ALTERNATIVE DISPUTE RESOLUTION (ADR): CONCEPT AND NEED

The fast-paced globalization led to a massive surge in the number of disputes – commercial or
otherwise. Cross border transactions and bilateral trade relations played a significant role in
increasing the legal intricacies. The Indian courts have traditionally been deemed slow in their
swiftness and efficiency. Further, the endemic delays and lengthy adjudications in Indian legal
system prompted the parties to realize the necessity of simpler and more expeditious ways of
resolving the disputes.

Consequently, ADR mechanisms such as Arbitration, Mediation and Conciliation gained power
and went on to become an integral component of commercial contracts. Parties chose to opt for
arbitration to stay outside the ambit of courts. India hasn’t quite reached a stage where litigation
has been completely displaced by ADR methods, but the legal system is beginning to see the
benefits of ADR.

What is alternative dispute resolution?

Alternative dispute resolution (ADR) refers to a range of dispute settlement methods which help
the parties in the dispute to come to a settlement without going to court, or without litigating on
the said matter. These methods usually involve a third party, who helps them in settling the
disputes. In many cases, ADR methods are used alongside the litigation process as well through
court authorization.

How did the concept of ADR arise?

As stated in the 222nd Report of the Law Commission of India, the Constitution has guaranteed
access to justice for all, primarily through Article 39A, which states that everyone must have an
equal opportunity of getting justice and this must not be denied to any citizen by reason of
economic or other sort of disabilities.

The report further states that ‘access to justice’ for the common masses in India means access to
the courts of law. But even that has been hindered, due to factors like poverty, illiteracy,
ignorance, social and political backwardness etc.

In a developing country like India, many people still live in poverty. When their rights get
violated, they often do not have the money to fight long battles in the Court. They do not have
the money to afford a lawyer. They do not know the legal system and procedures. Therefore,
they often think that the court system is an inconvenience.

These kinds of inefficiencies are shared reasons among many countries, which is why ADR is
being explored. The courts also have too many pending cases and these cases keep going on for
many years which is a tremendous burden to the courts.

These reasons prompted the Indian Government to enact Section 89 of the Code of Civil
Procedure, 1908 and replace the earlier Arbitration Act,1940 with The Arbitration and
Conciliation Act 1996, in accordance with the mandates of the United Nations Commission on
International Trade Law (UNCITRAL).

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Pros of ADR
 It is less expensive.
 It is less time consuming.
 It is free from the technicalities that are present in the court system.
 The parties are free to differ in their opinion and can discuss their opinions with each
other, without any fear of disclosure of this fact before the courts.
 There is no feeling of enmity between the parties as there is no winning and losing
side. They also get their grievances redressed and their relationship remains as it was
before, therefore, they can conduct future business deals with each other.
 ADR is more suitable for multi-party disputes, as all the parties can put forward their
opinions at the same place and in one go, rather than going to court again and again.
Also, it provides for a wider perspective of the dispute.
 The parties often have the choice of the ADR method to be used. They sometimes also
have the choice to select the individuals or bodies who will settle the dispute.
 The process is also very flexible, according to what suits the parties.
 The parties also have the option of being confidential. The ADR system also enables
the parties to put focus on practical solutions.
 A wider range of issues are considered and shared future interests of the parties are
protected.
 ADR system also allows for risk management.
Cons of ADR
 ADR is not helpful where a dispute is to be decided on the basis of a precedent.
 When there is a need for court and interim orders, ADR would not be useful.
 ADR is less suitable when there is a need for enforcement.
 When there is a need for live and expert evidence and analysis in a case, then ADR
would not be useful.
 When there is an imbalance of power, between the parties in the dispute, then ADR
would not work.
 If the case is of a complex nature, then the adjudicating body must look into minor
details and may need expert advice and suggestions. Here, ADR would probably not
work.

