Alternate Dispute Resolution for developing smart cities like Mangaluru

      - Prajval Albuquerque

Legal consultant and Trained Conciliator

Contact Lex Tweak via message: 8951343013 Or http://www.lextweak.com/contact-us

Introduction

Alternate Dispute Resolution or ADR is simply a procedure wherein people can resolve most non-criminal disputes, before being adjudicated “Judged” in a court of law.

Virtually, all disputes can be settled by ADR Methods. 

Some of the Disputes which can be resolved by Alternate Dispute Resolution are:

1. Contract disputes, 
2. Employer-employee disputes, 
3. Property disputes including partition disputes,
4. Family and matrimonial disputes,
5. Business and debt payment disputes, 

As a general rule, matters involving criminal Offences or questions of public law cannot be resolved by ADR.

The ADR stages are as follows: Negotiation → Mediation → Conciliation → Arbitration. There is no hard and fast rule that all these steps should be followed to resolve a dispute. It all depends upon the Parties involved and the nature of the dispute. Later in the article, you get to read about these in detail.

Why Alternate Dispute Resolution (ADR) is ideal for Mangaluru?

• High number of pending cases: 

As per Law Minister Kiren Rijiju, there are 4,10,47,976 cases are pending in the various district and subordinate courts in India[1]. As per a survey conducted by a research agency called Daksh way back in 2016[2], on an average; “If you have a case in any of the subordinate courts in the country, the average time in which a decision is likely to be made is nearly six years (2,184 days). Even assuming that a case does not go to the Supreme Court an average litigant who appeals to at least one higher court is likely to spend more than 10 years in court. If your case does go to the Supreme Court, the average time increases by at least three more years.”

• Lack of High Court: 

Mangaluru comes under the jurisdiction of the Bengaluru Bench of Karnataka High Court, so every time a judgment is appealed, the parties will have to travel all the way up to Bengaluru, hire lawyers, spend on boarding and lodging apart from all other expenses.

• Good for business:

1. The average time required to solve a dispute is three months.
2. The maximum time in exceptional cases is Five years. The duration is based on a reading of Section 29A of the Arbitration and Conciliation Act along with https://economictimes.indiatimes.com/news/india/over-4-70-crore-cases-pending-in-various-courts-govt/articleshow/90447554.cms] (which includes challenging an Arbitrator’s award before a High Court) as compared to Ten Years in Litigation.
3. Cost-effective and saves time because the meetings/hearings/sessions are limited and can be held at a mutually agreed place. The relationship between parties is not affected. 

• Building Relationships: 

Even today people of Mangaluru lay great emphasis on maintaining relationships. In ADR there is no form of judgment involved, it is all consensual (Arbitration is an exception). Hence a cordial relationship is maintained between the parties after the dispute has been resolved. So let it be a matrimonial dispute or a business relationship. After the dispute has been resolved via ADR ideally there are no hard feelings because the problem has been resolved quickly and with the consensus of both the parties.

• Smart City Dreams: 

Mangaluru is on the verge of becoming a smart city and soon many new Industries and Companies will be coming to Mangaluru. These huge companies believe in a quick and effective resolution of disputes and will have an ADR agreement and procedure in place. The Party’s lack of knowledge and initiative regarding ADR will restrict their opportunities of doing business with these MNCs and Corporations. 

How can Lex Tweak help you:

1. We evaluate your case to determine whether ADR or Litigation is the best alternative.
2. Negotiate and incorporate ADR agreement in commercial contracts.
3. We conduct Mediation and Conciliation proceedings between the Parties. We draft a settlement agreement after a Mediation or Conciliation.
4. We draft your contracts, with a focus on incorporating ADR clauses in them. This makes it difficult for the parties to approach court and delay proceedings, as and when disputes arise in the future.
5. The one lesson that COVID has taught us is that “Going digital is the future”. The ADR services can be availed from any part of India, right from the comfort of your home or office. The draft final settlement agreement will be mailed or emailed to your address.

Why Lex Tweak?

