding ADR and people are increasingly using the same for
getting their disputes settled outside the court. This will also
reduce the “backlog problem’ that India is facing. It is now
universally accredi ted that ‘Justice dela yed is Justice denied’.
The existing justice system is not able to cope up wi th the
ever-increasing8 burden of civil and criminal litigation. There
is growing awareness that in the m ajority of cases court action
is not an appropriate remedy for seeki ng justice. W e have to
formulate ef fective ADR Mechanisms to ease the burden of
judici al functioning. The backlog of cases is increasing day by
day but criticizing judiciary for the same is a wrong practice. It
must be noted that the backlog is a product of “inadequat e
judge population ratio” and the l ack of basic infrastructure.
The governm ent has to play a pro-active role in this direction.
4.4. Court approach towards legal reform through ADR mechanism

Further, the recent am endments of the CPC will give a boost
to ADR. The section 89 (1) of CPC deals with the s88ettlement
of disputes outside the court. It provides that where it appears
to the court that there exist elements, which may be
70

acceptable to the parties, the court may f orm ulate the terms of
a possible settlement and refer the same for arbitration,
conciliation, mediation or judicial settlement. W hile upholding
the validity of the CPC am endments in Salem Advocate Bar
Association v. U.O.I 7 , the Supreme Court had direct ed the
constitution of an expert committee to formulate the manner in
which section 89 and other provisi ons introduced in CPC have
to be brought into operation. The Court also directed to devise
a model case m anagement form ula as well as rules and
regulations, which should be followed while t aking recourse to
alternative dispute redress referred to in Section 89 of CPC.
All these efforts are aimed at securi ng the valuable right to
speedy trial to the litigants.
The Suprem e Court of Indi a has also suggested making ADR

as ‘a part of a package system designed to meet the needs of
the consum ers of justice’. The pressure on the judiciary due to
large num ber of pending cases has always been a matter of
concern as that being an obvious cause of delay. The culture
of establishment of special courts and tribunals has bee n
pointed out b y the SC of India in number of cases. The
rationale for such an establishm ent ostensibly was speedy and
efficacious disposal of certain types of offences.
In E.Venkatakrishna Vs Indian Oil Corporation Ltd 8 It was hel d

that, when ever there is an arbitration clause in a contract,
aggrieved parties must have recourse to the provisions of the
7
Salem Advocate Bar Association v. U.O.I AIR 2003 SC 189, 2002
8
E.Venkatakrishna Vs Indian Oil Corporation Ltd AIR 1989 Kant 35
71

arbitration act and that being a com plete code in itself, parties
cannot approach High Court, with a petition under Art-226.
The Stage for ADR was set up in the early 1930’s, the Priv y
Council decision in Sitana vs. Viranna, highlights the
beginning of the germination of the idea of ADR; In Sitanna Vs
Viranna, the Privy Council affirmed the decision of panchayat,
and Sir John W allis observed that the reference to a village
panchayat is the time honored method of deciding disputes. It
avoids protracted litigation and is based on the ground
realities verified in person by the adj udicators and the award
is fair and honest settlement of doubtful claims based on legal
and moral grounds.
9
In PT Thomas vs. Thomas Job It was held, that the
experiment of Lok-Adalat as an alternate mode of dispute
settlem ent has come to be accepted in Indi a as a viabl e,
economic, efficient and inf orm al one.
In Oil and Natural Gas Commission vs. CCE 10 In one of the

orders passed in this judgment it was recorded that the
cabinet secretary has issued instructions to all departm ents of
Government of India as well as PSU’s that all disputes
“regardless of type, should be resolved amicably b y mutual
consultation or through good offices of empowered agencies of
the governm ent or through arbitration and recourse to
litigation should be eliminated.
9
In PT Thomas vs. Thomas Job 2005 AIR 3575, 2005(2)
10
In Oil and Natural Gas Commission vs. CCE 104 CTR (SC)
72

In Bhasheer vs. Kerala State Housing Board 11 The Hon’ble
Justice K.Padmanabhan Nair.J opined that, it m ust be ensured
that in developing countries most of the cases are resolved by
ADR mechanism of Arbitration, Conciliation and Mediation.
In Salem Advocate Bar Association Tamil Nadu vs. UOI 12 It

was held that, keeping in mind the law delays and the limited
number of judges ,which are available ,it has now becom e
imperative that resort should be had to ADR, with a view to
bring an end to litigation at an early date .In this very case it
was highlighted ,that ADR m echanism contemplated by
Section 85 of CPC is arbitration ,conciliation ,judicial
settlem ent incl uding settlement through lok adalat and
mediation.
In Deco Mica Ltd Vs UOI 13 it was held that ADR is inevitable in

one form or the another , in view of global unquestionable
phenomenon because court of law som e times becomes suit
for life ,litigation in the present set up and mechanism has
becom e expensive and time consum ing and dispensation of
justice has become slow. It is reported that out of 192
Countries, which are mem bers of UN, 133 Countries have
successfully implemented ADR in one f orm or the other, with
encouraging and rewarding success.
4.5. Need and the purpose of ADR in India

The growth of A.D.R in the l ast few decades on the one hand
reflects disenchantm ent with the formal justice system
characterized by delays and on the other an effort to promote
11
Bhasheer vs. Kerala State Housing Board AIR 2005 Ker 64, 2005
12
ibid
13
4.5. In Deco Mica Ltd Vs UOI 2000 (68) ECC 554,
73

a less formal dispute resolution m echanism. This development
is not the outcome of any juristic philosoph y. Rather it was
necessitated by the growth of commercial litigation needing
speedy resolution, by the ever increasing volume of court
work, by court dockets becoming heavier and by the
judge/case ratio becoming imbalanced on account of limited
resources.
In a developing country like India with major economic reforms

under way within the fram ework of the rule of law, strategies
for swifter resolution of disputes for lessening the burden on
the courts and to provide m eans for expeditious resolution of
disputes, there is no better option but to strive to develop
alternative modes of dispute resolution (ADR) by est ablishing
facilities for providing settl ement of disputes through
arbitration, conciliation, mediation and negotiation. In this
context the legendaries of various fields i.e., commercial,
administrative and legal unanimously constituted an institution
to be called “International Centre for Alternative Dispute
Resoluti on-ICADR. This institution was established in Delhi on
31st Ma y, 1995 and registered under the Society Registration
Act, 1960. It is an autonom ous non-beneficial institution. The
chief obj ect of this institution is to inculcate and expand the
culture of alternative dispute resolution. In essence the system
of ADR em phasizes upon:
• Mediation rather than winner take all.

• Increasing Accessibility to j ustice.
• Improvi ng ef ficiency and reducing court delays.
74

The Constitution of India through Article 14 guarantees
equality before the law and the equal protection of the laws.
Article 39A of the Constitution mandates the State to secure
that the operation of the legal system promotes justice on a
basis of equal opportunity, and ensure that the same is not
denied to any citizen by reason of economic or other
disabilities. Equal opport unity m ust be afforded for access to
justice. Law should not only t reat all persons equally, but also
the law must function in such a way that all the people have
access to justice in spite of economic disparities. The
expression “access to j ustice” focuses on the foll owing two
basic purposes of the legal s ystem.
• The system must be equally accessible to all.

• It must l ead to results that are individually and socially just.
It is one of the most im port ant duties of a welfare state to
provide judicial and non-judicial dispute-resolution
mechanisms to which all citizens have equal access for
resolution of their legal disputes and enforcement of their
fundam ental and legal rights. Poverty, ignorance or social
inequalities should not become barriers to it. The workload of
Indian Judiciary increased by leaps and bounds and has now
reached a stage of unwieldy m agnitude, which has i n fact led
to a large backlog of cases. Due to this ADR has become the
need of the hour for Indian Judiciary. Considering the delay in
resolving the disput e Abraham Lincon has once sai d:
“Discourage litigati on. Persuade your neighbors to com promise
whenever you can point out to them how the nominal wi nner is
often a real loser, in fees, expenses, and waste of time”. “In
75

the same vein Judge Learned Hand comm ented, “I must say
that as a litigant, I should dread a law suit beyond almost
anythi ng else short of sickness and of death”.
4.6. Implementation of ADR in India
The concept of Conciliati on was introduced in the statute of

Industrial Disputes Act, 1947. The Conciliation is generally
conducted b y an officer appoint ed by Governm ent under
Industrial Disputes Act, 1947. Industrial Disputes Act, 1947
provides provisions for the parties to settle disputes through
Negotiation, Mediation and Conciliation, for example Section
12 Section 18 etc. Alternate Dispute Resolution pl ays a major
role in the f amily disputes settlement. Section 5 of the Family
Court Act, 1984 provides provisions for the association of
social welfare organizations to hold Family Courts under
control of government. Section 6 of the Act provide for
appointment of permanent counselors to enforce settlement
decisions i n the family matters. Further Section 9 of the Act
imposes an obligation on the court to make effort for the
settlem ent before taking evidence in the case. In addition to
all provisions referred above, Indian Contract Act, 1872 most
importantly gives a mention about Arbitration Agreement as an
exception to Section 28 that renders an agreement void if it
restrains a legal proceeding. Alternate Dispute Resolution
whether sort ed for or not can be easily inferred from presence
or absence of the ‘Arbitrati on clause’.
Alternate Dispute Resolution in India gained importance under

Arbitration Act, 1940, while sometime later Arbitration and
76

Conciliation Act, 1996 was passed in consonance with
UNCITRAL Model Law of Arbitration, which brought the nation,
on an international platform. The need arose as there was no
provision in the Indian Arbitration Act, 1940 to resolve a
dispute between an Indi an and a non Indian; it caused
difficulties to refer such matter for arbitration For the sake of
convenience and uniformity, most of the countries have based
their legislation on UNCITRAL Model Law, as this law gives
the binding force to arbitral award and lays down various
rights and duties for commercial parties handling disputes.
Som e important International Conventions on Arbitration are:
The Geneva Protocol on Arbitration Clauses, 1923, the
Geneva Convention on the Execution of Foreign Award, 1927,
the New York Convention of 1958 on the recognition and
Enforcem ent of Foreign Arbitral Award.
Alternate Dispute Resolution procedures are mostly divide d

into two segm ents: Adjudicatory and Non Adjudicatory. In case
of adjudicatory process case reaches a stage where decision
gets a binding effect, for example in case of arbitration. And
the other is non-adjudicatory; it contributes to resolution
without adjudication, such as process of Negotiation,
Mediation etc.
As in case of Salem court Bar Associati on v. UOI, The

Supreme Court had directed the setting up of committee that
woul d look into the implem entation of various provisions,
including Section 89. Section 89 (1) of Civil Procedure Code in
relation to provision of ADR, which will provide avenue for
settlem ent of disputes outside court. In view of the Judgment
77

pronounced by the apex court and subsequent law commission
report on bringing changes, the Government brought and
introduced adequate changes in section 89 of Civil Procedure
Code 1908 Settlement of disputes outside the Court giving
am ple jurisdiction to the court to see under section 89 (1)
where it appears to the court that there exist elements of a
settlem ent which may be acceptable to the parties, the court
shall form ulate the terms of settlement and give them to the
parties for their observations and after receiving the
observation of the parties, the court may reformul ate the terms
of a possible settlement and refer the sam e for- there by
formulating and incorporating any of four methods to settle
disputes outside the court nam ely, Arbitrati on, Conciliation,
Mediation and Lok Adalats. ..
Though there are certain deficiencies in reference to status of

settlem ent of disputes outside the court and in regard to
procedural implementation of the ADR, in m y view the section
89 was not made as elaborative as it should have been, still
non-insertion of many of relevant sections by enlarge has
gone unnoticed that the discreti on of referring to ADR has
been left to the court to decide is discretionary in nature,
secondly, few details are incorporated in relation to status of
opinion of expert rendered as mediators, conciliators
incentives, compensation, though still Alternate Di spute
Resoluti on received recognition from experts as a milestone in
the matter of settl ement of dispute outside of the court and in
view of enactment of Civil Procedure Code, 1859 it provides
section 312-325 for layi ng down the procedure of Arbitration
78

and Section 326-327 provides for Arbitration without courts
intervention . It can be mentioned that various methods and
processes have been incorporated in Indian legal system to
achieve speedy disposal of cases, the concept of Alternative
Dispute Resolution is a western approach where as Lok Adalat
one of its specie is purel y a national concept.
Alternate Disput e Resolution is more of corporate friendly,

comm ercial parties enter into contract with Arbitration Clause.
Most of the com panies resort to Alternate Dispute Resolution,
as it is less complicated, least expensive and most importantly
confidential. Litigation takes year’s long tim e with bundled up
procedures which affects the working processes of the
companies, causing uncertainti es in financial sphere of their
comm ercial sectors. Due to developm ent of trade at an
International level it has become difficult for the corporate
sector to maintai n pace with traditional ways of litigation.
Companies are desperate to get the dispute resolved outside
court, as it is beneficial to them in all ways.
Resoluti on can be of great advantage to common man yet the

idea doesn’t acclimatize in all the developing countries of the
world, as it contradicts with the domestic laws of that country,
special care must be taken that the resolution reached, must
depend upon honest y, trust, so as not to loosen ties of
subsisting relationship and moreover, courts lack command to
submit disputes to Alternate Dispute Resolution Methods.
Various steps have been taken to make the process of
Alternate Justice warren Burger, the former CJI of American
Supreme Court had observed:
79

