Alternative Dispute Resolution in India

Alternative Dispute Resolution (ADR) refers to mechanisms and processes outside the traditional courtroom litigation for resolving disputes in a cost and time effective manner. ADR has gained immense popularity globally due to the inherent drawbacks of long drawn court battles. With rising case pendency across courts in India, ADR presents an effective approach to unclog the burden on the courts while delivering quick justice to disputing parties. This blog provides a comprehensive overview of the ADR landscape in India across its various mechanisms and use cases.

The Arbitration and Conciliation Act, 1996 is the primary legislation governing ADR in India along with amendments concerning arbitration law and guidelines issued by the Indian judiciary from time to time. [1] Lok Adalats constituted under the Legal Services Authorities Act, 1987 is another notable ADR mechanism strongly promoted in India to settle disputes through compromise without undergoing the convoluted litigation process. [2] Overall, the policy focus is now on mainstreaming ADR to handle more routine disputes thereby improving the efficiency and credibility of India’s legal system.

Types of ADR Practiced in India

Negotiation as Initial Dispute Resolution Mechanism

Negotiation refers to the voluntary discussion and deliberation between disputing parties or through authorized representatives to reach a mutually agreeable settlement. As the most direct dispute resolution approach without a third-party intervention, negotiation happens regularly in day-to-day life for resolving differences. It essentially entails good communication, understanding different viewpoints and a willingness to compromise for furthering one’s interests. [3]

In commercial contracts and dealings, negotiation clauses are increasingly being included as the preliminary dispute redressal mechanism before exploring options of mediation and arbitration subsequently. Negotiation is suitable for conflicts in a business relationship where parties intend to operate on long term basis. It provides the flexibility of arriving at creative solutions like future business dealings which may not be possible in adjudicatory processes. Settlement through negotiation also allows the outcome to remain confidential without unneeded publicity.

Mediation as Assisted Negotiation Mechanism

Mediation involves an impartial and neutral third party assisting the disputing sides to negotiate for identifying mutually agreeable solutions. [4] As an extension of the negotiation approach, mediation helps in overcoming roadblocks if direct negotiation between parties reached an impasse due to lack of communication. The mediator through specialized communication and facilitation techniques tries re-establishing communication channels and helps parties take a broader conciliatory approach beyond their stated positions.

Under Section 89 of the Civil Procedure Code, judges hearing civil cases can direct the matter to mediation if elements of settlement exist and parties consent to this mechanism. [5] Mediation has proven useful in matters involving family disputes like divorce and child custody, commercial disputes, landlord-tenant disputes etc. where preserving relationships is important along with settlement of the conflict. Many mediation centers offer specialized domain and technical expertise to facilitate mediated negotiations in cases like medical negligence cases, IP and patent disputes etc. requiring subject matter knowledge.

The quick enforcement of decisions, privacy, confidentiality and flexibility makes mediation a more attractive ADR option relative to formal arbitration or court litigation. For instance, celebrity disputes are often mediated to avoid unwanted publicity of court proceedings involving personal details. The Supreme Court as well as High Courts have also been proactively directing parties to undergo mediation through court-annexed mediation centers where feasible to provide faster access to justice. [6]

Arbitration for Binding Decisions

Arbitration refers to the adjudicatory process of dispute resolution involving an impartial third party known as arbitrator upon whose decision the disputing parties agree to bind themselves. It is governed by the Arbitration and Conciliation Act which details the arbitration procedures, appointment processes and conditions for enforcement of awards. [7]

There are well laid out norms for serving notices, submission of statements, evidence taking, hearings and passing of award by the arbitrator. Arbitration commences based on mutual consent expressed through an arbitration agreement or contractual clause between the parties drafted prior to any dispute. Arbitration clauses are increasingly found in commercial contracts, partnership agreements etc. due to the sense of certainty and enforceability it provides for resolution of future disputes relative to mechanisms like mediation and conciliation.

Specialised institutions like Indian Council of Arbitration (ICA) and Federation of Indian Chamber of Commerce and Industry (FICCI) arbitration center provide robust arbitration services and maintain panels covering diverse sectors like insurance, construction, maritime, sports etc. [8] Arbitration is also statutorily provided for in areas like industrial disputes, motor accident claims etc. through bodies like labour arbitration tribunals and Motor Accident Claims Tribunals (MACTs).

