Dissertation MAIN

CLINICAL COURSE – I (2018-19)
JAMIA MILLIA ISLAMIA

MAULANA MOHAMMAD ALI JAUHAR MARG, NEW DELHI-25
FACULTY OF LAW
CLINICAL COURSE-I
DISSERTATION ON ALTERNATIVE DISPUTE

REDRESSAL
GUIDED BY :-
MRS. MADHU SAINI
Submitted by:-
Priyanshu Agarwal
IV year SEM VII
Sec-A
20150819
2015-2020 Batch
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ACKNOWLEDGEMENT
Firstly, I would like to express my profound sense of gratitude towards the almighty
for providing me with the authentic circumstances which were mandatory for the completion
of my project.
Secondly, I am highly indebted to Mrs. Madhu Saini ma’am, Faculty of Law, Jamia
Millia Islamia University, New Delhi for providing me with constant encouragement and
guidance throughout the preparation of this project.
My cardinal thanks are also for my parents, friends and all teachers of law department
in our college who have always been the source of my inspiration and motivation without
which I would have never been able to unabridged my project.
Priyanshu Agarwal
IV year SEM VII
Sec-A
20150819
2015-2020 Batch
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TABLE OF CONTENTS
1. Concept and Scope of ADR……………………………………………………………….
1.1. What is ADR
1.2. Scope of ADR
2. Various forms of ADR…………………………….............................................................
2.1 Negotiation
2.1.1. Characteristics of a negotiation………………………………………………….
2.1.2. Advantages of negotiation……………………………………………………….
2.1.3. Disadvantages of negotiation……………………………………………………
A. Process Of Conciliation
2.3. Mediation……………………………………………………………………………….
2.3.1. Benefits of Mediation
2.3.2. Difference between Mediation and Conciliation
2.3.3. Mediation in Indian legal system
2.3.4. Stages of Mediation……………………………………………………………….
A) The Mediation Process
B) Role of a Mediator
2.3.5. Issues Pertaining To Mediation……………………………………………………
2.4. Medola………………………………………………………………………………….
2.5. Mini- Trial……………………………………………………………………………
B. Advantages Of Lok Adalats
C. Issues Regarding Lok Adalats
2.7. Arbitration………………………………………………………………………………
2.7.1 Nature of Arbitration……………………………………………………………….
2.7.2. Meaning of
Arbitration……………………………………………………………..
2.7.3. Essentials of Arbitration
P. Section 29A: ‘Time Limit for Arbitral Award’
Termination of Proceedings…………………………………………………………………….
Judicial Interpretation of Section 48 and Section 57
Public Policy…………………………………………………………………………………..
Proceedings of Conciliation………………………………………………………………….
i. Commencement of Conciliation and Appointment Of Conciliator
ii. Procedure In Conciliation And Role Of Conciliator…………………………………………
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KK. Section 77: ‘Resort to arbitral or judicial proceedings’

6. Bibliography…………………………………………………………………………………
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1. CONCEPT AND SCOPE OF ADR
1.1. What is ADR
Alternative Dispute Resolution (ADR) is the procedure for settling disputes without
litigation, such as arbitration, mediation, or negotiation. ADR procedures are usually less
costly and more expeditious. They are increasingly being utilized in disputes that would
otherwise result in litigation, including high-profile labor disputes, divorce actions, and
personal injury claims. Generally, any method of resolving disputes without litigation.
Abbreviated as ADR. Public courts may be asked to review the validity of ADR methods,
but they will rarely overturn ADR decisions and awards if the disputing parties formed a
valid contract to abide by them.1It is a process in which a neutral third party—a mediator or
arbitrator—helps parties who are embroiled in a dispute come to an agreement. 2 ADR
processes may be facilitative, advisory, determinative or, in some cases, a combination of
these.3
Alternative Dispute Resolution is a concept developed in lust for an alternative to traditional

litigation, which is not only time consuming in most of the countries but also incurs heavy
financial burden on the aggrieved parties. It envisages different types of methods wherein the
parties can go and seek cost-effective and efficient remedies. It is a culmination of different
concepts and techniques which can be exhausted to settle disputes among the parties.
The process of dispute resolution by ADR is different from judicial process. Under ADR
disputes are settled with the assistance of a neutral third person generally of parties’ own
choice; that person is generally familiar with the nature of the dispute. Here the proceedings
are informal without any procedural technicalities. It is expeditious, inexpensive and
confidential. Thus, the decision-making process aims at substantial justice. The goal is to
provide more effective dispute resolution. Availability of ADR creates more choices within
the justice system. The alternative movement is not just a response to judicial administrative
shortcomings; it is also a demand for higher standards of justice. The movement and concern
for alternatives, including alternatives to the courts as well as alternatives in the courts also
1
https://www.law.cornell.edu/wex/alternative_dispute_resolution
2
https://www.pon.harvard.edu/daily/dispute-resolution/what-is-alternative-dispute-resolution/
3
https://www.iama.org.au/what-we-do/what-adr
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represent a desire to move the justice system closer to the people and their problems, needs,
perceptions and understandings.4
The technique of ADR is an effort to design a workable and fair alternative to one traditional
judicial system. It is a fast track system of dispensing justice. These measures are being taken
throughout the world for resolving pending disputes as well as at pre- litigation stage. The
law commission5 noted that in all developed systems normally not more than 15% of the
cases go for final adjudication. The rest of the cases are resolved by alternative dispute
resolution mechanisms like conciliation, mediation and arbitration. Pre-trial conciliation
accounts for the disposal of a large number of cases. ADR has emerged as a significant
movement in these countries and has not only helped reduce cost and time taken for
resolution of disputes but also in providing a congenial atmosphere.
The main aim of these fora is to settle the dispute in such a manner that the mutual relations
of the disputants remain virtually the same as these had been before the commencement of
such dispute. They aim not only at the restitution of normal relations between the disputing
individuals and families, but also at a better and more durable resolution of the problem, so
that their future relations might not get tense at the slightest aggravation and a tense situation
in immediate future might be avoided. All this lays a great importance on the social aspect of
the dispute also. In substance the ADR process aims at rendering justice in the form and
content, which not only resolves the dispute but also tends to resolve the conflict in the
relationship of the parties, which has given, rise to that dispute. Alternative mechanisms for
disputes resolution play an important role in the justice dispensation system not only by
improving access to dispute resolution processes but also by providing quality ‘Justice’.6
1.2. Scope of ADR
The methodology applied and techniques used in mechanism of ADR to settle the disputes
between the parties do not follow the ticklish procedure adopted by the Judicial Courts. The
mechanism of ADR system does not partake the course of judicial process. It is completely
different and divorced from judicial technicalities. The ADR process is very simple, cheap,
easy, speedy and result oriented in disposal of the cases. The ADR techniques are extra
4
http://shodhganga.inflibnet.ac.in/bitstream/10603/10373/7/07_chapter%201.pdf
5
222nd Report of Law Commission of India
6
Supra Note 4.
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judicial in character. These are the main reasons for recognition of ADR techniques. 7 The
Mechanism of Alternative Dispute Resolution System does not have single form or rigid
application in one particular way. There is an array of hybrid procedure for settlement of
disputes out side the Court. The ADR consists of various alternative techniques and forms.
For example Arbitration, Conciliation, Negotiations, Mediation, Judicial Settlement, Mini
Trial, Med-Arbitration and Settlement Conferences and Neutral Evaluation are the forms of
ADR techniques. These techniques are much acceptable both to the judiciary and common
man. The disputes may be civil in nature, commercial, and industrial or may relate to family
or matrimonial causes. The application of the ADR methodology has also shown favourable
results in the disputes relating to the business activities and commercial ventures. The
mechanism of ADR System may be able to yield expected results in the bank cases,
contractual performance, contracts in constructions, the cases of intellectual property rights,
the insurance coverage, business activities in joint venture, the cases of partnership arising
out of personal differences, personal injury, product liability, professional liability, real estate
and securities. The mechanism of ADR System is not intended to supplant altogether the
traditional or existing means of dispute resolution. It offers only alternative options to
litigation.8
The ADR process in philosophical perceptions is considered to be the mode in which dispute
resolution process is qualitatively distinct from a judicial process. The disputes are settled
with the assistance of a neutral third person. The third neutral person is selected or appointed
by the parties of their own choice and without fear or favour in order to avoid any sort of
bias. He is generally familiar with the nature of disputes and bone of contention between the
parties. The neutral person is also well conversant about the relationships of the parties with
each other. The involvement of third neutral person is inevitable requirement in the entire
process. He is known as Conciliator, Mediator or Negotiator. He assists the parties in an
independent and impartial manner and bring both the parties close for negotiations and
settlement. He endeavours them to reach an amicable settlement in peaceful manner. The
settlement through conciliation or mediation is guided by the principles of objectivity,
fairness and justice. The ADR process during settlement always gives consideration to the
rights and objections of the parties and heard on common platform in the presence of
adversaries. The nature of ADR system is common and a voluntary process. The process of
7
See, P.C.Rao & William Sheffield, Alternative Dispute Resolution : What it is and How it Works, Reprint,
2002, p-2
8
Ibid.
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settlement is initiated for the welfare of the litigant parties without any pressure or duress.
The litigant parties, because of its greater efficacy and economy choose this and prefer the
settlement as early as possible. The mechanism of ADR is most acceptable in nature because
entire process is non-judicial. Neither the judicial nor procedural technicalities are applicable
in dispute resolution through alternative methodology.9
The litigation in the Court is always governed by the set of rules and regulations under the
substantive or procedural laws. For example, criminal trials are governed by Criminal
Procedure Code and cases of civil nature are governed by Civil Procedure Code or other
subsidiary laws like Revenue or Land Laws, House Rents Acts etc. But there is always scope
of further litigation by way of appeals, reviews or revisions. But the scope of further litigation
in any form is not available in the concept of ADR techniques. These techniques are applied
and used keeping in view business environment and other allied activities, issues involved
and likelihood of settlement apart from the nature of relationship between the parties. These
are the main considerations in compromise settlement in order to end the litigation on
permanent basis. The ADR techniques terminate the litigation on permanent basis and
prevent future scope of litigation, which is an unending process in the judicial trials.
Moreover, the Mechanism of ADR System works in dispute resolution in accordance with
compromise agreement. Because the compromise agreements between the parties are pre-
requisites of their claims with reference to the performance of promises and these are
contained in that document, which is an effective instrument in ending the controversy
permanently.
The mechanism of ADR System and its techniques are extra-judicial remedy to resolve
disputes outside the legal fora. These techniques can be used in all those cases, which are
capable of being resolved, under law, by mutual agreement between the parties. The scope of
ADR is wider and can cover the cases of civil nature, commercial, industrial and family
disputes or any other cases of urgent nature. The ADR works across the full range of business
disputes: banking; contract performance and interpretations, construction contracts,
intellectual property rights, insurance coverage, conflicts in joint ventures, partnership
differences, personal injury; product liability; professional liability, real estate and securities.
The mechanism of ADR system may offers best solution in commercial disputes of an
international character. The scope of an ADR System is not intended to supplant existing
means of dispute resolution. It offers only alternative options to litigation. There are large
9
http://shodhganga.inflibnet.ac.in/bitstream/10603/127847/12/07_chapter%202.pdf
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number of important areas where there is no substitute for Court decision. For example the
matter pertaining to the Constitutional law and Criminal laws are beyond the purview of
amicable settlement. But the ADR system through conciliation or negotiations offers viable
substitute to resolve the dispute, if the matters are of such a nature which are compoundable
in the eyes of law. The demand for introduction of ADR system has been persistently
gathering momentum from every walk of life. The jurists, legal luminaries including judicial
officer presiding over the Courts and administrative heads considers that application of ADR
shall reduce the mounting pressure of cases in the higher and subordinate judiciary. The
conferences and meetings on judicial reforms always start with preliminary speeches and
addressed for search of viable substitute to existing legal system.
The fantastic growth of commerce and business activities in the field of information
technology has created an entirely new forum for business and conduct of global operations.
It has created necessity of new chapter with adequate definitions because business
transactions at international level has completely extinguished the geographical borders. The
laws neither have been enacted in a single day nor it could be so. The speed of justice
delivery system is not so fast what the commerce of today expects. The rapidity and the
advancement of technologies will remain far away of the updating and administering the
relevant enactment. The contracts and dispute in growing information technology, new
business transactions, environmental laws etc cannot be underrated. The dispute resolution in
the absence of appropriate laws shall have to take place on the basis of outdated laws in order
to address the consumers. In such a situation, the scope mechanism of ADR System extends
its hands to cover the new fields especially through arbitration whose award is non-
appealable and cannot be easily set aside.10 The ADR offers the best solution and attempts to
cover every field. The ADR system works to compromise the suit where disputants are
genuinely interested in a settlement. The ADR system may operate successfully in dispute
resolution of both domestic and international character. It may be commercial in nature or
civil. The ADR system is expanding its horizon continuously keeping in view the modalities
of time and delay in dispensation of justice.11
10
See, Dr. M.Seshagiri Rao, Arbitation in the Field of Information Technology and E-Commerce: Role of
Technocrats: A paper presented at the National Conference on Mediation/Arbitration, Bangalore, July 20,2001.
11
See, Ghanshyam Singh, Alternative Dispute Resolution: A Mechanism for Settlement of Commercial
Disputes, Delhi Law Review. Vol. XVIII, (1996), P237.
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2. VARIOUS FORMS OF ADR
The various types of alternative dispute resolution all have the goal of settling disputes
without the need for a trial. Frequently the process is begun with the parties attempting to
negotiate a resolution to the disagreement, whether through legal representatives, or directly.
If no resolution is reached through negotiation, the parties may resort to other forms of ADR.
2.1. Negotiation
Negotiation has been defined as any form of direct or indirect communication whereby
parties who have opposing interests discuss the form of any joint action which they might
take to manage and ultimately resolve the dispute between them.12 Negotiations may be used
to resolve an already-existing problem or to lay the groundwork for a future relationship
between two or more parties. Negotiation has also been characterized as the “preeminent
mode of dispute resolution”13 which is hardly surprising given its presence in virtually all
aspects of everyday life, whether at the individual, institutional, national or global levels.
Each negotiation is unique, differing from one another in terms of subject matter, the number
of participants and the process used.
It is a non-binding procedure involving direct interaction of the disputing parties, wherein a

party approaches the other with the offer of a negotiated settlement based on an objective
assessment of each other’s position. It is a voluntary non-binding process in which parties
control the outcome as well as procedures. Negotiation differs from other dispute resolution
procedures in as much as it does not involve a third party to facilitate or promote the
settlement while all other procedures essentially involve a third party.
2.1.1. Characteristics of a negotiation
Negotiation is:
 Voluntary: No party is forced to participate in a negotiation. The parties are free to

accept or reject the outcome of negotiations and can withdraw at any point during the
12
The Law Society of Upper Canada “Short Glossary of Dispute Resolution Terms” (Toronto: 1992) at 6.
13
S.G. Goldberg; E.A. Frank; N.H. Rogers; Dispute Resolution: Negotiation, Mediation, and Other Processes,
(2nd ed.) (Boston: Little, Brown and Company, 1992) at 3.
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process. Parties may participate directly in the negotiations or they may choose to be
represented by someone else, such as a family member, friend, a lawyer or other
professional.
 Bilateral/Multilateral: Negotiations can involve two, three or dozens of parties. They

can range from two individuals seeking to agree on the sale of a house to negotiations
involving diplomats from dozens of States (e.g., World Trade Organization (WTO)).
 Non-adjudicative: Negotiation involves only the parties. The outcome of a negotiation

is reached by the parties together without recourse to a third-party neutral.
 Informal: There are no prescribed rules in negotiation. The parties are free to adopt
whatever rules they choose, if any. Generally, they will agree on issues such as the
subject matter, timing and location of negotiations. Further matters such as
confidentiality, the number of negotiating sessions the parties commit to, and which
documents may be used, can also be addressed.
 Confidential: The parties have the option of negotiating publicly or privately.
 Flexible: The scope of a negotiation depends on the choice of the parties. The parties
can determine not only the topic or the topics that will be the subject of the
negotiations, but also whether they will adopt a positional-based bargaining approach
or an interest-based approach.
2.1.2. Advantages of negotiation
In procedural terms, negotiation is probably the most flexible form of dispute resolution as it
involves only those parties with an interest in the matter and their representatives, if any. The
parties are free to shape the negotiations in accordance with their own needs, for example,
setting the agenda, selecting the forum (public or private) and identifying the participants. By
ensuring that all those who have an interest in the dispute have been consulted regarding their
willingness to participate and that adequate safeguards exist to prevent inequities in the
bargaining process (i.e., an imbalance in power between the parties), the chances of reaching
an agreement satisfactory to all are enhanced.
Like any method of dispute resolution, negotiation cannot guarantee that a party will be
successful. However, many commentators feel that negotiations have a greater possibility of a
successful outcome when the parties adopt an interest-based approach as opposed to a
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positional-based approach. By focusing on their mutual needs and interests and the use of
mechanisms such as objective standards, there is a greater chance of reaching an agreement
that meets the needs of the parties. This is sometimes referred to as a “win-win” approach.
Negotiation is a voluntary process. No one is required to participate in negotiations should
they not wish to do so. There is no need for recourse to a third-party neutral. This is important
when none of the parties wants to involve outside parties in the process, e.g., the matter to be
discussed or the dispute to be resolved may be highly sensitive in nature. Unlike the
outcomes of certain adjudicative processes, e.g., the courts, the outcome of a negotiation only
binds those parties who were involved in the negotiation. The agreement must not, of course,
be contrary to Canadian law (e.g., an agreement to commit a crime would be illegal and thus
void for public policy reasons). Assuming that the parties are negotiating in good faith,
negotiation will provide the parties with the opportunity to design an agreement which
reflects their interests. Negotiations may preserve and, in some cases, even enhance the
relationship between the parties once an agreement has been reached between them. Opting
for negotiation instead of litigation may be less expensive for the parties and may reduce
delays.
2.1.3. Disadvantages of negotiation
 A particular negotiation may have a successful outcome. However, parties may be of

unequal power and the weaker party(ies) may be placed at a disadvantage. Where a
party with an interest in the matter in dispute is excluded or inadequately represented
in the negotiations, the agreement's value is diminished, thereby making it subject to
future challenge. In the absence of safeguards in the negotiating process, the
agreement could be viewed by a participant or others outside the process as being
inequitable, even though the substance of the agreement may be beyond reproach.
 A successful negotiation requires each party to have a clear understanding of its

negotiating mandate. If uncertainty exists regarding the limits of a party's negotiating
authority, the party will not be able to participate effectively in the bargaining
process.
 The absence of a neutral third party can result in parties being unable to reach
agreement as they be may be incapable of defining the issues at stake, let alone
making any progress towards a solution.
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 The absence of a neutral third party may encourage one party to attempt to take
advantage of the other.
 No party can be compelled to continue negotiating. Anyone who chooses to terminate

negotiations may do so at any time in the process, notwithstanding the time, effort and
money that may have been invested by the other party or parties.
 Some issues or questions are simply not amenable to negotiation. There will be
virtually no chance of an agreement where the parties are divided by opposing
ideologies or beliefs which leave little or no room for mutual concessions and there is
no willingness to make any such concessions.
 The negotiation process cannot guarantee the good faith or trustworthiness of any of
the parties.
 Negotiation may be used as a stalling tactic to prevent another party from asserting its
rights (e.g., through litigation or arbitration).
2.2. Conciliation
Conciliation is one of the non-binding procedures where an impartial third party, known as
the conciliator, assists the parties to a dispute in reaching a mutually agreed settlement of the
dispute. A conciliator does not give a decision, but his main function is to induce the parties
themselves to come to settlement. The Conciliator may formulate or reformulate the terms of
settlement.
The parties competent to contract can seek conciliation and resort to an amicable settlement
of their disputes. They may belong to the same or different nationalities. The dispute, which
has either arisen or may arise in future between the parties can be settled. The dispute may be
in respect of the defined legal relationship, whether contractual or not, can be settled by
conciliation. The parties should agree to seek an amicable settlement of that dispute by
conciliation. The conciliation means to console for settlement of the conflict by mutual
agreements. The settlement means 'right settlement' on give and take basis. The 'right' means
'just' from both parties point of view with a view to ensure future harmonious relationship
between the parties eliminating the possibility of litigation on the subject matter. According
to Simkin, "Conciliation is a mild form of intervention limited primarily to scheduling
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conferences, trying to keep the disputants talking, facilitating other procedural niceties,
carrying messages back and forth between the parties, and generally being a 'good fellow'
who tries to keep things calm and forward looking in a tense situation".14
The conciliation means an 'assisted bargaining process' between the two. The conciliation
involves the intervention of a third party whose fresh point of view, suggestions, proposals,
broad knowledge and dignity of office are intended to facilitate agreement between the
disputants. The Conciliator has no power of decision. The conciliation stresses the power of
diplomacy and of mental acuteness as contrasted with the judicial process and decision-
making aspect of adjudication and arbitration. The conciliation process requires involvement
of Conciliator who is knowledgeable and experienced person. The person to be appointed or
acting as Conciliator should possess three basic qualities:
i. He must possess knowledge and experience of compromise settlements,

ii. He should have broad thinking with objectivity,
iii. He must maintain Independence and Impartiality,
iv. He should have capability to employ the conciliation techniques efficiently like
persuasion, rationalization, suggestions and coercion on equal footings on both the
parties''.15
A. Process Of Conciliation
 Commencement Of Conciliation And Appointment Of Conciliator
The conciliation process commences when the disputing parties agree to conciliate and a
neutral conciliator is appointed. The party initiating conciliation sends a written invitation to
conciliate to the other party briefly identifying the subject matter of the dispute. Conciliation
proceedings commence when the other party accepts in writing the invitation to conciliate.16
Thus conciliation agreement should be an ad hoc agreement entered by the parties after the
dispute has actually arisen and not before.17 Even if the parties incorporate conciliation
clauses in their agreements, still conciliation would commence only if the other party accepts
the invitation of one party to conciliate in case of a de facto dispute. Thus unlike in the case
of an arbitration agreement, Part III of the Arbitration and Conciliation Act, 1996 does not
14
See, William E.Simkin, Mediation and the Dynamics of Collective Bargaining, (1971), p-26.
15
See, V.P.Gupta, Law and Practice of Industrial Disputes witti Central, Punjab and Haryana Rules, (1984), p-1
16
S. 62, Arbitration and Conciliation Act, 1996.
17
V. Nageswara Rao, “Conciliation Proceedings under the Indian Arbitration Conciliation Act of 1996 and CPC
— An Overview”, available at: http:// lawcommissionofindia.nic.in/adr_ conf/nageswararao.pdf
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envisage any agreement for conciliation of future disputes. It only provides for an agreement
to refer the disputes to conciliation after the disputes have arisen.18
In conciliation proceedings with one conciliator, the parties may agree on the name of a sole
conciliator and in conciliation proceedings with two conciliators, each party may appoint one
conciliator. The parties may also request any institution or person to recommend suitable
names of conciliators or directly appoint them and such person or institution while
discharging this responsibility should have regard to aspects as are likely to secure the
appointment of an independent and impartial conciliator.19
A. Procedure In Conciliation And Role Of Conciliator

The conciliator may request each of the parties to submit a brief written statement describing
the general nature of the dispute and the points at issue, with a copy to the opposite party. 20
At any stage of the conciliation proceedings the conciliator may request a party to submit to
him such additional information as he deems appropriate.
The role of the conciliator is to assist the parties to arrive at an amicable settlement. The
conciliator may, at any stage of the conciliation proceedings, himself make proposals for a
settlement of the dispute.21 In the Indian context the conciliator therefore plays an evaluative
role while managing the process of conciliation as opposed to a mere facilitator. The
conciliator assesses the respective cases of the parties and apart from acting as a facilitator
suggests and advices the parties on various plausible solutions to the parties so as to enable
the parties to choose the best possible and apt solution. He attempts to get the parties to
accept the merits and demerits of their cases thereby leading them to a mutually acceptable
solution. The conciliator, in this manner plays a more proactive and interventionist role in
persuading the parties to arrive at a final settlement. In actual practice conciliator needs to be
a person who is not only well-informed and diplomatic but can also influence the parties by
his persona and persuasive skills. However, if the system of conciliation is to succeed as a
proficient ADR mechanism professional training of conciliators needs to be a mandatory
requirement.22
18
Visa International Ltd. v. Continental Resources (USA) Ltd., AIR 2009 SC 1366.
19
20
21
3 S. 67, Arbitration and Conciliation Act, 1996
22
A.C.C. Unni, “The New Law of Arbitration and Conciliation in India”, in P.C. Rao and William Sheffield (Eds.),
Alternative Dispute Resolution 68 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997).
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The conciliator is supposed to assist the parties in an independent and impartial manner in
their attempt to reach an amicable settlement of their dispute. A conciliator assists parties by
helping them to initiate and develop positive dialogue, clarify misunderstandings, create faith
upon one another and generate a congenial atmosphere required for harmonious and
cooperative problem-solving. In order to justify his position the conciliator must be an
impartial person. The parties should be able to repose trust and confidence in him so as to
enable them to share their secrets and their thinking process with the conciliator with the
belief that the same will not be divulged to other party without specific instructions in that
regard.23
 The Settlement Agreement
When it appears to the conciliator that there exist elements of a settlement, which may be
acceptable to the parties, he is supposed to formulate the terms of a possible settlement and
submit them to the parties for their observations. After receiving the observations of the
parties, the conciliator may reformulate the terms of a possible settlement in the light of such
observations.24 The statutory provisions enjoin upon the conciliator to draw up and
authenticate a settlement agreement. He should ensure that the parties have full understanding
of the settlement terms. The agreement must embody the terms and conditions of the
settlement with clarity and precision. It is open to the parties to settle some of their disputes
by conciliation and leave the unresolved disputes between them for resolution by other modes
of adjudication.
The settlement agreement must also bear the signatures of the parties. 42 Once the parties
sign the settlement agreement, it shall be final and binding on the parties and persons
claiming under them respectively.25
B. Advantages Of Conciliation
 Cost Effective And Expeditious Process
Conciliation is an economical and expeditious mechanism for resolution of disputes in

comparison to litigation and arbitration, which makes it an excellent ADR Mechanism. The
cost management tools and expertise of the conciliator generally prevent multiplication of
actual costs to the parties and seek to make it cost efficient. The conciliator follows a
23
M. K. Sharma, “Conciliation and Mediation”, available at: www.delhimediationcentre.gov.in
24
S. 73(1), Arbitration and Conciliation Act, 1996; See also United India Insurance Co. Ltd. v. Ajay Sinha, AIR
2008 SC 2398.
25
S. 73(3), Arbitration and Conciliation Act, 1996
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simplified procedure suited to the aspirations of the parties and keeping in mind the need for
speedy settlement of the dispute. Moreover the time management tools applied by the
conciliator prevent dragging on of conciliation proceedings for longer periods and ensure its
conclusion within a reasonable time frame.26 The end result in conciliation is a negotiated
settlement which is treated to be an arbitral award on agreed terms, thereby obviating the
possibility of successive appeals and finally resolving the dispute in an expeditious and cost
effective manner.
 Autonomy And Convenience Of Parties
Conciliation is flexible and convenient. The parties are free to agree on the procedure to be
followed by the conciliator, the time and venue of the proceedings and thus eventually
control the process. The conciliator may conduct the conciliation proceedings in such a
manner as he considers appropriate, taking into account the circumstances of the case,
convenience of the parties and the wishes the parties may express. A very commendable
feature of conciliation is that the parties can withdraw from conciliation at any stage. Unless a
party consents to the initiation and continuance of conciliation and accepts the resultant
settlement agreement he cannot be said to be bound by the process, and he may walk out
from conciliation proceedings at any time. This is unlike arbitration and litigation where
decisions can be made even if a party walks out.27
 Creative Solutions/ Remedies
In litigation or arbitration what solution or resolution would be contained in the judgment or

award is not within the control or prior knowledge of the parties and moreover the ultimate
decision is based on a straightforward decision on merits keeping in view the rights and
positions of the parties. In conciliation however the parties control the outcome and can
incorporate terms and conditions in the settlement agreement as per mutual agreement. They
can devise creative solutions for their disputes at one go which may not have been within the
contemplation of an arbitrator or a judge. They can also decide how their rights and liabilities
are going to be actually worked out on resolution of the dispute and chalk out ingenious
modalities for complying with the basic terms of settlement.
 Party Satisfaction And Harmony
26
Ashwanie Kumar Bansal, Arbitration and ADR 23 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005).
27
Ibid.
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Unlike litigation and arbitration where one party wins and the other loses, in conciliation both
parties are winners as the decision is acceptable to both. Both parties are in favour of the
decision, as until both parties agree to a proposal, the settlement or agreement does not take
place. Therefore it is a win-win situation for both the parties as both the parties are satisfied
with the agreement. Such win-win situation enables them to retain good relationship for times
to come unlike litigation and arbitration where the parties on account of the win-loss equation
are not able to continue or rebuild their relationship. Even where the conciliation proceedings
do not fructify into a settlement, they prove to be useful by enabling the parties to understand
each other’s versions, positions and aspirations in a better perspective.
 Confidentiality
In contradistinction to judicial proceedings conciliation is a private closed door affair and

therefore offers privacy and confidentiality. In fact confidentiality in conciliation proceedings
is a statutory guarantee28 which makes conciliation an excellent dispute resolution
mechanism.
 Enforceability Of Conciliation Settlement Agreement
The settlement agreement drawn up in conciliation proceedings has the same status and effect
as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an
arbitral tribunal under section of the Arbitration and Conciliation Act, 1996. Thus the
settlement agreement in conciliation is executable as a decree of the civil court. It is open to
any party to apply for execution of the settlement agreement by filing an execution petition
before the civil court. The expeditious enforcement of a conciliation settlement agreement in
a summary manner i.e. by way of execution proceedings in a civil court is the principal
advantage attached with conciliation.
C. Issues Pertaining To Conciliation