“The harsh truth is that we ma y be on our way to a society
overrun by hordes of lawyers, hungry as locusts, and bridges
of Judges in numbers never before contem plated. The notion-
that ordinary people want black robed judges well-dresse d
lawyers, fine paneled court rooms as the setting to resolve
their disputes, is not correct. People with legal problem s like
people with pain, want relief and they want it as quickly and
inexpensivel y as possible”.
The directive Principals enumerated under Art-39(A), of Indian

Constitution promise to secure socio, economic, political
justice and equality of status and opportunity to all citizens.,
the Indian judicial system ,has not on once but several
occasions fallen short of fulfilling such promises. “ The
Malimath Committee also known as the arrears com mittee
undertook a comprehensive review of the working of the court
system ,particularl y all aspects of arrear and law’s delay in
addressing such concerns.
In its recommendations the Malimath committee underlined the

need for adopting an alternate dispute resolution mechanism,
for encouraging Arbitration, Mediation, Conciliation and Lok
Adalats, as a viable alternative for reduci ng backl og of cases
pending i n various courts, In its view such alt ernate dispute
resolution mechanism were capable of going a long way in
restoring confidence of people and establishing rule of law ,
which is in fact a key objective of our constitution.
That in a developing country like India with major economic

reforms under way wi thin the frame-work of rule of law,
strategies for swifter resolution of disputes for lessening the
80

burden on the Courts and to provide m eans f or expeditious
resolution of disputes, there is no better option but to strive to
develop alternative modes of dispute resoluti on by
establishing facilities for providing settl ement of disputes
through arbitration, conciliation, m ediation, negotiation, etc.
That the Government faced with these realities, coupled with

the usual issue of inadequate infrastructure but due to
legisl ative sensitivity towards providing a speedy and
efficacious justice in India is mainly reflected in two
enactm ents. The first one is the Arbitration and Conciliation
Act, 1996 and the second one is the incorporation of section
89 in the traditional Civil Procedure Code (CPC).
That the Parliament drastically amended the Code of Civil

Procedure 1908 (CPC) in the year 1999. One of the
am endments was by way of introduction of a new provision,
Section 89, which gave the Courts the power to refer matters
to one of the ADR tracks listed therein: Arbitration,
Conciliation, Judicial Settlement, Lok Adalat and Mediati on. A
Lok Adalat (literally meaning People’s Court) usually
comprises of 3 eminent personalities, like retired judges, and
senior m embers of the Bar, Administration or societ y
generally, who are appoi nted for a particular term and they
attempt conciliation and Judicial Settlement for dealing with
disputes referred to them.
As the first major step taken in this direction was the

enactm ent of Arbitration and Conciliation Act, 1996 and was
brought into force with effect from August 22, 1996. This Act,
based on the UNCITRAL Model Law on International
81

Commercial Arbitration and the UNCITRAL Conciliation Rules,
provides the basis for the growth of the ALTERNATIVE
DISPUTE RESOLUTION (ADR) movement in India on scientific
lines.
The term “Alternative Dispute Resolution” or “ADR” is often

used to descri be a wide variety of dispute resolution
mechanisms the term can refer to everything from facilitated
settlem ent negotiations in which disputants are encouraged to
negotiate directly with each other prior to som e other legal
process, to arbitration systems. It included arbitration, as also
conciliation, m ediation and all other forms of dispute
resolution outside the courts of law, which would all fall within
the ambit of ADR.
ADR facilitate parties to deal with t he underl ying issues in

dispute in a more cost-eff ective manner and with increased
efficacy. In addition, ADR’s provide the parties with the
opportunity to reduce hostility, regai n a sense of control, gain
acceptance of the outcom e, resolve conflict in a peacef ul
manner, and achieve a greater sense of justice in each
indivi dual case. The resolution of disputes takes place usuall y
in private and is more viable, econom ic, and ef ficient.
ADR was at one point of time considered to be a voluntary act

on the apart of the parties which has obtained statutory
recognition i n terms of CPC Amendment Act, 1999, Arbitratio n
and Conciliation Act, 1996, Legal Services Authoriti es Act,
1997 and Legal Services Authorities (Amendment) Act, 2002.
The access to justice is a human right and fair trial is also a
human right. In India, it is a Constitutional obligation in terms
82

of Art.14 and 21. Recourse to ADR as a m eans to have access
to justice m ay, therefore, have to be considered as a human
right problem. Considered in that context the judiciary will
have an important role to pla y.
The special provision Section 89, coupled with Order X Rules

1A, 1B, 1C of the CPC and allied laws, affords the judiciary
the opportunity to offer the parties an arra y of avenues to
resolve their issues in a timely and amicable manner and, in
the process, reduce its backlog. The purpose of this special
provision seems to help the litigant to settle his disput e
outside the Court instead of going through elaborate process
in the court trial. This is a special procedure for settling the
dispute outside the courts by a simpler and quicker method.
The litigants on the instituti on of the suit or proceedings may
request the Court to refer the disputes and if the court feels
that there exist any elem ent of settlement which m ay be
acceptable to the parties; it may refer them to any of the
forums abovem entioned at any stage of the proceedi ngs.
In fact new rules in Order X were inserted in consequence to

the insertion of the sub section (1) of section 89. These new
rules namel y 1A, 1B and 1C have been inserted by the
am ending Act. The settlement can be made by adopting any of
the m odes specified in the section 89 of the CPC inserted by
the Amendment Act. As per the Rule 1A the parti es to the suit
are given an option for settlem ent of the dispute outside court.
W hen the parties have exercised their option it shall fix the
date of appearance before such person as may be opted by
the parties. As per the Rule 1-B the parties are required to
83

appear before such forum opted by them. Rule 1C provides for
the Presiding Officer of the Forum to refer the m atter again to
the Court in case he feels that in the interest of justice he
should not proceed with the matter.
84

CHAP TER – 5 OVERVIEW OF IPR AND LI TIGATION IN INDI A
5.1. Introduction
For nearly last many centuries economics had recognized onl y
factor related to labour and capital, as of now in this is new
changing world scenario, where in the technology is now
pla ying a important role in shaping scenario of the world. In
the worl d over the information and knowledge has replace th e
factor related to g capital and energy as t he initial wealth-
creating assets in the world scenario, just as the m any years
later, the two had replaced land and labour 200 years ago.
The technology development driven majority of society of 20th

century has transformed its physical wealth-creati ng work to
"knowledge-based work. In current scenario the technolog y
and knowledge are now the key factors of production and
overall generation of wealth with increased m obility of
information world around as well as increased the mobility to
the global work force, now the knowledge and expertise can be
transferred instantantly anywhere in the world, and through
exchange of information any advantage gained by one
company can be eliminated b y com petitive improvem ents
overnight.
That due to wide spread access to information, the innovative

company enjoys a sole com parative edge on its process of
innovation--combining market and technol ogy know-how with
the creative tal ents of knowledge workers to solve a constant
stream of competitive problems and further its ability to derive
timely value from extracted information.
85

In view of wider reach of the information and technology
access to every one, the major challenge before companies,
organizations will be in the coming years is to create a system
for IPRs regime, so that innovative work and creative
innovations gets duly protected from pra ying eyes, to save
precarious cost already spent on creating innovation can be
stored thus m ore and m ore com panies may have to take or
utilize the services of IP Managem ent Consulting Firm for
drafting / prosecuti on of the intellectual Property (IP)
application(s) and also provide adequate funds for making
paym ents for accessing the relevant IP databases for this
purpose. Thus, to make Economics of Knowledge as the
greatest strength of Indian economy, there would also required
for creati ng an ecosystem for prom otion of particularl y
knowledge driven entrepreneurship with m ajor emphasis on
creating an environment and a system to provide due
protection to the intellectual properties. This can be achieved
by creating a stringent IPR regime.
The Intellectual Property Rights (IPR) are ri ghts granted to

creators and owners of innovative works which are results of a
human intellectual creativity. These intellectual creativity
works can be related to nay of industrial, scientific, literary
and artistic domains, which can be in the form of any invention
or in the shape of a manuscript, a suite of software, or a
business nam e.
For last few years the importance of intellectual property has

attained tremendously in India is well established at all levels
whether it is a statutory or administrative and or judicial. That
86

India has also ratified its statutory laws in accordance to the
agreem ent establishing the W orld Trade Organisation (W TO).
This Agreement, inter-alia, contains an Agreem ent on Trade
Related Aspects of Intellectual Property Rights (TRIPS) which
came into force from 1st January 1995. It lays down minimum
standards for protecti on and enforcement of intellectual
propert y rights in member countries, which are required to
promote eff ective and adequate protection of intellectual
propert y rights wi th a view to reducing distortions of and
impediments to international trade. The obligations under the
TRIPS Agreem ent relate to provisi on of minimum standard of
protection within the m ember countries legal s ystem s and
practices. The IPR is a general term covering patents,
copyri ght, trademark, industrial designs, geographical
indications, protection of layout design of integrated circuits
and protection of undisclosed information (trade secrets).
The Agreem ent provides for norms and standards in respect of

following areas of intellectual propert y:
· Trade Marks
· Patents,
· Copyrights and related rights
· Geographical Indications
· Industrial Designs
· Layout Designs of Integrated Circuits
· Protection of Undisclosed Information (Trade
Secrets)
· Plant varieties
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5.2. Intellectual Property Enforcement
The general laws in relation to Intellectual Property
Enforcem ent in India are mainly the following:-
• The Code of Civil Procedure
• The Indi an Penal Code
• The Civil and Criminal Rules of Practice.
W hile Civil Procedure Code provides for the civil rem edies and
enforcement through civil courts, the Indian Penal Code
provides for penal remedies. The rules of practice of the trial
courts, High Courts and the Supreme Court of India set the
finalities of the enforcement procedure.
India follows common law tradition and judicial precedents do

have binding force. Hence the decisions of the Supreme Court
bind the lower judiciary of the country. The Intellectual
Propert y Laws do provide for statutory enforcement
mechanisms. The most important of the Indian Intellectual
Propert y Laws are:-
The Patents Act, 1970

The Trade Marks Act, 1999
The Copyright Act, 1957 &
The Desi gns Act, 2001
The above legislations are supported by the relevant Rules
there under and these rules are:-
The Patents Rules, 1972 as amended by the Patents

(Amendm ent) Act of 1999
The Trade Rules, 2002
The Copyright Rules, 1958 &
The Desi gns Rules, 2000
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The main post W TO Intellectual Property legislations are:-
· The Geographical Indications Act, 1999
· The Semi Conductors Integrated Circuits Layout
· Design Act, 2000
The Geographical Indications Rules provide for the

administrative mechanisms for registration and enforcement of
Geographical Indications. The Semi Conductor Integrated
Circuits Layout Design Act is yet to have its rules to support
the administrative mechanism there under.
The Inform ation Technol ogy Act, 2000 also pl ays an important
role in relation to areas of inter-phase between Information
Technology and Intellectual Property Rights. All the above-
mentioned legislations provide for in-built enf orcement
mechanisms and detailed procedures there of.
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6. SCOPE OF ADR IN IPR DISPUTES
6.1. MECHANISM IN THE INTELLECTUAL PROPERTY REGIME
The following is a study as to how ADR mechanisms can be
used to resolve various copyright, patents, trade mark and
licensing disputes. The following is an in-depth study on how
ADR can be imbibed into resolving IP-related disputes.
6.1.1. Commercial Copyr ight and Software Disputes

