Understanding ADR: An Introduction to Alternative Dispute Resolution

Understanding ADR- INTRODUCTION
• Courts in crisis- problems & prospects
• General understanding of ADR
• Applicability - major &minor premises
• Historical perspective (Indian Context)
• Access to justice-Legal Services Authority Act,1987-
Amd.s-1994 & 2002
• Lok Adalat &Permanent Lok Adalat-issues of concern
• S.89 - CPC-genesis-reports-cases-clarifications (Salem
Advocates case I &II, Afcon’s Case)
• Applicability in Labour disputes & Family Law

Alternative Dispute Resolution
Spread over of ADR provisions
What is conflict- causes & reactions
ADR METHODS-
Negotiation
Conciliation & Mediation
Arbitration
Client interviewing & counseling

Course contents
• Understanding limitations of litigation &
appreciating advantages of ADR
• Historical perspective
• Comparative perspective
• What, Why & How of ADR mechanisms
• Theory & law on ADR
• Strategic uses
• Skill imparting sessions

A D R
x
Traditional legal & Adm. D. R
Disadvantages of RDR
x
Advantages of ADR
THE NEED FOR CONDUCIVE ATMOSPHERE

The Is proposition
• Adversarial character (restricted atmosphere)
• Adjudicatory process- third party/judge decides outcomes
• Focus on past events-determination of rights/liabilities of
parties
• Active participation of parties not mandatory unless
stipulated
• Proceedings held in public-lack of secrecy
• Decision is binding on parties
• Decision –appealable
• No opportunity for parties to directly communicate
• Cost factor
• LOSE-WIN SITUATION

Realities
• Non –organized work
• Overburdening of judiciary
• Non observance of rules and procedure
• Delayed –procedures & outcomes
• Language of courts
• State –the largest litigator
• Delay in disposal
• Vertically mounting appeals
• Adjournments
• Inadequate judge strength
• De-moralising subordinate court’s work

Courts in crisis
• Caveats-time consumption, normality of law,
complexity of norms, hierarchy x finalty
• Que:
• What kind of disputes?
• Pending for how long?
• For what reasons?

Govt. caused- Court caused- Bar caused- Litigant caused
DELAYS & ARREARS
• Lack of priority of matters, organized concern by Bar, quality of
judges, inadequate utilization of judges, trained managerial
personnel, research staff.
• Lack of priority to old cases, failure in clubbing cases, modernizing
court management, appeal, review, revisional jurisdiction,
admission of second appeals non screening of W.P, Prolix
argumentation, excessive stay orders.
• Prolonged cross examinations-piecemeal evidence recording,
purpose of preferring Appeal, lack of exhaustion of local remedies
• Inherent delays
• The system-
• over legislation-lack of skilled drafting skills-burdening courts-
dysfunctional laws-State as largest employer

RELEVANCE OF ADR
• Courts must have ADR Centres - Need
• Courts should not be prevented from taking
up decisions on serious and emergent matters
• Nature of disputes to be categorised-
specialised treatment
• ADR NEVER SUBSTIUTES RATHER IT
COMPLIMENTS THE PROCESS

Ought proposition - ADR
• creative compromises
• no concept of right and wrong,
• there need not be only one winner.

Terminology
• Alternative Dispute Resolution
• Primary Dispute Resolution(Australian Family
Law Act)
• Additional Dispute Resolution
• Amicable Dispute Resolution
• Appropriate Dispute Resolution
• Assisted Dispute Resolution

Basic ADR Models
• Negotiation: parties voluntarily seek a mutually
acceptable agreement to resolve their common
dispute. (negotiation allows the disputants
themselves to control the process and the
solution.)
• Conciliation: third party meets with the
disputants separately in an effort to establish
mutual understanding of the underlying causes of
the dispute and thereby promote settlement in a
friendly, un antagonistic manner.

Mediation:
• A voluntary and informal process in which the disputing parties
select a neutral third party(one or more individuals) to assist them
in reaching a mutually-acceptable settlement.
• (mediator has no power to impose a solution on the disputants;
instead, the mediator assists them in shaping solutions to meet
their interests)
• Techniques used-
• assist parties to communicate effectively to
• develop a co-operative, problem-solving attitude
• identify parties' underlying interests
• identify and narrow issues
• transmit messages between parties
• explore possible options for agreement and the consequences of
non-settlement.

Arbitration:
• An adjudicatory dispute resolution process
• one or more arbitrators issues a judgment on the merits (which may be
binding or non-binding)
• Expedited process
• adversarial hearing- each party has the opportunity to present proofs and
arguments.
• Arbitration is procedurally less formal than court adjudication;
• procedural rules and substantive law may be set by the parties.
• Can be=
• Court annexed or
• private arbitration
• Hybrid process
• Med-Arb
• Mini Trial

Terms & concepts involved
• Court-annexed ADR: ADR programs or practices
authorized and used by the court system.
• Facilitation
• Impartiality/Neutrality
• Mandatory / Voluntary =how disputes enter ADR
processes. Court/statute/consent of parties
• Nonbinding / Binding –
• Gen rule-disputants are not bound by an
outcome or resolution in ADR, unless they agree
to be bound.