Types of ADR methods

The following are the modes of ADR practiced in India:
1. Arbitration 4. Negotiation
2. Mediation 5. Lok Adalat
3. Conciliation

ARBITRATION
Arbitration in India is governed by The Arbitration and Conciliation Act, 1996. It is a form of
dispute resolution where one or more parties are appointed to adjudicate the dispute. They act as
third parties. This third party should be neutral and this party is referred to as an ’arbitrator’
while the decision of the arbitrator, which is essentially a determination of merits in the case, is
known as ‘arbitration award’.

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The arbitration process is informal and this process allows the dispute to be resolved amicably
and efficiently as it takes less time and involves lesser costs for the parties. Therefore, parties
frequently choose to arbitrate when disputes arise, especially in the business world.

Before the arbitration process begins, an arbitration agreement is required to be formed. This
agreement lays down the terms and conditions on which the arbitration process is carried out. It
is determined through this agreement as to how the process will be made cheaper, efficient and
how the rules of evidence would be applied etc. This agreement should be valid as per The
Indian Contract Act 1972 and the parties must have the capacity to contract under Sections
11 and 12 of the same Act.

Arbitral decisions are final and binding on the parties, who have limited scope of objecting to the
decisions. Non-binding arbitrations also exist wherein the party can request a trial if it is not
satisfied with the arbitrator’s decision.

Types of arbitration are:

Ad Hoc Arbitration - An ad hoc arbitration is one which is not administered by an institution
and therefore, the parties are required to determine all aspects of the arbitration like the number
of arbitrators, manner of their appointment, etc. Provided the parties approach the arbitration in a
spirit of cooperation, ad hoc proceedings can be more flexible, cheaper and faster than an
administered proceeding.
In case if the parties are not able to settle on one arbitrator, or one of the parties is reluctant to
appoint that particular arbitrator, then Section 11 of The Arbitration and Conciliation Act 1996
will be invoked by the other party. Under Section 11 of the Act, the arbitrator for that dispute
will be appointed by either the Chief Justice of the Supreme Court or his designate or the Chief
Justice of the High Court or his designate.

 If it is a domestic arbitration, then the Chief Justice of the High Court or his designate
will appoint the arbitrator.
 If it is international commercial arbitration, then the Chief Justice of India or his
designate will appoint the arbitrator. In ad hoc arbitration, the fee of the arbitrator is
decided mutually by the parties and the arbitrator.

The advantage is that, it is agreed to and arranged by the parties themselves. However, the
ground realities show that arbitration in India, particularly ad hoc arbitration, is becoming quite
expensive vis-à-vis traditional litigation.

Institutional Arbitration - An institutional arbitration is one in which a specialized institution

with a permanent character intervenes and assumes the functions of aiding and administering the
arbitral process, as according to the rules of that institution. These institutions do not arbitrate the
dispute, it is the arbitrators who arbitrate, and so the term arbitration institution is inapt and only
the rules of the institution apply.

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In this kind of arbitration, the parties decide in the agreement itself, that an arbitration institution
will administer the arbitration. The Indian institutions are
 International Centre for Alternative Dispute Resolution and
 The Indian Council of Arbitration.
These institutions formulate the rules for arbitration owing to their experience in observing
arbitral procedures and situations, therefore they are prepared for all possible situations that may
arise in future arbitration cases.

Statutory Arbitration - When a law specifies that if a dispute arises in a particular case it has to
be referred to arbitration, the arbitration proceedings are called “statutory arbitration”. Section
2(4) of the Arbitration and Conciliation Act 1996 provides, with the exception of section 40(1),
section 41 and section 43, that the provisions of Part I shall apply to every arbitration under any
other act for the time being in force in India.

Fast track arbitration - Fast track arbitration is a time-bound arbitration, with stricter rules of
procedure, which do not allow any laxity for extensions of time, and the resultant delays, and the
reduced span of time makes it more cost effective. Sections 11(2) and 13(2) of the 1996 Act
provides that the parties are free to agree on a procedure for appointing an arbitrator and choose
the fastest way to challenge an arbitral award respectively. The Indian Council of Arbitration
(ICA) has pioneered the concept of fast-track arbitration in India and under its rules, parties may
request the arbitral tribunal to settle disputes within a fixed time frame.