A copyright dispute typically involves t he issue of whether or
not an infringing party has infringed a copyright. 14 A key issue
in such a dispute is usually the questi on of whether the
infringer has unlawfull y "copied" or derived his own work from
a work protected by copyri ght 15 The dispute typically i nvolves
weighing the evidence of the infringing party's access to the
original work and the degree of substantial similarity between
the particular expressi ons of the original work and the
infringing party's work 16
Usually, the case arises in a less-than-exact setting, for

exam ple, consider the situation where the author of a book
sues a m ovi e company alleging that a movie infringed his
copyri ght in the book, or a writer of an old song sues the writer
of a new song alleging that the other writer copied his song.
Norm ally, of course, the nam e of the infringer's work and any
14
. Atari Games Corp. v. Nintendo of Am., Inc., 975 F.2d 832, 837 (Fed. Cir. 1992); see also Jessica Litman, Copyright As Myth, 53 U.
Pitt. L. Rev. 235 (1991).
15
Atari Games, 975 F.2d at 837-38; See, e.g., Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167, 1169 (7th Cir. 1997); Repp and K & R
Music, Inc. v. Webber, 132 F.3d 882, 891 (2d Cir. 1997); Grubb v. KMS Patriots, L.P., 88 F.3d 1, 6 (1st Cir. 1996).
16
Atari Games, 975 F.2d at 844.
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characters, as well as the setting, plot and words, are not
identical to their purported counterparts in the earlier work. If
such were the case, the dispute would in all likelihood be
settled quickly. Accordingly, the arbiter of the dispute must
decide whether the accused party copied the expression fixed
in the earlier work. This is accomplished by examining (1) the
accused author's access to the earlier work; and (2) the
degree of similarity between his work and the earlier work. A
strong determination on the first element will mitigate the need
to find a strong showing on the second. 17
Copyright cases are not technical and are usually fairly

constrained in scope and complexity. Rarely do these cases
require extensive discovery or documentation. Because
similarity is viewed from the perspective of the "ordinary
observer", no particular expertise is required or appropriate for
deciding these type s of cases. 18
Accordi ngly, these cases often are amenable to resolution

through ADR, but no more or less so than m ost of the
relatively straightforward commercial disputes. Although
involving m ore complicated subject matt er, disputes i nvolving
duplication or derivati on of computer software and other highly
technical issues can also be appropriate candidates for
ADR. 19 As parties recogni ze the benefit of utilizing an arbiter
with a particular technical background and ability to
understand the subject m atter at hand, ADR becomes a more
17
Shaw v. Lindheim, 919 F.2d 1353, 1361 (9th Cir. 1990).
18
Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1464 (Fed. Cir. 1997).
19
John R. Kahn, Negotiation, Mediation and Arbitration in the Computer Program Industry: Why play hardball with software?, pt. III.B (1989).
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attractive means of resolution. ADR also provides the parties
with the opportunity f or f ar greater protection of trade secrets
and other proprietary or sensitive inform ation during the
proceeding itself. Unlike a trial, ADR allows the parties to
determine for them selves the degree to which such information
will or will not be made publicly available. 2 3 20 This would likely
be considered a substantial advantage i n disputes regarding
computer software, for exam ple, where continue d
confidentiality is often a primary concern.
6.1.2. Commercial Patent Disputes

Patent disputes, especiall y those involving complex
technological issues, are often particularl y well suited f or
resolution through ADR. For instance, an arbitrator selected b y
the parti es may be better situated to address the technical
aspects of an invention. Resolving a patent dispute involves
addressing the patent's validity and subsequent
infringement. To address these issues, the decision maker
must examine the technical aspects of the patent, including
the claims and specification from the perspective of a person
"skilled in the art" of the patent's subject matter. 2 6 Because
many of the patents issued and involved in litigation today
deal with biotechnology, pharmaceuticals, computer hardware
and software (often referred to as "high technol ogy") the
ability to select a neutral arbitrator, with training sufficient t o
understand the subject matter at issue, can prove a
considerable advantage.
20
Jay E. Grenig, Alternative Dispute Resolution § 1.2 (2d ed. 1997 & Supp. 1998).
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In cases presenti ng a m ore "level pl ayi ng field" between
disputants, m an y of the t ypical advantages of ADR over
litigation sim ply becom e more prominent. Both sides may
appreciate the ability to control substantially the amount of
time, effort, intrusion and expense of the litigation. For
exam ple, average patent dispute arbitration rarely exceeds 12
to 15 months, and often concludes withi n six months. Also,
since m any such patent cases do not require that only one
party may be deemed the victor, both parties may appreciate
the opportunity to use ADR instead of litigation as a wa y to
find the appropriate middle ground. For example, a mutuall y
agreeable license arrangement benef its both parties and may
be preferable to an all or nothing outcom e.
Lastly, patent litigation has a well-deserved reputation for

being costly. In patent cases, attorney f ees easily can 'go
through the roof'. ADR allows parties to resolve their disputes
in a more efficient manner, without si gnificantly depleting their
budgets. One expert said that arbitration, conducted with skill
and experience, should cost less than 50 per cent of a patent
infringement suit. As ADR is becoming m ore popular in patent
disputes, specific materials are now available to assi st the
practitioner, ensuring a more successful process..
6.1.3. Commercial Trade mark and Trade Dress Disputes.

Trade mark and trade dress disputes typically involve a
questi on of "likelihood of confusi on." Trade mark Plaintiffs are
often involved in claims that allege that the Defendant's mark
is confusingly similar to the Plaintiff's mark. The trade dress
complainant often argues that the Defendant's packaging
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presents his product in a m anner that misleads the public to
believe it is the Plaintiff's product. In both instances, a key
issue is the likelihood that consum ers will be confused about
the source of the involved products. Issues often requiring
resolution in both types of cases can include: the degree of
distinctiveness obtained by the Plaintiff's mark or trade dress;
actual or likely confusion b y consumers; similarity of the
opponents' products or product categories; similarity of the
marks or trade dress; sophistication of the relevant potential
buyers and of the marketing channels used by the parties and
the Defendant's intent in choosing his mark or trade dress.
Many such cases, however, arise where the parties have an

ongoing business relationship. The parties in the dispute may,
for example, have a license or franchise relationship existing
prior to or unrel ated to the dispute. Often, a reasonable
resolution may involve modification of the existing license from
one party to the other, or the creation of an additional
agreem ent. In such situations, there is a substantial benefit to
avoid outright litigation not only in terms of time and expense
saved, but also in being able to f ormulate the solution that
best m eets the needs of the parties and the situation. This
also helps prevent the parties from escalating the dispute into
a purely aggressive "seek and destroy" approach, which easily
could destroy any potential for future collaboration.
Although trade mark and trade dress disputes do not present

complicated scientific or technical issues to a Court of law,
they do require an understanding of equally com plicated legal
94

rules, consumer perception and surveys, and market data.
Thus, disputing parties may pref er to resort instead to ADR for
handling their conflict. ADR presents clear advantages that
warrant consideration before most such disputes are pursued
in Court.
6.1.4. Commercial Trade Secret and Unfair Competition Disputes:
Misappropriation of a trade secret involves the acquisition of

trade-secret information through a breach of an obligation of
confidentiality or through illegal or otherwise improper
means. 3 6 The accused party must have actual or constructive
notice that the i nformation qualifies as a trade secret. Trade
secret protection covers business information that provides a
competitive advantage and that is kept secret and protected to
a degree reasonable under the circumstances. Often, a former
em ployee currentl y working for a competitor may be involved
in such a dispute between the old and new em ployers. Claims
of unfair competition m ay include unlawf ul, unfair or fraudulent
business activity and unfair, deceptive, f alse or misleading
advertising. Such claims are often intertwined with related
trade secret, breach of contract or trade m ark issues.
By the very nature of the issues i nvolved, usually at least one

party in a trade secret dispute is very concerned about
maintaining the secrecy of the trade secret or other
confidential or proprietary information. Unfair competition
disputes may also present such concerns, depending on the
exact nature of the claim. To the extent that confidentiality and
the secrecy of the procedure are important, ADR may be a
particularly appropriate alternative to litigation.
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Trade secret and unfair com petition issues also tend t o involve
parties that prefer a rapid resolution of their dispute, which
often involves time-critical issues. For exam ple, a trade
secret, once disclosed without a requirement of conf identiality,
loses its trade secret protection; an advertisem ent, by its
nature, usuall y has a limited life span. In either situation, the
parties often pref er a resolution as soon as possible. Again,
ADR presents alternatives that can address this concern, as
ADR methods generally proceed faster than litigation.
Trade secret and unfair com petition cases often involve

technical subject-matter issues t hat may be difficult for a lay
Judge or jury to underst and fully. For example, an unfair
competition claim could be based on a competitor's
comparative advertisement that is allegedly false and
misleading. A key issue could be whether, in fact, the
competitor's product is reasonably better, faster, more
complete, safer, long-lasting or in any other manner,
significantly superior to the Plaintiff's product. Just as with the
patent cases discussed above, parties to these cases may
also prefer to select a neutral arbitrator with the background
and trai ning best able to understand the underlying subject
matter, facts, and claims. Use of such an expert relieves the
parties of the need to educate the fact finder, and helps to
streamline the dispute resolution process by affording th e
parties greater control over expenditures of time, effort and
money.
6.1.5. Commercial Intellectual Property Licensi ng Disputes
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Companies increasingly try to capitalize and m aximize the
value of their intellectual property by entering into licensing
agreem ents. 4 1 Often, such licenses include a provision for
resort to ADR for resolution of any disputes that may develop
regarding the intellectual propert y and the licensing
relationship. 4 2 Such licenses, however, may also give rise to
issues implicating the underl ying subject matter. 4 3 For
exam ple, one issue could be whether and to what extent a
license covers the source code and/or object code of a
particular com puter program and, therefore, subj ects the
software product to royalties, if, in fact, the product is permitted
at all. Because the licensing agreem ent typically focuses in part
on adequatel y describing the scope and substance of what is
being licensed, such issues ma y also benefit from an arbiter's
understanding of the technical subject m atter, as discussed
above with regard to the underlyi ng and complex m atters often
involved in patent disputes.
Accordi ngly, when entering into an

intellectual property licensing agreement, both parties must
carefull y consider the identity and potential com plexity of
issues that could arise when deciding whether or not to
include an ADR clause in the contract. If the parties decide to
include an ADR clause, it m ay be advantageous to consider
issues such as the t ype of ADR available or the scope of
discovery permitted at the time the contract is entered into,
rather than belatedly when a dispute arises. One advantage of
agreeing on the use and f ormat of ADR at this early stage is
that attorneys and busi ness executives can establish fair rules
97

of conduct, which will prove advantageous if a dispute does
arise. Parties must take extra care, however, when
determining the procedure used to resolve future conflicts at a
time when the nature and exact subject m atter of a possible
dispute is not yet known. Thus, if the drafters of the ADR
clause appropriately consider possible ADR situations, and
draft their agreem ent accordingl y, the parties to
an intellectual property licensing agreement may be able to set
the stage for economical, efficient and reasonable resolution
of any conflict that may arise later. Additionally, agreeing i n
advance to ADR can relieve the parties from later concern that
the other side will perceive the suggestion of ADR as sign of a
weak case.
6.1.6. A copyright infringement

A copyright infringem ent, breach or violation can arise in two
ways:
a person (or even an employee), without your authority,

reproduces or takes a substantial portion of a work that is the
subject of your copyri ght, an author considers that you have
reproduced or taken a substanti al portion of their work. W hile
there are many ri ghts that com prise the Copyri ght Act 1968,
these are essentially divided into ‘economic rights’ and ‘moral
rights’.
6.1.7. Economic rights

Economic ri ghts can be bought, sold and licensed by th e
original owners of the cop yright. This means that, under the
Copyright Act, copyright owners have the exclusive right to do,
or authorise the reproduction, adaptation, translation,
98

performance, broadcast, publication or public communicating,
or importation of the protected work.
Most copyright infringem ents concern these economic rights.