 Inadequate Use Of Conciliation In Delhi At The Post Litigation Stage.
Conciliation in general may also prove to be an effective post litigation dispute resolution
mechanism. It is one of the prescribed mechanisms under section 89 CPC also. However it is
hardly used as a dispute resolution mechanism at the post litigation stage. One of the major
reasons for the scant use of conciliation is the fact that conciliation and mediation are
strikingly similar and at the post litigation stage the process of mediation flourishes in Delhi
28
S. 75, Arbitration and Conciliation Act, 1996
19 | P a g e
in contradistinction to the process of conciliation. The process of mediation on account of its

wide publicity by the courts29 overshadows conciliation in Delhi.
 Scope Of Challenge To Conciliation Settlement
The conciliation settlement agreement has the same status and effect as if it is an arbitral
award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under
section 30 of the Arbitration and Conciliation Act, 1996.30 Section 30 (4) of the Act provides
that an arbitral award on agreed terms shall have the same status and effect as any other
arbitral award on the substance of the dispute. Section 36 of the Act provides that the arbitral
award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it
were a decree of the Court after the time for making ‘an application to set aside the award
under section 34 of the Act’ has expired, or such application having been made, it has been
refused.
 No Suspension Of Limitation Period In Pre Litigation Conciliation
The object of pre litigation conciliation is to make an attempt for amicable resolution of the
dispute between the disputant parties at the pre litigation stage itself. In case the conciliation
proceedings fructify into a settlement agreement the same would be executable as a decree of
the court. In case the matter is not settled the parties are always at liberty to approach the
courts for judicial determination of their disputes or take recourse to arbitration. However,
undoubtedly the process of conciliation from the stage when one party enters a request for
conciliation to the stage of final termination of proceedings is likely to take some time. The
time span may extend even to a few months also, which might result in extinguishment of the
limitation period to take recourse to litigation or arbitration in the meantime. This would
result in undue hardship for a party in such a case.
2.3. Mediation
One of the most informal and economic method of dispute resolution is mediation. Mediation
refers to the process whereby parties to a dispute appoint a third person/party as mediator,
29
The courts in Delhi issue mediation pamphlets along with summons to be distributed amongst the litigating
parties so as to create awareness with respect to mediation and its availability as an ADR process at court
annexed mediation centres.
30
20 | P a g e
who by facilitating communication, helps the parties to arrive at an amicable settlement by

helping them identify the issues, look at the alternatives available.
The mediator has no authority to make any decisions that are binding on them, but uses
certain procedures, techniques and skills to help them to negotiate an agreed resolution of
their dispute without adjudication.31
A mediation proceeding can only be started if both the parties agree to it. It is a party centric
and party controlled mode of dispute resolution as it is ultimately the discretion of party
whether they want to arrive at a settlement or not, a mediator can only help them arrive at
settlement, he cannot compel the parties to a settlement. The process is so confidential that
the discussion terms need not be disclosed to anyone outside the parties involved. A mediator
is not allowed to take sides, offer guidance or make any judgments but develops
communication and builds a consensus of the parties.
The basic underlying motive of mediation is to provide the parties with an opportunity to
negotiate, converse and explore options aided by the mediator to determine if a settlement is
possible.
Mediation is negotiation carried out with the assistance of a third party. It can be said to be an
extended form of negotiation. As in a negotiation only the parties with their lawyers attempts
to arrive at a settlement, whereas in mediation this effort is further supplement with the help
of a third neutral party which attempts to encourage exchange of information, provide new
information, help the parties to understand each others’ views, let them know that their
concerns are understood; promote a productive level of emotional expression. The mediator,
in contrast to the arbitrator or judge, has no power to impose an outcome on disputing
parties.32
2.3.1. Benefits of Mediation
Mediation being the most informal method of dispute resolution provides various advantages
and benefits to the disputing parties. Some of them can be summarized as:-
31
‘ADR Principles and Practice’ by Henry J. Brown and Arthur L. Mariot (1997, 2nd Ed. Sweet & Maxwell,
Lord on Chapter 7, p 127)
32
‘Dispute Resolution’ (Negotiation, Mediation and other processes’ by Stephen B. Goldberg, Frank E.A.
Sander and Nancy H. Rogers (1999, 3rd Ed. Aspine Law & Business, Gaithesburg and New York)(Ch. 3, p.
123),
21 | P a g e
1. Economic- Mediation is the most economic mode of dispute resolution. Because of its
informality, mediation process can be commenced and terminated at the will of the
parties, therefore preventing unnecessary costs that are most of the times unavoidable
in litigation or arbitration. Further, since the settlement arrived at the end of the
mediation is a mutually arrived and agreed upon settlement, chances of parties going
to appeal against is minimal thus saving them from the exorbitant fees and cost of
professionals as well as the Court.
2. Expeditious- Mediation proceedings are decided and agreed upon by the parties to suit
their needs and requirements. Therefore, mediator tries his level best to resolve the
dispute as early as possible. Even the evidence examination and cross-examination
phase can be avoided if a mutually beneficial settlement can be concluded without
them.
3. Confidentiality- It is the fundamental principle of any mediation. Mediator is duty

bound to conceal the details of the proceedings from any other person. Parties can
instruct the mediator to keep the information exchanged during the mediation privy.
Confidentiality inculcates feeling of candour among the parties, which is very
monumental in increasing the chances of settlement.
4. Consensual Outcome- Mediation is aimed to arrive at a consensual settlement among

the parties. Mediator cannot force his conclusion or judgement on one party. A
mediation settlement can only conclude if both the parties agree to it.
5. Party Controlled & Party Centric- Mediation is a party centric and controlled mode of
dispute resolution. It is started & terminated with the consent of both the parties.
Parties can control time, location and duration of the proceedings.
6. Flexible- Since, there is no such prescribed procedure of mediation. It is at the liberty

and discretion of parties to formulate their own procedures to suit their needs and
convenience.
7. Finality- Since the settlements arrived in mediation are mutually beneficial and
consensual, the possibility of an appeal is very low, thus it settles a disputes
expeditiously, economically and most importantly no reason is left to further appeal
against the outcome and thus saves legal system from unnecessary burden of
multiplicity of cases.
22 | P a g e
2.3.2. Difference between Mediation and Conciliation
Of all the methods of dispute resolution, the concepts of Conciliation and Mediation are
almost indistinguishable.
International Model law33 provides no such distinction between the two terms as Article 1
sub-clause (3) of the Model Law states:-
“For the purposes of this Law, “conciliation” means a process, whether referred to by the
expression conciliation, mediation or an expression of similar import, whereby parties request
a third person or persons (“the conciliator”) to assist them in their attempt to reach an
amicable settlement of their dispute arising out of or relating to a contractual or other legal
relationship. The conciliator does not have the authority to impose upon the parties a solution
to the dispute.”
Therefore, from the above produced text of the Model law, it is clear that UNCITRAL
considers both the concepts to be one and same.
However, the difference between the two concepts is clearly apparent in Indian laws.
Firstly, Section 89 of Code of Civil Procedure, 1908 provides for court initiated alternative
mode of dispute resolution.
“89. Settlement of disputes outside them to the parties for their observations and after
receiving the observations of the parties, the court may reformulate the terms of a
possible settlement and refer the same for—the Court.- (1) Where it appears to the
court that there exist elements of a settlement which may be acceptable to the parties,
the court shall formulate the terms of settlement and give
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.”
The fact the Mediation and Conciliation finds separate mentioning in the Section ipso facto
proves that legislature understands these as different concepts.
33
UNCITRAL Model law on International Commercial Conciliation
23 | P a g e
This finding is further supplemented by Section 30 of Arbitration and Conciliation Act, 1996
(which is based on UNCITRAL Model law on International Commercial Arbitration &
UNCITRAL Conciliation Rules, 1980). It states:-
“30. Settlement.- (1) It is not incompatible with an arbitration agreement for an

arbitral tribunal to encourage settlement of the dispute and, with the agreement of
the parties, the arbitral tribunal may use mediation, conciliation or other
procedures at any time during the arbitral proceedings to encourage settlement.”
Hence it is clear that Legislature Intended to provide different meaning to both these
concepts. From the Perusal of Arbitration & Conciliation Act, 1966 34 the role of a conciliator
is clear, and much wider than a mediator. A conciliator can make proposals for settlement,
‘formulate’ or ‘reformulate’ the terms of a possible settlement, while a ‘mediator’ would not
do so but would merely facilitate a settlement between the parties.
A mediation is much more party centric and party controlled than conciliation, the main
difference between a Mediator and Conciliator can be summarized as that a Mediator merely
facilitates communication between the parties in order for them to arrive at solution and
settlement whereas a Conciliator plays a more pro-active & aggressive role in determining
the course for settlement. Furthermore, Conciliation proceedings in India are guided by
Arbitration and Conciliation Act, 1996 whereas there are no such legislation governing
Mediation, but after decisions in Supreme Court Bar Association. TN v. UOI 35 and M/S.
Afcons Infra. ltd. v. M/S Cherian Varkey 36, that Justice Justice M. Jagannadha Rao
Committee was constituted to frame draft Mediation Rules, which were to be modified
accordingly by different High Courts, therefore Mediation proceedings are mostly governed
by High Court rules in the State.
2.3.3. Mediation in Indian legal system

Mediation is not a new concept in Indian Society; its roots can be traced back to Ancient
Indian social system, wherein mediation was commonly practiced by people to settle their
disputes.
34
Section 67,73
35
W.P (C) 496/2002
36
Civil Appeal 6000/2010
24 | P a g e
With different problems such as excessive numbers of pending cases in different courts of the
country because of which it took courts years to resolve dispute compelled the legal system to
recognize and start inducing back alternative modes of dispute resolution.
Following types of Mediation can be found in Indian system: -
1. Statutory Mediation- Those cases for which statute provides for the parties to go
through mediation to settle their disputed. For eg. Industrial Disputes Act, 1947;
Hindu Marriage Act and various other acts give reference to mediation and
conciliation.
2. Court Ordered Mediation- Code of civil procedure by virtue of Section 89 gives

powers to court to refers] any case to arbitration, conciliation, mediation or judicial
settlement.
3. Agreement- Parties through agreement between them can establish that in even of any
conflict they can refer their dispute to mediation.
4. Voluntary- Even when there is no agreement between the parties, or no statutory

provision or court order, they can still resolve their dispute through mediation.
2.3.4. Stages of Mediation
There is as such no legislation laid down to govern or prescribe the procedure of Mediation
proceedings. A typical mediation involves several stages. These stages are neither rigid nor
inflexible and can be modulated to achieve the desired outcome.
Functional Stages of a Mediation process are:

1. Introduction and Opening statement
2. Joint Session
3. Separate Session
4. Closing
C) The Mediation Process
The agreement to mediate is the genesis of mediation. Unfortunately there is no legislation
governing mediation in general in India and therefore there is no statutory indication as to
how mediation is to be initiated and conducted by the parties in general. The agreement to
mediate is therefore generally an ad hoc agreement which emerges after a dispute has arisen
25 | P a g e
and where under the parties jointly agree to refer the existing dispute to mediation by a third
party. It is however a normal phenomenon for parties to incorporate mediation clauses in
their contracts thereby agreeing to refer future disputes to mediation also, although even in
that eventuality, there is still a requirement for the parties to be ad idem for actually referring
the matter to mediation after the dispute has in fact arisen. Mediation therefore commences
only when both the parties agree to resolve their disputes by taking recourse to mediation and
a neutral and independent mediator is jointly appointed for facilitating the process. The actual
mediation process follows thereafter under the guidance of the mediator to be suitably
moulded in light of the needs, aspirations, desires, preferences and goals of the parties.
Mediation is described as a structured process of consensual dispute resolution. Traditionally
the mediation process involves different stages viz. introduction, joint session, caucus,
agreement, etc. As far as the Indian scenario is concerned there is no statutory mandate to
follow a particular procedure, however it is the experience for years together which has been
crystallized into conventions, which require the mediator to preferably follow a structured
process. The stages of a conventional mediation process are, therefore neither rigid nor
inflexible and can be modulated to achieve the desired outcome.37 Procedural flexibility is an
inbuilt advantage in mediation which is untrammeled by any structural specifications and the
mediator may devise a tailor made procedure to suit the requirements of the parties and the
attending circumstances, with the necessity of finding a consensual resolution being the
primary guiding factor.
Yet the ground reality is that invariably the de facto process adopted by a specially trained
mediator, in substance turns out to be the conventional structured mediation process
comprising of pre defined stages or permutations and combinations thereof. The idea of
specifying a pre fabricated structured process is avoidance of hit and trial methods and
unnecessary experimentation so as to introduce consistency and efficacy in the process and
reap benefits of the best practices, experiences and research of professionals and intellectuals.
The fact of the matter is that the structure of mediation process creates an efficient
convention for mediators and parties to follow in multiple iterations; however, adjustments
may be desirable, indeed even necessary in many cases38 and such adjustments are quite
permissible.
 Introduction (Opening Statement)

37
Dhananjaya Y. Chandrachud, “Mediation – Realizing the Potential and Designing Implementation Strategies”,
available at: http://lawcommissionofindia.nic.in
38
Hiram E. Chodosh, “Mediating Mediation in India”, available at: http://lawcommissionofindia. nic.in
26 | P a g e
The mediation process starts with an opening statement wherein the mediator briefs the
parties about the purpose and benefits of mediation, the role of the mediator and the general
details about the mediation process. It is a sort of an introduction or a prologue to the
mediation process. The opening statement therefore sets the tone for mediation. The mediator
gives an overview to the parties as to how mediation and the mediation process function,
emphasizing the voluntary fabric of mediation and explaining that the parties in mediation
not only control the process but also the outcome of the process. He further explains the
ground rules and ultimately generates momentum towards open discussions. The object of the
opening statement of the mediator is also to commence to develop credibility and trust
relationship with the parties and a bonding between the mediator and the parties. The opening
statement also gives the parties an opportunity to familiarize themselves with the mediator,
understand the nature and disposition of the mediator and assures the parties of a confidential,
secure and amiable ambiance for a positive dialogue. It is therefore important to explain the
elements of voluntariness, confidentiality and party autonomy associated with the mediation
process and to project the mediator as a friend, philosopher and guide of the parties who is
there to help the parties to help themselves. The mediator must therefore square the circle and
create an inoffensive presence.39
 Joint Session
The next stage in the mediation process is a joint session where the mediator jointly and
simultaneously interacts with both the parties, who in presence of each other open and affirm
their respective cases. The parties are given sufficient time to describe the dispute from their
respective angles and thereafter they are also afforded an opportunity to respond to the case
of the other party, though not from a strictly adversarial perspective. There is an opportunity
to put questions also. The mediator also utilizes this opportunity to learn about parties’
interests and priorities, close the gap between the facts and the parties differing perceptions of
them, to demonstrate positive aspects of the relationship and the goals that the disputants
have in common and encourage and model negotiating behaviors more likely to produce
settlements. The joint sessions envisages a free and open dialogue facilitated by the mediator
with the objective of ascertaining views, exchanging information, comprehending emotions
and perceptions and analyzing the facts and issues. This discussion and dialogue is extremely
important for setting the tone for amicable resolution. It is extremely important that the
mediator makes sure that each party feels that he has been accorded his due share of time and
39
Alexander Bevan, Alternative Dispute Resolution 18 (Sweet and Maxwell, London, 1992).
27 | P a g e
has been effectively heard.40 The mediator however refrains from generating solutions at this
stage and concentrates on active listening. He however ensures a focused debate so as to
narrow down the controversies while simultaneously attempting to understand the genesis of
the dispute. The role of the mediator is that of a facilitator during the joint session and he
facilitates the parties to exchange information whilst at the same persuading the parties to
maintain decorum so that the talks do not break down. The mediator must not permit rigid
adversarial elements to enter the fray so as to prevent derailment of the mediation process.
The mediator should at all times be enthusiastic about the prospects of settlement, pointing
out that all of them will examine interests more so than positions, will generate options and
work towards settlement based on objective standards where available.
 Caucus
The next stage in the mediation process is the caucus. Caucus is a private meeting which is
conducted by the mediator with each party separately during the course of mediation. The
parties are free to discuss their views candidly, sharing information they would not convey to
the other party, acknowledging weaknesses in their legal positions, identifying and
prioritizing their interests, and exploring settlement options that would be difficult to discuss
directly with the other party.41
One of the main purposes of caucus is gathering further information which one party may not
initially want to disclose in presence of the other party. The mediator therefore separately
makes an endeavour to allow parties to privately open up with a view to further explore the
issues and ascertain further information which though germane to the dispute was kept out of
the purview of the joint session. He may put questions to the parties and counsel them so as
to extract such relevant information.
A party in a private session may specifically require the mediator not to disclose to the other
party information which has been provided in the course of caucus. Such information is
considered as confidential and it is obligatory for the mediator not to disclose such
information to the other party since confidentiality and faith form the edifice of mediation.
However the mediator may ingeniously utilize this additional information for brokering a
settlement in an amore effective manner without actually disclosing the same to the other
party.
40
Stephen B. Goldberg, Frank E.A. Sander, Nancy H. Rogers & S.R. Cole, Dispute Resolution: Negotiation,
Mediation and other Processes 128 (Aspen Law & Business, New York, 3rd Edn.).
41
Hiram E. Chodosh, “Mediating Mediation in India”, available at: http://lawcommissionofindia. nic.in
28 | P a g e
Caucus also allows ventilation of feelings and emotions privately in a safe manner as the
absence of the other party at such a stage obviates the possibility of disruption of the
mediation process and without resulting in deterioration of the relations between the parties.
Caucus also affords cooling off period to the parties and enables them to evaluate the
situation and appreciate alternatives in a better perspective. It also permits the mediator to
candidly share his views and perceptions with the parties. The mediator may also attempt to
get hold of a realistic offer which may be discussed with the other side so as to generate
plausible solutions. It is therefore the private session or the caucus that is the engine room of
the mediation process, the stage that develops the moment which hopefully turns into rapid
negotiation and in many cases, settlement.42
 Repeated Joint And Private Sessions
The mediator may conduct multiple intermittent joint sessions and caucuses depending upon
the facts and circumstances and requirements and goals. The mediator meets the parties
sequentially, indulges in shuttle diplomacy carrying offers, counter offers and arguments
back and forth.43 The object is to reduce posturing, break the impasse, allow the parties to
communicate freely, analyse their interests and priorities, brainstorm all possible options and
explore and generate plausible outcomes and solutions.
The mediator may use several communication techniques (reframing, agenda setting, etc.) to
confirm comprehension of the factual and legal background and the emotional postures of the
parties. In fact mediators are continuously in search of new tools and techniques to overcome
barriers in settlement. The mediator also ascertains and enables the parties to understand their
Best Alternative to a Negotiated Agreement (BATNA), Worst Alternative to a Negotiated
Agreement (WATNA) and Most Likely Alternative to a Negotiated Agreement (MLATNA).
As the negotiations progress, the mediator summarizes the areas of agreement to motivate the
parties towards a final settlement.
It should be the endeavour of the mediator to effectively monitor and streamline the
mediation process so that each and every aspect of the dispute is considered and the parties
collaborate with each other in a problem solving manner and move towards a mutually
acceptable self determined solution after appreciating their interests and priorities. The
42
Dhananjaya Y. Chandrachud, “Mediation – Realizing the Potential and Designing Implementation Strategies”,
available at: http://lawcommissionofindia.nic.in
43
Tom Arnold, “Mediation Outline : A Practical How-to Guide for Mediators and Attorneys” in P.C. Rao and
William Sheffield (Eds.), Alternative Dispute Resolution 210 (Universal Law Publishing Company Pvt. Ltd.,
Delhi,1997).
29 | P a g e
mediator has to use his skill and expertise to suitably control and mould the procedure so as
to arrive at a holistic solution to the problem.44
 Settlement
The final stage of the mediation process involves the mediator working with the parties to
assimilate the mutually acceptable offers and counter offers to generate an ultimate solution
which is agreeable to the parties. The last stride is that of actual preparation of the settlement
agreement once the parties are ad idem. The mediator also assists the parties to draft the final
settlement agreement. The settlement agreement should encompass comprehensive broad
based solutions to cater to the needs and aspirations of the parties and must specifically
provide answers for each and every facet of the dispute leaving behind no scope for further
dilemma either with respect to the dispute itself or with respect to enforcement of the
settlement. The terms of settlement may be elucidated and clarified so as to obviate the
possibility of any ambiguities. However if complete settlement is not possible, the mediator
may help the parties seek partial agreements or consider their next steps. The settlement
agreement should be signed by the parties.45
B) Role of a Mediator
Mediation is facilitated negotiation conducted with the assistance of a third party neutral
possessing specialized skills, requisite training and sufficient experience necessary to assist
the disputant parties in reaching a negotiated settlement. The foremost aspect of a mediator’s
role is his neutrality. The mediator occupies a fiduciary position and more so because not one
but all the parties repose confidence in him. A mediator must, therefore without delay
disclose any circumstances likely to give rise to a reasonable doubt as to his independence or
impartiality. His neutrality, independence and impartiality are therefore the keys to a
successful mediation.46
The mediator is a friend, philosopher and guide for the parties. A mediator however neither
imposes a solution nor actively suggests concrete proposals for resolution, but only creates a
conducive atmosphere in which the parties can themselves find a solution for their problems.
A mediator is a facilitator who facilitates communication between the parties and helps them
44
Stephen B. Goldberg, Frank EA Sander, Nancy H. Rogers & S.R. Cole, Dispute Resolution: Negotiation,
45
Stephen B. Goldberg, Frank EA Sander, Nancy H. Rogers & S.R. Cole, Dispute Resolution: Negotiation,
46
Article 7, WIPO Mediation Rules clearly stipulates that the mediator shall be neutral, impartial and
independent; Rule 8, Mediation and Conciliation Rules, 2004 (Delhi) also enjoins upon a mediator to disclose
any circumstance likely to give rise to a reasonable doubt as to his independence or impartiality.
30 | P a g e
generate possible solutions to a dispute.36 He always honours the right of self determination
of the parties and his duties includes determining the parties’ bottom lines and through
relatively persuasive interventions move them in stages off their positions to a point of
compromise. His task is limited to assisting the parties to conduct negotiations between
themselves. However despite the lack of teeth in the mediation process, the involvement of a
mediator alters the dynamics of negotiation.
The mediator attempts to facilitate voluntary resolution of the disputes by the parties,
communicates the views of each party to the other, assists them in identifying issues,
reducing misunderstandings, clarifying priorities, exploring areas of compromise and
generating options in an attempt to solve the dispute, emphasizing that it is the responsibility
of the parties to take decision which effect them and he does not impose any terms of
settlement on the parties.
The mediator, depending on what seems to be impeding an agreement, may attempt to

encourage exchange of information, provide new information, help the parties to understand
each other’s views, let know that their concerns are understood; promote a productive level of
emotional expression; deal with differences in perceptions and interest between negotiations
and constituents (including lawyer and client); help negotiators realistically, assess
alternatives to settlement, learn about those interests which the parties are reluctant to
disclose to each other and invent solutions that meet the fundamental interest of all parties.
2.3.5. Issues Pertaining To Mediation

 Enforcement Of A Mediation Settlement
Mediation is a non binding process. Once the parties arrive at a settlement agreement in
mediation, the next question arises as to how the agreement is to be enforced. There is no
dispute where the parties voluntarily execute the entire terms and conditions of the settlement
agreement, but in cases where one of the parties’ decides to backtrack from the settlement
agreement or attempts to procrastinate the matter, what is the remedy of the other party, is a
very perplexing question.
In case of pre litigation mediation, this settlement agreement is nothing but a simple contract.
While in conciliation the settlement agreement is considered to be an arbitral award on agreed
terms and is per se executable as a decree of the court there is no such analogous statutory
provision in case of mediation as there is no comprehensive legislation governing mediation.
31 | P a g e
The irony of the matter is that when a settlement is arrived at with the intervention of a
mediator the settlement though authenticated by a mediator is not deemed to be a decree; but
when the same settlement is arrived at by calling the mediator as a conciliator, the settlement
is deemed to be a decree.
The settlement agreement arrived between the parties in case of mediation is therefore not per
se enforceable as a decree of the court and it can at the most form the basis of a suit. This
would mean further recourse to litigation despite the matter having been settled by mediation
and would render the entire process of mediation as unproductive and otiose. But that is the
state of affairs which prevails in Delhi/ India and this has been a major hurdle in the
development of mediation.
 Enforcement of Mediation Settlement – Post Afcons47
Section 89 of the Code of Civil Procedure, 1908 deals with reference of disputes to
mediation at the post litigative stage. Interestingly section 89(2) of the Code of Civil
Procedure, 1908 provides that in case of reference of any sub judice matter to mediation the
court shall effect a compromise between the parties and shall follow such procedure as may
be prescribed. This again is something which is contrary to the general concept of mediation
as mediation is a private dispute settlement procedure de hors the judicial process. On the
contrary, section 89 of the Code of Civil Procedure, 1908 further provides that in case of
judicial settlement the court shall refer the matter to any person or institution which shall be
deemed to be a Lok Adalat. Judgment 48
This issue was considered by the Supreme Court of India in the year 2010 and the Supreme
Court acknowledged the fact that there is an error in the provision and opined that a proper
interpretation of section 89 of the Code of Civil Procedure, 1908 requires a change from a
plain and literal reading of the section and the definitions of `judicial settlement' and
`mediation' in clauses (c) and (d) of section 89(2) shall have to be interchanged to correct the
draftsman's error.
Clauses (c) and (d) of section 89(2) of the Civil Procedure Code, 1908 now read as under
when the two terms are interchanged:
47
Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.
48
Section 89 (2), Code of Civil Procedure, 1908 provides that: “...(c) for judicial settlement, the Court shall refer
the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat
and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were
referred to a Lok Adalat under the provisions of that Act;
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(c) for "mediation", the court shall refer the same to a suitable institution or person and such
institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal
Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok
Adalat under the provisions of that Act;
(d) for "judicial settlement", the court shall effect a compromise between the parties and shall
follow such procedure as may be prescribed.
Thus after the judgment of the Supreme Court in Afcons Infrastructure mediation has been
assigned its usual meaning. Mediation now contemplates reference of the dispute to any
person or institution. The matter in Delhi is normally referred to the court annexed mediation
centres and thereafter the matter is assigned to a particular trained mediator, who conducts
mediation proceedings.
But the most significant change which the Afcons judgment has brought about is that such
person or institution conducting mediation is now to be deemed as a Lok Adalat and the
provisions of the Legal Services Authorities Act, 1987 would be applicable. The necessary
concomitant is that the settlement agreement certified by the mediator would be deemed to be
an award of the Lok Adalat and would in turn be enforceable as a decree of the court.49
Interestingly even before the Afcons judgment the High Court of Delhi had held that parties
are estopped from withdrawing from the settlement agreement arrived at before the
Mediation Centre and in such eventualities the court can dispose of the case on the basis of
the said settlement in terms of Order XXXIII Rule 3 CPC. However, undoubtedly the Afcons
judgment lends tremendous support to the mediation movement by removing the foremost
disability associated with a mediation settlement and asserting the enforcement of a
mediation settlement agreement as decree of the court. But the Afcons judgment applies only
to post litigation court referred mediation in terms of section 89 of the Code of Civil
Procedure, 1908 and the fate of a pre litigation mediation settlement or post litigation
mediation settlement de hors section 89 of the Code of Civil Procedure, 1908 still lingers in a
quandary
 Lack Of A Comprehensive Statutory Framework
The next important issue concerning mediation relates to lack of statutory framework in
India. While arbitration and conciliation have been given statutory backing, mediation is yet
49
Every award of the Lok Adalat is final and binding on all the parties to the dispute and enforceable as decree
of the court. See s. 21, Legal Services Authorities Act, 1987.
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to get that status.50 The process of conciliation is governed by part III of the Arbitration and
Conciliation Act, 1996. However for mediation in general we do not have any legislation
which supports and governs the mediation process. It is only in case of post litigation court
annexed mediation where rules have been framed by various High Courts for conduct of such
mediation in pursuance of section 89 of the Code of Civil Procedure, 1908. However these
rules also cannot be equated with a comprehensive legislation. Thus neither confidentiality in
mediation is a statutory guarantee nor do the other aspects of mediation have statutory
backing. In fact the issue of unenforceability of a mediation settlement agreement in general
is a direct result of the absence of a comprehensive legislation on mediation. It is therefore
incumbent that if mediation is to flourish as an ADR mechanism we must have a Mediation
Act on the lines of the chapter on conciliation under the Arbitration and Conciliation Act,
1996.
 Inadequate Use Of Pre Litigation Mediation
Pre litigation mediation is an extremely important aspect from the point of view of both, the
parties and the judicial system. Why the parties should be relegated to mediation only once
they have invoked the jurisdiction of the courts. Why not give the parties an option to explore
dispute resolution through mediation at the pre litigation stage itself. If that is done there
would be additional benefits for parties in terms of time, money and preservation of
relationships. If such a case is brought before the court, it adds to the ever surmounting
arrears but if it is resolved at the pre litigation stage itself it would never enter the judicial
system. Such pre litigation mediation may be conducted by any institution or ad hoc
mediators and a range of options in this arena are available in Delhi. However it is to be
acknowledged that pre litigation mediation in Delhi has not been that successful and
effective. Therefore there is a need to focus and develop a better framework for pre litigation
mediation. The existing mediation centres can diversify their role so as to provide pre
litigation mediation services also. At the same time private players providing pre litigation
mediation services need to be promoted. The lawyers, NGOs, other organizations 51 and the
general public would also have to take initiative in this regard.
50
See also “Let litigation make way for settlement culture: Kapadia”, The Hindu, New Delhi, July 11 2010.
51
Indian Institute of Arbitration & Mediation (IIAM) has launched a community mediation service by
establishing community mediation clinics for popularizing mediation as a mode of dispute resolution. See Anil
Xavier, “Bringing Justice to your Doorsteps: IIAM Community Mediation Service”, 1(8) The Indian Arbitrator 2
(September 2009). Similar programs can be launched in Delhi also.
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However the ground reality is that the prime reason for inadequate use of pre litigation
mediation is legislative and not administrative. The lack of statutory basis and the
unenforceability of a mediation settlement agreement in a summary manner are the basic
causes which are preventing pre litigation mediation from flourishing in Delhi because then
the enforcement of a mediation settlement itself becomes an insurmountable challenge. 52 The
introduction of a comprehensive legislation on mediation would therefore also go a long way
in ameliorating the status of pre litigation mediation in Delhi.
 Lack Of Awareness And Settlement Culture
The Delhi Mediation Centre is doing a commendable job in increasing awareness with
respect to the existence, utility and benefit of the process of mediation yet we still have a long
way to go. Mediation is yet to become a part of legal and business culture in Delhi. Along
with awareness there is also a need to change the mindset of the masses so as to persuade
them to adopt mediation as a mode of dispute resolution. The basic challenge is therefore to
develop a settlement culture128 amongst the people and to effect an attitudinal
transformation so as to inculcate a collaborative and problem solving approach.
2.4. Medola
It is a combination of mediation with last offer arbitration. Parties agree to proceed to
mediation with the understanding that if mediation fails, they will submit their final offer
made during the mediation to the neutral. The neutral considers the final offers and gives his
binding decision on the basis of the offer he considers to be just and fair.53
2.5. Mini-Trial
The mini-trial is a device introduced in recent years to avoid lengthy and expensive litigation
between corporate parties. In mini-trial, the parties to the dispute choose an impartial third
party who may be an eminent lawyer, law professor, or former judge of any Court. The
person who is an authority in the area of dispute resolution is always preferred in mini-trial.
52
The information brochure published by the Delhi Mediation Centre is annexed with summonses so as to
increase awareness regarding mediation as an ADR mechanism amongst the litigants so as to enable them to
explore mediation as a mode of dispute resolution at the earliest.
53
Sarvesh Chandra, ADR: is Conciliation the Best Choice? , in P.C.Rao and William Sheffield (eds),
Alternative Dispute Resolution: What it is and How it Works, Universal Law Publishing Co., New Delhi (1997),
p 85.
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The mini-trial takes one day or less in dispute resolution. It consists of the attorneys for the
two parties making their presentation not only before the impartial adviser but also before the
chief executives of the two parties or some other executive who has been given the power to
settle the case. The respective attorney argues the case on behalf of the litigant parties. He
explains their case to the adversarial questions of the other side and expose every support that
why they should win the case. The Executives on hearing always arrive at a good settlement.
The min-trial is primarily a structured negotiation between business or disputing persons. If
they fail to negotiate the process turns into mediation with neutral adviser helping them. It is
like a moderately formal non binding arbitration, like case presentation held in an office,
conference room or borrowed court room; the presentations are made to the decision makers
from each party and to one or more neutral third parties.54
There is an important difference between a mediation and a mini-trial. In mediation, the