The arbitrator relies on Contract Act provisions and factual evidence provided by parties during the arbitration hearings. The Supreme Court has outlined that arbitral awards can be appealed under restricted and specific grounds only like party incapacity, lack of arbitration agreement validity, not having opportunity for presenting one’s case fully etc. [9] This ensures minimal judicial intervention post arbitration increasing certainty around enforceability relative to mediation and conciliation resolutions.

Conciliation for Simple Dispute Resolution

Conciliation represents a less formal type of arbitration aimed at expediting simple dispute resolution through reconciliatory approach. [10] As per guidelines, parties appoint conciliators based on mutual consent to assist resolution. Representation of parties’ viewpoints, persuasive discussions, and suggestion of settlement terms are involved similar to mediation attempts.

If agreed settlement is reached through recommended terms or mutual negotiations, the signed agreement becomes binding and enforceable on parties. Key advantage of conciliation over mediation is that partial settlements and agreements also acquire legal sanctity compared to an ‘all or nothing’ approach under mediation which imposes heavier burden for total settlement.

The conciliator plays a proactive role in furnishing proposals for consideration and in getting parties to re-examine rigid positions through constant engagement. ConciliationSuccess is highly dependent on the personality, negotiation skills and subject expertise of the individual conciliator.

Conciliation clauses are increasingly finding place in commercial contracts alongside arbitration for providing a speedier resolution before invoking arbitration which is relatively more complex and expensive. Conciliation works best for disputes involving straightforward claims and issues rather than complex technical and forensic review requiring domain expertise arbitrators.

Lok Adalats – Uniquely Indian ADR Mechanism

The system of Lok Adalats organized by statutory legal services authorities act as an effective ADR mechanism purely based on Indian ethos and jurisprudence. Promoting resolution of pending matters on the basis of conciliation and compromised settlement is the prime objective under it. [11]

While other ADR methods like arbitration typically involve legal professionals and retired judges, Lok Adalats comprise judicial officers, legal experts, social workers etc. with mandate for satisfied disposal. There is no court fee levied for cases filed directly at Lok Adalat while for matters pending in courts, the fee gets refunded upon settlement without having to undergo the tedious evidence production, cross-examination and arguments standard in traditional court litigation. [12]

Flexibility pertains not only to resolution approach but also to the execution process like parties approaching Taluk Lok Adalat for reconciliation before initiating court enforcement proceedings in case of award breach. Areas like monetary disputes, bank loans, civil suits, matrimonials, and labour issues coming under Lok Adalat jurisdiction see very high (over 90% in certain categories) settlement rates across states indicating the effectiveness. [13] While award given by Lok Adalat judges need not follow strict legal provisions or evidentiary requirements, the final order has the binding effect of a civil court decree.

Reach of ADR in Key Indian Sectors

Commercial Dispute Resolution

Commercial disputes arising over contract breaches, payment claims, partnership fallouts etc. can rarely afford the delays of traditional three-tier Indian court system often running into years. Litigation also drains key resources and hampers business relationships with outcomes remaining continually under suspense. Opting for time-bound ADR procedures thus becomes imperative to resolve such disputes for regaining business momentum.

Under the Commercial Courts Act, commercial disputes above INR 3 lacs get referred to arbitration or other ADR mechanisms by courts if substantial parts remain uncontested or parties display readiness to pursue amicable settlement. [14] Industries like construction, real estate, logistics etc. are including multi-tier ADR covering negotiation, mediation and arbitration in business contracts conforming to the arbitration law for timely settlement.

Intellectual Property Disputes Resolution

IP disputes related to areas like copyrights, trademark infringements and patent oppositions involve intricate technical and evidentiary issues. Adjudicatory ADR procedures allow specialized subject experts to evaluate merits based on niche domain knowledge. The Delhi High Court has proposed setting up India’s first international arbitration center focused exclusively on IP dispute resolution adopting global best practices. [15]

Taxation and finance related arbitrations are also growing exponentially with over 250 tax disputes involving amounts totalling to INR 1.75 lakh crores getting covered under the ‘Vivad Se Vishwas’ Direct Tax dispute resolution scheme as on mid-2020. [16] The scheme promoted settling tax disputes through conciliatory payments instead of pursuing long arbitration or court battles.