For example, cop ying a substanti al part of the source or object
code from one computer software program into another is a
breach of the copyright owner’s exclusive right to sell and
reproduce features of their computer program that derive from
that code. An ex-employee reproducing and publishing a
substantial part of their ex-employer’s training m anual without
permission is a breach of copyright on their literary work.
6.1.8. Moral rights
Authors and creators of copyright work also have moral rights;
these belong to the ori ginal creator and cannot be transferred
to others. Moral rights include the right to:
attribution as the work’s author whenever the work is
published or reproduced, preventing any other person from
falsely claiming that they are the author of the copyright work;
and preventing their work from being subjected to derogatory
treatment.
These right s can be infringed where authorship is not

recognised on a work or the work has been modified or
displa yed in such a way so as to be considered derogatory.
Most moral rights last for the duration of the copyright,

although the author's right of integrity (i.e. the ri ght to prevent
derogatory treatm ent of a copyri ght work) lasts only f or the
author's lifetime.
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There are two options for resolving an infringement of your
copyri ght, or a claim of infringement against you b y anot her
party.
6.1.9. Copyright dispute resolution

W hile an aggressive copyright litigation strategy might be the
best approach in some circumstances, often the preferable
comm ercial outcome (particularly when defending a copyright
infringement claim) is to use alternative dispute resolution
(ADR) methods such as negotiation, mediation or conciliation
to facilitate communication between the parties so a
settlem ent to the dispute can be reached. ADR can be court-
ordered or privately organised.
In all copyright infringem ent disputes, we consider whether

ADR is a viable option, as dispute resolution will minimise
costs and legal liability by avoiding a potential lawsuit.
Copyright disputes and litigation can sometimes be an
unwanted distraction from your day-to-day business.
6.1.10. Copyright litigation

W hile we will always facilitate settlement where appropriate,
sometimes the adoption of an aggressive copyright litigation
strategy is either unavoidable or a necessary business
strategy. At the start of any litigation we provide you with a
clear roadmap showing how a matter might unfol d, with
timefram es and costs associated with each of those stages.
W e keep you informed through regular updates as to the
progress and costs of litigation.
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Our copyright lawyers have litigated in various jurisdictions
including the Federal Court. Our team of copyright lawyers has
a wealth of intellectual propert y experience and will devise a
strategy, tailored to your needs and the needs of your
business.
6.1.12. The current approach: patent litigation

A patent can be generally defined as a proprietary right over
the invention of a product or process that provides an inventor
with a m onopol y right for a certain period of time, t ypically 20
years during which the product or process cannot be exploited
by others. The Patent disputes t ypically arise where a third
party allegedly infringes the monopoly right of a patent holder,
although other disputes such as those involving licensing
agreem ents can also eventuate.
In m ost federal states intellectual propert y is a matter of

national jurisdiction and so proceedings are initiated in the
federal level court. Most patent disputes involve courts having
to decide on technical questions of fact and law with respect
to claims of alleged patent infringement. This requires
consideration of an appropriate m eans to interpret the claims
of a patent, which can be defined as the precise technical
descri ptions of the invention on which is based an eval uati on
of the protection sought. Its interpretation is a question of law
and on appeal the court may discard the claim’s interpretation,
forcing the parties in dispute to re-argue their case on correct
interpretations. This is a complex procedure that ultimately
contributes to the often lengthy and expensive litigation
process.
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The cases become further com plicated when a part y alleged to
have infringed a patent responds with a counterclaim of patent
invalidity. This is the most typical defence to infringement.
Cross claiming requires the court to reconsider the validity of
the original patent and whether it meets the statutory
requirements of novelty, inventiveness and non-
obviousness.9During re-examination the court m ust consider
newl y uncovered references or evidence potentially material to
the patentability of the invention that had not been considered
by the relevant patent office.10 If a defendant successfully
pleads the defence of a patent the patent owner will lose not
only the case but also the patent itself.
Conversely, a patent owner who successfully wi ns an

infringement claim may be awarded dam ages, and an
injunction against further infringement will typically be
ordered. Evidently, patent litigation involves many
complexities.
That growth in international transactions has multiplied the

potential for cross-border intellect ual property (IP) disputes.
Global challenges – such as the digital environm ent, cl imate
change issues, access to health care, the protection of
traditional knowledge and traditional cultural expressions and
the preservation of biodiversity – may create new t ypes of IP
disputes. Meanwhile, the economic downturn is providing an
incentive for stakeholders to seek m ore efficient and
affordable means of resolving such disputes than through
court litigation – making alternative dispute resolution (ADR)
an increasingly attractive option.
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ADR refers to neutral mechanisms allowing parties to solve
their disputes outside of court i n a private forum, with the
assistance of a qualified neutral intermediary of their choice.
ADR can only be applied if all parties agree to submit their
dispute to the procedure or if it is mandated by a competent
court. The benefits include time and cost efficiency, flexi bility,
party control, neutrality, a single procedure, confidentiality and
expertise.
6.1.15. Domain Name

There is a distinction between a trademark and a domain
name, which is not relevant to the nature of the right of an
owner in connection with the dom ain name, but is material to
the “scope of the protection” available to the right. The
distinction lies in the m anner in which the two operate.
A trademark is protected by the laws of a country where such

trademark ma y be registered. Consequentl y, a trademark ma y
have multiple registrations in many countries throughout the
world. On the other hand, since the internet allows for access
without an y geographical limitation, a domain name is
potentially accessible irrespective of the geographical location
of the consumers. The outcome of this potenti al for universal
connectivity is not only that a domain name would require
world wide exclusivity but also that national laws might b e
inadequate to effectively protect a domain nam e. The lacuna
necessitated international regulation of the domai n nam e
system (DNS).
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This international regulati on was effected through W IPO 21 and
ICANN 22 . The outcome of consultation between ICANN an d
W IPO has resulted in the setting up not only of a system of
registrati on of domain nam es with accredited Registrars but
also the evolution of the Uniform Domain Name Disputes
Resoluti on Policy (UDNDR Policy) 23 by ICANN on 24th October
1999. As far as registration is concerned, it is provided on a
first com e first serve basis. Besides the UDNDR Policy is
instructive as to the kind of rights which a domain name owner
may have upon registration with ICANN accredited Registrars.
The Dispute resolution under the Uniform Dom ain Name

Disputes Resolution Policy (UDNDR Policy) b y ICANN
A person may complain bef ore administration-dispute-

resolution service providers listed by ICANN under Rule 4(a)
that:
i) A domain name is “identical or confusingly similar to a

trademark or service mark” in which the complainant has
rights; and
ii) The dom ain nam e owner/registrant has no right or

legitimate i nterest in respect of the domain name; and
iii) A dom ain name has been registered and is being used in
bad faith.
21
World intellecetula property organistion
22
Internet Corporation for assigned names and numbers
23
Uniform Domain Name Disputes Resolution Policy
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Rule 4(b) has listed by wa y of illustration the following f our
circumstances as evidence of registration and use of a domain
name in bad faith:
(i) Circumstances indicating that the domain name owner /

registrant has registered or the domain name owner /
registrant has acquired the domain nam e primaril y for the
purpose of selling, renting or otherwise transferring the
domain nam e registration to the complainant who is the owner
of the trademark or service mark or to a competitor of that
complainant, for valuable consideration in excess of its
docum ented out-of-pocket costs directly related to the domain
name; or
(ii) The dom ain nam e owner / registrant has registered the
domain name i n order to prevent t he owner of the trademark or
service mark from reflecting the m ark in a corresponding
domain name, provided that it has engaged in a pattern of
such conduct; or
(iii) The domain nam e owner / registrant has registered the

domain name primarily f or the purpose of disrupting the
business of a com petitor; or
(iv) B y using the domain nam e, the domain nam e owner/

registrant has intentionally attempted to attract, for
comm ercial gain internet users, to its web site or other on-line
location, by creating a likelihood of confusion with the
complainants m ark as to the source, sponsorship, affiliation,
or endorsement of the dom ain name owner/registrant web site
105

or locati on or of a product or service on its web site or
location.
The defences available to such a complaint have been

particularised " but without limitation", in Rul e 4 (c) as follows:
(i) Before any notice to the domain name owner/registrant, the

use of, or demonstrable preparations to use, the dom ain nam e
or a name corresponding to the dom ain name in connection
with bona fide offering of goods or services; or
(ii) (ii) The domain nam e owner/registrant (as an individual,

business, or other organization) has been commonly known by
the dom ain name, even if it has acquired no tradem ark or
service m ark rights; or
(iii) (iii) The dom ain name owner/registrant is making a legitimate

non-commercial or fair use of the domain nam e, without intent
for commercial gain to misleadingly divert consumers or to
tarnish the trademark or service m ark at issue.
These rules indicate that the disputes may be broadl y
categorised as:
(a) disputes between trademark owners and domain name

owners and
(b) between dom ain nam e owners inter se. A prior registrant
can protect its dom ain name against subsequent
registrants. Confusing similarity in domain nam es ma y
be a ground for complaint and similarity is to be decided
on the possibility of deception am ongst potential
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customers. The defences available to a com plaint are
also substantially similar to those available to an action
for passing off under trademark law.
As far as India is concerned, there is no legislation, which

explicitly refers to dispute resolution in connecti on with
domain nam es. But although the operation of the Trade Marks
Act, 1999 itself is not extra territorial and m ay not allow f or
adequate protection of domain names, this does not mean that
domain names are not to be legall y protected to the extent
possible under the laws relating to passing off.
6.1.16. International Intellectual Property Disputes

The nature of international disputes l ends itself to conflicts as
a result of diverse legal s ystems and tribunal procedures.
Also, international intellectual property disputes often involve
nations that may have very different ideas regarding
intellectual property and the level of protection that it should
be afforded; so therefore, the dispute mechanisms provided by
General Agreement on Tariffs and Trade (GATT) and W IPO
stand as the benchmark for the method and procedures to b e
followed when resolving international disputes.
6.1.17. Fundamental Problems of International IP Disputes

One of the fundamental problems in i nternational
intellectual property law disputes is the myriad conceptual
differences in the wa y in which different nations
view intellectual property rights. For instance, until the recent
ratification of the GATT, which resulted in dramatic changes i n
domestic patent law in the United States, the domestic law
107

required that patent applications be m aintained in secret, and
discl osure not be made until the granting of the patent. The
secrecy of pending applications distinguished domestic law
from foreign patent registration procedures, where disclosure
occurs at the time of filing. Mechanisms employed under
international agreements, that include ADR provisions, may
provide better means for protecting intellectual propert y in less
developed nations, and industrialized nations may then decide
to enter the markets in these nations. Complex issues, such as
choice of law or jurisdiction, will no longer be problematic
when dispute settl ement procedures are outlined in multilateral
agreem ents. For instance, when mediation is used in
international intellectual propert y disputes, it is more problem
solvi ng than bei ng right determinative. The fact that mediation
focuses on solving the problem and not on the rights of the
indivi duals is the key to its effectiveness in dispute settlem ent.
One of the fundamental problems with

intellectual property disputes is the existence of different
views that developed and under-developed countri es have with
respect to intellectual property rights. By focusing on problem
solvi ng and not exclusively on the rights of each party,
settlem ent may be reached through compromise.
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CHAPTER – 7 IP DISPUTES FOR ADR MECHANISMS
7.2. The IPR disputes and ADR:

The people across world over frequently involve in cross-
border commercial transactions having different backgrounds
and different national laws or sometimes within different states
of India. Som e time due to inherent flaws these disputable
transactions create multi-jurisdictional disputes between the
nationalities of different countries having different social
backgrounds, mindsets. Usually those business entities having
familiarity with alternative dispute resolution (ADR) are able to
resolve such conflicts efficiently. In other words, a court can
enforce a decision reached in an ADR proceeding solely
against the parties in that proceeding.
Though use of alternative dispute resol ution ADR to resolve

bilateral conflicts has been recognized and being carried out
successfully but use of ADR in Intellectual property right
conflicts is a not yet utilised to its full potential rather the
intervention of ADR in Intellectual property rights conflicts is
being carri ed out in slowl y as being seen as a novel
intervention. The ADR has not been fully used much in India in
respect of IPR m atters.
Though Intellectual property comprises of exclusive rights

acquired over property created with intellectual / innovational
effort of an individual principally over novel ideas, s ymbols,
names, images, creative works: inventi ons, literary, artistic,
scientific works and designs including performances of
performing artists, phonograms, and broadcasts, inventions in
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all fields of human endeavor, scientific discoveries, industrial
designs, tradem arks, service marks, and commercial names
and designations basically deriving the results or out come
from simulative and cognitive efforts put by such an individual
to protect its intellectual / innovational against unfair
competition.
Intellectual property right acquired over property created with

intellectual / innovational effort of an individual pri ncipally
over creative works give the creator the right to prevent others
from making un-authorised use of their property f or a certain
period but wide Internet usage has rendered boundaries of the
states m eaningless. In this scenari o the Intellectual Propert y
Rights are becoming fundamentally exigent to get in to
research collaborations and thereby m aking Intellectual
propert y rights tool as valuable business assets for
technological entities.
As the determination of commercial or non commercial

disputes before different nati onal courts can result in to high
legal and other costs as well as conflicting awards. Therefore,
the ADR has a potential to provi de business entities belonging
to distinct nationalities a single unified forum of arbitratio n
thereby having a f inal and enforceable award binding across
multiple jurisdictions. Hence, increasingly, IP owners and
users are approaching to many of known alternative dispute
resolution (ADR) procedures like arbitration and mediation to
resolve their IP disputes
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Though in today's consumer oriented world, intellectual
propert y is emerging as one of the most valuable legal rights
in the global economy, invariably technology has becom e
increasingly dependent Intellectual Property laws for its
protection, hence, we can not ignore the the importance of
Intellectual Property laws for provi ding protecti on to
intellectual / innovational efforts of an individual. Resultantly,
various nati ons around the globe have entered into multilateral
agreem ents having unified rules to increase the protection of
intellectual property rights i n their respective constituents.
The vast majority of intellectual property litigati on, especially

cases involving copyright, patent and trademark i nfringement
claims takes place in the our courts. Like most cases that set
out upon the litigati on path, intellectual property cases are
most often settled before trial; the number of cases actually
tried in court is sm all.
Regardless of when intellectual property lawsuits are settled,

the cost of litigating is extremely high and is incurred up to the
completion of trial. The Trademark, Copyright and Patent
cases but even these cases can run into the hi gh six figures or
more when potential damages are large (i.e., exceeding 20
lacs), there are complex legal issues and/or a lengthy trial is
anticipated.
Not only is litigation expensive, it is a liability on the balance

sheet f or as long as the lawsuit exists, which can be a decad e
or more in patent cases that are appealed and then retried A
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more practical problem is that litigation continually drains a
company’s cash flow. And litigation is so very public. So, when
your client is faced with enforcing—or acquiescing to—an
intellectual property right, the question “Should one advi se the
company to step into the ring?” should be asked because there
are alternative, less public and less costly ways of resolving
many intellectual propert y disputes. The m ost common are
arbitration and mediati on, whi ch are distinctly different
alternative dispute resolution (ADR) processes.
How do parties enter into arbitration? It is prudent to use a

pre-dispute ADR clause providing for arbitration in th e
transaction documents, such as a patent royalt y license. The
ADR clause usually states that the parties agree to arbitrat e
“any and all disputes arising out of or related to this
agreem ent.” Having this clause can lower the temperature of
the parti es’ potentially heated reactions, which can distract
them from objective decision making after a dispute arises.
If there is no ADR clause in the relevant documents, the

parties can agree to arbitrate post dispute. However, by that
time the parties usually are so at odds with each other that
they are less likely to agree on anythi ng. The cost of not
having a pre-dispute clause is that if litigation is commenced,
the court might require the case to be arbitrated or mediated
before a court-appointed neutral under a court-referred ADR
program. This obviously takes the decision making about the
process of resolving their intellectual propert y dispute out of
the parties’ hands.
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Private commercial arbitration allows the parties to have that
control. Significantly, it allows them to decide on the rules and
procedures that will appl y to their arbitration.
In most cases, parties agree to have their arbitration

proceedings administered by an established, neutral
arbitration provider, such as the Indian Council of Arbitration
(ICA), which has well-tested arbitration rules—but does not
includes specialized rules for patent disputes— and acts as an
intermediary with respect to neutral com pensation issues. The
Arbitration rules tend to be flexi ble and give great discretion to
the arbitrator to manage the proceedings. Even when agreeing
to arbitration under ICA rules, parties can adjust the rules to
meet their needs. Because the arbitration agreem ent governs
the arbitral process, parti es need to pay consi derable attention
to the terms of that agreement to increase the likelihood that
the dispute will be resolved without the need for litigation
In this scenario the W orld Intellectual Propert y Organization

(W IPO) has been pla ying pivotal role since its incepti on in
strengthening ADR procedures for IP conflicts and forefront in
resolving IP conflicts through their specialized ADR
procedures. The Intellectual Property conflicts are not that
conflicts which cannot be adjudicated or resolved through
ADR. As Intellectual Propert y conflicts being a specialised in
its nature and it require specialsed services of ADR experts in
resolving IP conflicts, mainl y due to non availability of IP
experts in India is the m ain obstacle in resolving IP conflict
through arbitration or through ADR.
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Thus under the aegis W IPO developed inherent mechanisms of
resolution the Arbitration and Mediation between various
nations around the globe trough their multilateral agreements,
These many of multilateral agreements entered between
various nations around the globe recognising that traditional
legal litigation is no longer the most viable as mean of settlin g
international intellectual propert y disputes.
It is agai nst this backdrop, till date it is not yet utilised fully in
India by Indian courts as well as Individuals and or business
entities in resolving the Int ellectual propert y rights conflicts. In
India at Present the provisi ons of ADR solely being i nvoked in
disputes of general civil nature litigation, matrimonial and
other business litigations where arbitration clauses are being
part of the agreem ents only in relation to ADR and conciliation
Act. Hence Through this research paper I will try to discuss
various remedies available in ADR in respect of IPR conflicts
which can considerable reduce the IP litigation i n our courts
too.
7.3. Reasons to Consider ADR for IPR Disputes
As a general principle, intellectual property rights are
territorial in scope. The Patent Act, for example, provides that
the grant of a patent confers a “right to exclude others from
making, using, offering for sale, or selling the invention
throughout the India.” That normall y copyright law also does
not apply beyond particular states territorial boundaries, even
though the Copyright Act is not explicit on the point. The
same principle is generally true of trademarks (alt hough
infringing activity in the case of trademarks sometim es is
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found to occur outside of territorial boundaries). At the sam e
time, contracts and licenses concerning IP rights and
transactions frequently create and extend related legal right s
and obligations beyond a single nation’s territorial boundaries
and, because of international treaties and the harmonization of
national laws concerning intellectual property, the same IP
rights increasingly are recognized and protected
simultaneously in many different nations.
7.3. Certainty as to Forum.

As with any commercial transaction implicating the laws and
judici al power of several different jurisdictions, one of the
primary reasons in an IP transaction for including a
contractual clause mandating the ADR rather public court
adjudication of any disputes is simply to provide the parties
with the certainty that, i n the event of a dispute, they will be
submitting their dispute to a simple forum for resolution rather
than potentially to several dif ferent forums in several different
jurisdictions simultaneously. W ithout such an arbitration
clause, one part y or the other might file a lawsuit in each of
several different jurisdictions having power to apply its law or
its judicial power to the parties or transaction. Courts of the
United States, as in m ost other nations, will ref use to hear a
lawsuit that is within the scope of a valid contractual
arbitration clause, and will instead refer the parties to
arbitration. Thus, such clauses generally are viewed as
indispensable by commercial parties whose transactions are
subject to the laws or j udicial power of more than one nation
or jurisdiction.
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7.3. The Relative Speed of ADR. The Properly managed,
arbitration and other ADR mechanisms tend to provide
speedier resolutions of disputes than public court
adjudications. This t ypically occurs either because the
arbitration / ADR proceedings, unlike public court
adjudications, are able to commence immediatel y (i.e., there is
not an entire docket of cases com peting f or the attenti on of
the adjudicator), or because the procedural flexibility of
arbitration / ADR results in the proceeding taking less time.
The speed of dispute resolution principal multinational treaty
governing international arbitration.
7.4. Arbitration and mediation of IP disputes as alternatives to litigation.

W hen the company has been accused of trademark
infringement and the suit has been filed and t he com plai nt
served. The court offers mediation of the dispute.
The com pany operates under a licence in connection with its
sale of a particular product line. A new line is introduced, and
the licensor claims the new product line is subject to the
licence. This licence agreement requires arbitration of all
disputes arising under the licence. In m yriad situations,
companies have at least an initial option to mediate a di spute,
or arbitrate, in advance or instead of litigation.
The common wi sdom is that arbitration is less expensive and

more expeditious than litigation. In some circumstances, this
may even be true. In som e circumstances, arbitration or som e
other form of alternative dispute resolution (ADR) m ay provide
an economical, efficient alternative to the race for the
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courthouse and all that transpires there. Certainly, as it has
been said, all disputes are settled eventually: they are settled
by the parties themselves or b y a judge or jury.
7.5. Initial considerations in selecting Litigation Alternatives:
The knowledgeable use of litigati on alternatives cannot occur

unless bot h parties to the IP dispute understand their business
goals. Do the y know wh y the y are fighting and what each
wants to accomplish? Is the goal a public victory in court or to
crush the com petition? Maybe what they reall y want is to put
the litigation behind them and get back to business; maybe
they want to control their litigation costs.
For example, before choosing a process to resolve a patent

dispute, a plaintiff should consider the potential returns from
litigation, including the available damages and how much
product excl usivity will be available under the scope of claim
coverage provided by the patent. A defendant shoul d consider
the likelihood that it will have to pay dam ages, the am ount of
such damages and whether product changes can be made to
minimize or eliminate the dispute. Given the costs, time and
uncertainty of IP litigati on, many issues m ay be better
addressed using ADR approaches such as arbitration or
mediation.
The competition in high-value technology areas like

pharmaceuticals and medical devices is so f ierce that in many
cases traditional civil litigation is heavily relied on to achieve
business goals. It is not rare for these cases to involve 10 or
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more patents, which inevitably entangles the parties in a long
and costly process with uncertain results. Attorneys shoul d
questi on whether it is necessary for their clients to take this
path in every IP dispute.
As recently the our Civil Procedure code has understood the

potentiality f or settlements through other means in which
courts to consider the potential for settlem ent in each case
after filing a lawsuit, counsel should raise with the client
whether mediation or arbitration—or both sequentiall y— would
be a more productive way to achieve the client’s commercial
goals. Clients should also be asked to research earlier
trademark and patent licenses and litigation settl ement
agreem ents with the adversary to determine whether any of
them require the use of ADR to resolve future disputes arising
out of new or related technology.
Som e IP cases cl early should go the litigation route: the cases

which present novel legal issues, wh ere a legal precedent is
desired for future enforcement efforts and where court-
supervised discovery ma y be necessary because of the level
of detail needed to obtai n critical facts regarding the
development of an invention. Full discovery and court
involvement m ay be required in some cases when dealing with
issues like multiple contributions to an invention, propriety of
conduct or the timing of a competing inventor’s efforts.
But many of IP cases do not raise novel issues or are not

potentially fit for judicial precedents. Thus, it is important to
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make a determination in almost every case as to whether
mediation and/or arbitration woul d be pref erable to litigation.
Making this determ ination depends on a num ber of factors. I n
some cases, one factor m ay be so dominant that it determines
which form of dispute resol ution is best. In other cases,
several factors taken together may weigh in favor of one
process over another. The factors to be considered are
addressed below.
7.6. What form of ADR should be pursued?

After setting out the framework for the discussion – regarding
what forms of ADR are commonly used and how they differ –
we can look at some of those circumstances in the context of
IP disputes, where the answers may be somewhat clearer than
it depends. W e can also look at some of those circumstances
where the determinati on to employ a particular form of ADR
may depend on the jurisdiction; the basis for the parties’ past
relationship; the desire of the parties to maintai n a
relationship going forward; and the nature of the relief sought.
W e can start with a presum ption that the legislature and the
judici ary favour arbitration, and other forms of ADR, as private
dispute resol ution shifts the costs to the parties and relieves
congestion in the courts. ADR encompasses a variety of
processes used to resolve disputes in lieu of trial. ADR
includes not only arbitration which is adjudicative, but also
mediation and earl y neutral evaluation, which are non-
adjudicative.
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W hether one opts for arbitration or mediation, or for any other
form of ADR (eg, earl y neutral evaluation), to resolve disputes
over intellectual propert y depends on a number of factors.
ADR has both advantages and disadvantages over litigation.
7.7. The advantages of ADR have been recognised:

Norm ally speed of resolution (the caveat is that some IP
disputes m ay be resolved m ore expeditiousl y by filing a motion
for interlocutory injunctive relief, whether an application for a
tem porary restraini ng order or a preliminary injunction);
• generally less expensive (this is in part because fewer
formal requirements allow for compromise in resolution
rather than zero-sum flexibility in fashioning remedies);
• less combative and so preserves business relationships;
• preserves confidentiality, which m ay be a major
consideration in matters involving trade secrets, patent
matters and even trademark disputes where product
attribute and custom er information may be relevant to
the determination; and
• the decision maker has accepted expertise, and
presumabl y, real interest in the subject m atter of the
dispute.
· The disadvantages of ADR have to be weighed for IP
disputes in particular:
• no binding precedent;
• may not serve as a deterrent to other infringers;
• Generally no appellate review; third parties cannot be
compelled to participate; and Costs may not be m uch
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lower than in litigation, particularly if the parties engage
in discovery and there is extensive briefing.
7.9. Mediation and Arbitration are different forms of ADR.