mediator is a neutral third party who does not take the side of either party, but instead tries to
facilitate open communication between the parties themselves in order to achieve
compromise and settlement. Even in court-ordered mediations conducted by a panel of
mediators, the focus is still on the parties: the mediators merely issue a recommendation to
the parties for settlement consideration.
Conversely, in a mini-trial, the mediators themselves are agents and advocates for the parties,
and they, rather than the parties, work out a settlement after hearing opposing sides to the
controversy (each goes into the mini-trial with advance authorization to settle the matter for a
certain dollar amount or under other conditions or criteria). The parties present their cases
(usually through their attorneys) but do not take active roles in the settlement negotiations nor
generally do their attorneys. The decision-makers in a mini-trial are the actual members of
the panel (excepting any neutral member, who may play the role of expert, advisor on
substantive law, etc.).
One might ask why the parties themselves do not facilitate the settlement directly in a mini-
trial. The answer is two-fold. First, parties involved in a controversy tend to approach and/or
perceive the matter subjectively rather than objectively. Parties also tend to inject emotion
or bias into their negotiations and will seldom compromise unless they have been introduced
to damaging information that tends to diminish their claim or defense. Therefore, officials
who are one step removed from the controversy, even if they serve as advocates for their
54
Tom Arnold, The Mini-Trial, in P.C.Rao and William Sheffield (eds), Alternative Dispute Resolution: What it
is and How it Works, Universal Law Publishing Co., New Delhi (1997), p 300.
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respective parties, tend to approach the dispute more objectively. Secondly, the officials at a
mini-trial tend to be well-seasoned and experienced in similar matters. For example, they
may be representatives of the insurance carrier for the party, or top-level management of a
business that is party to a dispute or they may be privately-retained consultants with technical
expertise in the subject matter. For these reasons, they may be better equipped to dissect and
sort out opposing evidence and arguments.
Mini-trials also differ from another ADR technique, the “summary trial” or “summary jury
trial.” Both mini-trials and summary jury trials involve the presentation of each side’s case,
usually without live testimony, but with opening and closing statements and an outline of
evidence they intend to produce at trial. However, summary trials are actually presented
before mock juries, who issue advisory “verdicts.” Following a jury determination, the parties
and their attorneys will attempt settlement.
Finally, a mini-trial differs from other forms of ADR in that it is usually conducted after
formal litigation has already been undertaken. Parties to a lawsuit generally stipulate to “stay”
pending litigation (put a hold on further advancement of the litigation) until the mini-trial is
concluded. Thus, mini-trial does not, in and of itself, represent an alternative forum for the
resolution of a dispute (such as arbitration), but rather it represents a pre-trial alternate
attempt to settle the matter before lengthy trial begins. The outcome of the mini-trial is
generally confidential and advisory only, and the parties may proceed to trial if settlement
negotiations fail.
2.6. Lok Adalat

The term Lok Adalat means ‘People’s Court’. However, a Lok Adalat is not a court in its
accepted connotation as it not an adjudicatory body, but an ADR forum established under the
aegis of the Legal Services Authorities Act, 1987. Lok Adalats are organized by Legal
Services Authorities/ Committees, constituted under the Legal Services Authorities Act, 1987
intermittently at such intervals and places and for exercising such jurisdiction as the
authority/ committee may deem fit and proper55 and have the jurisdiction in respect of any
case pending before any court for which they are organized.56
The Lok Adalat system is basically meant for the resolution of people’s disputes by using
conciliatory and persuasive techniques and voluntary participation and discussion for arriving
55
S. 19(1), Legal Services Authorities Act, 1987.
56
However the Lok Adalats have no jurisdiction to deal with cases pertaining to non compoundable criminal
offences.
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at a mutually acceptable solution and the whole emphasis is on conciliation rather than
adjudication. Thus settlement or compromise can only form the basis of dispute resolution by
Lok Adalats. The settlement arrived before a Lok Adalat gets crystallized into the award of
the Lok Adalat which is deemed to be a decree of a civil court and is final and binding upon
the parties and no appeal lies against such award Permanent Lok Adalats, on the other hand
are permanent pre litigation ADR fora established for resolution of disputes pertaining to
public utility services only. Any party to a dispute may, at the pre litigation stage, make an
application to the Permanent Lok Adalat for the settlement of the dispute. However where a
matter before a Permanent Lok Adalat cannot be settled mutually the Permanent Lok Adalat
is enjoined to decide the dispute on merits and thus the Permanent Lok Adalat must pass an
award, either on the basis of a mutual settlement or on merits. The award passed by the
Permanent Lok Adalat is also deemed to be a decree of a civil court and is final and binding
upon the parties. The process of conciliation, inter alia, involves creating a constructive
bonding between the parties to a dispute to steer them towards resolution.
B. Lok Adalats – Practices And Procedures

The Legal services Authorities Act, 1987 provides that every State/ District Legal Services
Authority or the Supreme Court/ High Court Legal Services Committee may organise Lok
Adalats at such intervals and such places and for exercising such jurisdiction and for such
areas as it thinks fit. The Lok Adalats may comprise of serving or retired judicial officers and
such other persons as may be prescribed by the Legal Services Authority/ Committee.57
Any case pending before a court may be referred to a Lok Adalat if all the parties agree or if
one of the parties makes an application to the court and the court is prima facie satisfied that
there are chances of settlement or if the court is satisfied that the matter is an appropriate one
to be taken cognizance of by the Lok Adalat after giving a reasonable opportunity of being
heard to the parties. Thus the court can also suo motu refer the dispute to the Lok Adalat even
where the parties are reluctant, if the court is satisfied that the matter is an appropriate one to
be taken cognizance of by the Lok Adalat. The prime consideration which the court has to
keep in mind is the existence of the possibility of a settlement. The parties however must get
a reasonable opportunity of being heard before the matter is referred to the Lok Adalat, suo
motu by the court. The Legal Services Authority or Committee organizing the Lok Adalat
57
S. 19(2), Legal Services Authorities Act, 1987
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may also refer a case to the Lok Adalat on receipt of an application from any one of the
parties after giving a reasonable opportunity of being heard to the parties.58
The Lok Adalat proceeds to dispose of the case on the basis of compromise or settlement
between the parties. The source of power of Lok Adalat, which is only a forum for ADR, is
conciliation and the Lok Adalat is not supposed to delve into the realm of adjudication. 59 In
fact the promotion of conciliation culture is one of the most important objectives of the Lok
Adalat movement. The jurisdiction of Lok Adalat is therefore limited to making an effort to
bring about a compromise or settlement between the parties to the dispute with their consent
so that the matter is finally settled once for all. Conversely where there is no compromise or
settlement the case cannot be disposed of by the Lok Adalat and in such an eventuality the
case is to be returned back to the court for disposal as per law. Where the matter is settled
before the Lok Adalat an award is passed by the Lok Adalat on the basis of the settlement.
However, the award of the Lok Adalat cannot travel beyond the compromise or settlement
arrived at between the parties. The award of the Lok Adalat is not a judicial decision and the
Lok Adalat cannot incorporate any finding, direction or stipulation in the award de hors the
settlement and the award is nothing but a formal assimilation and integration of the terms of
the settlement or compromise arrived between the parties, by the Lok Adalat in the form of
an enforceable order and the nature of this process of passing of the award though ostensibly
judicial is in fact essentially administrative. Further every award of the Lok Adalat is final
and binding on all the parties to the dispute and no appeal lies to any court against the award.
This is a very valuable and vital provision which is meant to give finality to the decision of
the Lok Adalat. Even review by the court which referred the case to the Lok Adalat is not
permissible. If any party wants to challenge such an award based on settlement, it can be
done only by filing a petition under Article 226 and/or Article 227 of the Constitution of
India and that too on very limited grounds.60
The award of a Lok Adalat is deemed to be a decree of a civil court and is per se executable.
Viewed in that perspective, since every award of the Lok Adalat is deemed to be a decree of a
civil court, the matter need not be referred back to the concerned court for passing of a
consent decree.
58
S. 20(2), Legal Services Authorities Act, 1987.
59
State Bank of Indore v. Balaji Traders, 2003(3) R.C.R.(Civil) 339
60
State of Punjab v. Jalour Singh, AIR 2008 SC 1209; See also Commissioner of Karnataka State Public
Instruction (Education) v. Nirupadi Virbhadrappa Shiva Simpi, AIR 2001 Karnataka 504 and Merlin alias Sherly
Augustin v. Yesudas, AIR 2007 Kerala 199. The award of the Lok Adalat can be questioned on grounds of fraud,
misrepresentation, coercion, arbitrariness, unreasonableness, denial of hearing etc.
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Lok Adalat has the requisite powers to specify its own procedure, however, it is bound to
follow the principles of natural justice, equity, fair play and other legal principles. Although it
ensures minimum standards of fairness, the emphasis is more on natural justice than the
rigours and formalities of legal procedure. A Lok Adalat has the same powers as are vested in
a civil court under the Code of Civil Procedure, 1908 for summoning and enforcing the
attendance of witnesses and examining them on oath, the discovery and production of any
document, requisitioning of any public record, reception of evidence on affidavits, etc. and all
proceedings before a Lok Adalat are deemed to be judicial proceedings. But despite this, the
procedure followed by Lok Adalat is relatively simple, flexible and straightforward.
D. Advantages Of Lok Adalats

Lok Adalats are extremely important and popular ADR fora enabling the parties to resolve
their disputes by way of amicable settlements once and for all. Since the final award in a Lok
Adalat is based on a mutually acceptable solution it results in a win-win situation for the
parties and therefore in Lok Adalat proceedings there are no victors and vanquished and,
thus, no rancour.61 Moreover the process of dispute resolution through Lok Adalats is a
purely voluntary process.
The biggest advantage of the Lok Adalat system is however, that the award passed by the
Lok Adalat is final and binding on the parties and it has the status of a decree of a civil court
and can thus be executed as such through a civil court. Moreover the award of the Lok Adalat
is final thereby obviating the possibility of successive appeals and thereby saving time,
money and effort of the parties which can be utilized for other constructive purposes.
Another important advantage of Lok Adalats is speedy resolution of disputes. The procedure
followed at a Lok Adalat is very simple and shorn of legal formalism and rituals and it
utilizes voluntary conciliation as a mode of dispute resolution. There is no strict application
of procedural laws like the Code of Civil Procedure and the Evidence Act. Procedural
flexibility coupled with straightforward course of action results in speedier dispute resolution.
Furthermore Lok Adalats are much more accessible than regular courts and there is no
requirement of a lawyer before the Lok Adalat. The Lok Adalat Judge is there to help out the
parties and the parties can directly interact with the Lok Adalat Judge and seek his guidance.
Lok Adalats are popular and effective because of their innovative nature and inexpensive
style. They provide inexpensive justice to the parties as the absence of a full dressed trial and
61
P. T. Thomas v. Thomas Job, AIR 2005 SC 3575.
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mandatory requirement of representation through lawyers coupled with a simplified and

expeditious procedure renders them an economical and cost effective mode of dispute
resolution. Moreover no court fee is payable in a Lok Adalat and on the contrary the court fee
which has already been paid before the referral court, has to be refunded if the dispute is
settled before the Lok Adalat.
E. Issues Regarding Lok Adalats

 Lok Adalats Are Not Apposite For Complex Cases
The first important issue pertaining to Lok Adalats is with respect to the time which is spent
on proceedings before a Lok Adalat. The amount of time spent assumes importance in
complex matters and the same is important to secure settlements and further ensure
efficacious settlements. In Lok Adalat proceedings the neutral (Lok Adalat Judge) may not be
able to devote as much time and attention as is possible in case of conciliation and mediation.
In case of mediation and conciliation only very few cases are taken up by the neutral
(mediator or conciliator) during the day and as such a lot of personalized attention can be
devoted by the neutral (mediator or conciliator). Time is also not a constraint in mediation or
conciliation and the parties may as well have as many numbers of sittings as are required for
the satisfaction of the parties.
However in case of Lok Adalats the average time spent on a single case is less than five
minutes.62 This is understandable as Lok Adalats are generally held in Delhi on ad hoc basis
for one day only – normally on second Saturdays. The time available is therefore limited and
as many as 50- 60 cases on an average are listed before the Lok Adalat in a single day in
Delhi.
Secondly, although there is no bar in having more than one sitting in Lok Adalats yet the
same is practically not possible. In Delhi although, Lok Adalats are held on second
Saturdays, yet the dates have to be formally notified by DLSA and they might change
depending on exigencies. Further, if the matter is carried forward to the next Lok Adalat,
there is a high probability that the matter would be listed before a different Lok Adalat judge.
Thirdly there is a time gap of one month between two successive Lok Adalats. Thus the
biggest disadvantage with Lok Adalats is that repeated sittings at short intervals with the
same judge are almost not possible which breaks the continuity of the deliberations. The
cumulative effect of all these factors practically results in a situation where practically only
62
6 In the Empirical study conducted 85% of the respondents stated that the average time spent on one case
was less than 5 minutes.
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one sitting is held before the Lok Adalat and if the matter is not finally settled in that one
sitting it is referred back to the court with an option for subsequent referral to the next Lok
Adalat.
One can imagine that within this time frame it is not possible for parties to arrive at final
settlements in complex disputes. Thus Lok Adalats may be suitable for simple cases such as
complaints under section 138 of the Negotiable Instruments Act, 1881, bank recovery suits,
electricity disputes, motor accident claim cases and traffic challans 63 where the only issue is
arriving at a mutually acceptable settlement amount in terms of quantum of money and the
schedule and manner of payment of the same. Likewise Lok Adalats may also be beneficial
in case of simple criminal cases involving compoundable offences where complex issues are
not involved and the final settlement is straightforward, which is normally based on
expression of contrition and clemency or financial quid pro quo.
In this background it cannot be denied that Lok Adalat as a forum of dispute resolution may
not be very effective for resolution of complex, multifaceted long standing disputes involving
myriad issues between multiple parties such as partition suits, family disputes, complex
commercial cases, matrimonial disputes, etc. For instance, in case of complex matrimonial
disputes where offence under section 498 A IPC is also involved it is preferable that parties
be referred to mediation. Another reason for this is that continuous, detailed and focused
personalized attention on the part of the neutral is lesser than in case of mediation or
conciliation.
The disposal rates of Lok Adalats also fortify this conclusion. For example in the quarter
from January to March 2011, the number of cases under section 138 of the Negotiable
Instruments Act, 1881 which were disposed of was 13,763 whereas only matrimonial
disputes were settled before Lok Adalats in Delhi. 64 To cite another example in the month of
March 2008, the number of criminal compoundable cases including cases under section 138
of the Negotiable Instruments Act, 1881, which were disposed of before Lok Adalats in Delhi
was 49 whereas only 6 disputes were settled by Mahila conciliation. Further in the mega
traffic Lok Adalat held on 8th and 9th September 2007 in all district courts in Delhi 42,567
traffic challans were disposed of and similarly in the mega traffic Lok Adalat held in
November 2008 in all district courts in Delhi 11403 traffic challans were disposed of. In the
63
We have special mega traffic Lok Adalats in Delhi where traffic challans issued by the Notice Branch of the
Delhi Traffic Police are specifically dealt with. The first such Mega Traffic Lok Adalat was organized on 8th and
9th September, 2007 at all the district court complexes in Delhi.
64
Statistical Information published in Nyaya Kiran (D.L.S.A., January – March, 2011).
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mega Lok adalat pertaining to bank matters of ICICI bank only on 8th February 2009, as
many as 5445 cases were disposed of.
Thus, when it comes to disposal of simple cases the disposal rates run into thousands but in
case of complex disputes the number of cases disposed of is quite less. Megal Lok adalats
organized for mass disposal of cases also work well in cases of petty offences like traffic
challans or cases under section 138 of the Negotiable Instruments Act, 1881 but not in case of
other complex matters.
Even the majority of the cases which are referred to Lok Adalats are matters where
complexities are not involved. For example, in the quarter from October to December 2008,
the number of cases under section 138 of the Negotiable Instruments Act, 1881 referred to
Lok Adalats was 16148. On the other hand only 40 cases pertaining to Mahila Courts, 271
cases pertaining to matrimonial disputes and 86 civil cases were referred to Lok Adalats. The
necessary conclusion is that Lok Adalats are not very apposite for complex cases, however
despite this fact Lok Adalats are quite popular in Delhi and are extensively used for
resolution of disputes.
 Lack Of Confidentiality
Lok Adalat proceedings are held in the open court and any member of public may witness
these proceedings. Thus, the element of confidentiality is also lacking. There is practically no
room for chamber meetings or individual sessions as time is a major constraint. The parties
are, therefore, not able to open up freely to the extent they can in conciliation or mediation
proceedings. This also impedes the process of exploration of various resolution options and
ultimately the success rate in matters where parties desire confidentiality.
Moreover there is no statutory guarantee of confidentiality in Lok Adalat proceedings nor is

there any statutory provision which restricts reference to events during the course of
settlement proceedings. However the Supreme Court has remedied this situation and has held
that section 20(5) of the Legal services Authorities Act, 1987 statutorily recognizes the right
of a party whose case is not settled before the Lok Adalat to have his case continued before
the court and have a decision on merits and any admission made, any tentative agreement
reached, or any concession made during the negotiation process before the Lok Adalat cannot
be used either in favour of a party or against a party when the matter comes back to the court
on failure of the settlement process.
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 Aura Of Court Proceedings
Lok Adalats are considered as ADR fora and are not strictly courts in their accepted
connotation. Lok Adalats are fora where voluntary efforts intended to bring about settlement
of disputes between the parties are made through conciliatory and persuasive efforts.
However the fact of the matter is that Lok Adalats are conducted in regular courts only.
Therefore some amount of formality still remains attached with Lok Adalats. Moreover all
proceedings before a Lok Adalat are deemed to be judicial proceedings within the meaning of
sections 193, 219 and 228 of the Indian Penal Code and every Lok Adalat is deemed to be a
civil court for the purpose of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973. Thus the proceedings before a Lok Adalat are undoubtedly ‘Legal
Proceedings’.
Furthermore some amount of formality continues to remain attached to proceedings before

the Lok Adalat and the aura of the court continues to haunt the parties and mould the
response of the litigants as a result they are not able to freely interact and communicate which
hampers dispute resolution in complicated matters.
Initially in Delhi Lok Adalats were presided over by judges in their regular court rooms while
sitting on the dais. However of late a tradition has been started were the judges along with
associate members sit across the table with the litigants. Other such steps can be to put a
curtain or a temporary screen so that the dais is not at all visible, exempt the traditional court
dress, employ psychologists and counselors as associate members, etc. The idea is to create a
more friendly and congenial atmosphere for settlement negotiations.
 Diminished Party Autonomy
In a Lok Adalat the ADR neutral is a judge and the parties are well aware of his position. The
Lok Adalat Judge though steers the parties to an acceptable resolution, plays and evaluative,
interventionist and suggestive role. Therefore it cannot be said that the parties remain in
absolute control of the proceedings in contradistinction to what happens in mediation. Lok
Adalat is therefore a neutral-centered process, where the primary focus is on presenting the
factual/legal background of a dispute to the Lok Adalat judge who plays an evaluative role
and actively proposes settlement terms and controls the process. Therefore affluent and
educated parties may not feel themselves to be in total control of the process to the extent as
they are in mediation. But for parties from the socially, educationally and economically
moderate strata this may be irrelevant since rather than controlling the process themselves
44 | P a g e
what they require is better guidance and they are more likely to trust and rely upon the Lok
Adalat judge for that.
2.7. Arbitration
The globalization of economy is taking place at a rapid pace. The business transactions and
disputes are also increasing. The commercial establishments and businessmen cannot afford
to lose time in avoidable litigation and they are increasingly moving towards ADR System.
The arbitration among all the methods of ADR is the most popular. The construction
contracts usually have an arbitration clause. After the enactment of the Arbitration and
Conciliation Act, 1996 the arbitration proceedings have taken a new dynamic shape. There is
no need to get the award of the arbitral tribunal to be made the rule of the Court. This is going
to save a lot the precious time. The arbitration has four commendable factors to it. The speed,
finality, cheapness and fair justice. When the International Chamber of Commerce at Paris
started offering the services of its Court of Arbitration, businessmen in different countries
immediately moved to avail these facilities under arbitration law. 65 The provisions of
Arbitration and Conciliation Act, 1996 has been discussed in detail in the following chapters
relating to the legislative provisions.
The arbitration is a process and recognized mode of dispute resolution. The dispute may be
existing one or shall arise in future. The method applied in arbitration is both fair and
equitable. The dispute is resolved between the disputing parties through a person or persons
or an institutional body without recourse to litigation who are known as Arbitrator. The
Arbitrator pursuant to an agreement between the parties initiates the process of arbitration.
The arbitration law has got statutory recognition and the proceedings under the Act except
few stages, is equally good as under judicial proceedings. There is equality of opportunities
during the proceedings to both the parties.66
2.7.1 Nature of Arbitration
The settlement of disputes by an elderman at village level in India was a common feature.
The people before the advent of the independence always resorted to amicable settlement
65
See, Anurag K.Agrawal, Justice Delayed is Justice Denied -Speedy Justice Through Arbitration, A.I.R 1999,
Journal, p-180
66
See, H.K.Saharay, The Law of Arbitration and Conciliation, (2001), p-3.
45 | P a g e
instead of going to Courts of laws. The usefulness and effectiveness of amicable settlement of
disputes was based upon high level of objectivity, impartiality and integrity of that elderman
who is famous and renowned as 'Headman' of the village as contrasted with the present day
situation.67 It would be pertinent to refer an episode of Sattiganahalli village in C. R.Patna
taluk, where a father acted as 'Arbitrator or Judge' gave a decision against his own son on a
complaint of having brought coconut from the garden belonging to another person. The father
while acting as decision-maker fined his own son though it might have exchequer his own
pocket. The village had earned a name and fame for avoiding any dispute in the Courts of
law. The spelled amount as fine was considered to be a fair adjudication with supporting
reasons, which was also reduced in writing that was beyond the expectation of the society.68
The explanations for the layman, "going to law" and "taking him to Court" are every day
expressions and general phenomenon. These wordings in ordinary parlance mean asking for
legal enforcement of one's right through legal platform. But there is lot of difference between
these two expressions. Taking some one to Court for enforcement of a legal claim against
someone in individual capacity, against some company, public body or against the State is
different thing in legal pursuits. But it is another thing or way of going to law to enforce a
claim by way of Arbitration instead of instituting a case for decision through regular Court
under the statutory provisions. The essence of arbitration is that the parties for 'right
settlement' refer some disputes to Arbitral Tribunal of their own choosing, instead of opting
to a Court. It is necessary that some assistance should be lent by the ordinary machinery of
law to make such methods of settling disputes effective. The recourse to legal machinery may
be necessary for enforcing the arbitrator's decision. Some degree of control by the Court
inevitably accompanies the official status thus lent to duly constituted arbitration. 69 The
nature of the arbitration and its procedure is flexible. The parties to an arbitration may in
large degree themselves determine the procedure to followed and the powers the arbitrator is
to have, as well as the constitution of the Arbitral Tribunal. The Act lays down a code
governing these matters even though its provisions may be excluded by an agreement
between the parties. The parties may withdraw from arbitration at any time but once the
67
See, K.A.Krishnaswamy, Change of Approach of Courts Towards Arbitration Awards Under The Changed
Modern Times, A.I.R 1997, Journal, p-195.
68
Ibid.
69
See, Russell on The Law of Arbitration, (1982), p-1
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arbitration is carried through to a final decision by the arbitrator, his award will be
enforceable by action.70
2.7.2. Meaning of Arbitration