Understanding the
strengths and limitations
Introducing ADR within rule of law
Advantages
Program design
Applicability
Characteristics
Uses
Limitations for applicability
Background setting

Advantages of ADR
• Can be used during pendency of cases before courts
• Better solutions at lesser costs
• Promotes realistic solutions-parties take over control
• Duration to reach outcome is less
• Flexibility
• Freedom of parties to litigation not restricted
• Appreciation of case by both sides
• No need of lawyer representation
• Reduction of workload
• Assistance of specialists - specialisation

Program design-
• Ist stage
• What are the needs for dispute resolution in the country?
• What kinds of disputes are going unresolved?
• What are the barriers?
• Are parts of the population excluded from or underserved by the existing formal structures?
• Are the costs of the existing system so high that many citizens cannot participate?
• II nd stage
• What disputes are considered appropriate for informal resolution?
• Whether judicial attitudes and the legal culture in thecountry are friendly to ADR?
• Public attitudes towards the judiciary?
• THREAT FROM INTEREST /VESTED GROUPS
• legal basis for informal dispute resolution
• Mandatory referral or voluntary?
• Degree of judicial control-EXPERIMENTS with India x South Africa ,China, Sri Lanka
• Cultural norms affecting selection and credibility of ADR providers?
• What is the skill required?

Major & Minor premise
• Processes designed to manage community
tension or facilitate community development
issues
• Specific disputes/reconciliation of relationships
• Methods/mechanisms-
• Negotiation,
• Conciliation/Mediation,
• Arbitration
+ Hybrid mechanisms

The System & effect
• Negotiation- encourage and facilitate direct negotiation between
parties to a dispute, without the intervention of a third party.(non –
binding)
• Mediation /Conciliation- mediate a specific dispute or to reconcile
their relationship.
• Facilitate communication/help direct and structure a settlement,
but they do not have the authority to decide or rule on a
settlement.(non-binding)
• Arbitration- authorize a third party to decide how a dispute should
be resolved.(binding/non-binding)
• Nature-
• mandatory processes prior to court litigation/voluntary
processes/part of a prior contractual agreement between parties.

Characteristics of ADR
Approaches
• Informality
• Application of Equity
• Direct Participation and Communication
between Disputants
• Flexibility in settlement design
- Identifying need
- Creating options
- Controlling process
- Restoring relationship

Uses of ADR
• Addresses economic restructuring, or the
management of tensions / conflicts in
communities.
• Land claims, economic development planning, environmental issues, conflict and
tension in the schools,
disputes within the health care system- civic engagement and create public processes
• Within the context of rule of law initiatives-
• Support and complement court reform-Dispute Clearinghouse model
• By-pass ineffective and discredited courts
• Increase popular satisfaction with dispute resolution
• Increase access to justice for disadvantaged groups
• Reduce delay in the resolution of disputes
• Reduce the cost of resolving disputes--simplicity of the system and the
• lack of need for legal representation

Limitations of ADR
• Define, refine, establish and promote a legal framework- do not
set precedent, refine legal norms, or establish broad community or national standards, nor do they promote a consistent application of legal
rules.
• Redress pervasive injustice, discrimination, or human rights
problems- Gender & Caste issues
• Resolve disputes between parties who possess greatly
different levels of power or authority- No legal or procedural protections for
weaker parties-spousal abuse cases
• Resolve cases that require public sanction- results of ADR programs are not
public
• Resolve disputes involving disputants or interested parties
who refuse to participate, or cannot participate, in the ADR
process.
• ADR may undermine other judicial reform efforts- myth

Social, economic and/or cultural
imbalances Egs:
• women in domestic abuse cases
• low-income debtors in collection cases
• low-income tenants/squatters in eviction
cases
• indigenous people in land rights cases
• Private parties x public regulatory agencies

The needed background setting
• Art.14 and 21.- Recourse to ADR as a means to have access to justice
• Adequate Political Support &Constituencies whose support may be necessary- Local community
leaders , National and state govt.,Judges and the bar, Advocates and representatives of user groups, Foreign donor
nation/foundation(s)
• Supportive Cultural Norms- CULTURAL IDEOLOGIES,User acceptance of informal Processes, Appropriate standards for
settlements, Enforcement through community customs and sanctions
• Adequate Human Resources- Public participatory process
• Financial Resources
• Parity in the Power of Disputants-
• A fairly balanced legal framework defining disputants' rights
• Carefully designed ADR programs -situations of general social power
imbalance.
• Procedural protection for those in weaker position-
• Commercial conciliation and arbitration through the Chamber of Commerce Conciliation Centers, Court-annexed
conciliation, Extra-judicial community conciliation centers
• Choosing "notables" and choosing "progressives“ or "representatives of
disadvantaged groups" as ADR providers.
• Create an effective outreach and education program to reach users

Litigation ADR
• To win
• Argumentative
• To establish &convince
• To find flaws& Develop
counter arguments
• Mutually acceptable
procedure & solutions
• Collaborative-
participatory
• To explain
• To understand
Goal , Style, Speak & Listen Goal , Style, Speak & Listen

• “I had learnt the true picture of law. I had learnt to find
out the better side of human nature and to enter
men's heart. I realised that the true function of a
lawyer was to unite parties riven as under. The lesson
was so indelibly burnt into me that a large part of my
time during the twenty years of my practice as a lawyer
was occupied in bringing about private compromised
of hundred of cases. I lost nothing thereby-not even
money-certainly not my soul.” ….Mahatma Gandhi
• Discourage litigation. Persuade your neighbors to
compromise whenever you can. Point out to them how
the nominal winner is often a real loser— in fees and
waster of time. As a peacemaker, the lawyer has a
superior opportunity of being a good man. There will
still be business enough.- Abraham Lincoln

