For those who know how the Judicial system functions, it is needless to say that it is always a pain to pursue justice through normal Courts. We are tired of the saying “God sees the truth but waits”. Many would say that I can tolerate injustice but not end less delay.
Further, Courts operate under the constraints of what the lawyers propose to them and not entirely on the basis of truth. More often we see Courts saying, based on the evidences before me, I come to this judgement. There are only a few honest and bold judges left in the system who can try to see the truth behind the powerful arguments put forth by the “Senior Advocates”. We know that these “Senior Advocates” collect crores of rupees as their fees based on their power to lie and also how much they can corrupt the system which we believe to be honest.
All litigants therefore should look to go the Courts only as a “Last Resort”.
In the case of business related disputes, normally both parties are normally reasonable and the dispute would be only because of a difference in interpretation of some terms. Hence both parties are not interested in wasting their time in Courts and hurting their further businesses.
Alternate Dispute Resolution therefore comes in as a relief to most. Only those persons who want to use Courts as an instrument of prolonging injustice prefer to litigate.
Hence there is no second thought that if an alternative dispute resolution process is available every litigant would like to avail of the same.
It was with this belief that Section 89 of Civil Procedure Code (Refer this article for details) provided that in any Civil Proceedings the Court tries to persuade the litigants to try the ADR before the Case proceeds in the Court. Such process could be through the process of a Court appointed mediator. However despite more than 10 years since the amendment came in force on 1st July 2002, not many litigants are using the facility.
The section states as follows:
(1) 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 court may reformulate the terms of a possible settlement and refer the same for
(c) judicial settlement including settlement through Lok Adalat; or
(2) Where a dispute had been referred-
(a) for arbitration or conciliation, the provisions of the 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, 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, 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, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.
Unfortunately the established legal community may not be keen on the success of the ADR process since any curtailment of litigation in Courts directly affects their revenue potential. The new generation of advocates however may not be averse to striking settlements and acting as mediators since this is the only method by which they can break into the system otherwise firmly occupied by the senior advocates.
However, until recently the Arbitration system had its own weaknesses because of which it only prolonged the litigation rather than eliminating it. Also in most cases, arbitration was always thought of only as a part of the pre-dispute agreement and parties never trusted to enter into an arbitration when it was not mandated in the agreement.
Now with the new amended Arbitration and Conciliation Act 2015 (ACA 2015) being in force, the ADR process has got a big boost in terms of ensuring that there is no delay in the arbitration process nor there is an automatic stay of the arbitration award when an appeal is filed. Additionally, the new Act tries to promote digital communications and opened the means for ODR (Online Dispute Resolution).
With the advent of the new ACA 2015, all judicial precedents of the past have lost meaning and we need to look at every thing afresh. We are in the After Amendment Era where the before Amendment Era judicial pronouncements are all amenable to be questioned and over turned.
It is therefore essential for all Civil disputes to make use of the benefits of ADR and this move has to be initiated by the parties at the time of contracting. Those contracts in which an Arbitration clause was not a part should be reviewed now or even after a dispute has formally arisen to introduce an ADR process.
An ADR process need not always be the Arbitration. It may be a “Mediation” or “Conciliation” that is an attempt to achieve a negotiated settlement with the assistance of a professional mediator. Arbitration however is more binding.
Legally, there is no difference between Mediation and Conciliation though technically, a Conciliation may be a process in which the Mediator may try to achieve a settlement with the force of the respect that the disputants place on his stature and knowledge. Ultimately however, a mediation/conciliation ends up with a settlement agreement between the parties out of their own free will.
Arbitration on the other hand may be a forced award which one party may not like and therefore wish to challenge.
As regards Criminal proceedings, there are provisions of “Compounding” (Sec 320 of CrPc) where there could be a negotiation between the accused and the victim which may result in the proceedings being dropped. (See the details here).
(P.S: CDMAC will address compounding under ITA 2000/8 which will be discussed separately in a subsequent article)
In summary we need to recognize that the time for ADR has arrived and without simply complaining about the delays in the Courts, inefficiency or corruption of Judges etc, we need to explore settlement of all our disputes through Negotiation, Mediation/conciliation or Arbitration.
Courts are the last resort for seeking justice and the more we avoid them better it is.