UTILISE ADR MECHANISM TO THE
POSSIBLE EXTENT–FOR REDUCTION OF PENDING CASES AND LITIGATIONS
By Dr TPadma.,
I Introduction
Despite an increased disposal rate of cases, the apex court failed to reduce the pendency as it could not cope with the rising number of cases filed every year. The dockets swelled and the pendency by January 2008 was within striking distance of the 50,000-mark, standing at 46,926. By January 2009, pendency rose to 49,819, before finally breaching the 50,000-mark in March.
A
similar trend was seen at the level of high courts and trial courts. The 21
high courts, working with a strength of 635 judges as against a sanctioned
strength of 886, reported a pendency of 38.7 lakh cases as of January 1, 2009,
against 37.4 lakh cases on January 1, 2008.
Trial courts, having a judge strength of 13,556
against a sanctioned strength of 16,685, were burdened with an additional
pendency of nearly 10 lakh cases by January 2009, when the pendency figure was
2.64 crore. It stood at 2.54 crore cases in January 2008[1]
The
huge backlog of cases and the interminable delays in adjudication of cases has
come to assume critical proportions in Indian Judicial System. Apart from an
infrastructural mismatch, the lower judge strength of around 10.5 per a million
population is broadly considered an endemic cause for this problem. In All India Judges’ Association & Ors.
V. Union of India & Ors[2].
the Supreme Court analyzed the reasons underlying the huge backlog of cases and
observed that additional posts of judicial officers and the complementary
infrastructure would have to be created and directed that an increase in the
judge strength to achieve the level of 50 judges per a million population should
be implemented in a phased manner and within a period of five years from the
date of judgment apart from taking expeditious steps for filling up existing vacancies.
Globalization has been
a great stimulation in the process of integration of economies and societies of different countries across the
globe. It has been a great tool for breaking
economic barrier and envisioning world as a market for trade. In the
modern techniques of dispute resolution of commercial conflicts, emphasis has
drifted from litigation to arbitration.
As things are never static, emphasis
is further sliding from
arbitration to alternate dispute resolution procedures. Mediation or conciliation is one of the most
important procedures of ADR (Alternate
Dispute Resolution). Regulation of
arbitration laws by conciliation or mediation is a novelty of the modern
arbitration law. The drift from arbitration towards conciliation started with
the appearance of conciliation
legislation, which of late has been
increasingly attracting the
attention of the international business community. Conciliation may play a
pivotal role, particularly in settling
commercial disputes. It is more economic convenient, speedy, and less
formal mode of dispute resolution.
There is no fixed form of ADR. There may be
many variants of the ADR themes. However
basically, ADR comprises of the
following five elements.
i)
The parties must be willing to seek informal resolution and
they must trust the intermediary and the procedure, however they are
free to walk away at any time.
ii)
There is no fixed procedure and there are no rules of
disclosures of documents and anything which is said or produced is on a
“without” prejudice” basis and cannot
be relied upon should there be
later judicial or arbitral proceedings.
iii)
The entire process is very
speedy and comparatively cheap;
iv)
The intermediary has no power to produce a binding result;
and indeed his intervention in pronouncing a recommendation may be unwelcome.
v)
The purpose of the procedure is to produce a compromise
result under which neither party loses face (win-win) and which gets away from the remedies open to a court.
III. Judicial approach to ADR
The only field where the Courts in India have recognized ADR is in the field of
arbitration. The arbitration was
originally governed by the provisions of the Indian Arbitration Act, 1940. The Courts were very much concerned over the
supervision of Arbitral Tribunals and they were very keen to see whether the
arbitrator has exceeded his jurisdiction while deciding the issue, which has
been referred to him for arbitration.
The scope of Interference of the award
passed by an arbitration was dealt with by the Apex Court in the decision
reported in Food corporation of India Vs.
Jogindarial Mohindarpal[3]
as follows: “Arbitration as a mode for
settlement of disputes between the parties has a tradition in India. It has a social purpose to fulfill
today. It has a great urgency today when
there has been an explosion of litigation in the Courts of law established by
the sovereign power. However in proceedings
of arbitration, there must be adherence to justice, equality of law and fair
play in action. The proceedings of
arbitration must adhere to the principles of natural justice and must be in
consonance with such practice and procedure, which will lead to a proper
resolution of the dispute and create confidence of the people, for whose
benefit these procedures are resorted to.