The origins of ADR
• Unwritten law- first originating philosophies of mediation - Wisdom,
Reason
• and Prudence
• KULA, SHRENI, PUGA , Parishad
• Justice, equity and good conscience
• usages and customs
• Buddhism
• "Meditation brings wisdom; lack of mediation leaves ignorance. Know well
what leads you forward and what holds you back; choose that which leads
to wisdom"
• Panch parmeshwar
• formal justice delivery system.
• KELSEN-ROSCOE POUND-BENTHAM

Prototypes of ADR
• Tribunals –Art.323-B (42 nd Amd.1976)
• Commissions
• Boards
• community based
• Nyaya Panchayat- Traditional-73 rd Amd.1992-
particpatory governance - civic amenities, social
welfare, development work, resolution of petty cases.
• Lok Adalats- LSA(Amendment) Act, 2002,-Chapter -VI
• Ombudsman
• Fast Track Courts
• Gram Nyayalaya Act, 2008

Hussainara Khatoon (IV) v Home Secretary, State of Bihar
[(1980) 1 SCC 98]
• Fairness under Article 21 is impaired where procedural law does not provide
speedy trial of accused; does not provide for his pre-trial release on bail on his
personal bond, when he is indigent and there is no substantial risk of his
absconding; if an under-trial prisoner is kept in jail for a period longer than the
maximum term of imprisonment which could have been awarded on his
conviction and if he is not offered free legal aid, where he is too poor to engage a
lawyer, provided the lawyer engaged by the State is not objected to by the
accused.

Khatri v. State of Bihar II [(1981) 1 SCC 635]
(the Bhagalpur Blinding case)
• This right of the indigent arises from the moment he is first
produced before a magistrate. It is at this stage that the accused
gets his first opportunity to apply for bail and obtain his release as
also to resist remand to police or jail custody and so the accused
needs competent legal advice and representation at this stage. The
accused can also claim free legal aid after he has been sentenced by
a court but is entitled to appeal against the verdict.
• it is the legal obligation of the magistrate or judge before whom the
accused is produced to inform him that if he is unable to engage a
lawyer on account of poverty or indigence, he is entitled to obtain
free legal services at the cost of the state.
• right to free legal aid would be illusory for the indigent accused
unless the trial judge informs him of such a right

LA-Justice S.M.Dharamadhikari
• Indianisation of justice dispensation
• Humanization of justice dispensation
• Spiritualization of justice dispensation

UNIQUENESS OF LA
• Participation & accommodation,
• fairness,
• expectation,
• voluntariness,
• neighbourliness,
• transparency,
• efficiency and
• lack of animosity
• APPLICABLE TO –poor/ignorant/illiterate/backward/ disadvantageous
position.
• rooted in India's history and culture and environment.
• A - Access to courts,
• B - Backlog in courts resulting in delays and
• C - Cost of litigation

LSA,1987-RELEVANT PROVISIONS
• S.19-CENTRAL, STATE, DISTRICT, TALUK Legal Services Committees – LSA
• S.20-REFERENCE OF CASES
• Consent of both parties,
• on application,
• On satisfaction of court
• Compromise settlement-challenge u/A.226/227*(LIMITED GROUNDS)
• On failure -divert the dispute back/advice parties to approach court
• S.21-If agreement-award by conciliator- no need for consent decree.
• Decision(award) is binding-executable-no appeal
• S.22- Every proceeding = judicial proceeding
• Procedure-
• secretary of LSC- Organises-
• Information to SLC-
• PLACE & DATE of LA,OTHER ORGANISATIONS FORWARDING
ASSISTANCE,CATEGORIES&NATURE OF CASES,,NO: OF CASES IN EACH CATEGORY
PROPOSED.,INFORMATION TO PARTIES.
• assistance by multi disciplinary stake holders.

Legal backing-LA
Preamble, Part III and Part IV -Art .39-A
• LEGAL SERVICES AUTHORITY ACT,1987
• ESTABLISHMENT OF PERMANENT LOK ADALAT -2002 Amd.-Public Utility Services –
• conciliation proceedings
-principles of natural justice, objectivity, fair play, equity and other principles of
justice
-transport service for the carriage of passengers or goods by air, road or water; or
-postal, telegraph or telephone service; or
-supply of power, light or water to the public by any establishment; or
- system of public conservancy or sanitation; or
-service in hospital or dispensary; or
-insurance service, and includes any service which the Central Government or the
State Government, as the case may be, may, in the public interest, by notification,
declare to be a public utility service for the purposes of this Chapter.

FUNCTIONS OF NLSA
• To encourage the settlement of disputes by way of negotiations, arbitration and
• conciliation.
• * To lay down policies and principles for making legal services available in the
conduct of any
• case before the court, any authority or tribunal.
• * To frame most effective and economical schemes for the purpose.
• To utilize funds at its disposal and allocate them to the State and District
Authorities appointed
• under the Act.
• * To undertake research in the field of legal services.
• * To recommend to the Government grant-in-aid for specific schemes to voluntary
institutions
• for implementation of legal services schemes.
• * To develop legal training and educational programmes with the Bar Councils and
establish
• legal services clinics in universities, Law Colleges and other institutions.
• * To act in co-ordination with governmental and non-governmental agencies
engaged in the
• work of promoting legal services.