1. The founder has completed Mediation Workshops organized by Catherine Davidson Mediation Services[3], and Peacekeeping And Conflict Resolution Team[4].
2. The founder has completed ADR Method Workshops organized by ILSCA[5] and IALS.
3. Most advocates who practice ADR lack in-depth knowledge of ADR Methodology because it is a part of pre-litigation, which is not taught in Indian Law Schools.
4. The founder besides appearing in courts of India and assisting in Arbitration Proceedings has over two years of experience in providing pre-litigation support to US-based Attorneys [6].
5. We are one of the few law firms which provide pan India virtual consultation and virtual conciliation services.
6. Since Lex Tweak is in its initial stages we take up a lot of work for free of cost or at a nominal cost.
7. Click on the below link to know more about how we can assist you with all your legal needs: http://www.lextweak.com/legal-services
8. You can read all our articles here: http://www.lextweak.com/articles

What is Alternate Dispute Resolution (ADR):

Alternative Dispute Resolution refers to all those methods of resolving a dispute, which are alternatives for litigation in the Courts. ADR intends to resolve disputes that do not involve the state as a party. In general, all civil disputes can be resolved by ADR.

Primarily ADR can be divided into three major types 1) Lok Adalat 2) Statutory 3) Commercial (This is not a legal classification but is just made for the sake of convenience). A major advantage of ADR is “flexibility”. The legal provision of ADR originates from Section 89 and Order X. Rule 1 of The Code of Civil Procedure, Arbitration and Conciliation Act 1996, Amended in 2019, and The Legal Services Authorities Act 1987.

• Lok Adalat:

The Lok Adalats are governed by the Legal Services Authority Act 1987 (LSA) to provide a quick and effective remedy to weaker sections of society. It is conducted for mass disposition of non-criminal cases and where there is a scope for an amicable resolution of disputes. Lok Adalat can make an award only when the parties arrive at a compromise or settlement but this settlement has no binding value, to solve this problem LSA was amended in the year 2002 to incorporate Permanent Lok Adalat. The major difference between Lok Adalat and Permanent Lok Adalat is that the designated authorities appointed as per LSA in Permanent Lok Adalat can pass an award. An award is similar to a decree of a Court, legally there is a lot of difference between the two terms. The major advantage of an award passed by Permanent Lok Adalat is that it has binding value and is enforceable.

• Statutory:

It is a mandatory and compulsory ADR mechanism imposed on the parties to dispute by the courts. Parties have to abide by the law of the land and the parties are not allowed to skip this ADR mechanism, consent of parties is also not required. If the parties don’t abide by the decision of the court, strict actions can be taken against them.

• Commercial ADR:

The parties of their own choice can opt for ADR i.e. Negotiation, Mediation, Conciliation, or Arbitration to resolve their disputes. The services provided by Lex Tweak come under this head. Virtually, all disputes can be settled by Arbitration, including contract disputes involving businesses and consumers, employment claims, and real estate and construction disputes. As a general rule, matters involving criminal offences or questions of public law cannot be resolved by Arbitration. For instance, the following matters cannot be referred for Arbitration:

1. Insolvency matters, like declaring a person as insolvent;
2. Criminal offences;
3. Dissolution or winding up of a company;
4. Disputes relating to age.

ADR/ Arbitration Clause in Commercial Contracts

As per the Arbitration and Conciliation Act, the ADR clause is not a mandatory provision of a contract. This agreement or clause is generally inserted to prevent a situation wherein one of the parties to the dispute refuses to participate in ADR. In the absence of any ADR Clause or Arbitration Agreement if all the parties agree to refer the matter to ADR including Arbitration then it is permitted.

The Arbitration Agreement must be drafted very accurately and precisely some of the questions which the Agreement must answer are:

1. What matters may be referred for an Arbitration?
2. Which law shall be applicable to govern the proceeding?
3. What is the number of Arbitrators to be appointed?
4. Who and How shall they be appointed? What should their Qualification be? Etc.
5. What shall be the seat and venue of Arbitration? 