It is therefore, the function of the Court of law to oversee that the
arbitrator acts within the norms of justice.
Once they do so and the award is clear, just and fair, compel to adhere
and obey the decision of their chosen adjudicator. It is in this perspective that one should
view the scope and limit of corrections by the Court on an award made by the
arbitrator. The law of arbitration must
be made simple, less technical and more responsible to the actual realities of
the situation but must be responsible to the canon of justice and fair
play. The arbitrator should be made to
adhere to such process and norms which will create confidence not only doing
justice between parties but by creating a sense that justice appears to have
been done”.
The Courts were anxious to see whether there was any
jurisdiction to the arbitrator to decide
such dispute or not while interpreting the arbitration clause in the
agreement. The power to decide such
dispute or not while interpreting the arbitration clause in the agreement. The power to decide the jurisdiction of the
arbitrator to decide a particular issue or not was vested with the Law
Courts. There was much delay in
settlement of disputes between the parties in law Courts which prevented
investment of money in India by other countries. Further there was no provision in the Indian
Arbitration Act 1940 to resolve a dispute between an Indian and a non-Indian as
the law-relating contract between the parties were different which caused
difficulties to refer such matter for arbitration. In order to avoid such a difficulty, India
has undertaken major reforms in its arbitration law in the recent year as part
of economic reforms Initially in 1991.
simultaneously many steps have been taken to bring judicial reforms in
the country, the thrust being on the minimization of Courts intervention in the
arbitration process by adoption of the United Nations Commission on
International trade Law (UNCITRAL). With this in mind, the Government has given
birth to a new legislation called. “The
Arbitration and conciliation Act 1996”.
There are distinctive features in this Act compared to 1940 Act. India judiciary has played a substantial role
in up gradation of ADR mechanism. The
Apex court has recognized the alternate forum in its various decisions. In
Guru Nanak Foundation V. Rattan &
Sons[4]
Court observed that “Interminable, time consuming, complex and expensive court
procedures impelled jurists to search for an alternative forum, less formal,
more effective and speedy for resolution of disputes avoiding procedure
claptrap”. The realization of concepts like speedy trial and free legal aid by
apex Court in various cases has also helped in the up gradation of Alternate
dispute redressal mechanism.
Another major
step in the growth of ADR services in India is the establishment of (1) Indian Institute of Arbitration and
mediation (IIAM) (2) Indian council for Arbitration (ICA) and (3) International Centre for
Alternate Dispute Resolution (ICADR) for alternate dispute resolution. These
institutions provide services of negotiation, mediation, conciliation,
arbitration, settlement conferences etc.
They also help in finding lacunae in existing ADR laws and recommended
reforms to overcome them.
IV.
Global perspective
The history of Alternate dispute resolution
forum at international level can be traced back from the period of Renaissance,
when Catholic popes acted as arbitrators in conflicts between European
countries. One of the successful examples of the said mechanism is the
international mediation conducted by former U.S. President Jimmy Carter in
Bosnia. ADR has given fruitful results not only in international political
arena but also in International business world in setting commercial disputes
among many corporate houses for e.g. settlement of a long standing commercial
dispute between General Motors Co. and Johnson Matthey Inc., which was pending
in US district court since past few years. The biggest stepping stone in the
field of International ADR is the adoption of UNCITRAL (United Nation
Commission on International Trade Law) model on International commercial
arbitration. An important feature of the said model is that it has harmonized
the concept of arbitration and conciliation in order to designate it for
universal application. General Assembly
of UN also recommended its member countries to adopt this model in view to have
uniform laws for ADR mechanism. Other important international conventions on
arbitration are: (1) The Geneva Protocol on Arbitration clauses of 1923. (2)
The Geneva convention on the execution of foreign arbitral Award, 1927 (3) The
New York convention of 1958 on the recognition and enforcement of Foreign
Arbitral Award.
