ADR

INDEX OF AUTHORITIES...................................................................................................... 2

Cases ...................................................................................................................................... 2

Statutes ................................................................................................................................... 2

INTRODUCTION ..................................................................................................................... 3

THE MAKING OF AN ADR FRIENDLY JURISDICTION ................................................... 4

INFORMATION DISSEMINATION THROUGH INFORMAL CHANNELS ...................... 7

CASE MANAGEMENT AND REFERENCING ..................................................................... 8

CONCLUSION ........................................................................................................................ 10

BIBILIOGRAPHY .................................................................................................................. 11

1
 INDEX OF AUTHORITIES

Cases

1. Afc0ns Infrastructure Limited v. Cherian Varkey C0nstructi0n C0mpany, Civil Appeal

N0. 6000 0f 2010.
2. BALC0 v. Kaiser Aluminium, Civil Appeal N0. 7019 0f 2005.

3. Bhatia Internati0nal v. Bulk Trading SA, (2002) 4 SCC 105.

4. Chh0telal v. Kamala Devi, AIR 1967 Pat 269.

5. Sakri v. Chhanwarlal, AIR 1975 Raj 134.

6. Sangeetha v. Suresh Kumar, JT 2000(8) SC 521.

7. TDM Infrastructure Private Limited v. UE Devel0pment India Private Limited, (2008) 14

SCC 271.

Statutes
1. The Arbitrati0n and Conciliati0n Act, 1996.

2. C0de 0f Civil Pr0cedure, 1908.

2
 INTRODUCTION
Alternative Dispute Resolution can be defined as “a set of mechanisms which enable effective,
efficient dispute resolution outside of courtroom litigation”. Over the years, Alternative
Dispute Resolution, as a concept, has gained currency for consistently mitigating delays and
backlogs and for providing an effective, user-friendly mode of justice. The importance of
adopting ADR mechanisms cannot be over-emphasised in the Indian context. Huge amounts
of resources in terms of time, money and efforts of parties are used and to circumscribe these
difficulties, ADR is a sustainable alternative means of dispute resolution. This paper delineates
the reasons for which popularity of ADR is skyrocketing in the Indian context and how the
judiciary itself is a major stakeholder in popularising the ADR mechanism.

Through this paper, the researcher aims to evaluate the role played by the courts in promoting
ADR methods. In order to achieve the same, I have analysed various means espoused by the
courts to bolster the promotion of ADR mechanisms. Apart from merely recommending
disputes of a certain nature to ADR channels, the judiciary has adopted secondary methods to
further the agenda at hand. In the light of this, the researcher has attempted to cursorily discuss
such ancillary channels as well.

The scope of this paper is only limited to the analysis of various measures undertaken by
judiciary to bolster ADR practices. In other words, questions pertaining to whether promotion
of any kind is “normatively desirable or not” has not been dealt with in this paper. S0me have
arguedxthatxexcessivexandxmechanical pr0m0ti0n 0f such meth0ds in matters 0f
jurisprudential imp0rtance must be av0ided as it may have undesirable repercussions 0n the
s0cial and dem0cratic fabric of the nation.1

The judiciary has employed both formal and informal channels towards promoting ADR. Such
plurality, when it comes to information dissemination, is indicative of a favourable judicial
temperament towards ADR. By 0ccasi0nally supplanting legislative prescripti0ns 0n 0ccasi0n,
the judiciary has played a key r0le in the devel0pment 0f ADR in the Indian
c0ntext.Additionally, the courts have, time and again, evaluated numerous policy
considerations while tackling with issues pertaining to Alternative Dispute Resolution.

1
“See, M. Shridhar, The Initiative of the Supreme Court of India in Alternative Dispute Resolution: A Study of
Two Cases, 3(2), THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2004).”

