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What is ADR

 What is ADR


Today’s world has become globalised and commercial with the advent of technology. People can now contact each other and settle business deals and disputes when they are sitting at the opposite ends of the world. Most people no longer have the time to go and file papers at the courts and then wait long periods for a hearing. We are rapidly approaching a stage where litigation is being replaced with alternative dispute resolution (ADR), due to the inefficiencies and drawbacks of litigation. India hasn’t quite reached a stage where litigation has been completely displaced by ADR methods, but the legal system is beginning to see the benefits of ADR. This article shall be helpful to give you an overview of the ADR methods and how it is beneficial.

What is alternative dispute resolution? 

Alternative dispute resolution (ADR) refers to a range of dispute settlement methods which help the parties in the dispute to come to a settlement without going to court, or without litigating on the said matter. These methods usually involve a third party, who helps them in settling the disputes. In many cases, ADR methods are used alongside the litigation process as well through court authorisation.

How did the concept of ADR arise?

As stated in the 222nd Report of the Law Commission of India, the Constitution has guaranteed access to justice for all, primarily through Article 39A, which states that everyone must have an equal opportunity of getting justice and this must not be denied to any citizen by reason of economic or other sort of disabilities.

 The report further states that ‘access to justice’ for the common masses in India means access to the courts of law. But even that has been hindered, due to factors like poverty, illiteracy, ignorance, social and political backwardness etc. 

In a developing country like India, many people still live in poverty. When their rights get violated, they often do not have the money to fight long battles in the Court. They do not have the money to afford a lawyer. They do not know the legal system and procedures. Therefore, they often think that the court system is an inconvenience. 

These kinds of inefficiencies are shared reasons among many countries, which is why ADR is being explored. The courts also have too many pending cases and these cases keep going on for many years which is a tremendous burden to the courts. 

These reasons prompted the Indian Government to enact Section 89 of the Code of Civil Procedure, 1908 and replace the earlier Arbitration Act,1940 with The Arbitration and Conciliation Act 1996, in accordance with the mandates of the United Nations Commission on International Trade Law (UNCITRAL).

There are various ADR methods, but they differ from country to country. This article shall look at the main ADR methods used, with special focus on India.


Arbitration in India is governed by The Arbitration and Conciliation Act, 1996. It is a form of dispute resolution where one or more parties are appointed to adjudicate the dispute. They act as third parties. This third party should be neutral and this party is referred to as an ’arbitrator’ while the decision of the arbitrator, which is essentially a determination of merits in the case, is known as ‘arbitration award’.

The arbitration process is informal and this process allows the dispute to be resolved amicably and efficiently as it takes less time and involves lesser costs for the parties. Therefore, parties frequently choose to arbitrate when disputes arise, especially in the business world. Big corporations would rather settle disputes quickly, rather than fighting long cases in the courts. 

Before the arbitration process begins, an arbitration agreement is required to be formed. This agreement lays down the terms and conditions on which the arbitration process is carried out. It is determined through this agreement as to how the process will be made cheaper, efficient and and how the rules of evidence would be applied etc. This agreement should be valid as per The Indian Contract Act 1972 and the parties must have the capacity to contract under Sections 11 and 12 of the same Act.

Arbitral decisions are final and binding on the parties, who have limited scope of objecting to the decisions. Non binding arbitrations also exist wherein the party can request a trial if it is not satisfied with the arbitrator’s decision. 

for all, whether he be poor or rich. Since the poor masses of the society were not being delivered on this promise, this Act was formed. This access has been further strengthened by judgements of various courts, such as the Delhi High Court, in the case of Abul Hasan and National Legal Service Authority v. Delhi Vidyut Board & Ors. AIR 1999 Del 88, where it gave an order for setting up permanent Lok Adalats. Further, the decision given by the Lok Adalat is binding and shall be treated akin to the order of a civil court., thereby increasing poor people’s access to justice. 


There are many other dispute resolution methods, like med-arb, mini trial, summary jury trial etc. But arbitration, mediation and Lok Adalats etc are the most commonly used techniques of ADR in India. Throughout the world, ADR has been slowly becoming the favored choice for parties, but India still relies a lot on litigation. However, with the development of these ADR methods, and in an effort to improve access to justice, ADR is being seen as a necessity. Legal recognition should be given to all ADR methods including negotiation as they are viable and convenient., and it would help to ease the burden of the courts.