MEDIATION
In mediation, a third neutral party aims to assist two or more disputants in reaching a settlement.
This third party is referred to as the mediator. The mediator needs to properly communicate with
both the parties and use proper negotiation techniques, in order to make one party fully aware of
the other party’s perspective, through empathy and dialogue. This process is controlled by the
parties.

The mediator is not allowed to give an outcome of the dispute. The solution is given mutually,
and the agreements are generally non-binding. Parties are in significant control of the mediation
process and it is strictly confidential. The parties can even go for litigation if they are not
satisfied with the mediation process.

It must be observed that the main aim of the mediation process is to build relationships, and not
to make a decision. It is more of an amicable resolution of differences with potential form future
business between the parties. In India, mediation has not yet been very popular. One of the
reasons for this is that mediation is not a formal proceeding and it cannot be enforced by courts
of law. There is a lack of initiative on the part of the government or any other institutions to take
up the cause of encouraging and spreading awareness to the people at large.

NEGOTIATION
Negotiation is also a form of dispute resolution, but there is no third party to adjudicate the
matter, therefore the parties work together to find a mutually acceptable solution or a

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compromise. The parties may choose to be represented by their attorneys during their
negotiations. Negotiation is not statutorily recognized in India. There are no set rules for
conducting a negotiation, it follows a predictable pattern.
Essentials of negotiation-
 It is a communication process;
 It resolves conflicts;
 It is a voluntary exercise;
 It is a non-binding process;
 Parties retain control over outcome and procedure;
 There is a possibility of achieving wide ranging solutions, and of maximizing joint gains

CONCILIATION
In conciliation, the third party, who is called the conciliator, talks to the parties involved
separately so that the parties can arrive at a mutually acceptable solution through facilitating
talks between the parties. Conciliation is also governed in India under The Arbitration and
Conciliation Act, 1996. Under Section 61, conciliation is provided for disputes arising out of
legal relationships, whether they are contractual or not.

Difference between mediation and conciliation

In mediation, the mediator plays a more active role in the process by proposing compromise
solutions after hearing all parties while in the case of conciliation, the conciliator has to bring the
parties into such a state of mind as to facilitate the parties to come to an acceptable compromise.

LOK ADALATS
In a country like India where there are many illiterate people, the concept of Lok Adalats is a
necessity. This was first introduced in 1982 in Gujarat. This concept mainly focused on reducing
the burden of pending cases on the Courts and has incorporated the concept keeping in mind
various factors like social justice.
Lok Adalats are governed under The Legal Services Authorities Act,1987. Sections
19, 20, 21 and 22 specifically deal with Lok Adalats. They have been organised by the State
Legal Aid and Advice Boards with the aid of District Legal Aid and Advice Committees. These
have helped poor people to avoid the inefficiencies of litigation.

The aim of The Legal Services Authorities Act was to provide access to justice for all, whether
he be poor or rich. Since the poor masses of the society were not being delivered on this promise,
this Act was formed. This access has been further strengthened by judgements of various courts,
such as the Delhi High Court, in the case of Abul Hasan and National Legal Service Authority v.
Delhi Vidyut Board & Ors. AIR 1999 Del 88, where it gave an order for setting up permanent
Lok Adalats. Further, the decision given by the Lok Adalat is binding and shall be treated akin to
the order of a civil court., thereby increasing poor people’s access to justice.