3
 WHY DO WE NEED ADR?

The former Chief Justice of India, R. C. Lahoti was of the opinion that the Indian court had its
own inherent drawbacks and weaknesses. Amidst such deficiencies arose the need for
inc0rp0rating effective meth0ds t0 strengthen the instituti0nal pr0cesses. While making this
claim, Justice Lahoti reiterated the importance of various ADR mechanisms; and elaborated
upon how they significantly assist in resolving disputes in a timely fashion.2

One prominent area where the Indian courts still continue to underperform is their inability to
serve justice in a time-bound manner. The massive backlog of cases coupled up with inordinate
delays make it even more imperative to havexeffective ADR channels inxplace.3 Along with
being significantly efficient, such alternate means are way more informal, and therefore more
“user-friendly”.4 Additionally, the ad0pti0n 0f ADR meth0ds not only reduces the w0rkl0ad
of the 0verburdened and understaffed c0urts, but also allows the parties t0 gain access to hassle-
free justice delivery mechanisms.5

THE MAKING OF AN ADR FRIENDLY JURISDICTION

The judiciary, on various occasions, has helped reinforce ADR through indirect means. Courts,
while rendering decisions, treat policy considerations as a guiding factor. It can be gauged from
their judgements that courts do promote ADR methods in its decision-making policy. The
researcher has employed a couple of illustrations to substantiate the claim.

In the case of Bhatia International v. Bulk Trading SA, 6 the Apex Court stated that the Indian
judiciary has the discretion to order “interim measures” even if the case is being arbitrated upon
by a foreign seat. This judgement received substantial flak, primarily because it deprived
international arbitration forums of its autonomy. This decision, in fact, showcased India as an
“arbitration-unfriendly” jurisdiction. In order to rectify its tainted reputation, the Apex Court,

2
“Y. F. Jayakumar, Conciliation and Family Dispute Resolution in Indian Legal System, 4(1), THE ICFAI
JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2005). See, R. C. Lahoti, Strengthening of the Judicial System
My Priority, THE HINDU, 25, (Hyderabad edn., May 29, 2004).”
3
“G. Singh, Mediation as a Dispute Settlement Mechanism in India, 5(1), THE ICFAI JOURNAL OF ALTERNATIVE
DISPUTE RESOLUTION, (2006). See also, Jayakumar, supra note 2.”
4
S. B. Sinha, ADR and Access to Justice: Issues and Perspectives, TAMIL NADU STATE JUDICIAL ACADEMY,
“available at http://www.hcmadras.tn.nic.in/jacademy/article/ADR-%20SBSinha.pdf, (Last visited on May 5,
2019).”
5
Id.
6
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.

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in the case of BALCO v. Kaiser Aluminium (“BALCO”)7 , overruled Bhatia International and
adopted a “pro-arbitration” approach. It is evidently clear that the aforementioned judgement
was aimed at redeeming the inconveniences caused by Bhatia International.8

In the case of BALCO, the Supreme Court clarified “territoriality was the primary premise
underlying the operation of the Arbitration and Conciliation Act9 and that therefore Indian
courts would be precluded from asserting jurisdiction, even in the form of interim relief orders,
in offshore and international arbitrations”. In furtherance of the same, the Apex Court clarified
that Indian courts cannot modify or set aside any awards granted by the of arbitration tribunals
seated outside India.10

A decisi0n guided by p0licy c0nsiderati0ns, the Supreme C0urt’s verdict in BALCO11 was
aimed at pr0m0ting ADR meth0ds and simultane0usly alleviating the c0ncerns 0f the
internati0nal business and legal c0mmunities alike in respect 0f Indian judicial interference in
internati0nal arbitrati0n pr0ceedings. N0 d0ubt BALCO d0es n0t address all the challenges
seen with reference t0 arbitrati0n - f0r example, BALCO d0es n0t address the rule laid d0wn
that in the Indian c0ntext that Indian parties cann0t c0ntract 0ut 0f Indian substantive law even
if the c0ntract pr0vides f0r a f0reign arbitrati0n seat.12 But that n0twithstanding, BALCO13
certainly has been a great start in the pr0-arbitrati0n directi0n.14

The path-breaking decision in the case of Afcons Infrastructure v. Cherian Varkey Construction
Company15 (“Afcons”) is yet another specimen of how judiciary continues to showcase India
as an “arbitration-friendly destination”.