Easing Docket Burden on Judiciary

The Chief Justice of India has strongly advocated for extensive use of ADR mechanisms by courts and tribunals to reduce pendency of cases across all levels. [17] Courts have been evolving various routes and guidelines for increased reliance on ADR procedures instead of full-fledged trials. For example, hiding vital facts from mediation to subsequently seek trial in courts will not be permissible where reasonable settlement possibilities exist as per Supreme Court ruling to prevent misuse of court resources. [18]

The employed and self-employed middle income group got significant relief from long pending labour disputes with the EPF Appellate Tribunal agreeing for structured negotiation settlements. As per ministry data, this helped clearing 93% of the pending 75,000 EPF grievance and dispute cases. [19] Likewise, family court matters like annulments and divorce upon mutual consent are being referred by judges for mediation at first instance before taking up meritorious trials. Such steps reinforce India’s commitment towards just and speedy dispute resolution.

Advantages of Embracing ADR

Win-win for parties

ADR processes allow parties to arrive at innovative and customized solutions aligned to interests rather than getting constrained by positions alone. Settlement terms can preserve relationships and enable sustainable remedies through engaging experts like child counselors and succession planners in case of family and inheritance disputes. [20] Parts of agreements can also be kept confidential as suited to business needs unlike rigid courtroom proceedings.

Quicker enforcement

Unlike endless adjournments and lengthy evidence hearings marking regular trials, ADR delivers resolution faster through structured processes like focused hearings and framed issues. Awards get recognition and enforcement as deemed decrees. Even settlement execution can avail simplified procedures like fast track Lok Adalat reconciliation without undergoing civil court execution formalities mandating lawyer representation again. [21]

Lower costs

Absence of tedious procedural compliance, lawyer fees for countless hearings and attendance of witnesses makes ADR more affordable. For small businessmen and individuals, opting for arbitration over litigation is 40% cheaper on average as per cost comparison studies. [22] Further ADR procedures like fast track arbitration are gaining momentum which economize resolution time and money resource of parties.


ADR procedures offer confidentiality of proceedings which court trials seriously lack with advocates releasing details openly during case arguments. Protecting client interests by avoiding unwanted publicity remains paramount in disputes involving reputation, underlying medical reasons, family matters and commercial secrets. Online ADR methods are also evolving as customized ODR solutions which elevate privacy aspects. [23]

Technological integration

Adoption of technology is revolutionizing conventional ADR through online mediation, e-arbitration platforms, video conference hearings and AI expert bots for evaluation. ODR facilitates out-of-court settlements removing geographical limitations and physical appearance needs during pandemic. Evolving mobile apps even aid document submission, online fee payments, scheduling, and multi-party conferencing. [24]

Challenges Faced in Mainstreaming ADR

Lack of awareness

Limited knowledge among public around adequacy of ADR and associated advantages relative to traditional justice delivery systems hampers adoption levels. Many still perceive them as informal mechanisms lacking statutory teeth and unable to protect rights adequately. Building confidence requires accelerating awareness drives through legal literacy camps, community participation and public-private partnerships. [25]

Inadequate infrastructure

India needs more dedicated ADR and mediation centers with panel of accredited experts covering diverse sectors and domains. Training resources for mediators and arbitrators also need enhancement to global standards. The Bangalore Mediation Center managed settlement rate of over 80% in referred cases displays the impact specialized centers make. [26] Judicial academies must prioritizeобав vibrant ADR ecosystem. [27]

Cost concerns

Though relatively affordable than litigation, growing professional costs of mediators and charges of arbitral institutions hinder sections from embracing ADR fully. Concerns also exist around unpredictable fee splitting, absence of model formats for non-administered arbitrations etc. Framing cost regime guidelines and graded fee structures can improve affordability. [28] The Karnataka government has taken welcome steps of recognizing Lok Adalats awards at par with civil court decrees for minimal costs. [29]

Reluctance to change

Entrenched socio-legal mindset viewing ADR solutions as informal continues blocking its growth trajectory beyond a certain base. Lawyers also hesitate promoting ADR voluntarily fearing loss of billing, while judges face subtle resistance to change in recommending referral suo moto. Building conviction for mainstreaming ADR as the first resort requires concerted steps. [30]

Future Trajectory for ADR Growth

The ADR landscape in India holds strong promise based on the sustained policy push and evolving regulatory architecture to facilitate affordable and timely access to justice. With over 30 million cases pending across Indian courts, ADR adoption becomes crucial for tackling case backlogs. [31]

By 2024, the arbitration landscape in India is projected to grow into a billion dollar industry as per ASSOCHAM estimates indicating massive headroom for growth. Thrust areas would encompass strengthening arbitral institutions, grooming professionals, improving enforceability climate and fine-tuning arbitration-related regulatory aspects. [32] Increased inter-country commercial transactions also augurs well for international arbitration outlook.