V. Online
Dispute Resolution
Online dispute resolution (ODR) is a branch of dispute resolution
which uses technology to facilitate the resolution of disputes between parties.
It primarily involves negotiation, mediation or arbitration, or a combination
of all three. Online dispute resolution (“ODR”) is conceived as a means to
achieve some of the most powerful legal ideals of the Western legal tradition,
which include:
(1) Legal Certainty:
In making individual plans,
decisions, and choices everyone is entitled to know what the law is in advance.
(2) Access
to Justice:
Everyone involved in a dispute
shall be entitled to an easily accessible redress mechanism that provides for a
timely resolution and effective remedies at reasonable cost.
ODR is concerned with the civilized
(i.e. peaceful) resolution of disputes between private parties, and, secondly,
with the prevention of such conflicts through the provision of legal certainty.
National legal systems fulfill the former function by offering plaintiffs to
litigate disputes before state courts which exercise mandatory jurisdiction
over defendants, and the latter by making the litigation process public, thus allowing
for the proliferation of precedent, as well as by the enactment of
codifications of rules of law.
Regarding the dispute resolution
function of private law, there are a variety of functional equivalents to
litigation available, which are collectively referred to as alternative dispute
resolution (ADR). On the one hand ODR relates to the resolution of disputes
that result from online conduct, i.e. from communications and transactions
which come about through the use of the Internet Domain name disputes are a
prominent example as are disputes related to e-commerce. On the other hand, ODR
relates to the use of online communication technology in the resolution
process, even if the dispute itself has an offline origin. The provision of
alternative dispute resolution (ADR) services on the Internet has become quite
popular[5]. Online
dispute resolution (ODR) in India is in its infancy stage and it is gaining
prominence day by day. With the enactment of Information Technology Act,
2000, e-commerce and e-governance have been given a formal and legal
recognition.[6]
VI.
Indian Scenario
In India Part III of Arbitration and Conciliation
Act, 1996 provides for International
Commercial Arbitration.
In common parlance, there is some
difference between conciliation and mediation. This is evident from these two
statutes of the parliament. (i) In the year 1996, the Arbitration and Conciliation Act, 1996 was passed and sec.30 of that Act, provides that an
arbitral tribunal may try to have
the dispute settled by use of
‘mediation’ or conciliation’ and sub-section (1) of sec.30 permits the
arbitral tribunal to “use mediation, conciliation or other procedures”, for the purpose of reaching settlement (ii)
The Civil Procedure Code (Amendment) Act, 1999 which introduced sec.89, too speaks of conciliation and
mediation as different concepts. Order 10 Rules 1A, 1B,1C of the Code
also go along with sec.89.
A. Conciliation
In order to understand
what Parliament meant by ‘Conciliation, we have necessarily to refer to the
functions of a ‘conciliator’ as
visualized by part III of the
`1996 Act. It is true, sec.62
of the said Act deals with
reference to conciliation by agreement of parties but sec.89 permits the court to refer a dispute
for conciliation even where parties do not consent, provided the Court
thinks that the case is one fit for
conciliation. This makes no
difference as to the meaning of ‘conciliation under sec.89 because, it says
that once a reference is made to a ‘conciliator’ the 1996 Act would apply. Thus
the meaning of ‘conciliation’ as can be gathered from the 1996 Act has to be
read into sec. 89 of the Code of Civil Procedure. The 1996 Act is, it may be
noted, based on the UNCITRAL Rules for conciliation.
Now under
section 65 of the 1996 Act, the ‘conciliator’ may request each party to submit
to him a brief written statement describing the “general nature of the dispute
and the points at issue”. He can ask for supplementary statements and
documents. Section 67 describes the role of a conciliator. Subsection (1)
states that he shall assist parties in an independent and impartial manner.