Mediation is a non-adjudicative, facilitated settlement
negotiation process. In som e jurisdictions, a statute or court
order may impose mandatory supervised m ediation on the
parties. The parties can themselves agree t o m ediate, either
before a dispute arises or after. The parties may em ploy an a d
hoc m ediation process or submit the dispute to mediation
through a private organisation.
7.10. Other approaches to ADR

Other approaches to ADR are as varied as submitting m atters
in dispute to a mock jury or using a rented j udge in a summary
trial for evaluation or disposition, and can be as simple as
earl y neutral evaluation.
W hen considering whether to resort to ADR, and what sort of

ADR, it is important to consider the nature of the relief sought:
is the process employed one that can provide the desired
relief; and, even if so, is there a means enforcement; and will
the arbitration resolve all of the issues in the proceeding, or
only some of the issues, so that there will be litigation in an y
event?
In the IP area, certain types of disputes are simply not as well

suited as others to ADR: f or example, counterfeiting cases and
cases where the Patent Office, and not the parties or an
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arbitrator, may grant a reissue or determine who prevails in
interference.
The point of all of this is the caution that boilerplate arbitration

clauses need to be reviewed carefully and that consideration
should be given to other forms of ADR, with the understanding
that there are situati ons in which arbitration, and other forms
of ADR, m ay not, in the context of IP disputes, provide the
best resolution or a better resol ution than either litigation or
no acti on at all.
7.10. The value of IPR disputes in ADR mechanisms

That in the various mechanisms for settling disputes, litigation
is a legitimate, open the most efficient process for resolving
disputes, which is characterized by the public, mandatory
program, etc., but these procedures to resolve disputes with
natural features of the resolution of intellectual property
disputes, but there are m any limitations. Although the ADR
and litigation in the settlement can not be completel y
overcome the drawbacks of intellectual property disputes, but
the ADR itself has many advantages that are not litigation, but
tend to become parties to the dispute select ADR to settl e
disputes on grounds of intellectual property, but also
highlights the existence of ADR on the value of the dispute.
As compared to other common property rights, rights of

intellectual property with the object hidden features, regional,
perishable, legal and others. Thus, to resolve disputes over
intellectual property as a resul t, there are special
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requirements, such as professionalism, timeliness,
confidentiality, diversity and so on.
7.10.1. professional
That Intellectual propert y disputes in the literature, art,
science and other fields, disputes the fact that a wider scope,
and resolve the disput e to resolve professional issues and
techni ques is greater. For example, the litigation in
counterfeiting. Is copyright, the judge is accused of having
violated if the works are ori ginal works of the same or similar
to the original artworks alleged offense is plagiarism, copy,
deform and manipulate the rights on works, and if in the
proceedings in counterfeiting? is patent, the questi on of the
alleged infringem ent of patent specifications and requirements
related to the corresponding technical characteristics, is
essentiall y the sam e way perform the sam e function, making it
the same ef fects. and there is no external manifestations of
intellectual property rights, the right to rely entirely on the
right to define the scope and content, and intelligence to
create products which these laws are often associated with a
considerable degree technical content, as often as those with
technical knowl edge and appropriate legal professionals to
understand and grasp. in the proceedings, the arbitrator of the
dispute are the professi onal judges, and judges generally
consider that a legal expert in the field, they have onl y the law
enforcement, the fa? we correctly determine the correct
development of the evidence presented at trial and the
expertise and capacity, and theref ore generally not a good
deal of intellectual propert y rights in cases of professional
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issues related to technology. and different action, ADR is able
to better m eet the IP needs to resolve disputes.
As part of ADR to resolve IP disputes, the parties ma y agree

to select the relevant field of technology experts, legal experts
and has extensive experience as an ADR neutral secti on three
people involved in the regulation dispute, vocational training
and experi ence to play the role? the conflict resoluti on are
more reasonable behavi or, and standardized as a third party
experts to provide professional or technical problems related
to cognition and evaluation to assist the parties to form on the
facts, evidence of technical and legal issues related to a
clearer understanding, which is conducive to m aximizing the
protection of clients to the right decision based on judgments
of a settlement of disputes rationally.
7.10.2 Low cost

Litigation is a national law bindi ng dispute settl ement process
applies, with a strict system of technical standards, complete
each step of the procedure or measures related to spend som e
time, usually a long period to resolve the dispute. Cycle and
intellectual property liti gation is generally higher than ordinary
civil cases, even more. First, because the legal issues of
intellectual property litigation and technol ogy intersect the
complexity of the issues m entioned, the finish is time
consuming, on the other hand, in intellectual propert y
disputes, and more supplement the general procedures
necessary civil engineering, often related to situations such
action is interrupted, which has exacerbated the c ycle delay of
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litigation. intellectual property litigation in the worl d have long
trial periods and characteristics of high cost, and the
widespread problem of the backlog of cases following the
procedure for settling the dispute has led to high cost in
litigation, because the parties have f ull control in ADR and at
the right speed and efficiency of dispute resolution depends on
the intention of the parties, the parties to the di spute
resolution sought cost of time and money invested in the
control it from a certain range, if the ADR has the advantage
of saving time and money no doubt.
In addition, ADR is not only savings cost for the parties,

including parties to the dispute settlement process to pay th e
cost directly, incl uding disputes arising in the process of cost
indirectly, such as business interruption, destruction of the
relationship between the parties and the l oss of future
business opportunities, etc.. 'Facts have proved that more use
of dispute resolution in intellectual property litigation in
resolving disputes outside of litigation, the parties can save
the cost of dispute settlement m ore and has thus more
viability.
7.10.5. Flexibility
The dispute is a national exercise of judicial power and the
right to obtain from large, so that the operation of process and
technology is very accurate, reasonable, and specialized, with
a separate set of procedures and standards. But the com plex
relationship of intellectual property rights disputes,
heterogeneous interests of the parties, the demand for variet y,
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it is difficult to solve with standard types of disputes. and?
ADR is a consensual basis, and for different parts of the
program center, which makes the resolution of disputes in
order to avoid the stark choice of anything, so that the ADR
with a high degree of flexibility and ph ysical variability, and
the parts (a) total compensation. '... in ADR, the parties
concerned the right to choose and decide the dispute
settlem ent of personal interest, the parties may com bine the
understanding of the nature of intellectual propert y disputes
and address the concerns of the design process in form
parties under the principles of aut onom y and self-selection
laws applicable intellectual property rights and regulations,
industry standards, busi ness practices, etc., or sim ply based
on som e principl es or rul es of law agreement negotiated
settlem ent of disputes.
7.10.5. Confidentiality
Intellectual property ri ghts, in addition to public intellectual
achievem ents, but there are many undocum ented trade secrets
and other confidential internal information such as product
formulation, production processes, technologies and data
customers, business plans, operational methods, co? ts,
profits, etc. This informati on m ay be parties to the competition
between com panies to win a key f actor, the parties do not
want to open and aware of com petitors in the process
settlem ent of disputes to the extent possible, protect the
confidentiality of proprietary information. The natural action of
the public with the evidence, procedure and results are open
to the parties and the public, so that the privacy and trade
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secrets is a large risk exposure and this difference is, ADR is
often the procedure is confidential. In m any countries
legisl ation ADR (mainly arbitration and conciliation law) and a
variety of ADR in rules of the organization of the procedure
are clear to the confidentiality provisions. For those who want
to protect privacy, trade secrets, com mercial information not to
discl ose the terms of the parties, the ADR conf identiality of the
process benefits the party more than the parties or by the
exchange of evidence dispute benefits obtained through
discovery.
7.10.5. To maintain beneficial relationships

In many intellectual property disputes, parties often have a
long business relationship, service providers and custom er
relationship, business relationship between the joint ventures,
the establishm ent of these relations is not the success of
overnight, and in the fierce market competition, possibilities of
cooperation is not often achieved, and therefore the parties
are generally the value of these relationships and attention. in
case of dispute, the parties shall consider the interests of
resolving disputes are often not only sta y in one time gains
and losses level, maintain long-term interests of the
comm ercial relationship is becoming more of a compromise
decisive factor, litigation is adversarial mechanisms for
resolving disputes, the judge's task is to clarif y and protect th e
authority of those who are enrolled in the legal text of th e
value and protect the legal rights of the parties and to achieve
social justice, result of the decision is? Either all-or-nothing
(all or nothing) ',' black and white, 'if the parties after the trial
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there may be in a state of perpetual conflict and confrontation.
and m echanism of action is different, ADR can provide a n
effective, but not resolve the conflict, given the rel ationship
between trade between the parties over a long period to avoid
the rights and obligations established under the law simply to
make a relation of determination, the result is not a simple
mechanism for resolution of the result, relatively little harm to
the feelings between the parties.
7.10.5. The adequacy of the results

For the administration of justice in the proceedings before the
dispute took place, the parties to the dispute settlement
procedure is the subject of rights and obligations between the
parties an absolute disti ncti on. However, a considerable
am ount of litigation and intellect ual property ri ghts and
obligations can not be sim ply attributed to relationship m ay be
of interest for m ore balance. ADR to resolve the dispute does
not dwell on the past, in the settl ement of disputes more
concerned about future earnings.
Accordi ng to t he principle that the interests of compromise and

concessions, as opposed to the struggle for human benefit
without more appropriate, For example, in disputes
counterfeiting? Is patent counterfeiting? One patent once the
composition, m ost have now an established fact that
counterfeit goods have a certain market, some companies
have even violated certai n scale. with respect to litigation to
obtain damages for the termination of the infringement, or the
results of such a measure, if both parties through licensing,
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joint ventures or other forms of mutually beneficial cooperation
in the exchange for ending the controversy, not onl y conducive
to achieving a win-win, and can create a more substantial
benefits socially and economically.
7.10.6 The specific modalities of intellectual property disputes

ADR
ADR, including all intellectual property disputes in a court
outside the mechanism of formal dispute resolution process to
resolve intellectual property rights, at present, the m ain mode
of IP ADR administrative processing, arbitration, mediation,
negotiation.
Administrative processing is regulated by the law of

intellectual property rights administrative organs of civil
disputes between equal entities, including administrative
decisions and administrative of the two forms of mediation,
arbitration is that parties to the conf lict took place before or
after the dispute agree to submit the dispute to the Joi nt
recognized third-party proceedi ngs, and subject to widely
advertise the results of the model dispute resolution, similar to
the privatization of the tri al, civil mediation refers primarily to
the interventi on of a neutral third party, to the parties in
reaching activities of the agreement dispute resolution,
including social groups, organizations, autonomous mediation
associations and i ndustry, lawyers, mediation, negotiation is
Referring to the dispute or the parties through their own
private forces of compromise and compromise to resolve the
dispute. In addition, there are still overseas, may be used f or
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various forms of ADR to resolve IP disputes, including
orientation assessment, mini -tri als, mediation - arbitration and
arbitration - mediation and various forms of repetition of the
ADR base, multi-application, or local changes in the resolution
of disputes.
7.11.7. The specific modalities of IPR comparison of ADR

Different t ypes of model intellectual propert y ADR has its own
characteristics, advantages and disadvantages, Table 1 of
voluntary, m andatory, third, a formal, procedural in nature,
results, and open to reveal several aspects of the main
similarities and differences.
7.10.8. That size and importance of the dispute:

Many litigators believe that IP disputes involving large
am ounts of damages, compl ex legal issues and extensive
expert testimony are not suited for mediation or arbitration.
This is too simplistic. There is no reason to allow the amount
of money at stake to rule out arbitration or mediation.
If the financial resources of the aggrieved part y are limited,
litigation is likely to quickly eat up those resources, leaving
this party without a resoluti on and without funds. In these
circumstances, mediation is a sensible alternative and should
be considered first.
Many litigators and business executives believe that when a

company’s survival is at stake, the di spute should be litigated.
However, both arbitration and m ediation allow for confidential
treatment of the parties’ financial data, business-plannin g
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information and development work—protection not available in
litigation, at least once the trial begins. Protective orders
typically are effective only during the discovery phase of
litigation, an important f actor to consider when trade secrets
or highly com petitive businesses are involved in a dispute.
Parties m ay not want to discuss their proprietary information in
court i n f ront of com petitors who frequently m onitor IP trials
precisely i n order to learn about a competitor’s business.
Mediation and arbitration do not take place in public. Thus,
ADR should not be ignored just because an IP case is
monetarily large, com plex and im portant.
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CHAPTER – 8 INTERNATIONAL DISPUTES:
Intellectual property cases that are international in scope are
particularly well suited for arbitration or m ediation. Arbitration
is a well-established dispute resolution mechanism for
international commercial disputes, and mediation is well
known in m any Asian countries (often known there as
conciliation). Mediati on is also attracting attention in the
European Union, where there is now a push to use mediation
before another adversarial process.
The reasons for acceptance of ADR in the international

business comm unity include, among others, a lack of
confidence in national courts; unfamiliarity with foreign laws;
concern about long, costl y court proceedings; unpredictable
and possibly i nconsistent outcom es; and difficulties with
enforcing judgments obtained in foreign countries. These
considerations are especially applicable in international IP
disputes, since IP rights are issued on a country-by-country
basis. Using international arbitration makes it unnecessary to
litigate in multi ple affected j urisdictions having unf amiliar
procedures, different legal protections for IP ri ghts and
different enforcement mechanisms. By arbitrating a
multinational IP dispute in a single dispute resolution process,
the parties can save m oney and time and obtain a consistent
result. 24
The institutions in developing countries are increasingl y

entering the IP market, and multipart y, multi national IP
24
Resolving Intellectual Property Disputes Outside of Court: Using ADR to Take Control of Your Case By Alan W. Kowalchyk
132

relationships are becoming more common, and even essential
to soci o-economic development. Through transactions
involving these relationships scientific, technical,
entrepreneurial, creative, and traditional knowl edge is
exchanged. Nonetheless, a protected right also tends to
increase the likelihood of disputes related to that right. 1 W hile
parties seek to reduce the frequency of disputes by rigorously
managing their IP rights and obligations, disputes will
inevitably arise. W hen they do, they can negativel y affect both
sides. Parties involved in IP transactions, therefore, should be
aware of dispute-resolution m ethods and have a specific
dispute-prevention and resolution strategy. Dispute-resolution
procedures too often are unwittingly sel ected when a
relationship begi ns, often years before a dispute actually
arises. The dispute-resolution clauses will therefore have been
inserted into contracts by people no longer involved in the
issues. Moreover, clauses frequently are inserted with a
limited awareness of their specific implications in a dispute-
resolution scenario.
Litigation, the formal, public process for resolving disputes

before national courts, is the most conventional method of
dispute resolution. Particularly for transnational disputes,
litigation may be risky, frequently protracted, and ma y at times
require seemingl y unlimited legal costs and management time.
Moreover, a dispute taking place in multiple jurisdictions may
result in different outcomes depending on which court decides
the case.
133

The alternative dispute resolution (ADR) procedures f or
resolving IP disputes, focusing on the i nterests of developing
countries, the ADR encompasses a range of options for
resolving disputes outside of form al court procedures. These
options differ in terms of formality, party control, and finality.
Each option, moreover, offers benefits uniquely appropriate to
different circumstances. This chapter concentrates on two
representative ADR procedures, arbitration and mediation.
8.1. Dispute Scenarios

The following dispute scenarios discuss some specific
circumstances that apply to health or agricultural IP disputes.
The scenarios m ay have particular relevance for institutions in
developing countries. Parties to the types of disputes in these
scenarios will most likel y first consider resorting to litigation in
national courts. They will, however, often find court action
stymi ed because of the challenges involved: cost, length of
procedure, legal uncertai nty, decision makers’ lack of
expertise, confidentiality/publicity, the difficulty of seeking
action in foreign jurisdicti ons, and the negative impact on
existi ng business relationships. Given these difficulties,
parties should consider whether there are practical
alternatives to expensive and protracted court proceedings.
8.2. Research collaboration: ownership dispute

Researchers in a medical research center in a developing
country (Center X) build a research partnership with a leading
university in a developed country (University Y). They
collaborate on pursuing leads for pharmaceutically active
134

compounds. The partners exchange dat a and discuss research
directions. University Y has a well-est ablished policy of
patenting campus research, and an invention disclosure is
filed with the technology transfer office (TTO). This becomes a
patent application in the name of University Y, citing three of
its researchers as inventors. There is no notice to, nor
recognition of, the researchers in Center X. The researchers at
Center X denounce the behavior of University Y and request
that their nam es be included as inventors. W hen University Y
refuses this request, the researchers contemplate legal action,
but are st ymied by prohibitive legal costs.
8.3. Patenting of research outputs from genetic material

A research institute obtains patent protection for a cell line
developed from genetic m aterial obtained from one of the
institute’s patients. The patient is from an indi genous group
that lived an isolated existence until very recently. The
indigenous group seeks redress, claiming ownership of
interest in the patent and breach of fiduciary obligations by the
research institute. The research institute asserts that it
proceeded to commercialize the research result based on the
patient’s prior consent to treatment. The controversy, with
claims of biopi racy, rapidly escalates into a global public
debate.
8.4. Claims based on traditional rights

An ethno botanist collects traditional m edical herbs and
associated knowledge about their therapeutic use from an
indigenous community. The community is led to believe that
135

this is the personal research of the ethno botanist; the
researcher acquires some of the knowledge after he falls ill on
site and is treated by a traditional medicine man. The
customary law of the indigenous community constrains both
the dissemination and use of this knowledge within the
comm unity. The researcher subsequentl y publishes the
knowledge, and details about the plants he collected, in a
noncommerci al academic publication. This publication is
widely distributed and used by several private companies in
their medical research. The disclosure of the information leads
to patents, not directly on the traditional knowledge, but on
further i nnovations, which are guided by and dependent upon
the traditional knowledge. These patents acknowledge th e
prior publication, but give no direct reference to the traditional
comm unity itself. The traditional community attempts to seek
relief but quickly finds that the legal remedies at their disposal
are uncl ear and inappropri ate for dealing with the cultural and
spiritual harm incurred.
8.5. Agricultural products and patents

Farm ers in a developing country have cultivat ed for centuries
a certain type of grain that gains popularity in global m arkets.
A biotechnological corporation obtains patents on the grain by
introducing genetic modifications. Farmers in the devel oping
country denounce their loss of international market share
resulting from the actions of the biotechnological corporation.
The farmers are concerned, however, that any inherent right
they m ay claim will be overshadowed in court by t he economic,
technical, and legal prowess of the corporation.
136

8.6. Rat v. elephant?
An inventor in a developing country holds patents in a number
of countries on com ponents used in consumer goods. The
inventor enters into a license agreem ent regarding these
patents with a m ultinational manufacturer. A dispute arises
regarding royal ty payments under the license agreem ent. The
inventor wants to enforce his rights, but does not dare to
engage in protracted and expensive multijurisdictional
litigation. Furthermore, the inventor hopes to maintain his
profitable relationship with the manufacturer.
8.7. The Arbitration Option

Seeking resoluti on to the above disputes through litigation
promises much pain and little certaint y for parti es in
developing countries. An alternative approach to litigation,
however, could offer better results. Arbitration, for example,
involves submitting a dispute, b y agreem ent of the parties, to
one or more arbitrators who make a binding decision.
8.8. Arbitration procedure

To send a dispute to arbitration, the parties must sign an
agreem ent to submit their existing or future disputes to
arbitration. Such an agreement is the foundation of an
arbitration arrangement. 3 It demonst rates the parties’ genuine
willingness to settle the dispute through arbitration and limits
the parties’ right to take the dispute to court.
Arbitration m ay be conducted in different ways, and it is up to
the parties and the arbitrator(s) to decide how the procedure
should unfold, subject to any applicable rules and public policy
137

requirements. Parties may agree on the num ber of arbitrators,
type of arbitration (ad hoc or institutional), place of arbitration,
language of arbitral proceedings, and the applicable
substantive law.
138

CHAPTER – 9 The WIPO Arbitration and Mediation Center
9.1. History of WIPO

The World Intellectual Property Organization (WIPO) is one
of the 17 specialized agencies of the United Nations. W IPO
was created in 1967 "to encourage creative activity, to
promote the protection of intellectual propert y throughout the
world." W IPO currently has 185 member states, administers 24
international treaties, and is headquartered in Geneva,
Switzerland. The current Director-General of W IPO is Francis
Gurry, who took off ice on Oct ober 1, 2008. 184 of the UN
Members as well as the Holy See are Members of W IPO. Non-
members are the states of Cook Islands, Kiribati,Marshall
Islands, Federated States of Micronesia, Nauru, Niue,
Palau, Solomon Islands,Timor-Leste, Tuvalu, and the states
with limited recognition. Palestine has observer status.
9.2. Strategic Direction and Acti vities

W IPO’s vision is that IP is an im portant tool for the economic,
social and cultural developm ent of al l countries. This shapes
its mission to promote the effective use and protection of IP
worldwi de. Strategic goals are set out in a four yearly Medium
Term Plan and refined in the biennial Program and Budget
docum ent.
The five strategic goals defined in the 2006 – 2007 Program
and Budget are:
· To promote an IP culture;
· To integrate IP into national development policies and
programs;
· To develop international IP laws and standards;
139

· To deliver quality services in global IP protection
systems; and
· To increase the efficiency of W IPO’s managem ent and
support processes.
9.3. WIPO Arbitration and Mediation Center (WIPO Center).

The W IPO Arbitration and Mediation Center (W IPO Center)
was established in 1994 on a not-for-profit basis to facilitate
the time and cost-effective resolution of IP and related
disputes through ADR. It is recognized as an international and
neutral forum especi ally appropriate for cross-border and
cross-cultural disputes and conducts procedures under th e
W IPO Mediation, Expedited Arbitration, Arbitration and Expert
Determination Rules (W IPO Rules).
The W IPO Rules contain specific provisions that are

particularly suitable for IP and related disputes, such as those
concerning confidentiality and technical evidence. However,
their scope is not limited to such disputes and they can be,
and have been, successfully applied in other areas. The W IPO
Center makes available, in different languages, m odel clauses
and agreements that parties may use as a basis for submitting
their disputes to W IPO.
As experience has shown, the effecti veness of ADR depends

largely on the quality of the m ediator, arbitrator or expert. The
W IPO Center maintains a database of over 1,500 qualified
neutrals from 70 countries with further candidates added
140

according to case needs, and it assists in the appointment of
neutrals in each case.
The W IPO Center works also as a resource center to raise

awareness of the valuable role ADR can play in different
sectors. It provides ADR advice to interested private and
public entities as well as training in IP-related ADR through
workshops and conferences. The W IPO Center recentl y
collaborated with the W IPO Academ y in introducing an online
course on Arbitration and Mediation under the W IPO Rules.
9.4. Tailored ADR ser vices

The W IPO Center recognizes that certain sectors experience
specific recurring types of disputes with particular features
and needs that can best be addressed by specially tailore d
ADR services. It works with IP owners and users as well as
their representative organi zati ons to facilitate or establish
specially adapted ADR schemes.
One such schem e is the W IPO-initiated Uniform Domain Name