Benefits of Lok Adalat
• Preventive litigation measure
• No court fee- refund of court fees
• No strict application of procedural laws & IEA
• Presided by –retired judicial officer + lawyer + social worker
• No criteria as to selection of disputes
• Direct access to LA
• Parties to the dispute can directly interect with the Judge
• Arriving at a compromise or settlement in friendly and harmonious
atmosphere.
• Decision(award) is binding-executable-no appeal -P.T. Thomas vs Thomas
Job on 4 August, 2005
• Voluntary process
• Quicker & cost effective
• Applicability-
• Pre- litigation, pending & post

Composition
State H.C District Taluk
Retired judge of
H.C/Serving/retir
ed Judicial
Officer
+
A MEMBER OF
LEGAL
PROFESSION
+
A SOCIAL
WORKER
ENGAGED IN
UPLIFTMENT OF
WEAKER
SECTIONS,SVC/S
T,WOMEN ETC.,
Retired judge of
H.C/Serving/retire
d Judicial Officer
+
A MEMBER OF
LEGAL
PROFESSION
+
A SOCIAL WORKER
ENGAGED IN
UPLIFTMENT OF
WEAKER
SECTIONS,SVC/ST,
WOMEN ETC.,
Sitting/retired
Judicial Officer
+
A MEMBER OF
LEGAL
PROFESSION
+
A SOCIAL
WORKER
ENGAGED IN
UPLIFTMENT OF
WEAKER
SECTIONS,SVC/ST,
WOMEN ETC.,
Sitting/retired
Judicial Officer
+
A MEMBER OF
LEGAL
PROFESSION
+
A SOCIAL
WORKER
ENGAGED IN
UPLIFTMENT OF
WEAKER
SECTIONS,SVC/ST
,WOMEN ETC.,

DISPUTES SUITABLE FOR LOK ADALAT
• Compoundable civil, revenue and criminal cases.
• Motor accident compensation claims cases·
• Partition Claims
• Damages Cases
• Matrimonial and family disputes
• Mutation of lands case
• Land Pattas cases· Bonded Labour cases
• Land acquisition disputes
• Bank’s unpaid loan cases
• Arrears of retirement benefits cases
• Family Court cases
• Cases which are not sub-judice
• Compoundable offenses-assault, house tress pass etc.
• S.89 -2002 Amd.- process

Need for PLA-Ss.22A-22E(LSA,1987)
• The absence of the power to arbitrate and
decide the dispute between non-conciliating
parties
• jurisdiction is invoked only to protract
litigation
• to procure the refund of court fee in cases
where parties have even otherwise settled
their disputes.

Grounds of challenge
• Fraud & misrepresentation
• Absence of free consent
• Coercion to refer matter to LA
• Impairing interest of minor
• Totally arbitrary and unreasonable
• If related to non- compoundable offences
• The questions?
• whether the decision-making authority
• exceeded its powers?;
• committed an error of law;
• committed a breach of the rules of natural justice;
• reached a decision which no reasonable Tribunal would have reached; or
• abused its powers.

State Of Punjab & Anr vs Jalour Singh & Ors AIR 2008 SC 1209
• When the LSA Act refers to 'determination' by the Lok Adalat and
'award' by the Lok Adalat, the said Act does not contemplate nor
require an adjudicatory judicial determination, but a non-
adjudicatory determination based on a compromise or settlement,
arrived at by the parties, with guidance and assistance from the Lok
Adalat. The 'award' of the Lok Adalat does not mean any
independent verdict or opinion arrived at by any decision making
process. The making of the award is merely an administrative act of
incorporating the terms of settlement or compromise agreed by
parties in the presence of the Lok Adalat, in the form of an
executable order under the signature and seal of the Lok Adalat.
• = ADR Mechanisms should not overpower themselves
• =statutory conciliators and have no judicial role.

COURT LA/PLA
• Main forum of deciding disputes
• Decides case on merits & acco. to law
• No limitations on full fledged court
• Purely judicial body
• Strictly follows procedural laws
• Consists of judicial officers/law experts to
determine disputes
• Supplementary to court system
• Conciliatory settlement of disputes/serious
attempt for settlement /compromise
• No jurisdiction to an offence which is not
compoundable under any law
• Role of judges= cociliators
• Nature-Quasi judicial body
• Not bound by procedural laws
• Can specify its own procedure
• PNJ ,fair play & equity
• May not involve law experts alone
• Under the civil procedure law no appeal shall
lie from a decree passed on consent of the
parties. S.96(3)
• Act reads-"no appeal shall lie to any court
against the award" of ordinary Lok Adalat
envisaged in Chapter VI of the Act. Intention-
finality of the proceedings since the matters
were to be settled on a compromise basis.
• Appeal is possible against an award of PLA in
terms of Section 96(1) of the Code of Civil
Procedure, when it is not specifically barred
by the Legal Services Authorities Act, 1987
and as the award has all the attributes of a
decree of a civil court.

