This article has been written by Ms. Anchita Niranjan Chavan, a 3^rd year BLS LLB student at Oriental College of Law, Navi Mumbai.

INTRODUCTION-

Section 89 of the Code of Civil Procedure States that: 

(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 observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for 

1. arbitration; 

(b) conciliation

 (c) judicial settlement including settlement through Lok Adalat; or 

(d) mediation. 

2. Where a dispute had been referred- 
3. for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 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 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 shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;

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

The objective of Section 89 is to ensure that the court makes an endeavour to facilitate out-of-court settlements through one of the ADR processes before the trial commences. One of the reasons for introducing section 89 CPC was that the trial judge is not able to devote much time and attention to effect conciliation between the parties and therefore the matter should be referred to some other ADR fora for resolution. Section 89 CPC makes it obligatory for the courts to explore the 

possibility of resolution of the dispute by making reference to one of the 

several ADR mechanisms provided

WHAT IS ADR (ALTERNATIVE DISPUTE RESOLUTION) ?

The Law Commission of India had recommended the introduction of the conciliation court system and had underlined the importance of conciliation/ mediation as a mode of ADR. The Malimath Committee had also advocated the need of an amendment in law for introduction of ADR mechanisms. 

Alternative Dispute Resolution (“ADR”) refers to a variety of techniques resolving disputes by means other than the litigation. Section 89 of the Code of Civil Procedure, 1908 which was introduced by the Act of 1999 and came into effect from 01/07/2002, embodies the legislative mandate to the court to refer civil disputes to various ADR mechanisms mentioned in the Section where it finds it appropriate to do so.  Common ADR processes include mediation, arbitration, and neutral evaluation. It is a method of resolving any dispute without litigation.

ADVANTAGES OF ADR ( ALTERNATIVE DISPUTE RESOLUTION)-

Alternative Dispute Resolution have a number of advantages. There are several types of ADR and one can enjoy any of the process related to the matter. A middle class can enjoy this process because of less time consuming and in low price. Litigation process are comparatively lengthy to Alternative Dispute Resolution. This is solved with greater satisfaction of the parties. Productive results are achieved through this process. ADR process includes the parties of the matter to involve in the proceedings and keep their terms and conditions in-front of the opposite parties so that the results can be in their favour. It also help the parties to open up and speak out the issues so that it is easier to solve the matter.

• Flexible
• Cost efficient
• Less time consuming
• Control over the rules
• Satisfying results
• Includes participation of the parties
• Lengthy process are avoided

 DISADVANTAGES OF ADR (ALTERNATIVE DISPUTE RESOLUTION)-  

Everything in this world has its own pros and cons. ADR has some of the disadvantages which are listed below. As this process does not lead always to a result there are some cons of this process. 

• There is no guaranteed resolution
• Decisions are final
• Limit on awards
• Facts may not fully be disclosed
• ADR is not for all cases

METHODS OF ADR MENTIONED IN SECTION 89 OF CPC-

There are five methods of Alternative Dispute Resolution which are mentioned in section 89 of Code of Civil Procedure. Arbitration, Conciliation, Mediation, Judicial Settlement and Lok Adalat Settlement are the methods of ADR.

• ARBITRATION-  Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. In choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. Its principal characteristics are consensual, neutral, confidential procedure, parties choose their own arbitrator, decisions are final and easy to enforce. It is a process of solving an argument between people by helping them to agree to an acceptable solution or result. It is necessary that both sides in the dispute have agreed to go to arbitration it means to have a disagreement solved by the arbitrator. Arbitration is often used in the matters relating to commercial disputes and particularly in the international matters.The scope of arbitration is wide and more in the international countries as compared to India. In India, most of the time people go for litigation as they feel there is no scope or no money in arbitration. It is not same as judicial proceedings. An arbitration decisions is legally enforceable in the courts. Arbitration is often faster than litigation in courts. In arbitration they allow the parties to choose their own tribunals, in litigation no one can choose the judge. 
• CONCILIATION- Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences. They do this by lowering tensions, improving communications, interpreting issues, encouraging parties to explore potential solutions and assisting parties in finding a mutually acceptable outcome. Conciliation literally means: “Process of bringing people together into council”.It differs from arbitration because it has no legal standing. The conciliator has no authority to seek evidence and usually makes no awards. This form of ADR is more akin to negotiation. Most successful conciliators are usually highly skilled negotiators. This process is flexible, confidential, voluntary and interest based process just like arbitration. It is necessary for a conciliator to act as a neutral third party. These process are rarely found in public. The ultimate decision to agree on the settlement remains with the parties like mediation proceedings. It offers a more flexible alternatives, for a wide variety of disputes, small as well as large. In this proceedings there is no scope of corruptions or biased and produces quicker resolution of dispute. 
• MEDIATION– Mediation is a process wherein the parties meet with a mutually selected impartial and neutral person who assists them in the negotiation of their differences. It leaves the decision power totally and strictly with the parties. The mediator acts as a catalyst between opposing interests attempting to bring them together by defining issues and eliminating obstacles to communication, while moderating and guiding the process to avoid confrontation and ill will. Mediation is an informal and flexible dispute resolution process. The mediator’s role is to guide the parties toward their own resolution. Mediator is required to be neutral and balanced and it is necessary that the parties hold the decision making powers. All decisions held at mediation must be confidential. The Parties must then be given a chance to apply their mind to this and to decide whether they have any objection to the Mediator’s continued involvement in their process.
• JUDICIAL SETTLEMENT-  Judicial Settlement’ means a final settlement by way of compromise before a Lok Adalat or before a suitable institution or person. In a judicial settlement, a dispute is placed before an existing independent court. There is less opportunity for abusing of the process. It allows safeguards for the parties.  The decision declared by the court or tribunal is binding for the disputed parties. The concerned judge tries to settle the dispute between the parties amicably.There are no specified rules framed so far regarding judicial settlement. Judicial settlement involves the application of law, while arbitration settlement operates on a wider basis, taking account, for instance, of considerations of equity and expediency.This process is of evidentiary burden. Legal precedents may be established through judicial settlements.  
• LOK ADALAT SETTLEMENT- Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably. Lok Adalats have been given statutory status under the Legal Services Authorities Act, 1987.  There is no court fee payable when a matter is filed in a Lok Adalat. A matter pending in the court of law is referred to the Lok Adalat. The persons deciding the cases in the Lok Adalats are called the Members of the Lok Adalat and have a role of statutory conciliator but not a judicial role. Cases which are referred to Lok Adalat are the ones which are pending before any court, the dispute which are not brought before any court or are likely to be filed in any court. Mobile Lok Adalats are also organized in various parts of the country which travel from one location to another to resolve disputes in order to facilitate the resolution of disputes through this mechanism. The award of the Permanent Lok Adalat is final and binding upon the parties. It also deals with criminal cases. There is no court fee and if the court fee is already paid the amount will be refunded if the dispute is settled at Lok Adalat. It is a speedy trail of disputes.

CONCLUSION-  

The provision under Section 89 CPC is an attempt to bring about resolution of disputes between parties, minimize costs and reduce the burden of the courts. It prohibits a civil court from referring a case to arbitration. The section in itself suffers from many anomalies which need to be looked to ensure the objective of the section is achieved and there is swifter and speedier form of justice. The  most consequential anomaly is related to court fees. The main problem here arises when the dispute is not resolved by a particular process and his brought back to the same court.

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