The word arbitration has not been defined in the Indian Statutes relating to Arbitration to the
complete satisfaction, which may expose its real meaning and senses. The definition provided
under the Arbitration and Conciliation Act, 1996 seems to be very narrow and pedantic. The
Act defines that arbitration "means any arbitration whether or not administered by permanent
arbitral institution.71 The arbitration is well known subject and its procedure is prescribed in
the statute book. Mr Ronald Barnstein in his publication 'Handbook of Arbitration Practice'
has defined arbitration as under:
"Where two or more persons agree that a dispute or a potential dispute between them
shall be decided in a legally binding way by one or more impartial persons in a
judicial manner, that is upon evidence put up before him or them, the agreement is
called an arbitration agreement or a submission to an arbitration. When, after a
dispute has arisen it is put before such person or persons for decision, the procedure is
called arbitration and a decision when made is called an award.”72
The Arbitration is being used as good substitute for litigation at international level. The
definition of Arbitration is provided by the Ghana Arbitration Act seems to be correct and
well understood in the Indian Context.
"Arbitration is the reference by the mutual consent of a difference between two or

more parties to a person other than a Court for determination after hearing the parties
in a judicial manner. The person; to whom a reference to Arbitration is made is called
a Arbitrator. An arbitration agreement is a contract in writing to refer present or future
differences to arbitration, whether an Arbitrator is named in the contract or not"73
70
Ibid. Pt. 2
71
See, The Arbitration and Conciliation Act [No. 26 of 1996], 1996. S. 2(1 ), Sub Clause(a) which runs: In this
part;, unless the context otherwise requires; "Arbitration" means any arbitration whether or not administered by
permanent Arbitral Institution;
72
See, H.K.Saharay, The Law of Arbitration and Conciliation, (2001), p-3-4.
73
See, Dr. M.Seshagiri Rao, Arbitation in the Field of Information Technology and E-Commerce: Role of
Technocrats: A paper presented at the National Conference on Mediation/Arbitration, Bangalore, July 20,2001.
47 | P a g e
The word arbitration according to oxford dictionary means the official process of settling an
argument or disagreement by some body who is called an 'Arbitrator' and not involved in the
dispute in question.74 The arbitrator means and is a person who is chosen to settle
disagreement.75 The word arbitration as has been defined in the Arbitration and Conciliation
Act, 1996, as 'any arbitration whether or not administered by permanent arbitral institution 76
which from definition point of view does not serve the literary or academic purpose. Whereas
the word "Arbitral Tribunal" means a sole Arbitrator or a panel of Arbitrators'"77
The Halsbury's Laws of England while explaining the arbitration envisages that the word
arbitration is nothing but a process used by the mutual agreement of the parties to resolve
disputes through an appointed Arbitrator.78 The disputes in arbitration are resolved with
binding effect by an Arbitrator or person appointed and acting for the purpose. He acts in a
judicial manner and would have jurisdiction but for the agreement of the parties to exclude it.
The parties in arbitration mutually agree to have their disputes decided with the intervention
of a third person working as 'Mediator', and he is appointed as Arbitrator but with all the
formalities of a judicial adjudication. The Arbitrator during arbitration proceedings acts in
judicial manner and the entire process of dispute resolution may be called arbitration. The
compact definition provided in 4th edition of Halsbury's Laws of England is as under:
"An arbitration is the reference of dispute or difference between not less than two
parties, for determination, after hearing both sides in a judicial manner by a person or
persons other than a Court of competent jurisdiction".
The word Arbitration has been defined by his lordship Mr Justice Romilly M.R. in Collins V
Collins79 as under :
"An Arbitration is a reference to the decision of one or more persons, either with or
without an umpire, of a particular matter in difference between the parties"80
74
See, Oxford Advanced Learner's Dictionary of Current English (2005), P-65.
75
Ibid.
76
See, The Arbitration and Conciliation Act [No. 26 of 1996], 1996.
77
S. 2(1 ) Sub-Clause (d) which runs as "Arbitral Tribunal" means a sole Arbitrator or a panel of Arbitrators.
78
See, Hulsbury's Laws of England, Vol.2 (3), 4'" Ed., P-2
79
(1858)26 Beav. P-306.
80
See, Collins Vs Collins, (1858) 26 Beav, p- 306 at 312-313.
48 | P a g e
However, the arbitration means the submission of dispute by two or more parties to the
judgement of third person called the Arbitrator who is to act and decide the controversy
before him in a judicial manner.81 An arbitration is the reference of a dispute or difference
between not less than two parties for determination, after hearing both sides in a judicial
manner, by a person or persons other than a Court of competent jurisdiction.82
2.7.3. Essentials of Arbitration
There are four important ingredients in the arbitration, which are essential for arbitration
award. i. There must be 'dispute' between the parties.
ii. The dispute must either 'exist or may arise in future',
iii. There must be two or more parties to conflict or dispute in question
iv. There must be an 'agreement' between the parties to refer the dispute for arbitration.
v. There must be 'Arbitrator or Arbitrators or umpire.83
The Arbitrator always acts like a Judge. He discharges quasi-judicial functions. He must act
honestly and impartially. He is bound to proceed fairly and honestly and to conduct himself
without bias or partiality towards either side. He should be above suspicion, which is the
basic ingredient to be possessed by decision making authority. 84 The Arbitrator cannot be a
party to the contract. He should not be a person making reference for arbitration or any kind
of decision. The Supreme Court in the State of Karnataka vs. Shree Rameshwara Rice Mills 85
has observed that
"Interests of justice and equity require that where a party to a contract disputes the
committing of any breach of conditions, the adjudication should be by an independent
person or body and not by the other party to the contract".86
The role of Arbitrator is vital in arbitration proceedings. He should not be biased. It is

axiomatic that the power predicates accountability. An arbitrator is substitute for a civil judge
to determine civil disputes inter se between the parties. The Arbitrator is required to be an
81
See, Avtar Singh, Law of Arbitration and Conciliation, {Arbitration and Conciliation Act,^996), 2002, p-12.
82
See, John B. Saunders, Words and Legal Phrases Legally Defined, Vol. I (1969), p-107.
83
See, H.K.Saharay, The Law of Arbitration and Conciliation, (2001), p-3.
84
See, S.Tibrewal, Nominated Arbitrator- An Analysis, A.I.R. 1991, Journal, p-8
85
A.I.R. 1987 SC, p-1359
86
See, State of Karnataka vs. Shree Rameshwara Rice Mills, A.I.R. 1987, SC, p1359.
49 | P a g e
independent and impartial judge during determination of the disputes referred to him. If he
fails or neglects to act as expected of him, the award may be set aside. He is public servant as
postulated by Indian Penal Code and is personally accountable for damages consequent on
his conduct amounting to breach of conduct or in tort.87
Theme Of Alternate Dispute Resolution System In India

Conflict is a fact of life and indeed it is difficult to imagine a human society without conflict
of interests.88 Human conflicts result in disputes. If elemental human behavior and disposition
is kept in mind it can be said that disputes are unavoidable. 89 However disputes need to be
resolved and that too in a judicious manner and indeed such resolution of disputes is essential
for societal peace, amity, comity and harmony and easy access to justice. 90 This underlines
the need for an adequate and effective dispute resolution mechanism, which is an
indispensable prerequisite for the subsistence of a civilized society and a welfare state.
The primary objective of every legal system is to render justice. 91 and access to justice is one
of the cherished goals, which is also the sine qua non for the existence of a democratic and
civilized state. The quest for justice has been an ideal which mankind has been aspiring for
generations down theline.27 The expression “access to justice” focuses on two basic purposes
of the legal system – firstly the system must be equally accessible to all and secondly it must
lead to results that are individually and socially just. 92 However access to justice, in its true
sense postulates effective and judicious resolution of disputes and that is vital for realization
of the fundamental rights of individuals in a welfare state.
The natural and necessary concomitant is that one of the prime functions of a welfare state is
to provide an effective dispute-resolution mechanism93 to which all citizens have equal access
87
See, M.A.Sujan, Accountability of an Arbitrator, A.I.R , 2002, Journal, p-66.
88
Pruitt describes conflict as an episode in which one party tries to influence the other or an element of the
common environment and the other resists. See Tony Whatling, “Conflict Matters - Managing Conflict and High
Emotion in Mediation”, 1(10) The Indian Arbitrator 2 (November 2009).
89
See Scott Pettersson, “e = mc3/ADR”, 1(6) The Indian Arbitrator 5 (July 2009).
90
Jitendra N. Bhatt, “Round Table Justice through Lok Adalat (People’s Court) – A Vibrant ADR in India”, 1 SCC
(Journal) 11 (2002).
91
6 Justice is a guarantee which, even the Preamble to the Constitution of India seeks to secure to all the
citizens of India.
92
S.B. Sinha, “ADR and Access to Justice: Issues and Perspectives”.
93
The justice delivery system, is under an obligation to deliver prompt and inexpensive justice to its
consumers, without in any manner compromising on the quality of justice or the elements of fairness, equality
and impartiality. Lecture of Justice Y.K. Sabharwal at Justice Sobhag Mal Jain Memorial Lecture on Delayed
Justice delivered on 25thJuly, 2006.
50 | P a g e
for judicious resolution of their disputes and realization of their fundamental and legal
rights.94 Indeed, in a democratic society people should have proper access to the dispute
resolution mechanism/ process as the legal maxim ubi jus ibi remedium cannot be permitted
to be reduced to an empty promise. However when we speak of access to the dispute
resolution mechanism/ process it is implicit that the process must yield fruitful results in an
efficacious manner.
The judicial system in India, laden with insurmountable arrears, marred by a poor judge to
population ratio and attended with procedural complexities, inherent delays and soaring
expenses, in the recent past, had entered into a phase where its credibility and efficacy was
getting eroded to a considerable extent. The reasons are not far to seek. In the last few
decades, there has been a sea change, both qualitative and quantitative, in the litigation in
India. Not only have new and diverse areas of litigation cropped up, but there has also been
an exponential increase in the quantum of litigation leading to what is often called "docket
explosion".95 The intricacies of our intertwined society and ever increasing population
coupled with development and liberalization of the economy, flourishing trade and
commerce, rising literacy rate, increasing awareness amongst the masses regarding their
rights, new legislations96 In the United States America it was once commented by a
contemporary expert and ever increasing legal ingenuity are some of the reasons for this
colossal spurt in litigation.
In the United States America it was once commented by a contemporary expert 97 that so
widespread is the impulse to sue that ‘litigation has become the nation’s secular religion’.
The same applies to India as well as like Americans we too are a litigious society 98 and
people here are said to be ever engaged to discover new and better ways to litigate. 99 The
consequence has been a tremendous spurt in litigation in India in the recent past and this has
now become a recurring feature of the Indian judicial system. The statistical data reveals
shocking details as in the quarter from 1st July 2010 to 30th September 2010 (within three
months) 11,30,518 civil cases and 37,06,939 criminal cases were instituted in the district
94
In the Magna Carta also it is stated “To no man will we deny, to no man will we sell, or delay, justice or
right”.
95
S.B. Sinha, “Courts and Alternatives”, available at: http://www.delhimediationcentre. gov.in/articles
96
Eg. The insertion of the provision regarding dishonor of cheques in the Negotiable Instruments Act, 1881 has
alone resulted institution of lacs of cases in Delhi.
97
J.K. Lieberman, The Litigious Society viii (Basic Books, New York, 1983).
98
M. Jagannadha Rao, “Need for more ADR Centres and Training for Lawyers and Personnel”, in P.C. Rao and
William Sheffield (Eds.), Alternative Dispute Resolution 103 (Universal Law Publishing Company P. Ltd.,1997).
99
Sadhna Pande, “Alternative Dispute Resolution System vis-à-vis Judiciary: Some Fads and Foibles” 30(1 & 2)
The Academy Law Review 141 (2006).
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courts in India and 3,55,351 civil cases and 1,71,840 criminal cases were instituted in the
High Courts.100
I. Tracing The Development Of Adr In India

The contemporary ADR mechanism which is prevalent in India is primarily based on the
western model and is inspired by the experiences of the western countries. The basic ADR
methods, however, are not new to India and have been in existence in some form or the other
in the days before the modern justice delivery system was introduced by the colonial British
rulers.101 In fact, the Panchayat102 , in its original conception was, primarily, an instrument of
law and order, a means of conciliation and arbitration within the community. The awards
were known as decisions of Panchayats, commonly known as Panchats. In ancient India
Disputes were peacefully decided by the intervention of Kulas (family assemblies), Srenis
(guilds of men of similar occupation), Parishad, etc.103
ADR is therefore by no means a recent phenomenon, though it has been organized and
systematized, expressed in clearer terms, employed more widely in dispute resolution in
recent years than before.104 The Arbitration Act, 1940 was an early step towards recognizing
and providing an alternative mode of dispute resolution outside the courts, although the entire
process under the Act turned out to be court oriented.
Article 39A105 was inserted into the Constitution of India106 and within few years the
Constitutional mandate of Article 39A manifested itself in the enactment of the Legal
Services Authorities Act, 1987 which inter alia provides was organizing Lok Adalats which
are important ADR fora.107
100
See Supreme Court of India, V (4) Court News (October-December 2010)
101
Law Commission of India, 222nd Report on Need for Justice-dispensation through ADR etc., (2009).
102
In Sitanna v. Viranna, AIR 1934 PC 105 the Privy Council while affirming the decision of the Panchayat in a
family dispute had observed that reference to a village Panchayat is a time honoured method of deciding
disputes of this kind.
103
Ashwanie Kumar Bansal, Arbitration and ADR 44 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005).
104
P.C. Rao, “Alternatives to Litigation in India”, in P.C. Rao and William Sheffield (Eds.), Alternative Dispute
Resolution 24 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997).
105
Article 39 A of the Constitution of India directs that “The State shall secure that the operation of the legal
system promotes justice on a basis of equal opportunity, and shall in particular, provide free legal aid, by
suitable legislation or schemes or in any other way, to ensure that opportunities for securing justice are not
denied to any citizen by reason of economic or other disability.”
106
Vide the Constitution (Forty-second Amendment) Act, 1976 (w.e.f. 3-1-1977).
107
The Legal Services Authorities Act, 1987 was amended in the year 2002 and Chapter VI-A pertaining to
Permanent Lok Adalats was introduced with the title “Pre-litigation Conciliation and Settlement”.
52 | P a g e
In 1989, the Government of India, constituted a committee, popularly known as the Malimath
Committee108 to inter alia propose remedial measures to manage and ease out the judicial
dockets. The Malimath Committee submitted its comprehensive report in August, 1990 inter
alia identifying various causes of accumulation of arrears and endorsed the recommendations
made by the Law Commission of India in its 124th and 129th reports to the effect that the
legal void resulting in the inability of the courts to cause the litigating parties to resort to
arbitration or mediation requires to be remedied by necessary legislative action. The
committee also advocated the introduction of conciliation as a dispute resolution process.
A joint conference of Chief Ministers of the States and Chief Justices of High Courts was
held on 4th December, 1993 at New Delhi wherein also the inadequacies of the traditional
justice delivery system were discussed and acknowledged and the need for recourse to ADR
was underlined.109
During this period, all over the world, there was a movement aimed at streamlining and
standardizing the law governing arbitration and conciliation under the auspices of the United
Nations Commission on International Trade Law (UNCITRAL). In this backdrop the
Arbitration and Conciliation Act, 1996 was enacted by the Indian Parliament, which
unequivocally demonstrates the legislative consciousness and concern towards the necessity
and importance of ADR in India. The turning point in the ADR movement was, however, the
legislative mandate articulated in the enactment of section 89 of the Code of Civil Procedure,
1908110 followed by an extraordinary, committed and concerted judicial endeavour, which
triggered an ADR revolution in India of a stature which was unprecedented and preeminently
unmatchable. The legislature gave statutory recognition to the importance of ADR, in respect
of sub judice matters, by empowering the courts to refer the parties to ADR for resolution of
pending lawsuits. The Supreme Court of India reiterated the importance of ADR while
meticulously analyzing and expounding the provisions of section 89 of the Code of Civil
Procedure, 1908.111 The Supreme Court and the High Courts have vociferously advocated the
pervasive use of ADR and have themselves taken myriad initiatives for popularizing and
promoting ADR in India. Since then there has been no looking back and ADR flourishes in
India and continues to attain greater echelons day by day.
108
9 As Justice V.S. Malimath, Chief Justice of Kerala High Court was the Chairman of the Committee.
109
H.R. Bhardwaj, “Legal and Judicial Reforms in India”, available at: http://icadr.ap.nic.in /articles/article_1
110
Section 89 was introduced into the Code of Civil Procedure, 1908 by the Code of Civil Procedure
(Amendment) Act, 2002 with effect from 01.07.2002.
111
Salem Advocates Bar Association v. Union of India (II), AIR 2005 SC 3353; Afcons Infrastructure Ltd. v.
Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.
53 | P a g e
I. Alternate Dispute Resolution Post Independence

Bodies such as the panchayat, a group of elders and influential persons in a village deciding
the dispute between villagers are not uncommon even today. The panchayat has, in the recent
past, also been involved in caste disputes.112 In 1982 settlement of disputes out of courts
started through Lok Adalats. The first Lok Adalat was held on March 14, 1982 at Junagarh in
Gujarat and now it has been extended throughout the country. Initially, Lok Adalats
functioned as a voluntary and conciliatory agency without any statutory backing for its
decisions. By the enactment of the Legal Services Authorities Act, 1987, which came into
force from November 9, 1995, the institution of Lok Adalats received statutory status. To
keep pace with the globalization of commerce the old Arbitration Act of 1940 is replaced by
the new Arbitration and Conciliation Act,1996. Settlement of matters concerning the family
has been provided under Order XXXIIA of the Code of Civil Procedure, 1908 by amendment
in 1976. Provisions for making efforts for reconciliation under Sections 23 (2) and 23 (3) of
the Hindu Marriage Act, 1955 as also under Section 34 (3) of the Special Marriage Act, 1954
are made. Family Courts Act was enacted in 1984. Under Family Courts Act, 1984 it is the
duty of family court to make efforts for settlement between the parties. Introduction of
section 89 and Order X Rule 1A, 1B and 1C by way of the1999 Amendment in the Code of
Civil Procedure, 1908 is a radical advancement made by the Indian Legislature in embracing
the system of “Court Referred Alternative Disputes Resolution”.
II. Amendment In Code Of Civil Procedure, 1908.

The Law Commission of India had prescribed the introduction of the conciliation court
framework and had underlined the significance of conciliation/mediation as a method of
ADR. The Malimath Committee113 supported the need of amendment in law for presentation
of ADR components. On the suggestions of the Law Commission of India and the Malimath
Committee the Code of Civil Procedure (Amendment) Bill was started in 1997.
Resultantly Section 89 CPC as it stands today was brought into the rule book by the Code of
Civil Procedure (Amendment) Act, 1999 with impact from 01.07.2002. With the presentation
of this provision, a required obligation has been vested on the civil courts to make an
undertaking for settlement of disputes by consigning the gatherings to an ADR procedure. It
has now turned out to be basic that resort ought to be needed to ADR systems with a view to
finish suit between the parties at an early date. For sure this is the strategy in the west
112
http://www.nishithdesai.com/Research-Papers/adr.pdf
113
The Malimath Committee report in August, 1990
54 | P a g e
additionally where court endeavors to encourage settlement in common cases, regardless of

whether through legal settlement gatherings or court associated intercession and other ADR
forms, have turned out to be common course in an dispute.
Section 89 of the Code of Civil Procedure, 1908 exemplifies the administrative command to
the court to allude sub judice question to different ADR instruments articulated in that where
it thinks that its proper to do as such, with the end goal to empower the gatherings to at last
determination their pending cases through settled debate goals techniques other than case.
Section 89 CPC has along these lines perceived the need and significance of ADR even at the
post litigation stage.
III. Evolution Of Alternate Dispute Resolution Vis-A-Viz Indian Judiciary

The Law Commission of Indian has maintained that, the reason for judicial delay is not a lack
of clear procedural laws, but rather the imperfect execution, or even utter non-observance,
thereof.114 The Law Commission of Indian in its 14th Report categorically stated that, the
delay results not from the procedure lay down by the legislations but by reason of the non-
observance of many of its important provisions particularly those intended to expedite the
disposal of proceedings. Given the huge number of pending cases, the governance and
administrative control over judicial institutions through manual processes has become
extremely difficult.115 The Supreme Court made it clear that this state of affairs must be
addressed: “An independent and efficient judicial system is one of the basic structures of our
Constitution…It is our Constitutional obligation to ensure that the backlog of cases is
decreased and efforts are made to increase the disposal of cases.116
The analysis of the Law Commission of India reports sheds light on the factors contributing
towards delays and huge backlog of cases before the Courts. The prominent contributory
factors are the frequent adjournments at the instance of the clients and lawyers117, the boycotts
of the Courts by the lawyers, shortage of presiding officers of the Tribunals and Courts 118,
lack of adherence to basic procedures and principles of case management and disposal. 119 The
114
Law Commission of India, 77th Report, pr.4.1.
115
In all, 33,79,033 cases are pending before the High Courts. As on December 31, 2004, the total number of
civil cases pending before the subordinate judiciary is 82,36,254 and criminal cases pending are 1,95,85,776.
The total pendency thus is 2,78,22,030. This shows that out of the total national pendency at the subordinate
Courts level, 70% is criminal cases and the remaining is civil cases. The total number of district and subordinate
Courts are 12,401. These Courts are located in 2,066 towns.
116
Brij Mohan LalVs. Union of India & Others (2002-4-Scale-433), May 6, 2002.
117
Salem Advocate Bar Association, Tamil Nadu Vs. Union of India (UOI), (2005) 6 SCC 344
118
120th Law Commission Report (1987)
119
977th Law Commission Report (1978)
55 | P a g e
Government is also known to be a huge contributor to delays, in matters where it is a party at

various stages from evading notices, replying to notices and replying without application of
mind, unnecessarily appealing even when the laws are clearly in favour of the other side. 120
The improper management of Court diary, absence of strict compliance with the provisions of
Code of Civil Procedure such as, provisions of the Order 10 Code of Civil Procedure relating
to examination of parties before framing issues, to ensure narrowing and focusing the area of
controversy, the laxity in enforcing the provisions of Order 8, R 1, Code of Civil Procedure
by allowing repeated adjournments with Order 17, Rule 1, Code of Civil Procedure to be read
with the proviso to Order 17, Rule 2 where Clause (b) for giving adjournments also are the
prominent contributors to the problem of delays and the resultant judicial arrears. The Code
of Civil Procedure (Amendment Act) 2002, Act No. 22 was sought to bring a change in the
procedure in suits and civil proceedings by way of reducing delays and compressing them
into a year's time from institution of suit till disposal and delivery of judgment, yet the
revised procedures are also not strictly adhered to. As a result, the time taken in the final
disposal of the cases by the Courts still runs into years by unduly lengthy and winded
examination and cross-examination of witnesses,121 protracted arguments122, inadequate
electronic connectivity and use of information technology and so forth. The problem judicial
delay and judicial arrears are spreading like epidemic at every level of the judicial system and
thus it is a major cause of concern for the very survival of the entire process of litigation.
Alternative dispute resolution was at one point of time considered to be a voluntary act on the
apart of the parties which has obtained statutory recognition in terms of Code of Civil
Procedure Amendment Act, 1999, Arbitration and Conciliation Act, 1996, Legal Services
Authorities Act, 1997 and Legal Services Authorities (Amendment) Act, 2002. The
Parliament apart from litigants and the general public as also the statutory authorities Like
Legal Services Authority have now thrown the ball into the court of the judiciary. What
therefore, now is required would be implementation of the Parliamentary object. The access
to justice is a human right and fair trial is also a human right. In some countries trial within a
reasonable time is a part of the human right legislation. But, in our country, it is a
Constitutional obligation in terms of Article 14 and 21. Recourse to alternative dispute
resolution as a means to have access to justice may, therefore, have to be considered as a
120
Tamil Nadu Vs. Union of India (UOI), (2005) 6 SCC 344, paras 38, 39
121
The 14th and 77th Law Commission Reports.
122
279th Law Commission Report (1979) on delays and arrears.
56 | P a g e
human right problem. Considered in that context the judiciary will have an important role to
play.
Even before the existence of Section 89 of the Civil Procedure Code, there were various
provisions that gave the power to the courts to refer disputes to mediation, which sadly have
not really been utilized. Such provisions, inter alia, are in the Industrial Disputes Act, the
Hindu Marriage Act and the Family Courts Act and also present in a very nascent form via
Section 80, Order 32 A and Rule 5 B of Order 27 of the Code of Civil Procedure. A trend of
this line of thought can also be seen in ONGC Vs. Western Co. of Northern America and
ONGC Vs. Saw Pipes Ltd. Industrial Disputes Act, 1947 provides the provision both for
conciliation and arbitration for the purpose of settlement of disputes. Section 23(2) of the
Hindu Marriage Act, 1955 mandates the duty on the court that before granting relief under
this Act, the Court shall in the first instance, make an endeavor to bring about a reconciliation
between the parties, where it is possible according to nature and circumstances of the case.
For the purpose of reconciliation, the Court may adjourn the proceeding for a reasonable
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 reconciliation123.
The Family Court Act, 1984 was enacted to provide for the establishment of Family Courts
with a view to promote conciliation in, and secure speedy settlement of, disputes relating to
marriage and family affairs and for matter connected therewith by adopting an approach
radically different from that ordinary civil proceedings.124 Section 9 of the Family Courts Act,
1984 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 subject matter. The Family Court has also
been conferred with the power to adjourn the proceedings for any reasonable period to enable
attempts to be made to effect settlement if there is a reasonable possibility. Section 80(1) of
Code of Civil Procedure lays down that no suit shall be instituted against government or
public officer unless a notice has been delivered at the government office stating the cause of
action, name, etc. The object of Section 80 of Code of Civil Procedure – the whole object of
serving notice u/s 80 is to give the government sufficient warning of the case which is of
going to be instituted against it and that the government, if it so wished can settle the claim
without litigation or afford restitution without recourse to a court of laws. 125 The object of
123
Section 23(3) of the Act
124
K.A.AbdulJalees v. T.A.Sahida (2003) 4 SCC 166
125
GhanshyamDass v. Domination of India, (1984) 3 SCC 46
57 | P a g e
section 80 is to give the government the opportunity to consider its or his legal position and if
that course if justified to make amends or settle the claim out of court. 126 Order 23 Rule 3 of
Code of Civil Procedure is a provision for making an decree on any lawful agreement or
compromise between the parties during the pendency of the suit by which claim is satisfied or
adjusted. The scheme of Rule 3 of Order 23 proves that if the court is satisfied that a suit has
been adjusted wholly or partly by and lawful agreement or compromise, the court shall pass a
decree in accordance to that. Order 23, Rule 3 gives mandate to the Court to record a lawful
adjustment or compromise and pass a decree in term of such compromise or adjustment.
Order 27 Rule 5B confers a duty on court in suit against the government or a public officer to
assist in arriving at a settlement. In a suit where Government or public officer is a party it
shall be the duty of the Court to make an endeavor at first instance, where it is possible
according to the nature of the case, to assist the parties in arriving at a settlement. If it appears
to the court in any stage of the proceedings that there is a reasonable possibility of a
settlement, the court may adjourn the proceeding to enable attempts to be made to effect
settlement.
Order 32A of Code of Civil Procedure lays down the provision relating to “suits relating to
matter concerning the family”. It was felt that ordinary judicial procedure is not ideally suited
to the sensitive area of personal relationships. Litigations involving affairs of the family seem
to require special approach in view of the serious emotional aspects involved. In this
circumstances, the objective of family counseling as a method of achieving the object of
preservation of family should be kept in forefront. Therefore, Order 32A seeks to highlight
the need for adopting a different approach where matters concerning the family are at issue,
including the need for effort to bring about amicable settlement. The provisions of this Order
applies to all proceedings relating to family, like guardianship, custody of minor,
maintenance, wills, succession, etc., Rule 3 imposes a duty on the Court to make an effort of
settlement by way of providing assistance where it is possible to do so. The Court may also
adjourn the proceeding if it thinks fir to enable attempt to be made to effect a settlement
where there is a reasonable possibility of settlement. In discharge of this duty Court may take
assistance of welfare expert who is engaged in promoting the welfare of the family127.
The concept of employing alternative dispute resolution has undergone a sea change with the
insertion of S.89 of Code of Civil Procedure by amendment in 2002. As regards the actual
126
Raghunath Das v. UOI AIR 1969 SC 674
127
O. XXXIIA, Rule 4
58 | P a g e
content, s.89 of Code of Civil Procedure lays down that where it appears to the court that
there exists element of settlement, which may be acceptable to the parties, the Court shall
formulate the terms of the settlement and give them to the parties for their comments. On
receiving the response from the parties, the Court may formulate the possible settlement and
refer it to either: - Arbitration, Conciliation; Judicial Settlement including settlement through
Lok Adalats; or Mediation. As per sub-section (2) of Section 89, when a dispute is referred to
arbitration and conciliation, the provisions of Arbitration and Conciliation Act will apply.
When the Court refers the dispute of Lok Adalats for settlement by an institution or person,
the Legal Services Authorities, Act, 1987 alone shall apply. Supreme Court started issuing
various directions as so as to see that the public sector undertakings of the Central Govt. and
their counterparts in the States should not fight their litigation in court by spending money on
fees on counsel, court fees, procedural expenses and waiting public time.128
In ONGC v. Collector of Central Excise 129, there was a dispute between the public sector
undertaking and Government of India involving principles to be examined at the highest
governmental level. Court held it should not be brought before the Court wasting public
money any time.
In ONGC v. Collector of Central Excise,130 dispute was between government department and
PSU. Report was submitted by cabinet secretary pursuant to Supreme Court order indicating
that an instruction has been issued to all departments. It was held that public undertaking to
resolve the disputes amicably by mutual consultation in or through or good offices
empowered agencies of govt. or arbitration avoiding litigation. Government of India directed
to constitute a committee consisting of representatives of different departments. To monitor
such disputes and to ensure that no litigation comes to court or tribunal without the
Committee’s prior examination and clearance. The order was directed to communicate to
every High Court for information to all subordinate courts.
In Chief Conservator of Forests v. Collector 131 were relied on and it was said that state/union
govt. must evolve a mechanism for resolving interdepartmental controversies- disputes
between department of Government cannot be contested in court.
128
Oil and Natural Gas Commission v. Collector of Central Excise, 1992 Supp2 SCC 432, Oil and Natural Gas
Commission v. Collector of Central Excise, 1995 Supp4 SCC 541 and Chief Conservator of Forests v. Collector,
(2003) 3 SCC 472
129
1992 Supp2 SCC 432,[ ONGC I]
130
1995 Supp4 SCC 541 (ONGC II)
131
(2003) 3 SCC 472 ONGC I AND II
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In Punjab & Sind Bank v. Allahabad Bank,132 it was held that the direction of the Supreme
Court in ONGC III133 to the government to setup committee to monitor disputes between
government departments and public sector undertakings make it clear that the machinery
contemplated is only to ensure that no litigation comes to court without the parties having had
an opportunity of conciliation before an in-house committee.
In the judgment of the Supreme Court of India in Salem Bar Association vs. Union of
India134, the Supreme Court has requested prepare model rules for Alternative Dispute
Resolution and also draft rules of mediation under section 89(2)(d) of Code of Civil
Procedure, 1908. The rule is framed as “Alternative Dispute Resolution and Mediation Rules,
2003”.
Rule 4 of the Alternative Dispute Resolution and Mediation Rules, 2003”, lays down that the
Court has to give guidance to parties (when parties are opting for any mode of Alternative
Dispute Resolution) by drawing their attention to the relevant factors which parties will have
to take into account, before they exercise their opinion as to the particular mode of
settlement, namely;
i. It will be to the advantage of the parties, so far as time and expense are concerned,
to opt for one of these modes of settlement rather than seek a trial on the disputes
arising in the suit;
ii. Where there is no relation between the parties which requires to be preserved, it
will be in the interests of the parties to seek reference of the matter to arbitration
as envisaged in clause (1) of sub-section (1) of sec.89.
iii. Where there is a relationship between the parties which requires to be preserved, it
will be in the interests of the parties to seek reference of the matter to conciliation
or mediation, as envisaged in clauses (b) or (d) of sub-section (1) of sec.89.
The Rule also says that Disputes are arising in matrimonial, maintenance and
child custody matters shall, among others, be treated as cases where a relationship
between the parties has to be preserved.
iv. Where parties are interested in a final settlement which may lead to a compromise,
it will be in the interests of the parties to seek reference of the matter to judicial
132
(2006) (3) SCALE 557
133
(2004) 6 SCC 437
134
(2005) 6 SCC 344
60 | P a g e
settlement including Lok Adalat as envisaged in clause (c) of sub-section(1) of

section 89.
According to Rule 8, the provisions of these Rules may be applied to proceedings before the
Courts, including Family courts constituted under the Family Courts (66 of 1984), while
dealing with matrimonial, and child custody disputes.
There is need for greater use of alternate dispute resolution. Alternative dispute resolution is
required when there is need for:
i. going into lesser depth of procedures, or more informal and less technical
procedures, or special procedures;
ii. the decision-maker or facilitator to be familiar with the or otherwise conversant
with the subject. In many technical matters, it eliminates the need to give evidence
or even ‘educate’ the decision-maker thereby enabling lesser costs, and greater
speed and accuracy; and
iii. adopting and encouraging ‘give and take’ by each.
This occurs in many situations, particularly where reasoning/ moral justification advanced by
one is likely to persuade the other to more readily relent. It is wrong to send parties to
alternative dispute resolution simply because the courts are not able to decide the cases in a
reasonable time. The principle behind alternative dispute resolution as also the need thereof
must be understood in its correct perspective. To emphasize further, pressing for alternative
dispute resolution systems without first resolving the problem of delays before the courts is
only driving people to alternative dispute resolution out to helplessness and giving them a
feeling that “It takes so long for the court to decide and the cost of attending to all the
hearings is so much that it is as good as justice denied. So whatever little alternative dispute
resolution has to offer, we might as well accept, and more than that, we cannot except”.
Although alternative dispute resolution systems are essential, and great attention and effort
must go towards them to make successful, it is necessary that apart from many other factors,
improvement in the functioning of the courts is brought first. Thereafter alternative dispute
resolution be encouraged, but confined to matters where it is more suitable/ appropriate as
compared to the ’efficient and proper’ court procedures. It should not merely be regarded as
an escape route form the inability of the courts to dispense justice in time.
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IV. Malimath Committee Report

