Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR)
Context: India’s courts are facing an unprecedented backlog of over 52 million pending cases as of July 2025, intensifying the national debate on judicial efficiency.
What is Alternative Dispute Resolution (ADR)?
ADR refers to non-judicial mechanisms for resolving disputes outside traditional courts. It includes arbitration, mediation, conciliation, negotiation, and Lok Adalats. ADR rests on principles of party autonomy, confidentiality, cost-effectiveness, and speed.
Static foundations come from:
- Legal Services Authorities Act, 1987 (Lok Adalats)
- Arbitration and Conciliation Act, 1996
- Mediation Act, 2023
The Supreme Court has repeatedly emphasised ADR, especially in Afcons Infrastructure Ltd. vs. Cherian Varkey Construction (2010), directing courts to refer suitable disputes to ADR.
Why is ADR the Need of the Hour?
- Massive Pendency Crisis: As of July 2025(Rajya Sabha data), India has 52.4 million cases pending, including:
- ~46 million in district courts
- ~6.3 million in High Courts
- ~91,723 in the Supreme Court
Traditional litigation often takes decades, undermining public trust and increasing business costs.
- Economic & Investment Implications
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- Long-drawn disputes harm Ease of Doing Business and contract enforcement, a parameter India historically struggles with.
- The Devas Multimedia arbitration case and DMRC–DAMEPL dispute showed how excessive judicial intervention weakens India’s arbitration-friendly reputation, triggering even Bilateral Investment Treaty claims.
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- Social Justice & Accessibility
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- ADR supports Article 39A (equal access to justice).
- National Lok Adalats settled 12.5 million cases in September 2024 alone, showcasing scalability.
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- Leveraging Technology
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- With increasing digital penetration, Online Dispute Resolution (ODR) can handle small-value disputes efficiently.
- NITI Aayog’s ODR Policy Plan (2020) emphasised a hybrid online–offline model to prevent digital exclusion.
What are the Types of ADR?
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Arbitration
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- A quasi-judicial process where parties appoint an arbitrator whose award is binding.
- Used widely in commercial disputes.
- India modernised its framework through repeated amendments to the Arbitration and Conciliation Act.
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Mediation:
A voluntary, confidential, facilitator-led process. The Mediation Act, 2023 provides:
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- pre-litigation mediation
- institutional mediation
- enforceability of settlement agreements as court decrees
- strict timelines
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Conciliation
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- Similar to mediation but conciliators take a more active role in suggesting terms.
- Recognised in Part III of the Arbitration Act (1996).
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- Lok Adalats
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- Statutory bodies under the Legal Services Authorities Act, 1987.
- They ensure quick, low-cost disposal through compromise.
- Ideal for compoundable criminal cases, motor accident claims, and utility disputes.
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Negotiation
A direct, informal settlement process between parties without third-party involvement.
What are the International Standards Associated with ADR?
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- Singapore Convention on Mediation (UN, 2019): Provides a global framework for enforcement of mediated settlements. (India has signed but not ratified yet.)
- UNCITRAL Model Law
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- Forms the basis of modern arbitration globally.
- India’s Arbitration Act (1996) is aligned with it.
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Best Practices from ADR Hubs
Singapore & Hong Kong:
- Integrated institutions
- Mandatory mediation in commercial disputes
- Time-bound enforcement
- Minimal judicial interference
Singapore International Arbitration Centre (SIAC) handled over $11.5 billion worth of cases in 2024 with >90% international clients, showing the importance of institutional strength.
Singapore Mediation Centre reported a 60% settlement rate in 2023, with 90% cases resolved in a single day—a global benchmark.
Measures Taken to Adopt the ADR System in India
- Legislative Reforms
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- Mediation Act, 2023 operationalised; rules under finalisation.
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- Arbitration Act amendments (2015, 2019, 2021):
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- reduced judicial intervention
- introduced timelines
- promoted institutional arbitration
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- Institutional Strengthening
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- Establishment of India International Arbitration Centre (IIAC)
- Setting up mediation centres in High Courts
- Training programs under National Legal Services Authority (NALSA)
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- Court-Driven Promotion
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- Supreme Court directives for compulsory pre-litigation mediation in family and commercial matters
- Use of Case Management Systems & early triaging
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- Technological Push
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- NITI Aayog’s ODR Framework (2020)
- Integration of ODR in eCourts Phase III
- Pilots with banks, NBFCs, and e-commerce entities for digital settlement platforms.
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Lok Adalat Reforms
Focus on thematic National Lok Adalats (traffic challans, utility disputes), increasing efficiency and outreach.
ADR is indispensable for unclogging India’s judicial system and enhancing economic competitiveness. With robust laws, institutional strengthening, and technology-driven dispute resolution, ADR can transform access to justice and significantly reduce pendency while restoring public faith in timely justice delivery.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