Subsection (2) states that he shall be guided by principles of objectivity,
fairness and justice, giving consideration, among other things, to the rights
and obligations of the parties, the usages of the trade concerned and the
circumstances surrounding the dispute, including any previous business
practices between the parties. Subsection (3) states that he shall take into
account “the circumstances of the case, the wishes the parties may express,
including a request for oral statements”. Subsection (4) is important and
permits the ‘conciliator’ to make proposals for a settlement. It states as follows:
“Section
67(4). The conciliator may, at any stage of the conciliation proceeding, make
proposals for a settlement of the dispute. Such proposals need not be in
writing and need not be accompanied by a statement of the reasons therefor.”
Section 69 states that the conciliator may
invite parties to meet him. Sec. 70 deals with disclosure by the conciliator of
information given to him by one party, to the other party. Sec. 71 deals with
cooperation of parties with the conciliator, sec. 72 deals with suggestions
being submitted to the conciliator by each party for the purpose of settlement.
Sec. 73, which is important, states that the conciliator can formulate terms of
a possible settlement if he feels there exist elements of a settlement.
He is also entitled to ‘reformulate the terms’ after receiving the observations
of the parties. Subsection (1) of sec. 73 reads thus:
“Sec. 73(1) settlement agreement. (1) When it appears to the
Conciliator that there exist elements of a settlement which may be acceptable
to the parties, he shall formulate the terms of a possible settlement and
submit them to the parties for their observations. After receiving the
observations of the parties, the Conciliator may reformulate the terms of a
possible settlement in the light of such observations.”
The above provisions in the 1996 Act, make
it clear that the ‘Conciliator’ under the said Act, apart from assisting the
parties to reach a settlement, is also permitted to make “proposals for a
settlement” and “formulate the terms of a possible settlement” or “reformulate
the terms”. This is indeed the UNCITRAL concept.
B.
Mediation
If the role of the ‘conciliator’ in
India is pro-active and interventionist as stated above, the role of the
‘mediator’ must necessarily be restricted to that of a ‘facilitator’.
Meditation is a facilitative process
in which disputing parties engage the
assistance of an impartial third party, the mediator who helps them to try to
arrive at an agreed resolution of their dispute. The mediator has no authority to make any
decisions that are binding on them, but uses certain procedures techniques and
skills to help them to negotiate an
agreed resolution of their dispute without
adjudication[7].
Prof. Robert
Baruch Bush and Prof. Joseph Folgen say:
“In
a transformative approach to mediation, mediating persons consciously try to
avoid shaping issues, proposals or terms of settlement, or even pushing for the
achievement of settlement at all. In
stead, they encourage parties to define problems and find solutions for
themselves and they endorse and support the parties” own efforts to do so”.
The meaning of these words as
understood in India appears to be similar to the way they are understood in
UK. In the recent Discussion Paper by
the lord Chancellor’s Department on alternative Dispute Resolution. While
defining “Mediation” and “Conciliation”, it is stated that ‘Mediation’ is a way
of settling disputes by a third party who helps both sides to come to an
agreement, which each considers acceptable Mediation can be evaluative or
‘facilitative’. ‘Conciliation’, it is said, is a procedure like mediation but
the third party, the conciliator, takes a more interventionist role in bringing
the two parties together and in suggesting possible solutions to help achieve a
settlement. But it is also stated that
the term ‘conciliation’ is gradually falling into disuse and a process which is
pro-active is also being regarded as a form of Mediation. This has already
happened in USA.
The above discussion shows that the
‘mediator’ is a facilitator and does not have a pro-active rule. But, as shown below, these words are
differently understood in US.
“Let us not negotiate with fear but let us
not fear to negotiate”.
In India, we
do not have a separate system of federal courts and state courts. The Courts established by the State
Governments in India administer both Central and State laws, In
particular they administer laws relatable mostly to the Concurrent List
(List III) (such as the Contract Act, the Indian Penal Code, the Code of Civil
Procedure, the Code of Criminal Procedure) and to the Union List (List I) in
the VII Schedule of the constitution. This creates an obligation on the Central
Government, in my view, to meet at least more than fifty percent of the expense
of the State Courts. Added to this,
whenever a Bill is introduced in Parliament or the State Legislatures, there is
no ‘Judicial impact assessment’ made, as done in other countries like the USA
setting out in the financial Memorandum attached to the bill, how many civil
and criminal cases will be generated out of the new rights and offences created
by the Bill if it becomes law.