The enormous arrears of cases, multiple appeals/revisions, procedural shackles and the
adversarial system, all result in creating a judicial lag of sorts and an effective remedy against
the same is settlement through alternate forums. The same was brought to light in the
Malimath Committee and the 129th Law Commission report.
The Law Commission in its 129th Report 135 advocated the need for amicable settlement of
disputes between parties and the Malimath Committee136 recommended to make it mandatory
for courts to refer disputes, after their issues having been framed by courts, for resolution
through alternate means rather than litigation/trials.
Malimath committee called for a “legal sanction to a machinery for resolution of disputes and
resort thereto is compulsory” which the sole objective of reducing he large influx of
commercial litigation in courts of civil nature, number of appeals to higher courts lessened
and the efficiency of courts revitalized by such implementation.
The Law Commission recommended the establishment of Conciliation Courts all over the
country to with the authority to initiate conciliation proceedings in all cases at all levels. The
aims of both these committees were to further the cause of justice and ensure efficient
working of the judicial system. The Commission called for a replication of the Himachal
Pradesh High Court’s Conciliatory practices before, during and post trial for litigants which
majorly covered issues related to partition, inheritance, wills etc. The positive results from the
experiment in Himachal Pradesh paved the way for revival of alternate forums. Furthermore,
it may be stated that it is the duty of the judges to assit parties in arriving at settlements in
certin suits, as has been elucidated under Rule 5-B of Order XXVII and Rule XXIII-A of the
Code of Civil Procedure. The conciliation process casts a duty on judges to take appropriate
steps, where there is scope of settlement, to bring about reconciliation in certain suits and to
come up with a conclusive resolution on an expeditious basis.
The aim and objective of reviving Section 89, as stated in the Statement and Objects of the
Bill Code of Civil Procedure (Amendment) Bill initiated in 1997, was to ensure effective
implementation of Conciliation schemes, following recommendations of the 129th Law
Commission and make it obligatory for courts to refer to disputes to alternate forums.
Initiation of suits in courts shall be the last resort of parties if all other alternatives fail.. The
135
129th Report of Law Commission of India
136
Malimath Committee Report, Chapter VIII, pg 112
62 | P a g e
resuscitated Section 89 incorporated Conciliation, Judicial Settlement including Lok Adalats

and Mediation in addition to Arbitration.
V. 238th Law Commission Report

The 238th Law Commission Report advocated for the same changes as were specified
in Afcons case and called for restructuring of the Section on the contours set out by the
Supreme Court with certain reservations. The Commission stated it would be unsuitable to
deem a Lok Adalat as a mediator and treating the Lok Adalat award as a mere agreement
arrived at on account of the Mediato and stated that an appropriate course would be for the
Mediator to submit the terms of settlement reached as a result of mediation to the court so
that the court, after due scrutiny, can pass a decree in accordance with the compromise
arrived at between the parties.
The Report was deemed it be unwise to refer the award of Lok Adalat arrived at through
conciliation to be referred to a Court, which would be empowered to pass a decree in
consonance with the compromise arrived at. Such sort of an implementation, as prescribed
under paragraph 38 of the Afcons case, would be in contravention with Section 21 of the
LSA Act and further review by courts is considered unwarranted. Such sort of a
recommendation would even hamper the conciliatory practices and go against the validity of
settlement agreement as provided for under Section 76 and 30 of the Arbtration and
Conciliation Act. The objective of Section 89 shall be served if the further step of passing a
decreewith regard to Alternate forums is not undertaken.
The Report called for a revamp of the current section to incorporate certain changes as had
been highlighted in the Afcons case such as court shall record its opinion in favor of ADR
before setting the issues to be dealt with in order to reduce the burden of the court. Copies of
settlement agreement need be provided to the courts by Conciliators to rectify any mistakes
or errors in the same with the consent of parties. (Recommendations 6.2)
The more important recommendation was with respect to rules under Order X, as the
committee recommended the removal of Rule 1B of Order X which calls for attendance of
parties before alternate forums. (Recommendation 6.3)
The Law Commission dealt with the problem of court fees as the literal interpretation of
Section 16 of the Court-fees Act may render the trial of a suit free of cost. The said section,
introduced along with section 89 of the Code by the same Act, provides for court fees to be
63 | P a g e
refunded to the plaintiff when recourse to alternate forums is avoided. The problem lies in the
fact that, there may be no settlement or resolution by alternate forums and the matter may be
reverted back to the court and the suit may move on to trial proceedings without any fees or
cost incurred by the plaintiff. Such a provision is also in conflict section 21 of the Legal
Services Authorities Act, 1987 as it provides for court fees being refunded only when a
settlement is arrived at between parties. Thus, parties while initiating proceedings, to avoid
costs, could abuse the provision under Section 16 and a need to make this section in
consonance with other such provisions such as Section 20 of the LSLA act is paramount. The
court fees must only be refunded when the matter has been resolved outside court through
alternate forums prescribed under Section 89. It may be draftsmen’s error which has caused
such a anomaly to arise but there is a need to alter the same.( Recommendation 6.4.3)
VI. Afcons Case:

Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC
616
In this case, the Supreme court of India relied upon the judgment of Sukanya Holding Pvt.
Ltd. v. Jayesh H. Pandya & Anrs 137 and held that to contend for a reference to arbitration
under section 89 of the Code, consent of parties is not required. The High Court has assumed
that section 89 enables the civil court to refer a case to arbitration even in the absence of an
arbitration agreement. Sukanya Holdings does not lay down any such proposition. In that
decision, this Court was considering the question as to whether an application under section 8
of the AC Act could be maintained even where a part of the subject matter of the suit was not
covered by an arbitration agreement.
Reliance was placed on Section 89 CPC in support of the argument that the matter should
have been referred to arbitration. The Division Bench held that Section 89 CPC cannot be
resorted to for interpreting Section 8 of the Act as it stands on a different footing and it would
be applicable even in cases where there is no arbitration agreement for referring the dispute
for arbitration. Further, for that purpose, the court has to apply its mind to the condition
contemplated under Section 89 CPC and even if application under Section 8 of the Act is
rejected, the court is required to follow the procedure prescribed under the said section. The
Court drew out inference that even in the absence of Arbitration agreement, Parties can go for
ADR process through Mutual Consent and Finally the Supreme court enlightened in this
matter by delivering landmark judgment stating that:
137
2003(5) SCC 531
64 | P a g e
i. The trial court did not adopt the proper procedure while enforcing Section 89 of
the Code. Failure to invoke Section 89 suo moto after completion of pleadings and
considering it only after an application under Section 89 was filed, is erroneous.
ii. A civil court exercising power under Section 89 of the Code cannot refer a suit to
arbitration unless all the parties to the suit agree for such reference.138
VII. Reasons For Growth Of Adr - Utility And Advantages Of Adr

The advent of ADR in India, in its modern setup, may be said to be primarily attributable to
the inadequacies of the justice delivery system to deliver expeditious and effective justice and
cope up with the swelling judicial dockets. There can also be no denial of the fact that the
process of underlining the need for ADR inevitably involves an invariable rhetoric aimed at
highlighting these lacunae and inadequacies of the judicial system. This, however, is not
peculiar to India alone as throughout the world, ADR is perceived as a method for
channelizing disputes outside the formal justice system139 and is promoted as an alternative
route to the wearisome path of litigation. This is, however only one side of the coin. The
pitfalls of the traditional justice delivery system may have been one of the prime propellants
for the advent of the ADR140 but the ADR revolution has gained momentum on account of its
own virtues. ADR offers an effective alternative to the disputants bereft of the rigours,
complexities and flaws of formal adjudication. It offers an additional remedy for resolution of
disputes outside the conventional litigative process and enables the parties to choose a
remedy which is most appropriate in the given circumstances. ADR has distinct advantages
and it offers a comparatively speedier and inexpensive mode of dispute resolution than
conventional litigation. It offers a system with procedural flexibility, a broad range of
remedial options and a focus on individualized justice. 141 The flexibility is available not only
in terms of procedure but also in terms of the solutions to the dispute. ADR, in
contradistinction to a judicial adjudication can provide creative solutions – novel ways of
138
Manjeet Sahu, “Afcons infrastructure and Ors. v. Cherian Verkay Construction and Ors” available at
http://www.legalservicesindia.com/article/1248/Afcons-infrastructure-and-Ors.-v.--Cherian-
VerkayConstruction-and-Ors.html (last accessed 21.10.2018)
139
Jethro K. Lieberman & James F. Henry, “Lessons from the Alternative Dispute Resolution Movement”, 53 U.
Chi. L. Rev. 424 (1986); The impetus behind the rising of ADR is the failure of the legal system to fulfill its
function as an efficient and effective dispute resolution mechanism in the growing and ever-developing
modern world. See Michael Tsur, “ADR — Appropriate Disaster Recovery”, 9 Cardozo J. Conflict Resol. 371
(2008).
140
As a movement, ADR has grown out of a general concern that courts are burdened with too many cases. See
Chandana Jayalath, “Courts and ADR - For a Harmonious Co-habitation”, 3 (10) The Indian Arbitrator 5
(October 2011).
141
Thomas O Main, “ADR: The New Equity”, 74 U. Cin. L. Rev. 329 (Winter 2005).
65 | P a g e
resolving disputes.142 Further most ADR mechanisms offer a private process, assuring
confidentiality, which is generally not available in court proceedings. The assurance of
confidentiality in ADR permits free and frank exchange of views and open and honest
discussions between the parties thereby improving the relationship between the parties as
well as their understanding of the dispute. Confidentiality also reduces posturing and
destructive dialogue amongst the parties during the resolution process 143 ADR (non
adjudicatory) is a purely voluntary process and the parties are free to opt out of the same at
any point of time as per their own volition. If a party does not accede to the settlement or to
the continuance of ADR proceedings, it is open to him to unilaterally terminate the ADR
process and initiate the formal legal process. Thus there is nothing to loose in ADR and even
if ADR is unsuccessful, the time and expense spent in ADR is put to good use as trial
preparation is advanced, issues are narrowed and thoughts are clarified. thereby increasing
the probability of amicable resolution.144 On the other hand adjudicatory ADR also affords an
expeditious, efficacious and convenient mode of resolution of disputes outside the courts. But
the biggest advantage in ADR is finality since the dispute is finally resolved, thereby
obviating the possibility of successive appeals.145
ADR is in fact a collaborative effort of the parties of discovering their actual concerns and
appreciating their interests in contradistinction to their superficial positions and claims. It
results in a win-win situation, steering clear of the acrimony which is in built in the
adversarial litigative process and thus results in increased respect and faith between the
parties, thereby preserving relationships in the long run.146
Further merely because a dispute is defined as justiciable, does not necessarily mean that the
courts are the only option to seek redress.147 Moreover a legal adjudication may be flawless
142
George Applebey, What is Alternative Dispute Resolution?, 15 Holdsworth L. Rev. 20 (1992).
143
See the Steering Committee of the Federal Interagency Alternative Dispute Resolution Working Group
(IADRWG), USA, Protecting the Confidentiality of Dispute Resolution Proceedings: A Guide for Federal ADR
Program Administrators, available at: Moreover a legal adjudication may be flawless but heartless but a
negotiated www.adr.gov
144
Alexander Bevan, Alternative Dispute Resolution 61 (Sweet and Maxwell, London, 1992).
145
In the empirical research conducted majority of the respondents asserted that finality was the biggest
advantage associated with individual ADR processes.
146
This is relevant especially in case of business disputes. See Benjamin F. Tennille, Lee Applebaum, & Anne
Tucker Nees, “Getting to Yes in Specialized Courts: The Unique Role of ADR in Business Court Cases”, 11
Pepperdine Disp. Res. L. J. 35 (2010).
147
See Law Reform Commission, Ireland, Report on Alternative Dispute Resolution: Mediation and Conciliation,
LRC 98-2010, November 2010, available at: http://www.lawreform.ie
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but heartless but a negotiated settlement148 will be satisfying, even if it departs from strict
law.149 ADR processes, on the other hand, aim at rendering justice in the form and content
which not only resolves the dispute but tends to resolve the conflict in the relationship of the
parties which has given rise to that dispute150 and thus ADR systems enable a change in the
mental approach of the parties.151
ADR has undoubtedly been successful in clearing the dockets in India. In certain countries of
the world ADR has been successful to the extent that over 90 per cent of the cases are settled
out of the court.152 However, the objective is to facilitate more responsive and effective
solutions to disputes and relieving the court dockets or saving time and money are secondary
concerns.153 However during this course of action, ADR indirectly reduces the burden on the
courts and resultantly saves valuable judicial time enabling the courts and judges to devote
adequate time and attention to the cases which inevitably require judicial determination. But
the basic goals of ADR are not only to relieve court congestion as well as undue cost and
delay, but also to enhance community involvement in the dispute resolution process, to
facilitate access to justice and to provide more effective dispute resolution.154
The reasons for the strengthening of the ADR revolution are therefore quite obvious. ADR
aims to provide the litigants with an economical, speedy and less formalistic remedy for
resolution of disputes, a remedy, which is most appropriate given the prevalent state of
affairs. ADR succeeds because it steers clear of rigidity, complexity and formality, which are
inherent in the conventional litigative process apart from the procedural delays and high
expenditure involved.155 It is because of all its advantages that the emergence of ADR has
148
2 In fact a settlement represents an alternative to adjudication, negotiated by the parties in the ‘shadow of
the law’. See Jonathan T. Molot, “An Old Judicial Role for a New Litigation Era”, 113 Yale L.J. 27 (2003)
149
Agarwal Engineering Comapany v. Technoimpex Hungarian Machine Industries, Foreign Trade Company, AIR
1977 SC 2122.
150
4 Sarvesh Chandra, “ADR: Is Conciliation the Best Choice” in P.C. Rao and William Sheffield (Eds.),
151
Byram Pestonji Gariwala v. Union Bank of India, AIR 1991 SC 2234.
152
ADR techniques are efficient and effective procedural solutions for managing court dockets. See Lisa
Blomgren Bingham, Tina Nabtchi, Jeffrey M.Senger, Michael Scott Jackman, “Dispute Resolution and the
Vanishing Trial: Comparing Federal Government Litigation and ADR Outcomes”, 24 (2) Ohio St. J. on Disp. Res.
225 (2009).
153
Sadhna Pande, “Alternative Dispute Resolution System vis-à-vis Judiciary: Some Fads and Foibles”, 30 (1 & 2)
The Academy Law Review 141 (2006).
154
See S.B. Goldberg, E.D. Green & F.E.A. Sander, Dispute Resolution (Little, Brown and Company, Toronto,
1985).
155
ADR programs are in fact tools of equity rather than tools of law. Ujwala Shinde, “Challenges Faced by ADR
System in India”, 4 (2) The Indian Arbitrator 6 (February 2012).
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been one of the most significant movements as a part of conflict management and judicial
reform and now it has become a global necessity.156
Important Provision Of Arbitration And Conciliation Act, 1996

C. Section 7: ‘Arbitration Agreement’
(1) In this Part, 'arbitration agreement' means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between them
in respect of a defined legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in
the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in-
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of telecommunication
which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the existence of the
agreement is alleged by one party and not denied by the other.
(5) The reference in a contract to a document containing an arbitration clause constitutes
an arbitration agreement if the contract is in writing and the reference is such as to
make that arbitration clause part of the contract.
As per Section 7, such an agreement must be in writing. The contract regarding which the
dispute exists, must either contain an arbitration clause or must refer to a separate document
signed by the parties containing the arbitration agreement. 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. An exchange of statement of claim and defense in
which existence of an arbitration agreement is alleged by one party and not denied by other is
also considered as valid written arbitration agreement.
In the case of Rukmanibai v. Collector157, it was held that arbitration agreement is not
required to be in any particular form. What is required to be ascertained is whether the parties
156
Jitendra N. Bhatt, “Round Table Justice through Lok Adalat (People’s Court) – A Vibrant ADR in India”, 1 SCC
(Journal) 11 (2002); See also K.D. Raju, “Alternative Dispute Resolution System: A Prudent Mechanism of
Speedy Redress in India” available at: papers.ssrn.com/sol3/paper
157
AIR 1981 SC 479.
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have agreed that if disputes arise between them in respect of the subject-matter of contract
such disputes shall be referred to arbitration, then such an arrangement would spell out an
arbitration agreement.
The Hon’ble Supreme Court in the case of Jagdish Chander v. Ramesh Chander158, held that
arbitration agreement clause mere use of the word “arbitration” or “arbitrator” in a clause will
not make it an arbitration agreement, if it requires or contemplates a further or fresh consent
of the parties for reference to arbitration. Such an agreement is not an arbitration agreement,
but an agreement to enter into an arbitration agreement in future.
In Indtel Technical Services Private Limited v. W.S. Atkins Rail Limited159, it was held that
agreement providing for settlement of disputes or differences by referring the same to
“adjudication” or to “adjudicator” - notwithstanding the use of the word adjudication, held,
the wordings of the relevant clauses indicated that the parties intended to have their disputes
resolved by arbitration.
Arbitration agreement clause, where the agreement postulated resolution of disputes through
institutional arbitration, then notwithstanding the non-mention of the name of a specific
institution therein, the same would be a valid arbitration clause, as held in Nandan Biomatrix
Limited. v. D 1 Oils Limited160.
In Ashapura Mine-Chem Limited v. Gujarat Mineral Development Corporation161, it was

held that arbitration clause contained in MoU, is an independent arbitration agreement and,
even if MoU is terminated, arbitration agreement continues to remain and parties are entitled
to invoke said clause and exercise option for appointment of arbitrator.
In the case of Larsen & Toubro Limited v. Mohan Lal Harbans Lal Bhayana162, it was held
that if arbitration clause and procedure for appointment of arbitrator in original agreement is
novated, and parties acted accordingly, clause in original agreement for appointment of
arbitrator cannot be invoked.
The Hon’ble Supreme Court in the case of Oriental Insurance Co. Ltd. v. Narbheram Power
& Steel Private Limited163, held that the parties are bound by the clauses enumerated in the
policy and the court does not transplant any equity to the same by rewriting a clause. Further,
158
(2007) 5 SCC 719.
159
(2008) 10 SCC 308.
160
(2009) 4 SCC 495.
161
(2015) 8 SCC 193.
162
(2015) 2 SCC 461.
163
(2018) 6 SCC 534.
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an arbitration clause is required to be strictly construed and if a clause stipulates that under
certain circumstances there can be no arbitration, and the circumstances are demonstrably
clear then the controversy pertaining to the appointment of arbitrator has to be put to rest.
Though a general reference to an earlier contract (Two-contract case) is not sufficient for
incorporation of an arbitration clause in the later contract, a general reference to a standard
form contract (Single-contract case) would be enough for incorporation of the arbitration
clause. M.R. Engineers & Contractors (P) Limited 164, inter alia, lays down that where the
contract provides that the standard form of terms and conditions of an independent trade
association or professional institution will bind the parties or apply to the contract, such
standard form of terms and conditions including any provision for arbitration in such standard
terms and conditions, shall be deemed to be incorporated by reference, as held in Inox Wind
Ltd. v. Thermocables Limited165.
Any party to the dispute can start the process of appointing arbitrator and if the other party
does not cooperate, the party can approach the office of Chief Justice for appointment of an
arbitrator. There are only two grounds upon which a party can challenge the appointment of
an arbitrator – reasonable doubt in the impartiality of the arbitrator and the lack of proper
qualification of the arbitrator as required by the arbitration agreement. A sole arbitrator or a
panel of arbitrators so appointed constitute the Arbitration Tribunal.
Except for some interim measures, there is very little scope for judicial intervention in the
arbitration process. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if
a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before
the tribunal itself. If the tribunal rejects the request, there is little the party can do except to
approach a court after the tribunal makes an award. Section 34 provides certain grounds upon
which a party can appeal to the principal civil court of original jurisdiction for setting aside
the award.
F. Section 8: ‘Power to refer parties to arbitration where there is an arbitration

agreement’
(1) A judicial authority, before which an action is brought in a matter which is the subject
of an arbitration agreement shall, if a party to the arbitration agreement or any person
claiming through or under him, so applies not later than the date of submitting his first
statement on the substance of the dispute, then, notwithstanding any judgment, decree or
164
(2009) 7 SCC 696.
165
(2018) 2 SCC 519.
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order of the Supreme Court or any court, refer the parties to arbitration unless it finds that
prima facie no valid arbitration agreement exists.
(2) The application referred to in sub-section (1) shall not be entertained unless it is
accompanied by the original arbitration agreement or a duly certified copy thereof.
Provided that where the original arbitration agreement or a certified copy thereof is not
available with the party applying for reference to arbitration under sub-section (1), and the
said agreement or certified copy is retained by the other party to that agreement, then, the
party so applying shall file such application along with a copy of the arbitration agreement
and a petition praying the court to call upon the other party to produce the original arbitration
agreement or its duly certified copy before that court.
(3) Notwithstanding that an application has been made under sub-section (1) and that the
issue is pending before the judicial authority, an arbitration may be commenced or continued
and an arbitral award made.
Interpretation:
Reference only on an application for reference:
The civil court can refer the dispute to the arbitration only on an application by the defendant
befoe submitting his defence. No one can dispute that a Civil Court has no jurisdiction to
entertain the suit after application under Section 8 of the Act is filed but this would be subject
to the application otherwise being in conformity with the requirements of the said Section.
The jurisdiction of the Civil Court is not ousted on account of an arbitration agreement
between the parties. It is ousted because of an application filed under Section 8 of the Act
provided it otherwise confirms to the requirements laid down in the Section.
Before first statement of defence:
The application for referring the dispute shall be made to the judicial authority before
submission of first defence before the judicial authority. In a civil suit first statement of
defence is written statement to the suit.
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In Smt. Kalpana Kothari vs. Smt. Sudha Yadav and others, 166 . The Court opined that - "In
striking contrast to the said scheme underlying the provisions of the 1940 Act, in the new
1996 Act, there is no provision corresponding to Section 34 of the old Act and Section 8 of
the 1996 Act mandates that the Judicial Authority before which an action has been brought in
respect of a matter, which is the subject-matter of an arbitration agreement, shall refer the
parties to arbitration if a party to such an agreement applies not later than when submitting
his first statement. ....... Similarly, having regard to the distinct purposes, scope and object of
the respective provisions of law in these two Acts, the plea of estoppel can have no
application to deprive the appellants of the legitimate right to invoke an all comprehensive
provision of mandatory character like Section 8 of the 1996 Act to have the matter relating to
the disputes referred to arbitration, in terms of the arbitration agreement". The Court had
adverted to its earlier decision in P. Anand Gajapathi Raju and Others vs. P.V.G. Raju (Dead)
and Others,167 in observing that there is no bar to referral under Section 8 of the 1996 Act
even where such an application had been filed after the first statement (Written Statement) on
the substance of the dispute, on the Plaintiff not objecting thereto.
Bifurcation of Cause of Action:
In Sukanya Holdings Pvt. Ltd vs Jayesh H. Pandya & Anr168 the Apex court held that “The
next question which requires consideration is even if there is no provision for partly referring
the dispute to arbitration, whether such a course is possible under Section 8 of the Act? In our
view, it would be difficult to give an interpretation to Section 8 under which bifurcation of
the cause of action that is to say the subject matter of the suit or in some cases bifurcation of
the suit between parties who are parties to the arbitration agreement and others is possible.
This would be laying down a totally new procedure not contemplated under the Act. If
bifurcation of the subject matter of a suit was contemplated, the legislature would have used
appropriate language to permit such a course. Since there is no such indication in the
language, it follows that bifurcation of the subject matter of an action brought before a
judicial authority is not allowed.
166
AIR 2002 SC 404
167
2000(4) SCC 539
168
Delivered on 14 April, 2003, (Appeal (civil) 1174 of 2002)
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Secondly, such bifurcation of suit in two parts, one to be decided by the arbitral tribunal and
other to be decided by the civil court would inevitably delay the proceedings. The whole
purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated
by such procedure. It would also increase the cost of litigation and harassment to the parties
and on occasions there is possibility of conflicting judgments and orders by two different
forums.”
Thorough abovementioned judgment the Supreme court has held that if the cause of action is
not severable and the claim is partly covered under the arbitration agreement and rest by the
Civil Court, the civil court is not obliged to refer the dispute to the arbitration.
G. Section 9: ‘Interim measures, etc. by Court’
(1) A party may, before or during arbitral proceedings or at any time after the making of
the arbitral award but before it is enforced in accordance with Section 36, apply to a Court: -
(i) for the appointment of a guardian for a minor or a person of unsound mind for the
purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters,
namely: -
(a) the preservation, interim custody or sale of any goods which are the subject-
matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the
subject-matter of the dispute in arbitration, or as to which any question may
arise therein and authorising for any of the aforesaid purposes any person to
enter upon any land or building in the possession of any party, or authorising
any samples to be taken or any observation to be made, or experiment to be
tried, which may be necessary or expedient for the purpose of obtaining full
information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the Court to be just
and convenient,
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and the Court shall have the same power for making orders as it has for the purpose of, and in
relation to, any proceedings before it.
(2) Where, before the commencement of the arbitral proceedings, a court passes an order
for any interim measure of protection under sub-section (1), the arbitral proceedings shall be
commenced within a period of ninety days from the date of such order or within such further
time as the court may determine.
(3) Once the arbitral tribunal has been constituted, the court shall not entertain an
application under sub-section (1), unless the court finds that circumstances exist which may
not render the remedy provided under Section 17 efficacious.
H. Section 10: ‘Number of arbitrators’
(1) The parties are free to determine the number of arbitrators, provided that such number
shall not be an even number.
(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall
consist of a sole arbitrator.
In the case of MMTC Limited v. Sterlite Industries (India) Limited169 it was held that
Arbitration agreement specifying even number of arbitrators cannot be a ground to render
arbitration agreement invalid.
I. Section 11: ‘Appointment of Arbitrators’
(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the
parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing
the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three
arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall
appoint the third arbitrator who shall act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request
to do so from the other party; or
169
(1996) 6 SCC 716.
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(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days
from the date of their appointment,
the appointment shall be made, upon request of a party, by the Supreme Court or, as the case
may be, the High Court or any person or institution designated by such court.
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole
arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a
request by one party from the other party to so agree the appointment shall be made, upon
request of a party, by the Supreme Court or, as the case may be, the High Court or any person
or institution designated by such court.
(6) Where, under an appointment procedure agreed upon by the parties,
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of
them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him or
it under that procedure,
a party may request the Supreme Court or, as the case may be, the High Court or any person
or institution designated by such court to take the necessary measure, unless the agreement on
the appointment procedure provides other means for securing the appointment.
(6-A) The Supreme Court or, as the case may be, the High Court, while considering any
application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding
any judgment, decree or order of any court, confine to the examination of the existence of an
arbitration agreement.
(6-B) The designation of any person or institution by the Supreme Court or, as the case
may be, the High Court, for the purposes of this section shall not be regarded as a delegation
of judicial power by the Supreme Court or the High Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section