The 2010 Supreme Court decision considered certain problematic issues revolving around the
“requirement of prior consent among parties as a pre-requisite for reference to arbitration”
under Section 89 of the Code of Civil Procedure.16 While addressing this issue, the Court ruled

7
“BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005. See, P. Nair, On the road to becoming arbitration
friendly: The decision of the Indian Supreme Court in BALCO v. Kaiser Aluminium, 1(1), LCIA INDIA NEWS,
(2012).”
8
Bhatia International v. Bulk Trading SA, (2002) 4 SCC 105.
9
The Arbitration and Conciliation Act, 1996.
10
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
11
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
12
TDM Infrastructure Private Limited v. UE Development India Private Limited, (2008) 14 SCC 271.
13
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
14
“A. Chugh, The Bharat Aluminium Case: The Indian Supreme Court Ushers in New Era, KLUWER ARBITRATION
BLOG, available at http://kluwerarbitrationblog.com/blog/2012/09/26/the-bharat-aluminium-case-the-indian-
supreme-court-ushers-in-a-new-era/, (Last visited on May 5, 2019). See also, Nair, supra note 8.”
15
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
16
Sec. 89, Code of Civil Procedure, 1908.

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that while prior consent is necessary if the matter is being referred to arbitration, it cannot be
made mandatory for all other ADR mechanisms. The Supreme Court simultaneously observed
that Section 89 of the Code,17 a significant provision in the context of ADR, was absurdly
drafted. The drafting of the provision, in the opinion of the apex court, required substantial
correction.18

In a 2010 Supreme Court judgment, where the main issue was centred around the prerequisite
requirement of consent of both the parties for referral to arbitration with respect to Section 89
of the Civil Procedure Code, 1908. 19 The Apex Court held that prior consent is compulsorily
required only in arbitration cases not including cases involving other modes of dispute
resolution. The Court not only condemned the clumsy legal drafting of Section 89 but also
recommended a considerable amount of suggestions.

The section has been drafted clumsily. It has vague definitions with respect to various ADR
mechanisms. Furthermore, it also imposes an obligation on the Courts which severely
overburdens the judiciary. Moreover, it also makes the section counterintuitive. 20 The section
requires that in situations wherein there is a possibility of parties to arrive at a settlement, the
trial court judges should formulate the same and forward them to the parties to observe and
consider. Next, the parties have the option to return the formulated settlement terms to the judge
21
for reconsideration. Now, before referring the dispute to the various ADR methods
mentioned in section 89, the Judge has to reframe the settlement terms. All these modalities
are indicative of clumsy legal drafting. 22

It is quite evident that the aforementioned section imposes “an unnecessary, redundant and
cyclic obligation” on the judiciary and, in a way, negates the very rationale underlying the
section. In response to this, the Apex Court not only condemned the absurdities of Section 89,
but also diluted it by doing away with the redundant requirement of “framing and reframing
possible terms of settlement”. In furtherance of the same, the court also delineated the
procedure to be adopted in case the matter fell within the ambit of Section 89, reformulated the

17
Sec. 89, Code of Civil Procedure, 1908.
18
“Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.”
19
Sec. 89, Code of Civil Procedure, 1908.
20
“Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.”
21
Sec. 89, Code of Civil Procedure, 1908.
22
Sec. 89, Code of Civil Procedure, 1908.

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definitions of various ADR mechanisms23 and also outlined several exhaustive guidelines in
this regard.24

Both BALCO25 and Afcons26 have paved the path for “an ADR friendly legal environment and
statutory framework”. The Indian courts have created a favourable legal climate by rendering
decisions which not only further the cause of ADR but also lend clarity vis-à-vis several
statutory impediments which have affected the growth of the ADR phenomenon in India.

INFORMATION DISSEMINATION THROUGH INFORMAL

CHANNELS
Judges have, time and again, employed both formal and informal channels to give ADR
mechanisms a boost. In his paper, ‘ADR and access to justice-Issues and Perspectives’, Justice
Sinha of the Apex Court not only propagated the use of ADR methods but also cited the
numerous benefits which these methods offer. According to his piece, ADR serves the twin
purpose of effective justice and reduction of backlog. Additionally, Justice Sinha also
recommended all civil cases to be effectively managed and mandatorily referred to ADR by
the courts.27

Justice Khanwilkar, during his tenure at the Bombay High Court, proposed that ADR channels,
which promise to deliver speedy justice, must not compromise on the quality of such justice.
Taking a cue from his philosophy, the Bombay High Court has now implemented an ADR
friendly mode of case management. Now, the High Court not only refers cases t0 such ADR
channels, but it als0 guarantees the parties that in the event of failure of such ADR methods,
the matter will be immediately addressed by the court.28

Essentially, judges have publicly spoken in favour of ADR strategies either through articles or
at conferences with the aim of propagating such information29 and consequently enhancing the
efficiency and efficacy of such methods.