The Constitution Review Committee has made a
recommendation that the central Government must bear a substantial part of the
expenditure on Courts and that sufficient allocation must be made by the
Finance Commission and the Planning Commission in this behalf.
It is obvious however that the Government of India
will not be able to establish all the needed Courts in a short time.
Alternative methods must therefore be necessarily found, even otherwise.
“As
a consequence of observations by the Constitution Bench of the Supreme Court in
P. Ramachandra Rao v. State of Karnataka[8] as
to the critical judge – population ratio
in the country, the Executive at the Federal level was energized and consequent
on the recommendations of the XI Finance Commission evolved a scheme of ‘Fast
Track Courts’. The operationalization of the scheme was however differently
managed in several States.”
The problem of overcrowding of dockets is not
peculiar to out country nor is peculiar to our times. Such problems have been and are faced by
almost every country in the world. Necessity
became the mother of invention in several countries. Alternative Dispute
Mechanisms were evolved and adopted. The
United States of America is a more litigious country than ours. It has
introduced Federal and State Legislations /Rules of Court to enable parties to
resort to mediation voluntarily or by compulsion (by what is called Court-annexed mediation).
So Australia, New Zealand, Canada and the United Kingdom. There are various
Reports of the Law Commissions or Reports of Royal Commissions or other
committees on the ADR, mediation and conciliation. In every country, initially, there has been
some resistance from the Bar. Judges,
known for their conservatism, as usual, were also somewhat lukewarm in their
approach to ADRs in the beginning. But,
gradually, once the systems were implemented, the Bar and the Bench found that
litigants did benefit enormously in terms of time and ``money Conciliation or
mediation became very popular. In USA,
in twenty years, surprisingly the settlement rate rose up to 94%. There are similar success stories in other
countries[9].
Let us take the case of Lok Adalats. When the institution of Lok Adalats was
started over fifteen to twenty years ago, there was tremendous skepticism and
opposition both at the Bar and in the Judiciary. Soon, it was discovered that certain special
types of cases- particularly those relating to claim for damages in motor
accidents and compensation in land acquisition cases and others and also some
criminal cases where the offences were compoundable, were best suited for
settlement through Lok Adalats. These
settlement centers were presided by retired Judicial Officers or those in
office but not attached to the cases. As
of today, millions of cases have been dealt with in Lok Adalats and millions of
rupees have been distributed through Lok Adalats in these types of cases. Ultimately, Lok Adalats have today come to
stay and have been accepted.
Lok Adalats can, however, deal only with cases where
the settlement process is not long. But
cases involving commercial disputes, property disputes, partition disputes,
matrimonial disputes and the like, it is obvious, cannot be listed in a Lok
Adalat and disposed of the same day by applying a multiplier formula as in
accident cases. These are more serious
cases where parties have to be brought to the negotiating table and the
conciliator/mediator has to have separate as well as joint sessions with the
parties in a good number of sittings.
These may extend to six, or even ten such sessions. Lot of facts may have to be ascertained,
documents may have to be called for, matters of equity may have to taken into
account and what is more, a lot of effort is to be made to make the rival
parties cool down their tempers. In a
Lok Adalat, in motor accident cases, the rivals are either the State or the
Insurance companies and there is absent the emotional part that is invariably
involved during negotiation in other types of cases. This is because there is no such long
standing rivalry or enmity in Lok Adalat cases.
It is, therefore, essential that in more serious cases, parties must be
cajoled, nay, even be persuasively compelled, to talk to each other through a
conciliation/mediation process so that they may first cool down, come to reason
and start thinking of settling their disputes.
Once that is done, then conciliation or mediation is held, and
settlement reached, they can still remain friends. There is no longer any acrimony. In addition,
both sides have saved time and money.
Now that the Indian Parliament, which saw that
conciliation and mediation processes have led to a new revolution in judicial
administration in other countries, has, in its wisdom accepted that
conciliation/mediation should be a regular process in every case which comes to
Court. Even if parties do not agree for
conciliation or mediation, the Court may, if it thinks the case to be a fit
case, make a reference to conciliation or mediation. Courts and lawyers have therefore a paramount
obligation to enforce the legislative mandate.