(6) to the Supreme Court or, as the case may be, the High Court or the person or institution
designated by such court is final and no appeal including Letters Patent Appeal shall lie
against such decision.
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(8) The Supreme Court or, as the case may be, the High Court or the person or institution
designated by such court, before appointing an arbitrator, shall seek a disclosure in writing
from the prospective arbitrator in terms of sub-section (1) of Section 12, and have due regard
to—
(a) any qualifications required for the arbitrator by the agreement of the parties; and
(b) the contents of the disclosure and other considerations as are likely to secure the
appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international commercial

arbitration, the Supreme Court or the person or institution designated by that court] may
appoint an arbitrator of a nationality other than the nationalities of the parties where the
parties belong to different nationalities.
(10) The Supreme Court or, as the case may be, the High Court, may make such scheme
as the said court may deem appropriate for dealing with matters entrusted by sub-section (4)
or sub-section (5) or sub-section (6), to it.
(11) Where more than one request has been made under sub-section (4) or sub-section (5)
or sub-section (6) to different High Courts or their designates, the High Court or its designate
to whom the request has been first made under the relevant sub-section shall alone be
competent to decide on the request.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section
(10) arise in an international commercial arbitration, the reference to the “Supreme Court or,
as the case may be, the High Court” in those sub-sections shall be construed as a reference to
the “Supreme Court”; and
(b) where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section (10)
arise in any other arbitration, the reference to “the Supreme Court or, as the case may be, the
High Court” in those sub-sections shall be construed as a reference to the “High Court”
within whose local limits the principal civil court referred to in clause (e) of sub-section (1)
of Section 2 is situate, and where the High Court itself is the court referred to in that clause,
to that High Court.
(13) An application made under this section for appointment of an arbitrator or arbitrators
shall be disposed of by the Supreme Court or the High Court or the person or institution
designated by such court, as the case may be, as expeditiously as possible and an endeavour
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shall be made to dispose of the matter within a period of sixty days from the date of service
of notice on the opposite party.
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of
its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary,
after taking into consideration the rates specified in the Fourth Schedule.
Explanation.- For the removal of doubts, it is hereby clarified that this sub-section shall
not apply to international commercial arbitration and in arbitrations (other than international
commercial arbitration) in case where parties have agreed for determination of fees as per the
rules of an arbitral institution.
In the case of M.M.T.C. Limited v. Sterlite Industries (India) Limited170 it was held that the
arbitration clause provides that each party shall nominate one arbitrator and the two
arbitrators shall then appoint an umpire before proceeding with the reference. The arbitration
agreement is valid as it satisfies the requirement of Section 7 of the New Act of 1996. Section
11(3) requires the two arbitrators to appoint the third arbitrator or the umpire. There can be
no doubt that the arbitration agreement in the instant case accords with the implied condition
contained in para 2 of the First Schedule to the Arbitration Act, 1940 requiring the two
arbitrators, one each appointed by the two sides, to appoint an umpire not later than one
month from the latest date of their respective appointments. There is no dispute that the
arbitral proceeding in the instant case commenced after the New Act came into force and,
therefore, the New Act applies. In view of the terms in the arbitration agreement that the two
arbitrators would appoint the umpire or the third arbitrator before proceeding with the
reference, the requirement of sub-section (1) of Section 10 is satisfied and sub-section (2)
thereof has no application. The agreement satisfies the requirement of Section 7 of the Act
and, therefore, is a valid arbitration agreement. The appointment of arbitrators must,
therefore, be governed by Section 11 of the New Act.
In the case of Kss Kssiipl Consortium v. GAIL171, it was held that before exercising power
under Section 11(6) to make appointment of an arbitrator, Court has to determine existence of
arbitrable dispute/enforceable claim between parties to the contract as per terms of the
contract. Such determination is limited only for purpose of decision on question of
arbitrability and nothing beyond.
170
Ibid.
171
(2015) 4 SCC 210.
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In the judgement of Walter Bau Ag v. Municipal Corporation of Greater Mumbai172 the Court
held that appointment of arbitrator contrary to procedure agreed upon in arbitration
agreement, not permissible. There must be strict compliance with agreement procedure by
parties and institutions nominated in agreement procedure. Appointment as fait accompli,
does not bar/oust jurisdiction of court unless it is in compliance with agreement procedure.
In Reliance Industries Limited v. Union of India173, it was held that concern of the Court is to
ensure neutrality, impartiality and independence of the third arbitrator. Choice of the parties
has little, if anything, to do with the choice of the Chief Justice of India or his nominee in
appointing the third arbitrator. It is true that even at the stage of exercising its jurisdiction
under Section 11(6) at the final stage, the Chief Justice of India or his nominee can
informally enquire about the preference of the parties. But it is entirely up to the Chief Justice
of India, whether to accept any of the preferences or to appoint the third arbitrator not
mentioned by any of the parties. In making such a choice, the Chief Justice of India will be
guided by the relevant provisions contained in the Arbitration Act, the UNCITRAL Model
Laws and the UNCITRAL Rules, where the parties have included the applicability of the
UNCITRAL Model Laws/UNCITRAL Rules by choice.
In the case of ONGC Mangalore Petrochemicals Limited v. ANS Constructions Limited174, it

was held that if the party which executes discharge agreement/discharge voucher, alleges that
the execution of such discharge agreement or voucher was on account of
fraud/coercion/undue influence practised by the other party but is not able to establish such a
claim or appears to be lacking in credibility, then it is not open to the courts to refer the
dispute to arbitration at all.
In the case of Kerala SEB v. Kurien E. Kalathil175, it was held that when there was no
arbitration agreement between the parties, reference of dispute for arbitration in the absence
of a written memo/joint application is not permissible, even when the counsel of the parties
consent to the same. For reference of the parties to arbitration, oral consent given by the
counsel without a written memo of instructions does not fulfil the requirement under Section
89 CPC.
In the case of Konkan Railway Corporation Limited and Another v. Rani Construction
Private Limited it was held that Article 136 empowers this Court to grant special leave to
172
(2015) 3 SCC 800.
173
(2014) 11 SCC 576.
174
(2018) 3 SCC 373.
175
(2018) 4 SCC 793.
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appeal from any judgment, decree, sentence or order in any cause or matter passed or made
by any court or tribunal in the territory of India. For the nomination of an arbitrator by the
Chief Justice or his designate under Section 11 of the Act to be subject to Article 136 such
nomination must be (a) a judgment, decree, determination, sentence or order (b) passed or
made by any court or tribunal in the territory of India. The question is whether such
nomination is a determination or order and whether it is made by a tribunal, as contended by
learned counsel for the appellants. There is in the line of authority of this Court on the subject
a recurring theme. In the judgment cited by learned counsel for the appellants himself,
namely, the case of Associated Cement Companies Ltd., a Constitution Bench said, "The
question which we have to decide in the present appeal is whether the State Government is a
tribunal when it exercises its authority under Rule 6(5) or Rule 6(6). The main and basic test,
however, is whether the adjudicating power which a particular authority is empowered to
exercise has been conferred on it by a statute and can be described as a part of the State's
inherent power exercised in discharging its judicial function. Applying this test, there can be
no doubt that the power which the State Government exercises under Rule 6(5) and Rule 6(6)
is a part of the State's judicial power. It has been conferred on the State Government by a
statutory Rule and it can be exercised in respect of disputes between the management and its
welfare officers. There is, in that sense, there is affirmation by one party and denial by
another, and the dispute necessarily involves the rights and obligations of the parties to it.
It was further held that for an order properly to be the subject of a petition for special leave to
appeal under Article 136 it must be an adjudicatory order, an order that adjudicates upon the
rival contentions of parties, and it must be passed by an authority constituted by the State by
law for the purpose in discharge of the State's obligation to secure justice to its people.
Section 11 of the Act deals with the appointment of arbitrators. It provides that the parties are
free to agree on a procedure for appointing an arbitrator or arbitrators. In the event of there
being no agreement in regard to such procedure, in an arbitration by three arbitrators each
party is required to appoint one arbitrator and the two arbitrators so appointed must appoint
the third arbitrator. If a party fails to appoint an arbitrator within thirty days from the request
to do so by the other party or the two arbitrators appointed by the parties fail to agree on a
third arbitrator within thirty days of their appointment, a party may request the Chief Justice
to nominate an arbitrator and the nomination shall be made by the Chief Justice or any person
or institution designated by him. If the parties have not agreed on a procedure for appointing
an arbitrator in an arbitration with a sole arbitrator and the parties fail to agree on an
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arbitrator within thirty days from receipt of a request to one party by the other party, the
nomination shall be made on the request of a party by the Chief Justice or his designate.
Where an appointment procedure has been agreed upon by the parties but a party fails to act
as required by that procedure or the parties, or the two arbitrators appointed by them, fail to
reach the agreement expected of them under that procedure or a person or institution fails to
perform the function entrusted to him or it under that procedure, a party may request the
Chief Justice or his designate to nominate an arbitrator, unless the appointment procedure
provides other means in this behalf. The decision of the Chief Justice or his designate is final.
In nominating an arbitrator the Chief Justice or his designate must have regard to the
qualifications required of the arbitrator in the agreement between the parties and to other
considerations that will secure the nomination of an independent and impartial arbitrator.
There is nothing in Section 11 that requires the party other than the party making the request
to be noticed. It does not contemplate a response from that other party. It does not
contemplate a decision by the Chief Justice or his designate on any controversy that the other
party may raise, even in regard to its failure to appoint an arbitrator within the period of thirty
days. That the Chief Justice or his designate has to make the nomination of an arbitrator only
if the period of thirty days is over does not lead to the conclusion that the decision to
nominate is adjudicatory. In its request to the Chief Justice to make the appointment the party
would aver that this period has passed and, ordinarily, correspondence between the parties
would be annexed to bear this out. This is all that the Chief Justice or his designate has to see.
That the Chief Justice or his designate has to take into account the qualifications required of
the arbitrator by the agreement between the parties (which, ordinarily, would also be annexed
to the request) and other considerations likely to secure the nomination of an independent and
impartial arbitrator also cannot lead to the conclusion that the Chief Justice or his designate is
required to perform an adjudicatory function. That the word 'decision' is used in the matter of
the request by a party to nominate an arbitrator does not of itself mean that an adjudicatory
decision is contemplated.
The only function of the Chief Justice or his designate under Section 11 is to fill the gap left
by a party to the arbitration agreement or by the two arbitrators appointed by the parties and
nominate an arbitrator. This is to enable the arbitral tribunal to be expeditiously constituted
and the arbitration proceedings to commence. The function has been left to the Chief Justice
or his designate advisedly, with a view to ensure that the nomination of the arbitrator is made
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by a person occupying high judicial office or his designate, who would take due care to see
that a competent, independent and impartial arbitrator is nominated.
It might be that though the Chief Justice or his designate might have taken all due care to
nominate an independent and impartial arbitrator, a party in a given case may have justifiable
doubts about that arbitrator's independence or impartiality. In that event it would be open to
that party to challenge the arbitrator under Section 12, adopting the procedure under Section
13. There is no reason whatever to conclude that the grounds for challenge under Section
13 are not available only because the arbitrator has been nominated by the Chief Justice or his
designate.
The schemes made by the Chief Justices under Section 11 cannot govern the interpretation
of Section 11. If the schemes, as drawn, go beyond the terms of Section 11 they are bad and
have to be amended. To the extent that The Appointment of Arbitrators by the Chief Justice
of India Scheme, 1996, goes beyond Section 11 by requiring, in clause 7, the service of a
notice upon the other party to the arbitration agreement to show cause why the nomination of
an arbitrator, as requested, should not be made, it is bad and must be amended. The other
party needs to be given notice of the request only so that it may know of it and it may, if it so
chooses, assist the Chief Justice or his designate in the nomination of an arbitrator.
This decision was over ruled by the Supreme Court in the case of SBP and Company v. Patel
Engineering Limited wherein it was held that the power exercised by the Chiej Justice of the
High Court or the Chief Justice of India under section 11(6) of the Arbitration and
Conciliation Act, 1996 is not an administrative power but a judicial power.
It was held that The Arbitration and Conciliation Act, 1996 was intended to comprehensively
cover international and commercial arbitrations and conciliations as also domestic
arbitrations and conciliations. It envisages the making of an arbitral procedure which is fair,
efficient and capable of meeting the needs of the concerned arbitration and for other matters
set out in the objects and reasons for the Bill. The Act was intended to be one to consolidate
and amend the law relating to domestic arbitrations, international commercial arbitrations and
enforcement of foreign arbitral awards, as also to define the law relating to conciliation and
for matters connected therewith or incidental thereto. The preamble indicates that since the
United Nations Commission on International Trade Law (UNCITRAL) has adopted a Model
Law for International Commercial Arbitration and the General Assembly of the United
Nations has recommended that all countries give due consideration to the Model Law and
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whereas the Model Law and the Rules make significant contribution to the establishment of a
unified legal framework for a fair and efficient settlement of disputes arising in international
commercial relations and since it was expedient to make a law respecting arbitration and
conciliation taking into account the Model Law and the Rules, the enactment was being
brought forward. The Act replaces the procedure laid down in Sections 8 and 20 of the
Arbitration Act, 1940. Part I of the Act deals with arbitration. It contains Sections 2 to 43.
Part II deals with enforcement of certain foreign awards, and Part III deals with conciliation
and Part IV contains supplementary provisions. In this case, we are not concerned with Part
III, and Parts II and IV have only incidental relevance. We are concerned with the provisions
in Part I dealing with arbitration.
Section 7 of the Act read with Section 2 (b) defines an arbitration agreement. Section
2(h) defines 'party' to mean a party to an arbitration agreement. Section 4 deals with waiver of
objections on the part of the party who has proceeded with an arbitration, without stating his
objections referred to in the section, without undue delay. Section 5 indicates the extent of
judicial intervention. It says that notwithstanding anything contained in any other law for the
time being in force, in matters governed by Part I, no judicial authority shall intervene except
where so provided in Part I. The expression 'judicial authority' is not defined. So, it has to be
Page 1800 understood as taking in the courts or any other judicial fora. Section 7 defines an
arbitration agreement and insists that it must be in writing and also explains when an
arbitration agreement could be said to be in writing. Section 8 confers power on a judicial
authority before whom an action is brought in a matter which is the subject of an arbitration
agreement, to refer the dispute to arbitration, if a party applies for the same. Section 9 deals
with the power of the Court to pass interim orders and the power to give interim protection in
appropriate cases. It gives a right to a party, before or during arbitral proceedings or at any
time after the making of the arbitral arbitral award but before its enforcement in terms
of Section 36 of the Act, to apply to a court for any one of the orders specified therein.
Chapter III of Part I deals with composition of arbitral tribunals. Section 10 gives freedom to
the parties to determine the number of arbitrators but imposes a restriction that it shall not be
an even number. Then comes Section 11 with which we are really concerned in these appeals.
The marginal heading of Section 11 is 'Appointment of arbitrators'. Sub- Section (1) indicates
that a person of any nationality may be an arbitrator, unless otherwise agreed to by the
parties. Under sub-Section (2), subject to sub-Section (6),the parties are free to agree on a
procedure for appointing the arbitrator or arbitrators. Under sub- Section (3), failing any
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agreement in terms of sub-Section (2), in an arbitration with three arbitrators, each party
could appoint one arbitrator, and the two arbitrators so appointed, could appoint the third
arbitrator, who would act as the presiding arbitrator. Under sub- Section (4), the Chief Justice
or any person or institution designated by him could make the appointment, in a case where
sub-Section (3) has application and where either the party or parties had failed to nominate
their arbitrator or arbitrators or the two nominated arbitrators had failed to agree on the
presiding arbitrator. In the case of a sole arbitrator, sub- Section (5) provides for the Chief
Justice or any person or institution designated by him, appointing an arbitrator on a request
being made by one of the parties, on fulfilment of the conditions laid down therein.
Sub-Section (7) gives a finality to the decision rendered by the Chief Justice or the person or
institution designated by him when moved under sub-Section (4), or sub-Section (5), or sub-
Section (6) of Section 11. Sub- Section (8) enjoins the Chief Justice or the person or
institution designated by Page 1801 him to keep in mind the qualifications required for an
arbitrator by the agreement of the parties, and other considerations as are likely to secure the
appointment of an independent and impartial arbitrator. Sub-Section (9) deals with the power
of the Chief Justice of India or a person or institution designated by him to appoint the sole or
the third arbitrator in an international commercial arbitration. Sub- Section (10) deals with
Chief Justice's power to make a scheme for dealing with matters entrusted to him by sub-
Section (4) or sub-Section (5) or sub- Section (6) of Section 11. Sub-Section (11) deals with
the respective jurisdiction of Chief Justices of different High Courts who are approached with
requests regarding the same dispute and specifies as to who should entertain such a request.
Sub-Section 12clause (a) clarifies that in relation to international arbitration, the reference in
the relevant sub- sections to the 'Chief Justice' would mean the 'Chief Justice of India'. Clause
(b) indicates that otherwise the expression 'Chief Justice' shall be construed as a reference to
the Chief Justice of the High Court within whose local limits the principal Court is situated.
'Court' is defined under Section 2(e) as the principal Civil Court of original jurisdiction in a
district.
Section 12 sets out the grounds of challenge to the person appointed as arbitrator and the duty
of an arbitrator appointed, to disclose any disqualification he may have. Sub-Section (3)
of Section 12 gives a right to the parties to challenge an arbitrator. Section 13 lays down the
procedure for such a challenge. Section 14 takes care of the failure of or impossibility for an
arbitrator to act and Section 15deals with the termination of the mandate of the arbitrator and
the substitution of another arbitrator. Chapter IV deals with the jurisdiction of arbitral
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tribunals. Section 16 deals with the competence of an arbitral tribunal, to rule on its

jurisdiction. The arbitral tribunal may rule on its own jurisdiction, including ruling on any
objection with respect to the existence or validity of the arbitration agreement. A person
aggrieved by the rejection of his objection by the tribunal on its jurisdiction or the other
matters referred to in that Section, has to wait until the award is made to challenge that
decision in an appeal against the arbitral award itself in accordance with Section 34 of the
Act. But an acceptance of the objection to jurisdiction or authority, could be challenged then
and there, under Section 37 of the Act. Section 17 confers powers on the arbitral tribunal to
make interim orders. Chapter V comprising of Sections 18 to 27 deals with the conduct of
arbitral proceedings. Chapter VI containing Sections 28to 33 deals with making of the arbitral
award and termination of the proceedings. Chapter VII deals with recourse against an arbitral
award. Section 34 contemplates the filing of an application for setting aside an arbitral award
by making an application to the Court as defined in Section 2(e) of the Act. Chapter VIII
deals with finality and enforcement of arbitral awards. Section 35 makes the award final
and Section 36 provides for its enforcement under the Code of Civil Procedure, 1908 in the
same manner as if it were a decree of court. Chapter IX deals with appeals and Section
37 enumerates the orders that are open to appeal. We have already referred to the right of
appeal available under Section 37(2) of the Act, on the Tribunal accepting a plea that it does
not have jurisdiction or when the arbitral tribunal accepts a plea that it is exceeding the scope
of its authority. Page 1802 No second appeal is contemplated, but right to approach the
Supreme Court is saved. Chapter X deals with miscellaneous matters. Section 43 makes
the Limitation Act, 1963 applicable to proceedings under the Act as it applies to proceedings
in Court.
Normally, any tribunal or authority conferred with a power to act under a statute, has the
jurisdiction to satisfy itself that the conditions for the exercise of that power existed and that
the case calls for the exercise of that power. Such an adjudication relating to its own
jurisdiction which could be called a decision on jurisdictional facts, is not generally final,
unless it is made so by the Act constituting the tribunal. Here, sub- Section (7) of Section
11 has given a finality to the decisions taken by the Chief Justice or any person or institution
designated by him in respect of matters falling under sub-Sections (4), (5) and (6) of Section
11. Once a statute creates an authority, confers on it power to adjudicate and makes its
decision final on matters to be decided by it, normally, that decision cannot be said to be a
purely administrative decision. It is really a decision on its own jurisdiction for the exercise
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of the power conferred by the statute or to perform the duties imposed by the statute. Unless,
the authority satisfies itself that the conditions for exercise of its power exist, it could not
accede to a request made to it for the exercise of the conferred power. While exercising the
power or performing the duty under Section 11(6) of the Act, the Chief Justice has to
consider whether the conditions laid down by the section for the exercise of that power or the
performance of that duty, exist. Therefore, unaided by authorities and going by general
principals, it appears to us that while functioning under Section 11(6)of the Act, a Chief
Justice or the person or institution designated by him, is bound to decide whether he has
jurisdiction, whether there is an arbitration agreement, whether the applicant before him, is a
party, whether the conditions for exercise of the power have been fulfilled and if an arbitrator
is to be appointed, who is the fit person, in terms of the provision. Section 11(7) makes his
decision on the matters entrusted to him, final.
The Court held that the very scheme, if it involves an adjudicatory process, restricts the
power of the Chief Justice to designate, by excluding the designation of a non-judicial
institution or a non-judicial authority to perform the functions. For, under our dispensation,
no judicial or quasi-judicial decision can be rendered by an institution if it is not a judicial
authority, court or a quasi-judicial tribunal. This aspect is dealt with later while dealing with
the right to designate under Section 11(6) and the scope of that designation.
The appointment of an arbitrator against the opposition of one of the parties on the ground
that the Chief Justice had no jurisdiction or on the ground that there was no arbitration
agreement, or on the ground that there was no dispute subsisting which was capable of being
arbitrated upon or that the conditions for exercise of power under Section 11(6) of the Act do
not exist or that the qualification contemplated for the arbitrator by the parties cannot be
ignored and has to be borne in mind, are all adjudications which affect the rights of parties. It
cannot be said that when the Chief Justice decides that he has jurisdiction to proceed with the
matter, that there is an arbitration agreement and that one of the parties to it has failed to act
according to the procedure agreed upon, he is not adjudicating on the rights of the party who
is raising these objections. The duty to decide the preliminary facts enabling the exercise of
jurisdiction or power, gets all the more emphasized, when sub-Section (7) designates the
order under sub-sections (4), (5) or (6) a 'decision' and makes the decision of the Chief Justice
final on the matters referred to in that sub-Section. Thus, going by the general principles of
law and the scheme of Section 11, it is difficult to call the order of the Chief Justice merely
an administrative order and to say that the opposite side need not even be heard before the
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Chief Justice exercises his power of appointing an arbitrator. Even otherwise, when a statute
confers a power or imposes a duty on the highest judicial authority in the State or in the
country, that authority, unless shown otherwise, has to act judicially and has necessarily to
consider whether his power has been rightly invoked or the conditions for the performance of
his duty are shown to exist.
It is common ground that the Act has adopted the UNCITRAL Model Law on International
Commercial Arbitration. But at the same time, it has made some departures from the model
law. Section 11 is in the place of Article 11 of the Model Law. The Model Law provides for
the making of a request under Article 11 to "the court or other authority specified in Article
6 to take the necessary measure". The words in Section 11 of the Act, are "the Chief Justice
or the person or institution designated by him". The fact that instead of the court, the powers
are conferred on the Chief Justice, has to be appreciated in the context of the statute. 'Court' is
defined in the Act to be the principal civil court of original jurisdiction of the district and
includes the High Court in exercise of its ordinary original civil jurisdiction. The principal
civil court of original jurisdiction is normally the District Court. The High Courts in India
exercising ordinary original civil jurisdiction are not too many. So in most of the States the
concerned court would be the District Court. Obviously, the Parliament did not want to
confer the power on the District Court, to entertain a request for appointing an arbitrator or
for constituting an arbitral tribunal under Section 11 of the Act. It has to be noted that
under Section 9 of the Act, the District Court or the High Page 1805 Court exercising original
jurisdiction, has the power to make interim orders prior to, during or even post arbitration. It
has also the power to entertain a challenge to the award that may ultimately be made. The
framers of the statute must certainly be taken to have been conscious of the definition of
'court' in the Act. It is easily possible to contemplate that they did not want the power
under Section 11 to be conferred on the District Court or the High Court exercising original
jurisdiction. The intention apparently was to confer the power on the highest judicial
authority in the State and in the country, on Chief Justices of High Courts and on the Chief
Justice of India. Such a provision is necessarily intended to add the greatest credibility to the
arbitral process. The argument that the power thus conferred on the Chief Justice could not
even be delegated to any other Judge of the High Court or of the Supreme Court, stands
negatived only because of the power given to designate another. The intention of the
legislature appears to be clear that it wanted to ensure that the power under Section 11(6) of
the Act was exercised by the highest judicial authority in the concerned State or in the
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country. This is to ensure the utmost authority to the process of constituting the arbitral
tribunal.
Normally, when a power is conferred on the highest judicial authority who normally performs
judicial functions and is the head of the judiciary of the State or of the country, it is difficult
to assume that the power is conferred on the Chief Justice as persona designata.
Under Section 11(6), the Chief Justice is given a power to designate another to perform the
functions under that provision. That power has generally been designated to a Judge of the
High Court or of the Supreme Court respectively. Persona designata, according to Black's
Law Dictionary, means "A person considered as an individual rather than as a member of a
class". When the power is conferred on the Chief Justices of the High Courts, the power is
conferred on a class and not considering that person as an individual. In Central Talkies
Limited, Kanpur v. Dwarka Prasad176, the Court held that “a “persona non designata” is "a
person who is pointed out or described as an individual, as opposed to a person ascertained as
a member of a class, or as filling a particular character." (See Osborn's Concise Law
Dictionary, 4th Edition., p.253). In the words of Schwabe, C.J., in Parthasardhi Naidu v.
Koteswara Rao177 ‘personae designatae are, "persons selected to act in their private capacity
and not in their capacity as Judges."’
In Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker178 this Court after quoting the

above passage from the Central Talkies Ltd., Kanpur v. Dwarka Prasad179, Page 1806
applied the test to come to the conclusion that when Section 18 of the Kerala Buildings
(Lease and Rent Control) Act, 1965 constituted the District Judge as an appellate authority
under that Act, it was a case where the authority was being conferred on District Judges who
constituted a class and, therefore, the appellate authority could not be considered to be
persona designata. What can be gathered from P. Ramanatha Aiyar's Advanced Law Lexicon,
3rd Edition, 2005, is that "persona designata" is a person selected to act in his private
capacity and not in his capacity as a judge. He is a person pointed out or described as an
individual as opposed to a person ascertained as a member of a class or as filling a particular
character. It is also seen that one of the tests to be applied is to see whether the person
concerned could exercise the power only so long as he holds office or could exercise the
power even subsequently. Obviously, on ceasing to be a Chief Justice, the person referred to
176
AIR 1961 SC 606.
177
ILR 47 Mad. 369 F.B.
178
(1995) 5 SCC 5.
179
AIR 1961 SC 606.
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in Section 11(6) of the Act could not exercise the power. Thus, it is clear that the power is
conferred on the Chief Justice under Section 11(6) of the Act not as persona designata.
Normally a persona designata cannot delegate his power to another. Here, the Chef Justice of
the High Court or the Chief Justice of India is given the power to designate another to
exercise the power conferred on him under Section 11(6) of the Act. If the power is a judicial
power, it is obvious that the power could be conferred only on a judicial authority and in this
case, logically on another Judge of the High Court or on a Judge of the Supreme Court. It is
logical to consider the conferment of the power on the Chief Justice of the High Court and on
the Chief Justice of India as presiding Judges of the High Court and the Supreme Court and
the exercise of the power so conferred, is exercise of judicial power/authority as presiding
Judges of the respective courts. Replacing of the word 'court' in the Model Law with the
expression "Chief Justice" in the Act, appears to be more for excluding the exercise of power
by the District Court and by the court as an entity leading to obvious consequences in the
matter of the procedure to be followed and the rights of appeal governing the matter. The
departure from Article 11 of the Model Law and the use of the expression "Chief Justice"
cannot be taken to exclude the theory of its being an adjudication under Section 11 of the Act
by a judicial authority.
J. Section 11A: ‘Power of Central Government to amend Fourth Schedule’
(1) If the Central Government is satisfied that it is necessary or expedient so to do, it may,
by notification in the Official Gazette, amend the Fourth Schedule and thereupon the Fourth
Schedule shall be deemed to have been amended accordingly.
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid
in draft before each House of Parliament, while it is in session, for a total period of thirty
days which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive sessions
aforesaid, both Houses agree in disapproving the issue of the notification or both Houses
agree in making any modification in the notification, the notification shall not be issued or as
the case may be, shall be issued only in such modified form as may be agreed upon by the
both Houses of Parliament.
K. Section 12: ‘Grounds for challenge’
(1) When a person is approached in connection with his possible appointment as an

arbitrator, he shall disclose in writing any circumstances,
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(a) such as the existence either direct or indirect, of any past or present relationship
with or interest in any of the parties or in relation to the subject matter in dispute,
whether financial, business, professional or other kind, which is likely to give rise
to justifiable doubts as to his independence or impartiality; and
(b) which are likely to affect his ability to devote sufficient time to the arbitration and
in particular his ability to complete the entire arbitration within a period of twelve
months.
Explanation 1.—The grounds stated in the Fifth Schedule shall guide in determining
whether circumstances exist which give rise to justifiable doubts as to the independence or
impartiality of an arbitrator.
Explanation 2.—The disclosure shall be made by such person in the form specified in the
Sixth Schedule.
(2) An arbitrator, from the time of his appointment and throughout the arbitral
proceedings, shall, without delay, disclose to the parties in writing any circumstances referred
to in sub-section (1) unless they have already been informed of them by him.
(3) An arbitrator may be challenged only if—
(a) circumstances exist that give rise to justifiable doubts as to his independence or
impartiality; or
(b) he does not possess the qualifications agreed to by the parties.
(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has
participated, only for reasons of which he becomes aware after the appointment has been
made.
(5) Notwithstanding any prior agreement to the contrary, any person whose relationship,
with the parties or counsel or the subject matter of the dispute, falls under any of the
categories specified in the Seventh Schedule shall be ineligible to be appointed as an
arbitrator:
Provided that parties may, subsequent to disputes having arisen between them, waive the
applicability of this sub-section by an express agreement in writing.
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L. Section 13: ‘Challenge procedure’
(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging
an arbitrator.
(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge
an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstances referred to in sub-section (3) of
Section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the
other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
(4) If a challenge under any procedure agreed upon by the parties or under the procedure
under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral
proceedings and make an arbitral award.
(5) Where an arbitral award is made under sub-section (4), the party challenging the
arbitrator may make an application for setting aside such an arbitral award in accordance with
Section 34.
(6) Where an arbitral award is set aside on an application made under sub-section (5), the
Court may decide as to whether the arbitrator who is challenged is entitled to any fees.
M. Section 14: ‘Failure to act’
(1) The mandate of an arbitrator shall terminate and he shall be substituted by another

arbitrator, if—
(a) he becomes de jure or de facto unable to perform his functions or for other reasons
fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of his mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a) of
sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to
decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of Section 13, an arbitrator withdraws from his
office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply
acceptance of the validity of any ground referred to in this section or sub-section (3) of
Section 12.
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N. Section 15: ‘Termination of mandate and substitution of arbitrators.’
(1) In addition to the circumstances referred to in Section 13 or Section 14, the mandate
of an arbitrator shall terminate—
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be