23
Sec. 89, Code of Civil Procedure, 1908.
24
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
25
BALCO v. Kaiser Aluminium, Civil Appeal No. 7019 of 2005.
26
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
27
Sinha, supra note 4.
28
A. M. Khanwilkar, Need to Revitalise ADR Mechanism, 4(3), NYAYADEEP, (2005).
29
“ D. Y. Chandrachud, Mediation – Realizing the Potential and Designing Implementation Strategies, presented
at, Law Commission of India International Conference on ADR and Case Management, (New Delhi, May 3 to
May 4, 2003).”

7
With extensive dissemination of information, ADR now enjoys judicial backing. With such
endorsement at its disposal, ADR has, over the years, gained public confidence. 30 Further,
c0urts must take eff0rts t0 see t0 it that rec0urse is taken t0 these ADR meth0ds bef0re
litigati0n is inv0ked, specifically, neg0tiati0n and c0nciliati0n bef0re arbitration.31

CASE MANAGEMENT AND REFERENCING

Promoting the use of the ADR mechanisms has been done through a long list of legislations
both by recommendations to the judiciary and even by imposing a duty on the courts to make
such references to arbitration.32 In addition to this, the judiciary has taken suo moto cognizance
of the need to have a strong ADR system in the country and laid down guidelines for promotion
of the same.

A set of guidelines were laid down by the Supreme Court in the Afcons case whereby the
categories of cases that can be referred to arbitration can be identified. 33 These include disputes
which are related to “trade and commerce, money disputes, disputes of specific performance,
disputes between builders and customers, bankers and customers, cases pertaining to tortious
liability, disputes between partners, disputes relating to family law and so on”.34

Taking forward the spirit of the legislature in the promotion of ADR the courts have
consistently made references to arbitration wherever possible. Recently the Bombay High
Court assured parties who were sent to arbitration that in the event of failure of the ADR
process the case will be immediately taken up by the court. 35 This clearly shows the enthusiasm
expressed by the judiciary in actively promoting these methods.

The use of ADR mechanisms for resolution of disputes wherever possible is suggested and
even imposed by several legislations. 36 Especially when it comes to matters relating to family
law, ADR channels were adopted. In a case for divorce and maintenance where the court was

30
Singh, supra note 3.
31
“Singh, supra note 3. See also, F. S. Nariman, Arbitration and ADR in India, in P. C. Rao and W. Sheffield,
ALTERNATIVE DISPUTE RESOLUTION: WHAT IT IS AND HOW IT WORKS, (1st edn., 1997).”
32
See, Jayakumar, supra note 2.
33
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
34
Afcons Infrastructure Limited v. Cherian Varkey Construction Company, Civil Appeal No. 6000 of 2010.
35
Khanwilkar, supra note 36.
36
See, Jayakumar, supra note 2.

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convinced that reconciliation was possible, the parties were referred to conciliation and the
proceedings put to rest. 37

The Rajasthan High Court in Sakri v. Chhanwarlal38 said that efforts for conciliation should be
made at the beginning of proceedings wherever it is possible and even if that had not been
done, such efforts should be taken before relief is granted. The court also observed that such
efforts should be reasonable and made in every case. 39 In Chhotelal v. Kamala Devi40, the
Patna High Court was of the opinion that efforts at conciliation must be made even if the parties
submit that reconciliation is not possible and this has to be done before the regular proceedings
begin. 41

Endorsement of these methods by the courts has gone a long way in bolstering their popularity.
The 1984 experiment of the Himachal Pradesh High Court is of much importance in the long
history of the judiciary’s engagement with the ADR process. Due to large number of arrears
before lower courts, the High Court directed that all new cases be mandatorily subjected to a
conciliation mechanism before proceedings are taken up. This experiment was modelled along
the lines of a project that had earlier been taken up in Canada and was so successful 42 that a
recommendation was made for courts in other states to follow suit. 43

37
Sangeetha v. Suresh Kumar, JT 2000(8) SC 521. See, Jayakumar, supra note 2.
38
Sakri v. Chhanwarlal, AIR 1975 Raj 134.
39
Sakri v. Chhanwarlal, AIR 1975 Raj 134. See, Jayakumar, supra note 2.
40
Chhotelal v. Kamala Devi, AIR 1967 Pat 269.
41
Chhotelal v. Kamala Devi, AIR 1967 Pat 269. See, Jayakumar, supra note 2.
42
“Singh, supra note 3. The experiment was commended in the Law Commission of India 77th and 13th Report
the Conference of Chief Ministers and the Chief Justices in their resolution in December, 1993; and the Calcutta
Resolution of the Law Ministers and Law Secretaries Meeting in 1994.”
43
Singh, supra note 3.