Challenges ahead
• IPR
• CYBER CRIMES
• MONEY LAUNDERING
• COMPETITION
• TELECOM
• TAXATION
• INT. ARBITRATION

LEGAL JUSTIFICATIONS
• Industrial Disputes Act, 1947
• Hindu Marriage Act, 1955
• Family Court Act, 1984
• CPC
• Order 23 Rule 3
• Order 27 Rule 5B
• Order 32A
• S.89-2002 Amd.
• Gram Nyayalaya Act,2008

CPC & ADR
• O 23 R 3 -mandate to the Court to record a lawful
adjustment or compromise and pass a decree in term of
such compromise or adjustment.
• O 27 R 5B confers a duty on court in suit against the
government or a public officer to assist in arriving at a
settlement.
• O 32A of CPC lays down the provision relating to “suits
relating to matter concerning the family”. (guardianship,
custody of minor, maintenance, wills, succession, etc.,)
• R 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. (WELFARE EXPERTS)

Section 89 & Rules 1-A to 1-C in O X
-2002 Amd.to CPC (129 th Law Commission Report,1988-
Order XXVII Rule 5B )
OBJECTIVE-
ADR process was resorted to before
the commencement of trial in suits.
Salem Advocate Bar Association v.
Union of India I & II

THE LAW IN PLACE
• 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 courtmay 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.
• Where a dispute had been referred-
(a) for arbitration (adj) or conciliation (non-adj) -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, (non-adj) 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 (non-adj), 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, (non-adj) the court shall effect a compromise between the parties and shall
follow such procedure as may be prescribed.
• = Jurisdiction of the court to refer a dispute to ADR process

Rules 1A, 1B & 1C of O X CPC
“1A Direction of the Court to opt for any one mode of alternative dispute
resolution.—
After recording the admissions and denials, the court shall direct the parties
to suit to opt either mode of the settlement outside the court as specified in sub-section
(1) of section 89. On the option of the parties, the court shall fix the date of appearance
before such forum or authority as may be opted by the parties.”
“1B. Appearance before the conciliatory forum or authority.–
where a suit is referred under rule 1A, the parties shall appear before such forum or authority
for conciliation of
the suit.”
“1C. Appearance before the Court consequent to the failure of efforts of
conciliation.-
Where a suit is referred under rule 1A and the forum or authority to whom the matter has
been referred is satisfied that it would not be proper in the interest of justice to proceed with
the matter further, then it shall refer the matter again to the court and direct the parties to
appear before the court on the date fixed by it.”
= Manner in which jurisdiction is to be exercised by court

S.16-Court-fees Act, 1870
• Refund of fee.-
• Where the section refers the parties to the suit to any one
of the mode of settlement of
• dispute referred to in section 89 of the Code of Civil
Procedure, 1908,(ON MERE REFERENCE) the plaintiff shall
• be entitled to a certificate from the court authorizing him
to receive back from the
• collector, the full amount of the fee paid in respect of such
plaint.”
• ANOMALY WITH LSA ? = ABUSE BY PLAINTIFF
• ……and as a result thereof a compromise or settlement
has been arrived at between the parties…….?

Afcons Infrastructure Ltd. and Anr. V. Cherian
Varkey Construction Co. Pvt. Ltd. and Ors.,
(2010) 8 SCC 24
S.89-“a trial judge’s nightmare”.
Procedure to be followed by a court in implementing
section 89 and Order 10 Rule 1A of the Code.
Exercising Judicial Procedure under Section 89 of the CPC-
( preferences of parties, procedure , Adj & non adj
processes)
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.
(CONSENT)

Afcons Infrastructure Ltd. Vs. Cherian
Varkey Consturction Co. (P) Ltd.
• In the case of arbitration,
• if there is no pre-existing arbitration agreement, the parties to suit
can agree for arbitration by filing a joint memo or application and
the court can then refer the matter to arbitration and such
arbitration will be governed by the provisions of the AC Act.
• The award of the arbitrators is binding on the parties and is
enforceable as if it is a decree of the court, in view of what has
been said in section 36 of the AC Act.
• If any settlement is reached in the arbitration proceedings, then the
award passed by the arbitrator on the basis of such agreed terms
will have the same status and effect as any other arbitral award,
vide section 30 of the AC Act.
• The reference to arbitration or conciliation is only possible if there
is consent of the parties. In the absence of consent, the court
cannot on its own refer the parties to arbitration or conciliation

• Anomaly-
• final stage of conciliation referred to in section 73(1) of
the AC Act into the pre-ADR reference stage under
section 89 of the Code.
• …. When it appears to the conciliator that there Where
it appears to the Court that there exist elements of a
settlement which may exist elements of a settlement
which may be acceptable to the parties, he shall be
acceptable to the parties, the Court shall formulate the
terms of a possible settlement formulate the terms of
settlement and give and submit them to the parties for
their them to the parties for their observations .

Reconciling the provisions &
understandings
*“where it appears to the court that there exist elements
of a settlement”
** Ans=inclusion &exclusion of cases for reference
*Que: Why the courts should be burdened with the onerous and virtually
impossible, but redundant, task of formulating the terms of settlement at
pre-reference stage?”
**Ans: Salem Advocates Bar Association vs. UOI-“terms of settlement” =
“summary of disputes
*Que: “How Section 89 should be interpreted”
**Ans: “Section 89 has to be read with Rule 1-A of Order 10
= the court to consider and record the nature of the
dispute, (in a sentence or two) inform the parties about five options available
and take note of their preferences and then refer them to one of the
alternative dispute resolution processes.”
*Que: “judicial settlement” and “mediation”?
**Ans: interchange the words used in S.89 (c )&(d)