Stages of Alternate Dispute Resolution:

• Negotiation:

Negotiation means where the parties are aware that a dispute exists and they amicably wish to resolve a dispute by a friendly discussion. In a formal negotiation both parties generally employee a team of two people to represent them; 1. An expert on the matter in dispute. Ex. An Architect, in a construction dispute for the purpose of negotiation. 2. An Advocate, so as to negotiate on the legal terms. If both parties agree on amicable terms to settle the dispute is resolved. It must be noted that unless a new contract is drafted as per the negotiated terms there.

 

• Mediation:

In a contract generally one of the parties is a dominating party i.e. who is in a position to dictate terms in a contract. This dominant position is generally acquired due to the financial dominance or monopoly over a resource enjoyed by the party. When a dispute arises and the parties agree to negotiate on the dispute. Here too the dominating party tries to assert its dominance so as to convince the other party to abide by its maximum terms. The consequence is the submissive party feels that this is injustice and drags the matter to court, thus defeating the very purpose of ADR. To avoid this situation mediation comes into the picture.

 The mediator acts as a referee and overlooks so that the negotiation does not turn into a quarrel or that one party does not try to assert its terms on others. The mediator also uses tools like mirroring, counseling, time-out strategy, etc. to help the parties come to a consensus. Based on what the parties agree upon the mediator then drafts an agreement, which is then signed by both the parties. As of today, there is no law with regards to mediation however a bill has been drafted and soon we will have a law regarding the same[7]

 

• Conciliation:

Conciliation is similar to Mediation except:

1. The third person appointed is called the conciliator.
2. The Conciliation proceeding is governed by The Arbitration and Conciliation Act 1996 (Amended 2019).
3. The Mediator only acts as a referee but the Conciliator also performs certain other functions like:

• He after listening to both parties may suggest any other feasible alternative solution that both the parties may oblige to.
• He also conducts private sessions with each party so as to make them aware of the merits and demerits of claims made during the dispute. However, he must take care that he must not disclose the information to the other party with regards to what happened in the private session without the consent of the party who disclosed any information in the private session. 
• As per Section 74 of the Arbitration and Conciliation Act. The settlement agreement is similar to an Award under Section 30 (4) read with Section 34 of the same Act, and the scope for challenging it is very limited.

• Arbitration:

For a common man’s understanding, Arbitration is just like a court proceeding except:

1. The parties appoint the Judge who is called an ‘Arbitrator’ and is generally an expert on the matter with regards to the dispute (He need not be a person related to the legal profession). This is known as ad-hoc Arbitration. The other form of Arbitration is known as institutional Arbitration. In this form of Arbitration, the parties appoint an institute to conduct the Arbitration. The institute then appoints an arbitrator or arbitrators from its panel. The institute also arranges for the venue and other services like collecting evidence, sending notices, etc. For this, the institute charges fees.  Besides these, there are other forms of Arbitration too like Fast Track Arbitration, Med-Arb, etc. Let’s keep that for some other post.
2. The Act grants the parties to mutually agree on procedural rules to be followed by the arbitral tribunal in conducting the proceedings. When Parties opt for institutional Arbitration the institute may have its own procedures which the parties will have to agree to, before the commencement of the proceeding.
3. Parties have the freedom to choose the place for the arbitration proceedings as per their convenience.
4. The judgment passed by an Arbitrator is called an award and for its enforcement, the court need not be approached unless the other party objects to its enforcement. Then such objection may be raised in Court. However, the Arbitration and Conciliation Act 1996 (Amendment 2015) provides fixed grounds for challenging an award. Generally, the court does not entertain any appeal against the Award. 
5. Under normal circumstances depending upon the amount in dispute a case could be filed before Court of Small Causes or Senior Civil Judge but an award can be challenged before a High Court [Read:Executive Engineer, Road Development Division No.III, Panvel & Anr. v Atlanta Limited.] Thus parties save all the time spent litigating in lower courts. 
6. Arbitration is very similar to a Court proceeding, the biggest advantage of Arbitration has come into the picture after the Amendment of 2015 to the Arbitration and Conciliation Act 1996 as it has made it mandatory for the Arbitrator to pass a final Award within 12 months from the date of the beginning of Arbitration proceeding unless exceptional circumstances exist. Thus where court proceedings may go on for years. Here normally the dispute is resolved within a period of 12 months.