appointed according to the rules that were applicable to the appointment of the arbitrator
being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-
section (2), any hearings previously held may be repeated at the discretion of the arbitral
tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made
prior to the replacement of an arbitrator under this section shall not be invalid solely because
there has been a change in the composition of the arbitral tribunal.
O. Section 16: ‘Competence of arbitral tribunal to rule on its own jurisdiction’
(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any
objections with respect to the existence or validity of the arbitration agreement, and for that
purpose,
(a) an arbitration clause which forms part of a contract shall be treated as an

agreement independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not
entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than
the submission of the statement of defence; however, a party shall not be precluded from
raising such a plea merely because that he has appointed, or participated in the appointment
of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised
as soon as the matter alleged to be beyond the scope of its authority is raised during the
arbitral proceedings.
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(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-
section (3), admit a later plea if it considers the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section
(3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the
arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting aside
such an arbitral award in accordance with Section 34.
In the case of IFFCO Limited v. Bhadra Products180 it was held that decision on limitation is
not a ruling by the Arbitral Tribunal on its own jurisdiction. Not all “errors of law” are
“errors of jurisdiction”. An erroneous decision on a question of limitation or res judicata
would not oust the jurisdiction of the court/arbitrator in the primitive sense of the term and
render the decision or a decree embodying the decision, a nullity liable to collateral attack.
The jurisdiction of the arbitral tribunal to adjudicate on the disputes between the parties is
dependant on the powers conferred by the arbitration agreement. The arbitration agreement is
the source of power and authority of an arbitral tribunal and what is not contemplated to be
settled in arbitration by the parties cannot be made subject-matter of arbitration. The arbitral
tribunal may rule on its on jurisdiction, including ruling on any objections with respect to the
existence or validity of the arbitration agreement. 181 The question whether a particular issue is
or is not one that should be referred to arbitration under the terms of the arbitration agreement
must be raised as soon as the matter alleged to be beyond the authority of the arbitral tribunal
is raised during the arbitral proceedings, but the delay can be condoned by the arbitral
tribunal, if justifiable grounds causing delay are shown. Whatever be the decision of the
arbitral tribunal, it is final and the aggrieved party can challenge only after arbitration
proceedings are over and award has been made. The Act advocates that all kinds of questions
pertaining to the tribunal’s jurisdiction should be taken before the arbitral tribunal The
Supreme Court, however, considerably watered it down and held that the jurisdictional
questions were to be decided by the court under sec.11 and not by the arbitrator 182 though at
the time when the court appoints the arbitrators.
180
(2018) 2 SCC 534.
181
Section 16(1).
182
National Insurance Company v. Boghara Polyfab, (2009) 1 SCC 267
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In National Agricultural Co-op. Marketing Federation India Ltd. Vs. Gains Trading Ltd 183
case, it was held that, the arbitration clause forming part of the contract is to be treated as an
agreement independent of the other terms of the contract. The Arbitration and Conciliation
Act, 1996 under Section 16 does not take away the jurisdiction of the Chief Justice of India or
his designate if need be, to decide the question of the “existence” of the arbitration
agreement. In Wellington Associates Ltd Vs Kirit Mehata 184 case, Supreme Court of India
held that, Section 16 does not declare that except the Arbitral Tribunal, none else can
determine such question. Merely because the new Act of 1996 permits the arbitrator to decide
this question, it does not necessarily follow that at the stage of Section 11 the Chief Justice of
India or his designate cannot decide a question as to the existence of the arbitration clause. In
Owners and Parties interested in the Vessel M.V. “Baltic Confidence” Vs State Trading
Corporation Ltd185 it was held by the Supreme Court that, whether a particular dispute arising
between the parties comes within the purview of the arbitration clause as incorporated in the
Bill of Lading is a matter to be decided by the arbitrator or the Court. However, that does not
mean that despite incorporation of arbitration clause in the Bill of Lading by specific
reference the parties had not intended that an arbitrator should resolve the disputes arising on
the Bill of Lading.
P. Section 17: ‘Interim measures ordered by Arbitral Tribunal’
(1) A party may, during the arbitral proceedings or at any time after the making of the
arbitral award but before it is enforced in accordance with Section 36, apply to the arbitral
tribunal—
(i) for the appointment of a guardian for a minor or person of unsound mind for the
purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the following matters,
namely—
(a) the preservation, interim custody or sale of any goods which are the subject
matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;

183
(2007) 5 SCC 629
184
2000 S.C. 1379
185
2001 (7) SCC 473.
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(c) the detention, preservation or inspection of any property or thing which is the
subject matter of the dispute in arbitration, or as to which any question may
arise therein and authorizing for any of the aforesaid purposes any person to
enter upon any land or building in the possession of any party, or authorizing
any samples to be taken, or any observation to be made, or experiment to be
tried, which may be necessary or expedient for the purpose of obtaining full
information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the arbitral tribunal
to be just and convenient,
and the arbitral tribunal shall have the same power for making orders, as the
court has for the purpose of, and in relation to, any proceedings before it.
(2) Subject to any orders passed in an appeal under Section 37, any order issued by the
arbitral tribunal under this section shall be deemed to be an order of the court for all purposes
and shall be enforceable under the Code of Civil Procedure, 1908 (5 of 1908), in the same
manner as if it were an order of the court.
While Section 9 provides for the taking of interim measures by the Court in certain matters,
Section 17 provides for the taking of interim measures in respect of the subject-matter of the
dispute by the arbitral tribunal. The opening words of Section 17(1) indicate that the parties
may by agreement exclude the exercise of such a power by the arbitral tribunal.
The Arbitration Act, 1940, did not confer any specific powers on arbitrators to take interim
measures. It was, however, open to the parties to confer such powers on the arbitrator.
Sub-section (2) empowers the tribunal to order the furnishing of adequate surely by a party
for carrying out the interim measure ordered under sub-section (1).
In the case of NHAI v. Gwalior-Jhansi Expressway Limited186 it was held that Right of First
Refusal(ROFR)/right to match the lowest bid, granted to claimant/contractor by Arbitral
Tribunal qua tender for completion of the balance unfinished works originally awarded to the
claimant, is inconsequential, when such original awardee/contractor does not participate in
the subsequent tender.
186
(2018) 8 SCC 243.
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Q. Section 18: ‘Equal treatment of parties’
The parties shall be treated with equality and each party shall be given a full
opportunity to present his case.
This section casts a twofold duty on the Arbitral Tribunal:
(i) it must be independent and impartial and must mete out equal treatment to each party.
(ii) it must give each party a full opportunity to present its case. Sections 23 and 24
provide for the giving of such opportunity.
There was no specific provision in the Arbitration Act, 1940, corresponding to Section 18,
but such provisions were applicable as principles of natural justice.
R. Section 19: ‘Determination of rules of procedure’
(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (V of
1908) or the Indian Evidence Act, 1872 (1 of 1872).
(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the
arbitral tribunal in conducting its proceedings.
(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject
to this Part, conduct the proceedings in the manner it considers appropriate.
(4) The power of the arbitral tribunal under sub-section (3) includes the power to
determine the admissibility, relevance, materiality and weight of any evidence.
S. Section 20: ‘Place of arbitration’
(1) The parties are free to agree on the place of arbitration.
(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be
determined by the arbitral tribunal having regard to the circumstances of the case, including
the convenience of the parties.
(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless
otherwise agreed by the parties, meet at any place it considers appropriate for consultation
among its members, for hearing witnesses, experts or the parties, or for inspection of
documents, goods or other property.
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In the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc187. it was
held that Court has to undertake a detailed examination to discern from arbitration agreement
and surrounding circumstances, intention of parties as to whether particular place mentioned
refers merely to a venue or does it refer to juridical seat of arbitration. Part I of 1996 Act
would be applicable, held, only if arbitration agreement is construed to provide for juridical
seat of arbitration in India (the foreign “seat” thus only being a choice of venue and not really
the juridical seat, curial law in fact thus being 1996 Act). On the other hand, if arbitration
agreement on its construction is held to provide for juridical seat of arbitration outside India,
Part I would be inapplicable to the extent inconsistent with arbitration law of juridical seat of
arbitration, even if arbitration agreement purports to provide that 1996 Act shall govern
arbitration proceedings. Choice of another country as juridical seat of arbitration imports an
acceptance that law of that country relating to conduct and supervision of arbitrations will
apply.
T. Section 29A: ‘Time Limit for Arbitral Award’
(1) The award shall be made within a period of twelve months from the date the arbitral
tribunal enters upon the reference.
Explanation- For the purpose of this sub-section, an arbitral tribunal shall be deemed to
have entered upon the reference on the date on which the arbitrator or all the arbitrators, as
the case may be, have received notice, in writing, of their appointment.
(2) If the award is made within a period of six months from the date the arbitral tribunal
enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of
additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specified in sub-section (1) for making
award for a further period not exceeding six months.
(4) If the award is not made within the period specified in sub-section (1) or the extended
period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless
the court has, either prior to or after the expiry of the period so specified, extended the period:
Provided that while extending the period under this sub-section, if the court finds that the
proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it
187
(2012) 9 SCC 552.
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may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of
such delay.
(5) The extension of period referred to in sub-section (4) may be on the application of any
of the parties and may be granted only for sufficient cause and on such terms and conditions
as may be imposed by the court.
(6) While extending the period referred to in sub-section (4), it shall be open to the court
to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the
arbitral proceedings shall continue from the stage already reached and on the basis of the
evidence and material already on record, and the arbitrator(s) appointed under this section
shall be deemed to have received the said evidence and material.
(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal
thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral
tribunal.
(8) It shall be open to the court to impose actual or exemplary costs upon any of the
parties under this section.
(9) An application filed under sub-section (5) shall be disposed of by the court as
expeditiously as possible and endeavour shall be made to dispose of the matter within a
period of sixty days from the date of service of notice on the opposite party.
Termination of Proceedings
Section 32 of the Act provides from the termination of proceedings. It states that “32.
Termination of proceedings. – (1) The arbitral proceeding shall be terminated by the final
arbitral award or by all order of the arbitral tribunal under subsection (2).
(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings
where-
(a) The claimant withdraws his claim, unless the respondent objects to the order and the
arbitral tribunal recognizes a legitimate interest on his part in obtaining a final settlement of
the dispute,
(b) The parties agree on the termination of the proceedings as, or
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(c) The arbitral tribunal finds that the continuation of the proceedings has for any other
reason become unnecessary or impossible.
(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral
tribunal shall terminate with the termination of the arbitral proceedings.”
Section 32 makes provision for termination of the proceedings upon making of the final
award by the arbitral tribunal. The arbitration proceedings can also be terminated by an order
of the arbitral tribunal which order can only be passed when claimant withdraws the claim or
when the parties to the reference agree on the termination of the proceedings or the arbitral
tribunal finds that continuation of the arbitral proceedings has become unnecessary or
impossible.
U. Section 34: ‘Application for setting aside arbitral award’

(1) Recourse to a Court against an arbitral award may be made only by an application for
setting aside such award in accordance with sub-section (2) and subsection (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have
subjected it or, failing any indication thereon, under the law for the time being
in force; or
(iii) the party making the application was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise
unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling
within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration: Provided that, if the
decisions on matters submitted to arbitration can be separated from those not
so submitted, only that part of the arbitral award which contains decisions on
matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties, unless such agreement was in
98 | P a g e
conflict with a provision of this Part from which the parties cannot derogate,
or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration
under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India. Explanation.-
Without prejudice to the generality of sub-clause (ii), it is hereby declared, for
the avoidance of any doubt, that an award is in conflict with the public policy
of India if the making of the award was induced or affected by fraud or
corruption or was in violation of section 75 or section 81.
(3) An application for setting aside may not be made after three months have elapsed
from the date on which die party making that application had received the arbitral
award or, if a request had been made under section 33, from the date on which that
request had bow disposed of by the arbitral tribunal: Provided that if the Court is
satisfied that the applicant was prevented by sufficient cause from making the
application within the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is 16
appropriate and it is so requested by a party, adjourn the proceedings for a period of
time determined by it in order to give the arbitral tribunal an opportunity to resume
the arbitral proceedings or to take such other action as in the opinion of arbitral
tribunal will eliminate the grounds for setting aside the arbitral award.
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.
In the case of State of Himachal Pradesh v. Himachal Techno Engineers188, it was held that a
“month” does not refer to a period of thirty days, but refers to actual period of a calendar
month. Legislature did not intend that period of three months used in Section 34(3) be
equated to 90 days, nor intended that period of thirty days in proviso be taken as one month.
In the case of Bharat Aluminium Company v. Kaiser Aluminium Technical Services Inc.189, it
was held that “domestic award” can either be an: (i) award made in India in a domestic
arbitration, or (ii) award in an international arbitration whose juridical seat is in India. Both
188
(2010) 12 SCC 210.
189
(2012) 9 SCC 552.
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types of awards [(i) and (ii), above] are liable to be challenged under Section 34 and are
enforceable under Section 36. “Foreign award” is an award in any arbitration whose juridical
seat is outside India, which would be enforceable in India, if at all, under Part II and only to
the extent provided therein. Part I is completely inapplicable to foreign awards.
In the case of Union of India v. Tecco Trichy Engineers and Contractors190 it was held that in
the context of the State or a department of a large govt. organization like Railways, it means
the departmental head concerned, who is directly connected with and is in control of the
arbitral proceedings, and not the GM. Copy of the award has to be received by the
departmental head. Where Chief Engineer of the Southern Railway had, on behalf of Union
of India, signed the contract entered into with respondent, represented the Union of India in
the arbitral proceedings and notices were served on him during the arbitral proceedings, held,
date of service of copy of the award on him, instead of on GM by way of receipt in his
inward office, would be the starting point of limitation.
In the case of State of Maharashtra v. ARK Builders191 it was held that limitation period for
setting aside arbitral award is to be reckoned not from date copy of award is received by
objector from any source but from date copy of award duly signed by arbitrator is delivered
to/received by objector. If law prescribes that copy of order/award is to be communicated,
delivered, dispatched, forwarded, rendered or sent to parties concerned in a particular way
and also sets a period of limitation for challenging order/award by aggrieved party, then
period of limitation commences from date on which order/award was received by party
concerned in manner prescribed by law — High Court overlooked that what is contemplated
is not merely delivery of any kind of a copy of award but a copy of award duly signed by
arbitral tribunal.
In the case of Sutlej Constructions v. Union Territory of Chandigarh192 when it comes to

setting aside of an award under the public policy ground, it would mean that the award should
shock the conscience of the Court, and would not include what the Court thinks is unjust on
the facts of the case seeking to substitute its view for that of the arbitrator to do what it
considers to be “justice”.
190
(2005) 4 SCC 239.
191
(2011) 4 SCC 616.
192
(2018) 1 SCC 718.
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In the case of Emkay Financial Global Services Limited v. Girdhar Sondhi193 it was held that
an application for setting aside an arbitral award will not ordinarily require anything beyond
the record that was before the arbitrator. However, if there are matters not contained in such
record, and are relevant to the determination of issues arising under Section 34(2)(a), they
may be brought to the notice of the Court by way of affidavits filed by both parties. Further,
cross-examination of persons swearing to the affidavits should not be allowed unless
absolutely necessary.
In Bengal Chemists and Druggists Association v. Kalyan Chaudhary194 it was held that
Section 433, Companies Act, 2013 which provides for application of Limitation Act also
cannot be of any help to appellant because of words “as far as may be” in Section 433.
Section 5, Limitation Act, was held, not applicable. Further held, language of the proviso to
Section 421(3) which contains mandatory or peremptory negative language and speaks of a
second period not exceeding 45 days, would have the same effect as the expression “but not
thereafter” used in Section 34(3) proviso of the Arbitration Act, 1996.
In the case of Maharashtra State Electricity Distribution Company Limited v. Datar

Switchgear Limited195 it was held that arbitral Tribunal is the master of evidence and the
findings of fact which are arrived at by the arbitrators on the basis of evidence on record are
not to be scrutinised as if the Court was sitting in appeal. Further, fundamental breach, by its
very nature, pervades the entire contract and once committed, the contract as a whole stands
abrogated.
In the case of State of Bihar v. Bihar Rajya Bhumi Vikas Bank Samiti196 it was held that
requirement of issuance of prior notice to the other party and filing of an affidavit endorsing
compliance with the said requirement under Section 34(5), is directory and not mandatory.
Considerations of convenience and justice are uppermost, and if general inconvenience or
injustice results, without promoting the real aim and object of the enactment, the provision
must be declared to be directory. Subsection (5) is not a condition precedent, but a procedural
provision which seeks to reduce the delay in deciding applications under Section 34.
193
(2018) 9 SCC 49.
194
(2018) 3 SCC 41.
195
(2018) 3 SCC 133.
196
(2018) 9 SCC 472.
101 | P a g e
V. Section 35: ‘Finality of arbitral awards’

Subject to this Part an arbitral award shall be final and binding on the parties and persons
claiming under them respectively.
W. Section 36: ‘Enforcement’
(1) Where the time for making an application to set aside the arbitral award under Section
34 has expired, then, subject to the provisions of sub-section (2), such award shall be
enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908),
in the same manner as if it were a decree of the court.
(2) Where an application to set aside the arbitral award has been filed in the court under
Section 34, the filing of such an application shall not by itself render that award
unenforceable, unless the court grants an order of stay of the operation of the said arbitral
award in accordance with the provisions of sub-section (3), on a separate application made
for that purpose.
(3) Upon filing of an application under sub-section (2) for stay of the operation of the
arbitral award, the court may, subject to such conditions as it may deem fit, grant stay of the
operation of such award for reasons to be recorded in writing:
Provided that the court shall, while considering the application for grant of stay in the
case of an arbitral award for payment of money, have due regard to the provisions for grant of
stay of a money decree under the provisions of the Code of Civil Procedure, 1908 (5 of
1908).
In the case of Sundaram Finance Limited v. Abdul Samad197, it was held that
execution/enforcement of award can be done/filed anywhere in country where such decree
can be executed and there is no requirement for obtaining a transfer of decree from court
which has jurisdiction over arbitral proceedings/award within whose jurisdiction award is
passed.
In the case of BCCI v. Kochi Cricket Private Limited198 it was held that Section 36 as
amended in 2015, applies to pending Section 34 applications even in arbitrations commenced
prior to 23rd October, 2015 i.e. date of coming into force of Amendment Act, 2015, as Section
197
(2018) 3 SCC 622.
198
(2018) 6 SCC 287.
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36 is a procedural provision. Rule of automatic stay of operation of award on filing of Section

34 application, even in absence of an order of stay/imposition of conditions by court as per
unamended Section 36, held, is no longer applicable.
X. Section 37: ‘Appealable Orders’
(1) An appeal shall lie from the following orders (and from no others) to the court
authorised by law to hear appeals from original decrees of the Court passing the order,
namely:—
(a) refusing to refer the parties to arbitration under Section 8;
(b) granting or refusing to grant any measure under Section 9;
(c) setting aside or refusing to set aside an arbitral award under Section 34.
(2) An appeal shall also lie to a court from an order of the arbitral tribunal—
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16; or
(b) granting or refusing to grant an interim measure under Section 17.
(3) No second appeal shall lie from an order passed in appeal under this section, but
nothing in this section shall affect or take away any right to appeal to the Supreme Court.
Judicial Interpretation of Section 48 and Section 57
Both the Geneva Convention and New York Convention provides for limited grounds on
which the recognition & enforcement of an award can be refused. Some of the common
grounds inter-alia are: -
a. That the agreement/submission on which the arbitration proceedings were initiated