Need for Alternative Dispute Resolution

1. Amicable settlement of disputes - ADR provides for a friendly settlement of disputes. In
business it is a prudent approach to have a competitor not a rival. It is clear that a healthy

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 competition brings improvement and it’s also cost effects cost of service or commodities
in every sphere.
2. Speedy disposal of trial - ADR provides for speedy disposal of trials. Unlike litigation
process in ADR there is no scope of adjournment or stay order.
3. Economical settlement of disputes - Unlike litigation process where huge expenses are
incurred to pay the advocates and other people involved in the trial, in ADR it is not the
case and minimum amount of money is required.
4. Time saving management - In ADR the dispute is resolved without following the
cumbersome procedure of ordinary litigation that’s why ADR is also known as dispute
management.
5. Legal recognition - This system has been recognized in the Indian Statutes. For instance-
now the Civil Procedure Code,1908, Order 32-A, Rule 3 contains scope for compromise
and the decree evolved from that compromise is not appealable. Notably, section 12 of
the Industrial Disputes Act,1947 contemplated provisions for conciliation as pre-requisite
for any pressure tactics/collective bargaining.
6. Advent of multinational corporations - A number of multinational corporations are
coming to invest and establish their business. These businesses have dynamic approach in
their business activities. Therefore, in case of disputes they should be provided with such
a mechanism which can resolve their dispute immediately and without delays.

LEGAL AID
India which is known to be the second most populated country in the world has the majority of
illiterate. The major part of individuals doesn’t know about the legal system of the nation and
furthermore of their protected rights. Even though individuals know about it, they are not in a
circumstance to manage the cost of giving their monetary and social backwardness. They are in a
defenseless circumstance to be able to afford the service of legal counselors, which has turned
into expensive affairs.

Legal aid means “free legal assistance to the poor persons in any judicial proceedings before
the Court, Tribunals or any authority”. It intends to provide free legal assistance to the poor
persons who are not able to enforce the rights given to them by law.

Justice P.N. Bhagwati has clearly stated that legal aid means providing an arrangement in the
society which makes the machinery of administration of Justice easily accessible and in reach of
those who have to resort to it for enforcement of rights given to them by law. He has rightly said
that the poor and the illiterate should be able to approach the courts and their ignorance and
poverty should not be an impediment in the way of obtaining justice from the Courts. The
constitution of India gives much importance to rule of law. In India, it is regarded as a part of the
basic structure of the Constitution and also of natural justice. Free legal aid to the poor and weak
persons has been held to be necessary adjunct of the rule of law.

Legal Aid Definition

‘Legal Aid’ has been taken to mean the organized effort of the bar council, the community and
the government to provide the services of lawyers free, or for a token charge, to persons who

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cannot afford the usual exorbitant fees. Inability to consult or to be represented by a lawyer may
amount to the same thing as being deprived of the security of law.

Under Section 2(1)(c) of the Legal Services Authorities Act, 1987 (hereinafter referred to as ‘the
said Act';), “Legal Service” includes the rendering of any service in the conduct of any case or
other legal proceeding before any court or other authority or tribunal and the giving of advice on
any legal matter; To provide free and competent legal services to the weaker section of the
society was the basic object of enacting the aforesaid Act. Justice - social, economic and
political, is our constitutional pledge enshrined in the preamble of our Constitution. The
incorporation of Article 39-A in the Directive Principles of State Policy in the year 1976,
enjoined upon the State to ensure justice on the basis of equal opportunity by providing free legal
aid.

NEED OF PROVIDING LEGAL AID

Legal aid plays a crucial role in enabling people to make informed decisions, as well as to obtain
justice remedies. Legal aid strives to ensure that equal justice is made available to the poor,
downtrodden and weaker sections of the society. It helps people to assert their rights and to
contest cases of discrimination. It contributes to enhancing people’s trust in the justice system,
and it enhances the legitimacy of the state.

Legal aid can also ensure that people have access to information about their rights, entitlements,
and obligations. Access to legal aid is fundamental to safeguarding fair, equal, and meaningful
access to justice.