Having initiated historic judicial reforms like National Judicial Data Grid (NJDG), National Court Management Systems and establishment of commercial courts, embracing ADR wholeheartedly forms the logical next step. It would also bring India at par with evolved ADR ecosystems across countries like Singapore, France and Hong Kong facilitating their faster movement in contract enforcement and dispute resolution indices. [33]

Overall there lies enormous potential in making ADR the preferred first mechanism to realize the vision of affordable and timely justice reaching the common man through collaborative efforts of the executive, legislature and the judiciary. Rather than undermining the litigation route, systematically easing the pressure on courts through ADR where dispute nature permits, can benefit the constitutional goal of justice delivery the most.


[1] The Arbitration and Conciliation Act, 1996

[2] The Legal Services Authorities Act, 1987

[3] Ho, K.Y.I. (2014). Control, Communication & Power: Study on Negotiation & Mediation in Intellectual Property Disputes. Asia Pacific Law Review, 22(2), 185-204.

[4] Madhok, S. (2013). Role of Mediation: An Analysis. Journal of Legal Studies and Research, 1(5), 26-33.

[5] Civil Procedure Code Amendment (2002), Code of Civil Procedure, 1908

[6] Afcons Infrastructure Ltd vs Cherian Verkay Constructions (P) Ltd (2010) 8 SCC 24

[7] The Arbitration and Conciliation Act, 1996

[8] The Indian Council of Arbitration

[9] Associate Builders vs Delhi Development Authority (2014)

[10] The Arbitration and Conciliation Act, 1996

[11] The Legal Services Authorities Act, 1987

[12] National Legal Services Authority

[13] State Legal Services Authority Reports

[14] Iram Majid, ADR in Commercial Disputes, Galgotias Journal of Legal Studies 1 (2021)

[15] Manas Chandan & Sappho D’Souza, India: Delhi High Court’s IP Division Proposes to Establish India’s First International Arbitration Centre, Mondaq (2020)

[16] Times of India, Nov 2020

[17] Economic Times, Jul 2019

[18] Afcons Infrastructure Ltd vs Cherian Verkay Constructions (P) Ltd (2010) 8 SCC 24

[19] The Times of India, Jul 2019

[20] Madhok, S. (2013). Role of Mediation: An Analysis. Journal of Legal Studies and Research, 1(5), 26-33

[21] The Legal Services Authorities Act, 1987

[22] Jayanth K. Krishnan, Globetrotting Law Firms, 23 Geo. J. Legal Ethics 57 (2010)

[23] Pavani Diwanji, Online Dispute Resolution: The India Perspective, 8(28) NLSIR 79 (2021)

[24] Pavani Diwanji, Online Dispute Resolution: The India Perspective, 8(28) NLSIR 79 (2021)

[25] Ho, K.Y.I. (2014). Control, Communication & Power: Study on Negotiation & Mediation in Intellectual Property Disputes. Asia Pacific Law Review, 22(2), 185-204.

[26] Bangalore Mediation Centre

[27] Mittal Rishi and Bafna Pallavi, Mediation Training Manual of India, Asia Pacific Mediation Forum 2017

[28] SA Ramesh, Arbitration Costs in India – Challenges and Solutions, MDA Consulting (2020)

[29] Deccan Herald, Nov 2017

[30] Ho, K.Y.I. (2014). Control, Communication & Power: Study on Negotiation & Mediation in Intellectual Property Disputes. Asia Pacific Law Review, 22(2), 185-204.

[31] Economic Times, Feb 2020

[32] Times of India, Dec 2018

[33] Singhania & Partners LLP, Nov 2018 https://singhania.

Leave a Reply