and award passed was valid under the law applicable to it.199
b. That the arbitral award passed is against the public policy of the country where the
said award is to be enforced.200
199
Article (V) 1 (a) (New York Convention) and Article 1 (a) (Geneva Convention).
200
Article (V) 2 (b) (New York Convention) and Article 1 (e) Geneva Convention)
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c. That the arbitral award is not capable of settlement under the law of the country where
the said award is intended to be enforced.201
Similarly, these grounds have been incorporated into the 1996 Act under the respective
headings.202
Public Policy
The most controverted and notorious of all the grounds specified in the Conventions and
subsequently incorporated in the 1996 Act is the ground of refusal to enforce the arbitral
award if the same is against the public policy of the country where it is sought to be enforced.
This wide, unfettered and vague liberty given to the countries has left the enforcement of
arbitral award at the mercy of the judicial set-up of the country where the said award is
sought to be enforced. The concept of public policy is highly dynamic as it changes in
matters of months. What may be acceptable in a country today may be highly objectionable
to the same public after three months. Different countries have different culture, different
political outlook, different approach to economic activities and similarly different perceptions
of justice & morality. It is on the culmination of these perceptions that a public policy of a
country is skeletonised. Therefore, it is quite possible that a particular award may be enforced
in one country and at the same time may be refused in another on the ground of public policy.
The volksgeist or the common conscience of the people of a country cretes and shapes its
public policy. This creates a problem in the process of getting a foreign award recognized and
enforced because it is not easy to comprehend whether an award in a country would be
according to its public policy. Moreover, these perceptions coupled with the judge’s own
notions of fairness and justice creates prejudice in the mind of Courts against a foreign decree
or judgment. Resultantly, judges end up adopting a parochial view. So, in the interest of the
parties, it is essential that uniformity in the interpretation of public policy is established.
Due to the vagueness of the term ‘Public Policy’ particularly in India, it is the interpretation
of the term by the judiciary which decides the fate of the award. In, as back as 1824, J.
Burrough in ‘Richardson v. Mellish’203 rightly described public policy as “a very unruly horse
and when once you get astride it you never know where it will carry you. It may lead you
from sound law. It is never argued at all, but when other points fail”
201
Article (V) 2 (a) (New York Convention) and Article 1 (b) (Geneva Convention).
202
Section 48 and 54.
203
(1824) 2 Bing 229,252.
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In order to attract foreign investment and foster bilateral trade it is pertinent that a country has
a pro-arbitration legal system. Therefore, to establish an arbitration friendly environment it is
imperative for the Courts and law of the country to be have a non-obtrusive and non-
interfering approach with respect to foreign arbitral awards. The Courts interpreting the
provision of these Conventions and Statute play a very pivotal role. They are required to de
horse the litigation mind-set imbibed in them and give impetus to the arbitration keeping in
view the economic implications and furthering the legislative intent of the statute. However,
the interpretation accorded by the Indian Courts in few of its landmarks judgment reveals a
contrary approach.
One of the very first and landmark judgment pronounced by the Hon’ble Supreme Court of
India was in ‘Renusagar Power Electric Ltd. v. General Electric 204(hereinafter referred to as’
Renusagar’) wherein a two-faceted objection was raised against the award passed by the
arbitral tribunal, firstly that the Renusagar was unable to present its case and secondly that the
enforcement of the award would be against the Public Policy. One of the bizarre contention
with respect to the second objection was that the term “Public policy” has to be interpreted in
a liberal sense so as to include not only the Public Policy of India but also the Public policy
of the country which governs the contract. Fortunately, this argument was rejected by the
Apex Court. It is quite apparent from the judgment in Renusagar that up till that point, the
judiciary was well acquainted with the oulook with which it was supposed to approach the
field of public policy. In this case, the Apex Court settled the controversy by enunciating that
a narrow interpretation is to be accorded to the term public policy so far as it related to
foreign award and thus specified a different standard for international public policy. The
Court in its ratio laid down the criteria for refusal of enforcement on the ground of public
policy, that if the same is against: (i) Fundamental policy of India law (ii) Interests of India
(iii) Justice or Morality.
The jurisprudence established by Renusagar saw its first modification in ‘Oil and Natural Gas
Corporation v. SAW Pipes ltd.205’(hereinafter referred to as ‘ONGC case’) wherein the ambit
and scope of Court’s jurisdiction in case where award passed by the Arbitral Tribunal is
challenged under Section 34 of the 1996 Act was under consideration. In adjudication of the
same, the Court brought a distinction between enforcement of an award which has attained
finality and challenging the validity of the award and thus in case of latter it enlarged under
204
(1994) Supp (1) SCC 644.
205
(2003) 5 SCC 705
105 | P a g e
the scope of ‘public policy’ under Section 34 of the 1996 Act, empowering Courts with wide
power of judicial review and thus advocated that narrow meaning should not be assigned to
the term ‘public policy’ instead a wide interpretation should be bestowed. This led the Court
to modify the ratio laid down in Renusagar whereby it introduced a new ground to the list
propounded in list enumerated in Renusagar, i.e. refusal to enforce is the same is patently
illegal. Ground of Patent illegality as propounded in this case included violation of statutory
provisions or violation of express provisions of contract. This judgment virtually allowed the
parties to challenge the entire award on merits and re-argue the case, thus frustrating the
entire purpose of arbitration.206 The Court erred in not realising that the ratio laid down in
Renusagar was with respect to foreign awards only keeping in view the standard public
policy in private international law.
The judgment in ONGC although rightly criticised for its adverse effect on domestic
arbitrations, it is however often mis-read and mis-understood for its implications on foreign
awards. The judgment, if read in isolation, has no bearing on the awards passed by Foreign
Arbitral Tribunal and therefore as such the ground of patent illegality is not only by the virtue
of the judgment in ONGC applicable to foreign awards. However, the issue arises when this
judgment is read with the ratio laid down by the Hon’ble Supreme Court in ‘Bhatia
International v. Bulk Trading SA’207 (hereinafter referred to as ‘Bhatia’s case’), wherein it
was held that Part -I of the 1996 Act is applicable to all the arbitrations irrespective of the
place of arbitration unless the parties by agreement, express or implied, choose to exclude all
or any of the provisions of Part- I. In this scenario, if the party apparently fails to exclude the
provisions of Part I then the foreign arbitral award can be subjected to the wide test of Public
Policy under Section 34 including the ground of patent illegality. The ruling in Bhatia’s case
was followed by the Courts in many subsequent judgments 208 and subsequently led to
‘Venture Global Engineering v. Satyam Complex Services Ltd.’ 209 (hereinafter referred to as
‘Venture Global’). The catastrophic judgment in Venture Global, where the Hon’ble Court
206
https://www.kaplegal.com/upload/pdf/AIAJ_V4_N1_2008_Book_(Sumeet_Kachwaha).pdf
http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-single-
view/article/widened-scope-0f-public-policy-leaves-arbitral-awards-susceptible-to-further-scrutiny-by-
courts.html?no_cache=1&cHash=bd6a9abae83687808f2ccb78211ea511.
207
(2002) 4 SCC 105.
208
Indian Technical Services Pvt. Ltd. v. Atkins PLC (2008) 10 SCC 308; Citation Infowares Ltd. v. Equinox
Corp. (2009) 7 SCC 220.
209
(2008) 4 SCC 190
106 | P a g e
after considering the judgment in Bhatia’s case, endorsed the same by further propounding
that foreign awards can be challenged in India under Section 34 and that the same is not
inconsistent with Section 48 of the Act. The thought process of the court behind the same is
abundantly clear from the judgment wherein the Court observed that the broader/extended
test of public policy under Section 34 which includes the ground of patent illegality has to be
made applicable to foreign awards. Similar trend continued till the judgment in ‘Phulchand
Exports Ltd. v. O.O.O Patriot’210 (hereinafter referred to as ‘Phulchand’) wherein the
Supreme Court completely diminished the already fading line between Section 34 and
Section 48 of the Act with respect to public policy and brought the two at the same pedestal.
The Court expressly held that the ratio laid down in ONGC is also applicable to foreign
awards. The ratio of Renusagar was overruled to the extent that narrow meaning is to be
given to ‘Public policy’ under Section 48. It was held that wide meaning has to be given and
that the award could be set aside. Phulchand was culmination of series of judgments which
deviated from Renusagar.
Before venturing into the later decision which have fortunately over-ruled the above-
mentioned case law, it is crucial to first dissect and divulge into the chaotic position of law
created by the co-joint reading of the judgments in ONGC, Bhatia, Venture Global and
Phulchand.
Firstly, the decision in Bhatia it correct to the extent of its concern towards the awards passed
in countries not party to the convention and to identify that there indeed is lacuna on behalf of
the legislature in not providing for the same. Although it’s a different debate whether the
legislature actually intended the enforcement of awards passed in a non-convention country.
However, the same couldn’t have been corrected by subjecting all the awards passed in
International Commercial Arbitrations to the Part-I of the 1996 Act including those passed by
countries party to the Conventions. As the scheme of Part-I of the 1996 Act is wide and in
comparison, to Part- II more regulatory and controlling in nature.
Secondly, an important aspect which the Hon’ble Court in Bhatia and Venture Global missed
was that in Renusagar the ratio was laid down by the Court after identifying the distinction
between the application of ‘Public policy’ test in domestic matters and in cases involving
foreign element/ conflict of laws. Although the concept of public policy is the same in nature
in these two spheres of law i.e. municipal and in conflicts on law, its application differs in
degree and occasion, corresponding to the fact that transactions containing a foreign element
210
(2011) 10 SCC 300
107 | P a g e
may constitute a less serious threat to municipal institutions than would purely local
transactions.211 The same is manifest in ONGC judgment as the Court recognized this
distinction and was careful so as to confine the extended test of public policy (Patent
illegality) to domestic awards only although the whole point of extending the same was
erroneous but still it was not read into Section 48 but only confined to Section 34.
Thirdly, the reason why only limited grounds were given in New York and Geneva
Convention for refusal to enforce an award, which were subsequently incorporated into the
1996 Act, was that these grounds were intended to provide minimum resistance against
foreign awards and as such the intent of the legislature was to facilitate the growth and
development of International trade and Commerce. “The essence of the theory of
transnational arbitration is that the institution of international commercial arbitration is an
autonomous juristic entity which is independent of all national courts and all national systems
of law”212 Therefore, in order to properly encapsulate the intent of the legislature an
interpretation which facilitates the enforcement of a foreign award ought to be accorded to
the provisions of Part-II. Thus, Part-II cannot be read together with Part-I instead it has to be
read in isolation. The purpose of consolidating all the three act and enacting 1996 Act was
limited to the extent of having a comprehensive legislation. Both the parts cater to different
class of arbitrations therefore both are amenable to their respective provisions only. While a
domestic award can be set aside in India a foreign award can only be set aside in the country
where it has been passed213. Thus, the role of the enforcement Court is very limited in this
regard. Therefore, the Court in Venture Global ignored the very essence behind the special
purpose of Part-II.
Subsequently, the landmark judgment of the Hon’ble Supreme Court in ‘Bharat Aluminium
Co. v. Kaiser Aluminium Technical Services Inc.’214 (hereinafter referred to as ‘Balco’)
straightened out the deviations and brought the position of law in sync with the legislative
intent. In this case although the interpretation of the term ‘public policy’ was not under
consideration before the Court. Instead the issue was whether the Part-I is applicable to
211
R.H. GRAVESON, CONFLICT OF LAWS, p. 165(7th Edn)
212
SIR MICHAEL JOHN, TRANSNATIONAL ARBITRATION IN ENGLISH LAW, P133 (1984)
213
International Standard Electric Corp. vs. Bridas Sociedad Anonima Petrolera, Industrial Y Comercial, 745
F.supp.172, Karaha Bodas Co. L.L.C. vs. Perusahaan Pertambangan Minyakdan Gas Bumi Negara 364 F.3d
274, Inventa Fischer Gmbh & Co., K.G. vs. Polygenta Technologies Ltd., 2005 (2) Bom C.R. 364, Bharat
Aluminium Co. Ltd. vs. Kaiser Aluminium Technical Services, AIR 2005 Chhatisgarh 21
214
(2012) 9 SCC 552
108 | P a g e
foreign seated International Commercial Arbitration. Answering the same in negative the
Hon’ble Supreme Court rightly propounded that both Part I and Part II or the Act are
mutually exclusive. It acknowledged the existence of territorial principle in the UNICTRL
Model Law which forms the basis of 1996 Act and thus seat of the arbitration determines the
supervisory jurisdictions of the Courts on them. The Court over-ruled the ratio laid down in
Bhatia and in Venture Global.
Finally, in Shri Lal Mahal Ltd. v. Progetto Grano SPA 215(hereinafter referred to as ‘Lal
Mahal’) the three-judge bench of the Hon’ble Supreme Court laid the controversy with regard
to public policy to rest by confirming and reiterating Renusagar’s interpretation of ‘Public
Policy’. It was held that the scope of public policy under Section 48 is limited and thus
although the expression ‘public policy’ is same in both Section 34 and 48, its application is
different and as such in case of former wider meaning as given in ONGC case and in case of
latter a narrow and strict meaning has to be given and therefore Court endorsed the test of
public policy as originally conceived in Renusagar. Commenting on Section 48 the Court
further limited its scope by expressly barring any “second look” or review of the award under
Section 48.
The implications of Balco judgment read with Lal Mahal with respect to public policy is that
a foreign award cannot be set aside under Section 34 and thus is excluded from being
challenged under its wide provisions more particularly from the wide ambit of public policy.
Moreover, when enforcement of a foreign award is challenged under Section 48(2)(b) the
Court only has to see whether the award is against (i) fundamental policy of Indian Law
(ii)interest of India (iii) justice and morality.
These judgments particularly Balco ushered a new era in Arbitration law in India and
significantly helped in casting aside Indian judiciary’s anti-arbitration reputation worldwide.
Proceedings of Conciliation
i. Commencement of Conciliation and Appointment Of Conciliator
The conciliation process commences when the disputing parties agree to conciliate and a
neutral conciliator is appointed. The party initiating conciliation sends a written invitation to
conciliate to the other party briefly identifying the subject matter of the dispute. Conciliation
215
Civil Appeal 5085/2013
109 | P a g e
proceedings commence when the other party accepts in writing the invitation to conciliate. 216
Thus conciliation agreement should be an ad hoc agreement entered by the parties after the
dispute has actually arisen and not before.217 Even if the parties incorporate conciliation
clauses in their agreements, still conciliation would commence only if the other party accepts
the invitation of one party to conciliate in case of a de facto dispute. Thus unlike in the case
of an arbitration agreement, Part III of the Arbitration and Conciliation Act, 1996 does not
envisage any agreement for conciliation of future disputes. It only provides for an agreement
to refer the disputes to conciliation after the disputes have arisen. 218 In conciliation
proceedings ordinarily there is one conciliator unless the parties agree that there shall be two
or three conciliators. Even in case of plurality of conciliators they are supposed to act jointly.
An uneven number of conciliators is not necessary in conciliation since the task of the
conciliators is to make recommendations for a settlement and not to render binding
decisions.219 In conciliation proceedings with one conciliator, the parties may agree on the
name of a sole conciliator and in conciliation proceedings with two conciliators, each party
may appoint one conciliator. The parties may also request any institution or person to
recommend suitable names of conciliators or directly appoint them and such person or
institution while discharging this responsibility should have regard to aspects as are likely to
secure the appointment of an independent and impartial conciliator.220
ii. Procedure In Conciliation And Role Of Conciliator
The conciliator may request each of the parties to submit a brief written statement describing
the general nature of the dispute and the points at issue, with a copy to the opposite party .221
At any stage of the conciliation proceedings the conciliator may request a party to submit to
him such additional information as he deems appropriate.222 The conciliator is supposed to
assist the parties in an independent and impartial manner in their attempt to reach an amicable
216
217
V. Nageswara Rao, “Conciliation Proceedings under the Indian Arbitration Conciliation Act of 1996 and
CPC — An Overview”, available at: http:// lawcommissionofindia.nic.in/adr_ conf/nageswararao.pdf (last
visited on 08.08.2011).
218
Visa International Ltd. v. Continental Resources (USA) Ltd., AIR 2009 SC 1366.
219
See Commentary on Draft UNCITRAL Conciliation Rules.
220
221
222
110 | P a g e
settlement of their dispute.223 A conciliator assists parties by helping them to initiate and
develop positive dialogue, clarify misunderstandings, create faith upon one another and
generate a congenial atmosphere required for harmonious and cooperative problem-solving.
In order to justify his position the conciliator must be an impartial person. The parties should
be able to repose trust and confidence in him so as to enable them to share their secrets and
their thinking process with the conciliator with the belief that the same will not be divulged to
other party without specific instructions in that regard.224 The conciliator may conduct
conciliation proceedings in such a manner as he considers appropriate, taking into account the
circumstances of the case and the wishes of the parties. The conciliator has wide procedural
discretion in shaping the dynamic process towards a settlement. The process of conciliation,
inter alia, involves creating a constructive bonding between the parties to a dispute to steer
them towards resolution.225 The conciliator is not bound by the Code of Civil Procedure, 1908
or the Indian Evidence Act, 1872.226 He is to be guided by principles of objectivity, fairness
and justice giving due consideration to the rights and obligations of the parties, the usages of
the trade concerned and the circumstances surrounding the dispute, including any previous
business practices between the parties.227 The conciliator may invite the parties to meet him or
may communicate with them orally or in writing. He may meet or communicate with the
parties together or with each of them separately.228 The conciliator may hold several joint or
private meetings with the parties so as to enable the parties to clarify their cases and so as to
persuade the parties to arrive at a mutually acceptable solution. 229 Unless the parties have
agreed upon the venue of conciliation proceedings the conciliator is supposed to decide the
venue of conciliation proceedings in consultation with the parties. Thus the conciliator is
vested with extensive power to choose and mould the procedure to be followed by him
untrammeled by the procedural laws, albeit in consultation with the parties. In order to
facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the
223
5 S. 67, Arbitration and Conciliation Act, 1996.
224
M. K. Sharma, “Conciliation and Mediation”, available at: www.delhimediationcentre.gov.in (last visited on
05.09.2010).
225
P.M. Bakshi, “Conciliation for Resolving Commercial Disputes”, 1 Comp. L. J. (Journal) 19 (1990); See also
Haresh Dayaram Thakur v. State of Maharashtra, AIR 2000 SC 2281.
226
227
228
229
Sarvesh Chandra, “ADR: Is Conciliation the Best Choice” in P.C. Rao and William Sheffield (Eds.),
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consent of the parties, may arrange for administrative assistance by a suitable institution or
person. This shows that depending upon the requirement from case to case basis the
conciliator may or may not adopt a structured process in conciliation. 230 The role of the
conciliator is to assist the parties to arrive at an amicable settlement. The conciliator may, at
any stage of the conciliation proceedings, himself make proposals for a settlement of the
dispute.231In the Indian context the conciliator therefore plays an evaluative. 232 role while
managing the process of conciliation as opposed to a mere facilitator. The conciliator assesses
the respective cases of the parties and apart from acting as a facilitator suggests and advices
the parties on various plausible solutions to the parties so as to enable the parties to choose
the best possible and apt solution. He attempts to get the parties to accept the merits and
demerits of their cases thereby leading them to a mutually acceptable solution. 233 The
conciliator, in this manner plays a more proactive and interventionist role in persuading the
parties to arrive at a final settlement. 234 In actual practice conciliator needs to be a person who
is not only well-informed and diplomatic but can also influence the parties by his persona and
persuasive skills. However, if the system of conciliation is to succeed as a proficient ADR
mechanism professional training of conciliators needs to be a mandatory requirement.235
Y. Section 61: ‘Application and Scope’
(1) Save as otherwise provided by any law for the time being in force and unless the
parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of
legal relationship, whether contractual or not, and to all proceedings relating thereto.
230
231
S. 67, Arbitration and Conciliation Act, 1996
232
However Conciliation may be facilitative also. See M. K. Sharma, “Conciliation and Mediation”, available
at: www.delhimediationcentre.gov.in (last visited on 05.09.2010). The difference lies in the approach adopted
by the conciliator and the level of intervention.
233
See O.P. Malhotra and Indu Malhotra, The Law and Practice of Arbitration and Conciliation (LexisNexis
Butterworths, Delhi, 2nd Edn., 2006).
234
Salem Advocate Bar Association v. Union of India, AIR 2005 SC 3353; See also Anirudh Wadhwa and
Anirudh Krishnan (Eds.), R.S. Bachawat’s Law of Arbitration and Conciliation (Lexis Nexis Butterworths
Wadhwa, Nagpur, 5th Edn., 2010.
235
A.C.C. Unni, “The New Law of Arbitration and Conciliation in India”, in P.C. Rao and William Sheffield
(Eds.), Alternative Dispute Resolution 68 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997).
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(2) This Part shall not apply where by virtue of any law for the time being in force certain
disputes may not be submitted to conciliation.
Z. Section 62: ‘Commencement of conciliation proceedings’
(1) The party initiating conciliation shall send to the other party a written invitation to
conciliate under this Part, briefly identifying the subject of the dispute.
(2) Conciliation proceedings shall commence when the other party accepts in writing the
invitation to conciliate.
(3) If the other party rejects the invitation, there will be no conciliation proceedings.
(4) If the party initiating conciliation does not receive a reply within thirty days from the
date on which he sends the invitation, or within such other period of time as specified in the
invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so
elects, he shall inform in writing the other party accordingly.
AA. Section 63: ‘Number of conciliators’
(1) There shall be one conciliator unless the parties agree that there shall be two or three
conciliators.
(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.
BB. Section 64: ‘Appointment of conciliators’
(1) Subject to sub-section (2),—
(a) in conciliation proceedings with one conciliator, the parties may agree on the
name of a sole conciliator;
(b) in conciliation proceedings with two conciliators, each party may appoint one
conciliator;
(c) in conciliation proceedings with three conciliators, each party may appoint one
conciliator and the parties may agree on the name of the third conciliator who
shall act as the presiding conciliator.
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(2) Parties may enlist the assistance of a suitable institution or person in connection with
the appointment of conciliators, and in particular,—
(a) a party may request such an institution or person to recommend the names of
suitable individuals to act as conciliator; or
(b) the parties may agree that the appointment of one or more conciliators be made
directly by such an institution or person:
Provided that in recommending or appointing individuals to act as conciliator, the

institution or person shall have regard to such considerations as are likely to secure the
appointment of an independent and impartial conciliator and, with respect to a sole or third
conciliator, shall take into account the advisability of appointing a conciliator of a nationality
other than the nationalities of the parties.
CC. Section 65: ‘Submission of statements to conciliator’
(1) The conciliator, upon his appointment, may request each party to submit to him a brief
written statement describing the general nature of the dispute and the points at issue. Each
party shall send a copy of such statement to the other party.
(2) The conciliator may request each party to submit to him a further written statement of
his position and the facts and grounds in support thereof, supplemented by any documents
and other evidence that such party deems appropriate. The party shall send a copy of such
statement, documents and other evidence to the other party.
(3) At any stage of the conciliation proceedings, the conciliator may request a party to
submit to him such additional information as he deems appropriate.
Explanation.—In this section and all the following sections of this Part, the term
“conciliator” applies to a sole conciliator, two or three conciliators, as the case may be.
DD. Section 66: ‘Conciliator not bound by certain enactments’
The conciliator is not bound by the Code of Civil Procedure, 1908 (V of 1908), or the
Indian Evidence Act, 1872.
EE.Section 67: ‘Role of conciliator’
(1) The conciliator shall assist the parties in an independent and impartial manner in their
attempt to reach an amicable settlement of their dispute.
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(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving
consideration to, among other things, the rights and obligations of the parties, the usages of
the trade concerned and the circumstances surrounding the dispute, including any previous
business practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a manner as he
considers appropriate, taking into account the circumstances of the case, the wishes the
parties may express, including any request by a party that the conciliator hear oral statements,
and the need for a speedy settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for
a settlement of the dispute. Such proposals need not be in writing and need not be
accompanied by a statement of the reasons therefor.
FF. Section 68: ‘Administrative assistance’
In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator
with the consent of the parties, may arrange for administrative assistance by a suitable
institution or person.
GG. Section 69: ‘Communication between conciliator and parties’
(1) The conciliator may invite the parties to meet him or may communicate with them
orally or in writing. He may meet or communicate with the parties together or with each of
them separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are
to be held, such place shall be determined by the conciliator, after consultation with the
parties, having regard to the circumstances of the conciliation proceedings.
HH. Section 70: ‘Disclosure of information’
When the conciliator receives factual information concerning the dispute from a party, he
shall disclose the substance of that information to the other party in order that the other party
may have the opportunity to present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific
condition that it be kept confidential, the conciliator shall not disclose that information to the
other party.
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II. Section 71: ‘Cooperation of parties with conciliator’
The parties shall in good faith cooperate with the conciliator and, in particular, shall
endeavour to comply with requests by the conciliator to submit written materials, provide
evidence and attend meetings.
JJ. Section 72: ‘Suggestions by parties for settlement of dispute’
Each party may, on his own initiative or at the invitation of the conciliator, submit to the
conciliator suggestions for the settlement of the dispute.
KK. Section 73: ‘Settlement agreement’
(1) When it appears to the conciliator that there exist elements of a settlement which may
be acceptable to the parties, he shall formulate the terms of a possible settlement and submit
them to the parties for their observations. After receiving the observations of the parties, the
conciliator may reformulate the terms of a possible settlement in the light of such
observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and
sign a written settlement agreement. If requested by the parties, the conciliator may draw up,
or assist the parties in drawing up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the
parties and persons claiming under them respectively.
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof
to each of the parties.
LL.Section 74: ‘Status and effect of settlement agreement’
The settlement agreement shall have the same status and effect as if it is an arbitral award on
agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section
30.
MM. Section 75: ‘Confidentiality’
Notwithstanding anything contained in any other law for the time being in force, the
conciliator and the parties shall keep confidential all matters relating to the conciliation
proceedings. Confidentiality shall extend also to the settlement agreement, except where its
disclosure is necessary for purposes of implementation and enforcement.
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NN. Section 76: ‘Termination of conciliation proceedings’
The conciliation proceedings shall be terminated—
(a) by the signing of the settlement agreement by the parties, on the date of the
agreement; or
(b) by a written declaration of the conciliator, after consultation with the parties, to the
effect that further efforts at conciliation are no longer justified, on the date of the
declaration; or
(c) by a written declaration of the parties addressed to the conciliator to the effect that
the conciliation proceedings are terminated, on the date of the declaration; or
(d) by a written declaration of a party to the other party and the conciliator, if
appointed, to the effect that the conciliation proceedings are terminated, on the
date of the declaration.
OO. Section 77: ‘Resort to arbitral or judicial proceedings’
The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial
proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings
except that a party may initiate arbitral or judicial proceedings where, in his opinion, such
proceedings are necessary for preserving his rights.
PP. Section 78: ‘Costs’
(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of
the conciliation and give written notice thereof to the parties.
(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—
(a) the fee and expenses of the conciliator and witnesses requested by the conciliator
with the consent of the parties;
(b) any expert advice requested by the conciliator with the consent of the parties;
(c) any assistance provided pursuant to clause (b) of sub-section (2) of Section 64 and
Section 68;
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(d) any other expenses incurred in connection with the conciliation proceedings and
the settlement agreement.
(3) The costs shall be borne equally by the parties unless the settlement agreement
provides for a different apportionment. All other expenses incurred by a party shall be borne
by that party.
QQ. Section 79: ‘Deposits’
(1) The conciliator may direct each party to deposit an equal amount as an advance for the
costs referred to in sub-section (2) of Section 78 which he expects will be incurred.
(2) During the course of the conciliation proceedings, the conciliator may direct
supplementary deposits in an equal amount from each party.
(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both
parties within thirty days, the conciliator may suspend the proceedings or may make a written
declaration of termination of the proceedings to the parties, effective on the date of that
declaration.
(4) Upon termination of the conciliation proceedings, the conciliator shall render an
accounting to the parties of the deposits received and shall return any unexpended balance to
the parties.
RR. Section 80: ‘Role of conciliator in other proceedings’
Unless otherwise agreed by the parties,—
(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a

party in any arbitral or judicial proceeding in respect of a dispute that is the
subject of the conciliation proceedings;
(b) the conciliator shall not be presented by the parties as a witness in any arbitral or
judicial proceedings.
118 | P a g e
SS. Section 81: ‘Admissibility of evidence in other proceedings’
The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings,
whether or not such proceedings relate to the dispute that is the subject of the conciliation
proceedings,—
(a) views expressed or suggestions made by the other party in respect of a possible
settlement of the dispute;
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his willingness to accept a proposal for
settlement made by the conciliator.
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5. Conclusion
The conventional 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 mechanism of dispute
resolution that is non adversarial. A dispute is basically ‘lis inter parties’ and the justice
dispensation system in India has found an alternative to Adversarial litigation in the form of
ADR Mechanism.
It is win – 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 it’s not something new
to us, we had for ages, like panchayats etc, it was self-sufficient, every village has panchayat
and it was a powerful authority for redressing the disputes. The best part of ADR is that since
both parties come face to face and they work out the modalities and reach to an amicable
solution, there is no likelihood of winning or losing the case, i.e. it’s a win – win situation and
thereafter no appeal, and thus it reduces the burden of appellant courts as well, the arbitration
and conciliation Act, 1996 provides for Arbitration and the award given by the arbitrator is
deemed to be a decree. It was step towards the ADR. The labor legislation has already
incorporated conciliation and mediation system in their enactments, to have an amicable
solution in case of tussle between the labor and the management. The conventional courts are
already overburdened with loads of cases, and at least a sizable number of cases can be
disposed off by way of ADR. The CPC envisages for use of ADR in section 89 in amended
section as mandatory for court to refer the dispute after the issues are framed for settlement of
disputes outside the Court (Clause 7 of the CPC Amendment (Bill), 1999). The Law
Commission of India in its 129th Report recommended for the Alternate modes of Dispute
Redressal to be obligatory on the courts after framing of issues. It is only after the parties fail
to get their disputes settled through any one of the alternate dispute resolution methods that
the suit shall proceed further in the court where it was filed.
The purpose of this special provision seems to help the litigant to settle his dispute 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 institution of the suit or proceedings may request the Court to refer 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 forums abovementioned at any stage of the proceedings. In
120 | P a g e
fact new rules in Order X were inserted in consequence to the insertion of the sub section (1)
of section These new rules namely 1A, 1B and 1C have been inserted by the Amending Act.
The settlement can be made by adopting any of the modes specified in the section 89 of the
CPC inserted by the Amendment Act. As per the Rule 1A the parties to the suit are given an
option for settlement of the dispute outside court. When 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 appear before such forum opted by them. Rule
1C provides for the Presiding Officer of the Forum to refer the matter again to the Court in
case he feels that in the interest of justice he should not proceed with the matter.
On the basis of above analysis, it is apparent that the ADR is the best and most effective
solution to reduce the Himalayan pendency in various courts of our country. It is not to forget
that the ADR is more effective as it is an amicable solution and both parties are in win – win
position and brings about harmonious relationship between both the parties unlike in the
conventional courts, thus it is permanent solution to any dispute, as it don’t lead to appeal or
revision, and hence reducing the burden of appellate courts as well and also it saves valuable
time and energy of the courts which can be utilized erstwhile in other matters pending before
court and it renders justice on time (Justice delayed is justice denied, but ADR saves time and
timely judgment is possible). As a judge it is our duty as envisaged by the new CPC to
encourage the ADR, in civil matters in the interest of justice. Despite many advantages of
using Alternative dispute resolution mechanisms, our society has been reluctant to give it its
due recognition, the predominant reason being that a litigation ridden society is generally
unable to explore consensual dialogue or arrive at an amicable solution. The ADR
practitioner therefore acts like a healer of conflicts rather than a combatant. It is similar to the
Panchayat system we have in our villages. The resolution of disputes is so effective and
widely accepted that Courts (In sitanna v. Viranna; AIR 1934 SC 105, the Privy Council
affirmed the decision of the Panchayat and Sir John Wallis observed that the reference to a
village panchayat is the time-honored method of deciding disputes) have more often
recognized them. It avoids protracted litigation and is based on the ground realities verified in
person by the adjudicators and the award is fair and honest settlement of doubtful claims
based on legal and moral grounds.
Arbitration is a process by which a dispute between the parties is settled outside the court, by
a third person. An Arbitrator is a person to decide the dispute outside the Court. He may be
appointed either by the parties or by the Court. There may be a sole Arbitrator or a panel of
121 | P a g e
Arbitrators. Whether the Arbitrator is a sole person or a panel, it is called Arbitral Tribunal.
The award given by the Arbitral Tribunal is equal to a decree of a Civil Court. In most of the
matters, the arbitrator / arbitral tribunal resembles a Court, however it is not a Court. The
Arbitration and Conciliation Act, 1996 is based upon the principle of disposing the dispute in
a cost effective, quick and fair manner. An Arbitrator deals with the matters of the dispute
concerning the Arbitration Agreement. The arbitration and the office of the arbitrator flow
from the Arbitration Agreement.
122 | P a g e
X. Bibliography
PRIMARY SOURCES
 Constitution of India, 1950

 Alternative Dispute Resolution Act, 1998 (USA)
 Alternative Dispute Resolution Act, 2004 (Republic of Philippines)
 Arbitration Act, 1940 [Repealed]
 Arbitration and Conciliation Act, 1996
 Code of Civil Procedure, 1908
SECONDARY SOURCES
Books:-
1. D.P. Mittal, Taxmann’s Law of Arbitration, ADR & Contract (Taxmann Allied
Services (P) Ltd., Delhi, 2nd Edn.).
2. Davit St. John Sutton, Judith Gill, Mathew Gearing (Eds.) Russel on Arbitration
(Sweet and Maxwell, London, 23rd Edn., 2007).
3. Fali S. Nariman, India’s Legal System: Can it be Saved? (Penguin Books, Delhi,
2006).
4. G.K. Kwatra, Arbitration & Alternative Dispute Resolution (Universal Law
Publishing Company Pvt. Ltd., Delhi, 2008).
5. G.K. Kwatra, Arbitration & Conciliation Law of India (Universal Law Publishing
Company Pvt. Ltd., Delhi, 7th Edition, 2008).
6. H.E. Chodosh, N.J. Bhatt, F.Kassam, Mediation in India: A Toolkit (U.S. Educational
Foundation in India, Fulbright House, New Delhi, Feb. 2004).
7. H.K. Saharay, Law of Arbitration and Conciliation (Eastern Law House, Calcutta,
2001).
8. Henry J. Brown and Arthur L. Mariot, ADR Principles and Practice (Sweet &
Maxwell,London, 2nd Edn.,1997).
9. J.G. Nerrils, International Dispute Settlement (Sweet and Maxwell, London, 1984).
10. J.K. Lieberman, The Litigious Society (Basic Books, New York, 1983).
Articles:-
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1. Benjamin F. Tennille, Lee Applebaum, & Anne Tucker Nees, “Getting to Yes in
Specialized Courts: The Unique Role of ADR in Business Court Cases”, XI
Pepperdine Disp. Res. L. J. 35 (2010).
2. Brian Dorini, “Institutionalizing ADR: Wagshal v. Foster and Mediator Immunity”, 1
Harv. Negot. L. Rev. 185 (Spring 1996).
3. Bruce E. Meyerson, “The Dispute Resolution Profession should not Celebrate the
Vanishing Trial”, 7 Cardozo J. Conflict Resol. 77 (2005).
4. Carrie Menkel-Meadow, “Do the Haves Come out Ahead in Alternative Judicial
Systems? Repeat Players in ADR”, 15 Ohio St. J. on Disp. Res. 19 (1999)
5. Chandana Jayalath, “Courts and ADR - For a Harmonious Co-habitation”, 3 (10) The
Indian Arbitrator 5 (October 2011).
6. D.K. Jain, “Arbitration as a Concept and as a Process”, XLI (4) ICA Arbitration
Quarterly 1 (January – March 2007).
7. D.M. Popat, “ADR and India: An Overview”, The Chartered Accountant (December
2004).
8. D.R. Dhanuka, “Drafting of Rules under Section 82 of the Arbitration and
Conciliation Act, 1996 – A Necessity”, XLI (2) ICA Arbitration Quarterly (July –
September 2006).
9. Debi S. Saini, “Delay in Conciliation Proceedings: A Systematic Malaise”, LIV (2)
IJSW 232 (April 1993).
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CLINICAL COURSE – I (2018-19)

JAMIA MILLIA ISLAMIA

DISSERTATION ON ALTERNATIVE DISPUTE

KK. Section 77: ‘Resort to arbitral or judicial proceedings’

1. CONCEPT AND SCOPE OF ADR

1.1. What is ADR

Alternative Dispute Resolution is a concept developed in lust for an alternative to traditional

1.2. Scope of ADR

2. VARIOUS FORMS OF ADR

It is a non-binding procedure involving direct interaction of the disputing parties, wherein a

2.1.1. Characteristics of a negotiation

 Voluntary: No party is forced to participate in a negotiation. The parties are free to

 Bilateral/Multilateral: Negotiations can involve two, three or dozens of parties. They

 Non-adjudicative: Negotiation involves only the parties. The outcome of a negotiation

 Confidential: The parties have the option of negotiating publicly or privately.

2.1.2. Advantages of negotiation

2.1.3. Disadvantages of negotiation

 A particular negotiation may have a successful outcome. However, parties may be of

 A successful negotiation requires each party to have a clear understanding of its

 No party can be compelled to continue negotiating. Anyone who chooses to terminate

i. He must possess knowledge and experience of compromise settlements,

A. Procedure In Conciliation And Role Of Conciliator

 The Settlement Agreement

Conciliation is an economical and expeditious mechanism for resolution of disputes in

 Autonomy And Convenience Of Parties

 Creative Solutions/ Remedies

In litigation or arbitration what solution or resolution would be contained in the judgment or

 Party Satisfaction And Harmony

In contradistinction to judicial proceedings conciliation is a private closed door affair and

 Enforceability Of Conciliation Settlement Agreement

C. Issues Pertaining To Conciliation

in contradistinction to the process of conciliation. The process of mediation on account of its

 Scope Of Challenge To Conciliation Settlement

 No Suspension Of Limitation Period In Pre Litigation Conciliation

who by facilitating communication, helps the parties to arrive at an amicable settlement by

2.3.1. Benefits of Mediation

3. Confidentiality- It is the fundamental principle of any mediation. Mediator is duty

4. Consensual Outcome- Mediation is aimed to arrive at a consensual settlement among

6. Flexible- Since, there is no such prescribed procedure of mediation. It is at the liberty

2.3.2. Difference between Mediation and Conciliation

“30. Settlement.- (1) It is not incompatible with an arbitration agreement for an

2.3.3. Mediation in Indian legal system

Following types of Mediation can be found in Indian system: -

2. Court Ordered Mediation- Code of civil procedure by virtue of Section 89 gives

4. Voluntary- Even when there is no agreement between the parties, or no statutory

2.3.4. Stages of Mediation

Functional Stages of a Mediation process are:

 Introduction (Opening Statement)

 Repeated Joint And Private Sessions

The mediator, depending on what seems to be impeding an agreement, may attempt to

2.3.5. Issues Pertaining To Mediation

 Enforcement of Mediation Settlement – Post Afcons47

 Lack Of A Comprehensive Statutory Framework

 Inadequate Use Of Pre Litigation Mediation

 Lack Of Awareness And Settlement Culture

There is an important difference between a mediation and a mini-trial. In mediation, the

2.6. Lok Adalat

B. Lok Adalats – Practices And Procedures

D. Advantages Of Lok Adalats

mandatory requirement of representation through lawyers coupled with a simplified and

E. Issues Regarding Lok Adalats

Moreover there is no statutory guarantee of confidentiality in Lok Adalat proceedings nor is