Unsuitable Suitable
• Representative suits under Order I Rule 8
CPC which involve public interest or
interest of numerous persons who are not
parties before the court.
• Disputes relating to election to public
offices.
• Cases involving grant of authority by the
court after enquiry, as for example, suits
for grant of probate or letters of
administration.
• Cases involving serious and specific
allegations of fraud, fabrication of
documents, forgery, impersonation,
coercion, etc.
• Cases requiring protection of courts, as
for example, claims against minors, deities
and mentally challenged and suits for
declaration of title against the
Government.
• Cases involving prosecution for criminal
offences.
• trade, commerce and contracts, including
• disputes arising out of contracts(including all money
suits);
• disputes relating to specific performance;
• -disputes between suppliers and customers;
• disputes between bankers and customers;
• disputes between developers/builders and customers;
• disputes between landlords and tenants/licensor and
licensees;
• disputes between insurer and insured
• disputes relating to matrimonial causes, maintenance,
custody of children;
• disputes relating to partition/division among family
members/coparceners/co-owners; and
• disputes relating to partnership among partners.
• disputes between neighbours ( relating to easementary
rights, encroachments, nuisance, etc.);
• disputes between employers and employees;
• disputes among members of
societies/associations/apartment owners' associations;
• claims for compensation in motor accidents/other
accidents
• disputes where a trader/supplier/manufacturer/service
provider is keen to maintain his
• business/professional reputation and credibility or
product popularity.

Arbitration conciliation
• is an adjudicatory process.
• by a chosen private forum-independent
proceeding before arbitral tribunal.
• parties should also be informed that the
cost of arbitration will have to be borne by
them.
• Only if both parties agree for arbitration,
and also agree upon the arbitrator, the
matter should be referred to arbitration.
• If no pre existing arbitration agreement-
mutual consent of parties is mandatory
for reference u/S.89
• Once a civil dispute is referred to
arbitration, the case will go outside the
stream of the court permanently and will
not come back to the court.
• Always ends with a decision
• Award-executable(S.36AC Act)
• if settlement reached-award passed on
such settlement is binding-executable
u/s.30 AC Act.
FOR REF-
• CONSENT OF PARTIES MANDATORY FOR
BOTH
• non-adjudicatory process-
• does not go out of the domain of the court-
process permanently.
• If the parties are not agreeable for arbitration,
the court should ascertain whether the parties
are agreeable for reference to conciliation which
will be governed by the provisions of the AC Act.
If all the parties agree for reference to
conciliation and agree upon the conciliator/s,
the court can refer the matter to conciliation in
accordance with section 64 of the AC Act.
• If there is no amicable settlement, the matter
reverts back to the court which has to proceed
with the trial after framing issues.
• When the matter is settled through
conciliation, the settlement agreement shall
have the same status and effect as if it is an
arbitral award (vide Section 74 of AC Act) and
therefore it is enforceable as a decree of the
court by virtue of S. 36 of the AC Act.

“Neither S 89 nor R 1-A of O 10 of the Code is intended to supersede or
modify the provisions of the Arbitration and Conciliation Act, 1996 or the Legal Services
Authorities Act, 1987.
• Arbitration and conciliation, will be governed by the provisions of the AC Act
• CONSENT IS MANDATORY
• consent of parties not mandatory - for other ADR processes
• Lok Adalat settlement – (easily sortable, which may be completed in a single
sitting, or cases relating to a matter where the legal principles are clearly settled
and there is no personal animosity between the parties (as in the case of motor
accident claims) will be governed by the Legal Services Authorities Act.
• Mediation…COMPLICATED&LENGTHY SUIT-(Model Mediation Rules 2003 in Part
II)will be governed by the Legal Services Authorities Act.
• Judicial settlement…if suggestion or guidance by judge is required-(compromise
entered by the parties with the assistance of the court adjudicating the matter or
another judge to whom the court had referred the dispute.)
• Section 89 makes it clear that it is not governed by any enactment and the section
will follow such procedure as may be prescribed (by appropriate rules).

Procedure u/S.89 to be followed
• Stage - pleadings are complete + before framing of issues-preliminary hg by court
• Exclusion & non exclusion considerations - If excluded-brief record of reasons-
framing-trial
• Inclusion cases-court to explain 5 ADR Processes-to exercise option
• Info. As to nuances of arbitration/conciliation-ORDER SHEET must reveal ref. is by
mutual consent.
• If ref. to other processes- say- nature of dispute & case deserves to be decided so.
• Formulation &reformulation =nature of dispute and decide upon ADR process
• In cases of judicial settlement –refer to another judge (prevent bias)
• Sequential order of preferences to be followed-cases –for want of consent
• If ref. fails- issues are framed - trial starts
• If referred (to other than arbitration)- keep track of processes-(to avoid delays)
• court not to send- original records
• If settlement-court will make decree in acco with O23 R3CPC
• If the settlement includes disputes which are not the subject matter of the suit
the court may direct that the same will be governed by Section 74 of the AC Act (if it
is a Conciliation Settlement) or Section 21 of the Legal Services Authorities Act, 1987
(if it is a settlement by a Lok Adalat or by mediation which is a deemed Lok Adalat).
If any term of the settlement is ex facie illegal or unforceable, the court should draw
the attention of parties thereto to avoid further litigations and disputes about
executability.