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 CONCLUSION
The judiciary plays a multidimensional role when it comes to promotion of ADR. Through this
paper, the researcher has analysed numerous approaches adopted by judiciary as far as
promotion of ADR is concerned. The need f0r sustainable and robust ADR meth0ds is
imminent given the massive backl0g 0f cases.

There are “multiple instances where certain decisions pertaining to ADR, were guided by
policy considerations. The judiciary has repeatedly ironed out any impediments that may come
in the way of ADR movement. Whether in the international context, or domestic, the judiciary
seems to be handing out decisions which overcome legal hurdles, statutory in character or
otherwise. Some of these decisions even have larger implications in the context of international
commerce and business.”

Judicial endorsement of ADR has now spread to different channels which are, to some extent,
epistemic. A couple of senior judges have authored research pieces and articles depicting the
benefits of ADR. Also, these papers extensively deal with different strategies which may lend
efficiency and legitimacy to the existing ADR practices.

The courts have, through a bevy of decisions, reiterated the need to regularly refer cases for
Alternative Dispute Resolution. In fact, in a couple of cases, where ADR mechanisms failed,
the matters were immediately taken up by the courts. In a nutshell, the courts have displayed a
fav0urable inclination t0wards ADR meth0ds, and have attempted to bolster it thr0ugh
numer0us channels.

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 BIBILIOGRAPHY

1. A. Chugh, The Bharat Aluminium Case: The Indian Supreme C0urt Ushers in New Era,
KLUWER ARBITRATIN BLOG, available at http://kluwerarbitrati0nbl0g.c0m/bl0g/2012/09/26/the-
bharat-aluminium-case-the-indian-supreme-c0urt-ushers-in-a-new-era/, (Last visited 0n May 5,
2019).

2. A. M. Khanwilkar, Need t0 Revitalise ADR Mechanism, 4(3), NYAYADEEP, (2005).

3. D. Y. Chandrachud, Mediati0n – Realizing the P0tential and Designing Implementati0n

Strategies, presented at, Law C0mmissi0n 0f India Internati0nal C0nference 0n ADR and Case
Management, (New Delhi, May 3 t0 May 4, 2003).

4. F. S. Nariman, Arbitrati0n and ADR in India, in P. C. Ra0 and W. Sheffield, ALTERNATIVE

DISPUTE RES0LUTION: WHAT IT IS AND HOW IT WORKS, (1st edn., 1997).

5. G. Singh, Mediati0n as a Dispute Settlement Mechanism in India, 5(1), THE ICFAI J0URNAL
0F ALTERNATIVE DISPUTE RES0LUTI0N, (2006).

6. M. Shridhar, The Initiative 0f the Supreme C0urt 0f India in Alternative Dispute Res0luti0n: A
Study 0f Tw0 Cases, 3(2), THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2004).

7. P. Nair, 0n the r0ad t0 bec0ming arbitrati0n friendly: The decisi0n 0f the Indian Supreme
C0urt in BALCO v. Kaiser Aluminium, 1(1), LCIA INDIA NEWS, (2012).

8. R. C. Lah0ti, Strengthening 0f the Judicial System My Pri0rity, THE HINDU, 25, (Hyderabad
edn., May 29, 2004).

9. S. B. Sinha, ADR and Access t0 Justice: Issues and Perspectives, TAMIL NADU STATE
JUDICIAL ACADEMY, available at http://www.hcmadras.tn.nic.in/jacademy/article/ADR-
%20SBSinha.pdf, (Last visited 0n May 5, 2019).

10. Y. F. Jayakumar, C0nciliati0n and Family Dispute Res0luti0n in Indian Legal System, 4(1),
THE ICFAI JOURNAL OF ALTERNATIVE DISPUTE RESOLUTION, (2005).

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