Dispute Resolution Policy (UDRP), under which the W IPO
Center has been providing services since 1999. More recently,
in 2008, the W IPO Center responded to a request by the
Association of International Collective Management of
Audiovisual W orks (AGICOA) by developing the “W IPO
Expedited Arbitration Rules f or AGICOA”, tailored to the
specific needs of AGICOA right holders. One provision
includes the direct implementation of the award by AGICOA,
which updates the rights and releases the royalties
141

accordingl y. For AGICOA disputes, the W IPO Center has
identified a special panel of copyri ght and entertainment law
arbitrators from various jurisdictions.
The W IPO Center also collaborates with stakeholders i n

em erging IP-rel ated areas, including biodiversity, traditional
knowledge, traditional cultural expressions and access to
health care, in order to develop adapted dispute resolution
systems. It has, for i nstance, been involved in informal
explorations of ADR’s potential in the context of the
Convention on Biological Diversity and the International Treat y
on Plant Genetic Resources for Food and Agriculture.
9.5. Ser vices of the wipo arbitration and mediation center

Mediation: a procedure i n which one or more independent
mediators assist the parties in reaching a settlem ent of the
dispute through facilitating dialogue and helping the parties to
identif y their interests. The mediator does not render a
decision.
Arbitration: a procedure in which a dispute is submitted to

one or more independent arbitrators who m ake a binding
decision on the dispute. The decision of the arbitrator is
internationally enforceable under the 1958 New York
Convention for the Recognition and Enforcem ent of Foreign
Arbitral Awards.
Expedited Arbitration: Arbitration procedure with shortened

timelines and reduced costs, normally providing for a sol e
142

arbitrator. The award is enf orceable under the New York
Convention.
Expert Determination: a procedure in which a specific

questi on is submitted to one or m ore independent experts who
make a determination on the referred matter. The
determination is binding, unless the parties agree otherwise.
9.6. Trends in WIPO mediation and arbitration

The W IPO Center – having administered over 80 mediations
and 110 arbitrations, the m ajority of which were filed in the
last four years – has observed various trends and
developments in IP dispute resolution:
41 percent of the administered procedures were mediation
cases, 49 percent standard arbitration, and 10 percent
expedited arbitration.
The W IPO clauses and procedures are often found in a

combined model. For example, the m ost frequently used W IPO
clause is that providing for “mediation, followed in the absence
of a settlem ent by (expedited) arbitration”. It has the
advantage of giving parties the opportunity to settle their case
in a more informal forum before moving to arbitration.
W IPO standard arbitration tends to be used in more com plex

cases such as patent disputes, which generally last from 12 to
18 months. W IPO expedited arbitration is primarily used in
disputes where a lower amount is at stake, less vol uminous
and technical evidence is involved and where a quick result is
143

needed, which tends to be the case for t rademark and
software-related disputes. In general, the expedited arbitration
procedure takes up to six months.
W IPO mediation and arbitration have been used in disputes

coveri ng a variety of fields, incl uding patent infringem ent and
licenses, information technology transactions,
telecommunications, distribution agreem ents for
pharmaceutical products, copyright issues, research and
development agreements, knowledge transfer, trademark co-
existence agreements, art marketing agreements, joint venture
agreem ents, engineering disputes, life sciences, sports,
entertainment, dom ain name disputes and cases arisi ng out of
agreem ents in settlement of prior multi-jurisdictional IP
litigation. Parties have also used the Center’s services in non-
IP-related disputes, such as general contractual matters,
insurance, construction and employm ent (at an IP law firm).
9.7. A WIPO expedited arbitration relating to a banking

software dispute.
Another area in which W IPO ADR has recentl y been used is

banking. Banks can be i nvolved in a vari ety of IP-related
disputes, for example, in connection with the use of a bank’s
trademark or the development of software systems, as this
case demonstrates.
A U.S. company providing data processing software and

services and an Asian bank concluded an agreem ent regardin g
144

the provision of account processing services. The parties
agreed the U.S. Company was to be the exclusive service
provider for certain of the bank’s affiliates in North America
and Europe. Any dispute arising out of or in connection with
the agreement would be resolved under the W IPO Expedited
Arbitration Rules.
Four years later, the U.S. Com pany alleged the bank had
violated the agreement by using the processing services of
third parties in the countries covered by the agreement. W hen
the parties failed to settle the dispute, the U.S. service
provider commenced W IPO expedited arbitration proceedings,
claiming infringement of the agreement and substanti al
consequential damages.
The parties agreed upon a sole arbitrator who held a two-day

hearing in New Yo rk. The parties and the arbitrat or agreed to
use the W IPO Center’s electronic case communicati on facility,
W IPO ECAF. After three months, the arbitrator rendered a
final award f or partial infringem ent of the agreement granting
damages to the U.S. service provi der.
9.8. Settlement trends

The Price W ater house Coopers (PW C) study on “International
arbitration: Corporate attitudes and practices” observed a
general trend according to which parties explore settlement at
different stages of the dispute resolution process. Twenty-five
percent of the study’s participants indicated achieving a
settlem ent before the arbitral award, while 7 percent reported
145

settlem ents that were impl emented in a consent award,
suggesting an approximate settlement rate of 32 percent in
international arbitration within the perimeters of the survey.
The W IPO Center observes an even higher settlement trend in

relation to IP-related disputes.1 The flexibility of W IPO ADR
procedures allows parties to com bine the different procedures
and to consider am icable settl ement throughout the process.In
W IPO mediation, 71 percent of cases settl ed, 23 percent did
not and 6 percent are pending. Most settlem ents occur during
the mediation phase, consistent with the parties’ intent in
using this mechanism and with the role of mediator. The
mediator assists the parties to explore workable, interest-
based solutions that help them to preserve their long-term
relationship.
But a number of W IPO cases also end in settlem ent after the
termination of the m ediation. By enabling the parties to
identif y their interests and to better understand their dispute,
mediation can provide a basis for direct negotiation between
the parties after the m ediation. For example, in a recent W IPO
mediation, a European university holding several
pharmaceutical patent applications and a European
pharmaceutical company used mediation in order to conclude
a license agreement. The mediator, a lawyer with years of
experience in the pharmaceutical industry, helped the parties
to identif y the issues and deepen their understanding of the
legal circumstances. After the mediation, the parties resumed
direct negotiations and reached an agreement.
146

Interestingly, a significant proportion of W IPO arbitration
cases also result in settlement: 50 percent of cases settled
(including consent awards), 39 percent did not settle and an
award was issued (excluding consent awards) and 11 percent
are pending. The W IPO Arbitration Rules provide that the
arbitral tribunal can suggest that the parties explore
settlem ent whenever it deems appropriate. If the parties so
wish, the arbitral tribunal can give them a preliminary view of
the case in order to facilitate settl ement discussions. W here
the parties concl ude a settlem ent before an award is made,
the arbitral tribunal can, upon the parties’ joint request, record
that settl ement in the form of a consent award, which is
enforceable under the New York Convention.
147

CHAPTER – 10 CONCLUSION
ADR procedures are flexibl e m echanisms allowing parties to

explore appropriate remedies that may not always be available
in court litigation.
W hile monetary relief remains the most comm on form sought

in W IPO cases, parties often also request specific actions as a
remedy, such as a declaration of non-performance of
contractual obligations, or of infringem ent of rights. Other
forms of remedies sought are, for inst ance, further safeguards
for the preservation of conf identiality of evi dence, the
provision of a security, the production of specific data, the
delivery of a specific good or the conclusion of new contracts.
The time has come legal fraternity to have trained panels of
mediators and training also being imparted to Judges,
Magistrates & other Judicial Officers, concerned court staff
and, more importantly, the litigation lawyers, along with the
necessary sets of Rules f or their respective conduct - in
tandem with a robust Case Management system, these
provisions hold great promise for the litigants virtually
languishing for years in the corri dors of Indian courts.
The courts may refer IPR disputes to resolve all disputes ev n

to the extent of controversial nature of the disputes; wherever
both parties are wish to resolve their dispute largely by
determining common manageable disputes is most appropriate
for ADR systems to bring parties on the tabl e.
148

W ith certainty, it can with be stated that most
intellectual Property disputes would derived benefit in som e
way or otherwise from usage of wide range of ADR
mechanisms, which could be either by settlement, narrowing
the issues, improved comm unication, or case-planning
assistance. That one of the key benefits of ADR is the ability
of the parties to select a process suitable for their case and to
tailor the process to their needs.
Thus, to obtain the m ost beneficial result from ADR in usag e

of IPR cases, lawyers should help their clients make inf ormed
decisions in selecting a suitable ADR process and in
customizing it for their case, and should thoroughly prepare
themselves and their client to participate m eaningfully in the
ADR proceeding.
An epitom e for a conclusion would be to resonate the words

eloquently stated by Abraham Lincoln, that "part of the role of
an attorney is to persuade your neighbours to com promise
whenever you can. Point out to them how the nominal litigant
winner is often a real loser-in fees, expenses and waste of
time". Presently, many Intellectual Property attorneys and their
clients do not regularly consider ADR as a means for resolving
their disputes. ADR processes are relatively new in India to
the Intellectual Property field and should be used more
frequentl y.
149

BIBLIOGRAPHY 125-140
Books
Statutes
Reports
Articles, Papers and Transcripts
Websites referred
News papers
150

APPENDIXES
41 The Arbitration and Conciliation Act, 1996

42 The Legal Services Authority Act,1987
43 Code of Criminal Procedure,1973 148
151

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AN EMERGING TREND - ADR MECHANISM IN IPR

MEWAR UNIVERSITY, NH-76,

Sanjeev Kumar Chaswal

Electronic copy available at: https://ssrn.com/abstract=3401259

I, Sanjeev Kumar Chaswal a student of LL.M final year of Mewar University of

Date ------------- ( ………………………… )

Electronic copy available at: https://ssrn.com/abstract=3401259

This is to certify that the dissertation entitled “ADR MECHANISM IN IPR

The dissertation is worthy of consideration for the award of LL.M. Degree of

The conduct of research scholar remained excellent during the period of

Electronic copy available at: https://ssrn.com/abstract=3401259

I feel proud to acknowledge the able guidance of our esteemed.. I acknowledge

Place: (Sanjeev Kumar Chaswal)

Electronic copy available at: https://ssrn.com/abstract=3401259

Place: (Sanjeev Kumar Chaswal)

Electronic copy available at: https://ssrn.com/abstract=3401259

AGICOA Association of International Collective Management of

ADR alternative dispute Resolution

Cr LJ Criminal Law Journal

C.P.C Civil Procedure Code

CILAS Committee for Implementing Legal Aid Schemes

GATT General Agreement on T ariff s and T rade

ICA International Centre for Arbitration

ICADR International Centre for Alternative Dispute Resolution.

ICANN Internet Corporation for Assigned Names And Numbers

IPR Intellectual Property Rights

LL.M. Master of Laws

NALSA National Legal Services Authority

PWC Price Water house Coopers

SCC Supreme Court Cases

TRIPS Trade Rel ated Aspects of I ntellectual Propert y Ri ght s

UNCITRAL The United Nation Commission on International trade laws

UDRP Uniform Domain Name Dispute Resolution Policy and Rules

WLR Weekly Law Reports

WIPO The World Intellectual Propoerty Organistion

WIPO Arbitration and Mediation Center:

Electronic copy available at: https://ssrn.com/abstract=3401259

THE ABSTRACT 1-3

CHAPTER – 1. INTRODUCTION 4-8

1.1. What is Alternative Dispute Resolution 4

CHAPTER – 2 HISTORY OF ADR- IN INDIAN PERSPECTIVE 9 - 15

2.1 Prevalance of justice in ancient india 9 - 13

CHAPTER – 3 OVERVIEW OF ADR MECHANISMS 16 - 36

3.1. What is ADR Mechanism 16-17

CHAPTER – 4 ADR SYSTEM AFTER INDEPENDENCE 37 - 71

4.1. The Emergence of ADR system in independent India 42- 46

Electronic copy available at: https://ssrn.com/abstract=3401259

CHAPTER – 5 OVERVIEW OF IPR AND LITIGATION IN INDIA 72 – 90

5.0. Introduction 72- 74

CHAPTER – 6 SCOPE OF ADR IN IPR DISPUTES 77 -110

6.1. Mechanism in the intellectual Property regime 77

CHAPTER – 7 IP DISPUTES FOR ADR MECHANISMS 96 - 118

7.0. The IPR disputes and ADR: 96-101

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CHAPTER 8 INTERNATIONAL DISPUTES 119-125

8.1. Dispute Scenarios 121

CHAPTER 9 THE WIPO ARBITRATION AND MEDIATION CENTER 126-134

9.1. History of WIPO 126

10. CONCLUSION 135-136

11. Table of Cases 137

12. Bibliography 138

13. Appendixes 139

Electronic copy available at: https://ssrn.com/abstract=3401259