PROCEDURE CONTEMPLATED
• “…Know the dispute;
• exclude unfit cases;
• ascertain consent for arbitration or
conciliation;
if there is no consent, select Lok Adalat for
simple cases and mediation for all other cases,
reserving reference to Judge–assisted
settlement only in exceptional or special cases.”

VOLUNTARY ARBITRATION
• Sd.10(1)
• Where any industrial dispute exists or is apprehended and
the employer and the workman (parties) agree to refer the
dispute to arbitration,
• they may, at any time before the dispute has been referred
under section 10 to a Labour Court or Tribunal or National
Tribunal by a written agreement,
• refer the dispute to arbitration and the reference shall be
to such person or persons (including the presiding officer of
a Labour Court or Tribunal, or National Tribunal) (selection)
• as an arbitrator or arbitrators as may be specified in the
arbitration agreement.

FORMAT & PUBLICATION OF
AGREEMENT
• (1A) Where an arbitration agreement provides for a reference of
the dispute to an even number of arbitrators the agreement shall
provide for the appointment of another person as umpire who shall
enter upon the reference, if the arbitrators are equally divided in
their opinion, and the award of the umpire shall prevail and shall be
deemed to be the arbitration award for the purposes of this Act.
• (2) An arbitration agreement referred to in sub-section (1) shall be
in such form and shall be signed by the parties thereto in such
manner as may be prescribed.(consent of arbitrator)
• (3) A copy of the arbitration agreement shall be forwarded to the
appropriate government and the conciliation officer and the
appropriate government shall, within one month from the date of
the receipt of such copy, publish the same in the Official Gazette.
• Karnal Leather Karamchari Sangathan v. Liberty Footwear Co.-
significance of publication-mandatory

• (3A) Where an industrial dispute has been referred to arbitration
and the appropriate government is satisfied that the persons
making the reference represent the majority of each party, the
appropriate government may, within the time referred to in sub-
section (3), issue a notification in such manner as maybe
prescribed;
• and when any such notification is issued, the employers and
workmen who are not parties to the arbitration agreement but are
concerned in the dispute, shall be given an opportunity of
presenting their case before the arbitrator or arbitrators.]
• (4) The arbitrator or arbitrators shall investigate the dispute (on
satisfaction of mandates of S.10(A))and submit to the appropriate
government the arbitration award signed by the arbitrator or all
the arbitrators, as the case may be.

• (4A) Where an industrial dispute has been
referred to arbitration and a notification has been
issued under sub-section (3A), the appropriate
government may, by order, prohibit the
continuance of any strike or lock-out in
connection with such dispute which maybe in
existence on the date of the reference.]
• (5) Nothing in the Arbitration Act, 1940 (10 of
1940), shall apply to arbitrations under this
section.

Role-“statutory arbitrator”
• Engineering Mazdoor Sabha v. Hind Cycles Ltd.
• Powers,
• procedure,
• Validity and binding nature of awards
• Jurisdiction
• Source of power- agreement
• Nature of dispute –all ind. Disputes referred

S.20 COMMENCEMENT&CONCLUSION
OF PROCEEDINGS
• Proceedings before an arbitrator under
section 10A or before a Labour Court, Tribunal
or National Tribunal] shall be deemed to have
commenced on the date of the reference of
the dispute for arbitration or adjudication, as
the case maybe, and such proceedings shall be
deemed to have concluded on the date on
which the award becomes enforceable under
section 17A

ENFORCEABILITY OF AWARD
• S.17A
• An award (including an arbitration award) shall become enforceable on the expiry
of thirty days from the date of its publication under section 17
Award binding on (S.18)
• A settlement arrived at in the course of conciliation proceedings under this Act or
an arbitration award in a case where a notification has been issued under sub-
section (3A) of section 10A or an award of a Labour Court, Tribunal or National
Tribunal] which has become enforceable] shall be binding on-
• (a) all parties to the industrial dispute;
• (b) all other parties summoned to appear in the proceedings as parties to the
dispute, unless the Board, arbitrator, labour Court, Tribunal or National Tribunal, as
the case may be, records the opinion that they were so summoned without proper
cause;
• (c) where a party referred to in clause (a) or clause (b) is an employer, his heirs,
successors or assigns in respect of the establishment to which the dispute relates;
• (d)where a party referred to in clause (a) or clause (b) is composed of workmen, all
persons who were employed in the establishment or part of the establishment., as
the case may be, to which the dispute relates on the date of the dispute and all
persons who subsequently become employed in that establishment or part.

Kathayee Cotton Mills Ltd. v.
Distt.Labour Officer
• Not forwarding agreement &NON Publication
of agreement
• Effect
• Arbitral award is inoperative
• Conduct of arbitrator
• Air Corporation Employees Union v. D.Y. Vyas

• S.21 confidentiality in reports
• S.30Breach FOR UNLAWFUL DISCLOSURE-penalty
• S.29-breach of an y terms of award-penalty
• S.33C application-recovery on money due by an
employer to workman
• The process in toto
• Agreement between parties-Arbitration agreement-
sent to app. Govt. & conciliation officer-publication-
reference-notification-proceedings-Award-sent to
app. govt.-publication-enforceability

JUDICIAL REVIEW?
• Engineering Mazdoor Sabha v. Hind Cycles Ltd.
• Statutory arbitrator,A.226// A.136
• Gujarat Steel Tubes Ltd. V. Gujarat Steel Tubes Mazdoor Sabha –
• quasi -judicial procedure, statutory tribunals amenable to judicial
review, powers u/S.11A
• Rajender Kumar Kindra v. Delhi Administration-
-reappraisal of evidence-S.11 A
INSTANCES-
• FINDINGS BASED ON NO EVIDENCE
• NON APPLICATION OF MIND
• Rohtas Industries v. Rohtas Industries Staff Union(1976)-settled
position

UNDERSTANDING
Conflict & dispute
“A compromise is the art of dividing a cake in such a
way that everyone believes that he has got the
biggest piece.”
But what if someone wants the whole cake?
Task
management of what can be very confrontational situations
Strategy
getting everyone involved to focus on negotiating agreement.