We, therefore, have necessarily to make an effort to see how, by
peaceful means, rather than by the adversarial process, we can wipe out the tears of those suffering
prolonged agony caused by delay and expense. If Lok Adalats, regarding which
there was initial opposition, have come to stay and have become acceptable
because of the spectacular results achieved, there is no reason why the
conciliation/mediation processes should not be given a fair trial in civil
litigation, where a mediator/conciliator brings down the tensions, make parties
see reason, and helps in settling their disputes. Unlike other systems of ADR like ‘compulsory
or court-annexed non-binding arbitration’, there is here no compulsion. There is only persuasion so far as the terms
of settlement are concerned. Compulsion is only persuasion so far as the terms
of settlement are concerned. Compulsion
is only to the extent of compelling parties to go to the negotiating table, discuss
through the medium of an experienced conciliator/mediator. Such a process was always part of our Indian
culture, even long before any system of Courts was established.
Now the trend is to treat the Court not only as a
seat for regular adjudication but also as a Centre for settlement, established
by Parliament. In every High Court and
in every District Court, to start with, separate accommodation must be provided
for a conciliation/mediation centre to function. The Courts have a dual function – one as an
adjudicator and the other as a facilitator for settlement. As done in the Gujarat High Court, every High
Court and district Court must straightaway set apart specific accommodation for
a “Conciliation and Mediation Centre”.
After Court hours every day, and during weekends and holidays, the
centre must function regularly. Such
Centers are sure to attract a lot of response.
Apart from the direct advantages to the
litigants in each of such cases which is
settled, there are other indirect advantages to the judicial administration as
a whole on account of this new effort?
This new process of settlement through conciliation and mediation will
reduce the civil dispute dockets and bring the pendency to a tolerable
level. The greater advantage, in fact,
is the one that will indirectly accrue to the criminal justice system. If civil cases are reduced substantially or
to some extent, the time so saved can be utilized for disposal of a larger
number of criminal cases. In that
branch, there cannot be settlements except where they relate to compoundable
offences. Plea bargaining has not yet
become part of our system.
In our country, there is one great advantage, as
compared to other countries, in that we are not burdened, both terms of time
and expense, by a jury system in civil cases.
That would have delayed our trials more, with that advantage in our
procedural system, there is need to go for conciliation/mediation in a big way
as ordained by statute and take it seriously. The new concepts introduced in
sec. 89 as regards conciliation and mediation are sure to result in bringing
about a silent revolution in our judicial system.
Human beings, when it comes to disputes relating to
money or status, are all the same, everywhere round the globe. Selfishness,
strength of money-power for protracting litigation or ego are common
features. If the conciliation /mediation
solutions have been successful in other countries, they must and will succeed
here also. Where the problems are same,
the solutions could be similar, though there may be differences in degree or
the methodology adopted. The procedure for conciliation/mediation are today
part of the systems of almost every judicial administration both in common law
countries as well as in countries governed by civil law systems. The fact that we have woken up in 1999 and
have started to enforce sec. 89 of the Code of Civil Procedure only from 1st
July 2002, should not matter. Better
late than never. Every Bar council, every Bar Association and every lawyer to
give conciliation/mediation higher priority than adjudication and give the
litigant a reasonably good chance of settling the disputes so as to save time,
money-leaving more complicated and tougher cases and the criminal cases to pass
through the adjudicatory process.
[ This article was published in the Supreme Court Journal]
Note: The
Author is a member of A P State Higher Judiciary. The views expressed in this
article are purely personal.
[1]
Source : Supreme Court News Jan-Mar, 2009
[2]
JT 2002 (3) SC 503
[3] 1989(2)
SCC 347
[4] AIR 1981 SC 2075
[5]
German Law Journal
[6]
Wikipedia
[7]
ADR Principles and Practice by Henry J. Brown and Arthur L. Marriot 1997
[8]
JT 2002 (4) SC 92
[9]
Law Commission of India (papers presented in international conference on ADR)
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