This article has been written by Kapila Patidar a student of Indore Institute of Law

INTRODUCTION

The world is spotting daily new cases of disputes arising between people as a result of relationships or contracts between them. The courts are already overburdened with so many cases and they don’t have much time,  judges, and litigants to deal with the same. So, the alternative for the same has been provided in section 89 of CPC. Some of the alternatives are arbitration, conciliation, mediation, judicial settlement, and lok adalat. The money which is involved in the court proceedings is also so high and every person could not afford the huge expenditure. Apart from that the cases involve sometimes which can be solved by negotiation and counseling. This not only saves the time of the client as well as the court. That is why sometimes the clause of arbitration and other alternatives are provided in the contracts to escape from the same. These all are sometimes called Alternate  Dispute Resolution (ADR). The method basically combines the judicial and extrajudicial dispute resolution processes. Nowadays It has been regarded as the best option for solving minute disputes.

HISTORICAL BACKGROUND

The ADR as an alternative has been prevalent in the Indian subcontinent from the Vedic times. The Brihadaranyaka Upanishad is the first earliest text mentioning arbitral bodies. These bodies are the Puga, the Shrine, and the Kula. They are also called Panchayats dealing with a variety of issues such as Matrimonial, criminal and contractual disputes. Then comes the medieval era where the disputes are solved by Hidya which contains certain provisions regarding solving the disputes. Tahkeem was the word for arbitration while Hakam means arbitrator. Then in modern times, the provision for arbitration was the Bombay Regulation Act 1772 and Bombay Regulation Act 1781 which provided for parties to submit their dispute to the arbitrator. Thus in the present era, the Arbitration and conciliation Act 1996 has been made to deal with the problems outside the court.

SECTION 89 CPC

The wordings of the section are as follows:

¹[89. Settlement of disputes outside 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 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:

(a) arbitration;

(b) conciliation; (c) judicial settlement including settlement through Lok Adalat: or

(d) mediation.

(2) Were a dispute has been referred–

(a) for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;

(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall .apply in respect of the dispute so referred to the Lok Adalat;

(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;

(d) for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]

ADR includes five alternatives that are available to an individual. These are Arbitration, conciliation, mediation, Judicial Settlement, and Lok Adalat. Arbitration is an arrangement where two or more arbitrators are there and their decision is binding on the parties. Is already provided in the agreement that the dispute should be solved by the arbitration clause. The decision of the arbitration is called the Arbitration Award. In conciliation, the parties refer the matter to a third party called a conciliator, who meets the parties separately and tries to solve the dispute. Basically, it is less formal than arbitration. Apart from that the conciliator tries to negotiate between both of them very perfectly. In mediation,  the mediator tries to solve the dispute very amicably and peacefully. The mutual consensus is there in the case of mediation of both parties. The process is totally controlled by the parties. Lok Adalat is called the people’s court which is basically presided over by retired judicial officers. The system is basically not so rigid and the court is also not required in this case. Parties are in direct interaction with the judge and they can communicate whatever they want to communicate with the judge. The cases which are pending in the regular courts can also be referred to the Lok Adalat. Judicial settlement is a way of compromise between Lok Adalat and a suitable institution and a person.

CASE LAW

The Supreme Court in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. has discussed, in great detail the provisions of Section 89 of the Code of Civil Procedure, 1908 which casts a duty on the courts to encourage parties for settlement of their disputes by means of alternate dispute resolution. Even though upon an examination of Section 89 of the Code along with the stipulations of Order X, the Supreme Court was of the opinion that the provision is incorrectly worded and various faults in the legislative drafting to that effect were pointed out, the Bench applied the rule of interpretation to make it workable. The Bench also, on its own, took up the task of identifying which all cases could be referred to alternate forms of dispute resolution, given the nature of these disputes, and also noted that “Section 89 refers to five types of ADR procedures, made up of one adjudicatory process (arbitration) and four negotiatory (non-adjudicatory) processes – conciliation, mediation, judicial settlement, and Lok Adalat settlement.”

CONCLUSION

so, ADR is a very amicable process of solving disputes outside the court. As it is clear that the pendency of cases is too high in the Indian courts and there is a requirement for alternates for the same. Apart from that sometimes the cases are so petty in nature which will basically squander the time of the court. So, according to the requirement, the parties can go for anyone one of the five alternates available.

REFERENCES

https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_20_00051_190805_1523340333624&orderno=95

Arbitration and Conciliation Act 1996

Case law –Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. 

Section 89 CPC.

Aishwarya Says:

Law students often face problems, which they cannot share with their friends and families. We have started a column on our website Student’s Corner. In this column we are talking to several law students about the challenges that they face. Students who are interested in participating in the same, can fill this Google Form.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems to aishwarya@aishwaryasandeep.com

Join our  Whatsapp Group for latest Job Opening