Why conflicts/disputes occur
• People differ, so they:
• · see things differently
· want different things
· have different thinking styles, which prompts them to
disagree
· are predisposed to disagree
· have different personalities
· have different status
· have ideological and philosophical differences
· have different goals
· have different approaches
· are influenced by fear, force, fairness or funds

Burton’s views
• Dispute-
• short-term disagreements that are relatively
easy to resolve.
• Conflict-
• Long-term, deep-rooted problems that involve
seemingly non-negotiable issues and are
resistant to resolution-
• egs:values, and fundamental human needs.

Traditional theory x Contemporary
theory
• conflicts are caused by trouble-makers
are bad-should be avoided or suppressed
• conflicts are inevitable between human
beings-often beneficial-conflicts are the
natural result of change- conflicts can and
should be managed
COMPETING
COLLABORATING
COMPROMISING
AVOIDING
ACCOMMODATING

Conflict
• Positive effects:
• Diffuses more serious
conflicts
-Stimulates a search for
new facts/resolutions
- Increases group
cohesion and
performance
- Demonstrates
measure of power or
ability
• Negative effects:
• Hinders smooth
working
Hampers the decision
making process
Causes the formation of
competing coalitions
Reduces productivity

Supporting/understanding people
people
• What do I really know about this person?
• Where does my knowledge come from?
- My own experience? Things other people have said? Rumors? Gossip?
My own prejudices
• What might be important to this person?
• What is something this person needs?
• What is something this person might like?
• What are some reasons this persons acts the way they do?
• What problems might this person have?
• What might this person be struggling with?
• What might this person be afraid of?
• What might his person wish he or she could do?

Controlling processes
• Managing emotions
What am I feeling?
Am I blaming them for my feelings?
Will telling them how I feel help the situation?
What do I want to change?
Have I removed the desire to punish them?
What can I do to handle my feelings?
• Willingness to Resolve
Do I really want to resolve the conflict?
What is the resentment caused to me?
something in my past that still hurts?
something I dislike in them because I won't accept it in myself?
• Win/Win
What is my real need here?
What is theirs?
Do I want it to work for both of us?
• Creative Response
What opportunities can the situation bring?
Rather than "how it's supposed to be".,,,, can I see possibilities of 'what it can be"?

Changing /solving for better
• Fight mode.....
• Aggressive Behavior..........I win/You lose
• Flight mode.....
• Passive Behavior .........I lose/ You win
• Flow Response……
• Assertive Behaviour.......I Win/ You Win.
• “When we change the way we communicate,
we change society” (Shirky, 2008, p. 17).

Conflict in workplace
-causes-
• poor management
• unfair treatment
• unclear job roles
•inadequate training
• poor
communications
• poor work
environment
•lack of equal
opportunities
• bullying and
harassment.
Needs
&expectations-
demand/interest
• a flexible work
routine
• a safe and
healthy working
environment
• personal
development and
training
• a fair rate of pay
Ignoring
common
values-
to give
someone a fair
hearing
•to explain the
reasoning
behind a
decision
•to be
impartial
•to hear an
appeal against
a
Decision
-Unresolved
problems from
the past
-Increase in
workload
-the
personalities
involved

How much do you involve your
employees?
‘This is what I’ve done’
• ‘This is what I’ve done/want to do –
• what do you think?’
• ‘What are the options and which one
do you think we should take?’
• ‘Let’s get together to discuss the
problem and see if we can agree
what we ought to do’
• ‘Can we reach a deal on what to do?’
• ‘This is the problem – you decide
what to do’
-Briefing
-Communication
-Consultation
-Joint problem-solving
-Negotiation
Empowerment

Healthy and unhealthy ways of managing and resolving conflict
Unhealthy responses to conflict: Healthy responses to conflict
An inability to recognize and respond to the
things that matter to the other person
The capacity to recognize and respond to the
things that matter to the other person
Explosive, angry, hurtful, and resentful
reactions
Calm, non-defensive, and respectful reactions
The withdrawal of love, resulting in rejection,
isolation, shaming, and fear of abandonment
A readiness to forgive and forget, and to move
past the conflict without holding resentments
or anger
An inability to compromise or see the other
person’s side
The ability to seek compromise and avoid
punishing
The fear and avoidance of conflict; the
expectation of bad outcomes
A belief that facing conflict head on is the best
thing for both sides

Addressing
Causes & strategy
• Information-
Agree on considering all interpretations of information
• Interests and Expectations-
Shift focus from positions to interests-expand options
• Relationships-
Clarify misconceptions-Improve communication-Focus on improving the
future, not dissecting the past
• Structural Conflicts-
Reallocate ownership and control-Establish fair, mutually acceptable decision-
making process
• Values-
Allow parties to agree and to disagree-Build common loyalty

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