Alternative Dispute Resolution

Alternative dispute resolution, or ADR, means resolving disputes through processes other than a full trial in a conventional court. It includes consensual methods such as negotiation and mediation, as well as arbitration, where a chosen neutral adjudicates the dispute; some ADR processes may also be referred or supervised by courts.

Principal forms

• In negotiation, the parties communicate directly and seek a mutually acceptable settlement without requiring a neutral third party.
• In mediation and conciliation, a neutral person facilitates settlement but ordinarily does not impose a decision on the parties.
• In arbitration, parties submit the dispute to an arbitrator whose award is binding and enforceable according to law.
• Lok Adalats settle pending or pre-litigation disputes through compromise; their awards are deemed civil court decrees, are final and binding, and ordinarily permit no appeal.

Legal and institutional framework

Article 39A directs the State to promote equal justice and free legal aid. The Arbitration and Conciliation Act, 1996, the Legal Services Authorities Act, 1987, and the Mediation Act, 2023 provide statutory frameworks for major ADR mechanisms.

• Section 89 of the Code of Civil Procedure, 1908 enables courts to refer suitable disputes to specified modes of settlement outside court.
• Legal Services Authorities at national, state and district levels organise Lok Adalats under the Legal Services Authorities Act, 1987.

Significance and limitations

ADR can provide speed, flexibility, confidentiality and party autonomy, while reducing costs and the burden on courts. It is especially useful where preserving commercial, family or community relationships matters.

• Its effectiveness depends on informed consent, competent neutrals, procedural fairness and enforceability of outcomes.
• Power imbalances, unwillingness to compromise, complex questions of law or disputes requiring authoritative public precedent may make conventional adjudication more suitable.
• Criminal offences and other matters that the law treats as non-compoundable or non-arbitrable cannot be privately settled merely by choosing ADR.