1. Legal aid is not a charity or bounty, but is an obligation of the state and right of the
citizens. The prime object of the state should be “equal justice for all”. Thus, legal aid
strives to ensure that the constitutional pledge is fulfilled in its letter and spirit and equal
justice is made available to the downtrodden and weaker sections of the society.
2. According to United Nations Principles and Guidelines on Access to Legal Aid in
Criminal Justice Systems— “Legal aid is an essential aspect of a fair, humane, and
efficient criminal justice system based on the rule of law. Without access to legal aid,
millions of people around the world are at high risk of having their rights ignored or
violated when they interact with a criminal justice system, including through arbitrary
pretrial detention, torture, coerced confessions, and/or wrongful convictions.”
3. Legal aid enables society’s poor and marginalized groups to better understand and
exercise their rights and entitlements. They may resolve their disputes peacefully, and
seek remedies for grievances and thereby enjoy equal protection of the law.
4. Effective legal aid service systems can improve the performance of justice systems,
including law enforcement, simultaneously increasing accountability and respect for the
rule of law – all of which are integral to sustainable development. Access to legal
information and assistance with legal or justice-related issues are also key for upholding
human rights.

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 5. In the context of criminal justice, a functioning legal aid system is essential to ensure a
fair, efficient and effective criminal justice system. Providing legal aid to persons accused
or suspected of a crime can protect their right to a fair trial.
6. In civil matters, access to legal aid for poor and marginalized groups – for example, to
resolve disputes over land and property or in commercial or family cases – can help
empower poor and marginalized groups. They may claim their rights and entitlements,
use their assets, and grant them access to services and benefits they are entitled to under
the law.

CONSTITUTIONAL PROVISIONS RELATING TO LEGAL AID

In the context of our Constitutional demands and State obligations Legal aid has assumed a more
positive and dynamic role which should include strategic and preventive services. Relieving
‘Legal Poverty’– the incapacity of many people to make full use of law and its institutions has
now been accepted as a function of a ‘Welfare State’.

Apart from the social, economic and political requirements on which the claim of legal aid rests,
its now recently recognized as a constitutional imperative arising from Articles 14[2], 21[3],
22[4](1), 39-A[5] of The Constitution of India.

Article 14 of the Constitution of India reads “The State shall not deny to any person equality
before the law or the equal protection of the laws within the territory of India.”

Article 21 plainly says that each individual has an equal right to life and liberty except according
to the procedure.

Article 38(1) affirms that the State will advance the welfare of the general population by
verifying and ensuring the social order including justice.
Case Hussainara Khatoon vs. State of Bihar: In this case, the court held that the accused has the
right to free legal aid at the expense of state if he is not able to afford legal service for himself.

Article 39A of the Constitution of India provides for equal justice and free legal aid. It lays
down that—
“The State shall secure that the operation of the legal system promotes justice, on a basis of
equal opportunity, and shall, in particular, provide free legal aid, by suitable legislation or
schemes or in any other way, to ensure that opportunities for securing justice are not denied to
any citizen by reason of economic or other disabilities.”
Articles 14 and 22 (1) of the Constitution of India also make it obligatory for the State to ensure
equality before law and a legal system which promotes justice on a basis of equal opportunity to
all.

Art 39A. Equal justice and free legal aid - The state shall secure that the operation of the legal
system promotes Justice on a basis, of equal opportunity, and shall in particular, provide free
legal, aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for
securing Justice are not denied to any citizen by reason of economic or other disabilities”.

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The Constitution of India under Article 39-A mandates for free legal aid to the poor and weaker
sections of society. The Legal Services Authorities Act, 1987, as amended by the Act of 1994
which came into force on 9th November 1995, aims at establishing a nation-wide network for
providing free and comprehensive legal services to the weaker sections. It makes it obligatory for
the State to ensure equality before law and a legal system which promotes justice on a basis of
equal opportunity to all. Legal aid strives to ensure that constitutional pledge is fulfilled in its
letter and spirit and equal justice is made available to the poor, downtrodden and weaker sections
of the society.

Legal aid under Criminal Procedure Code

Section 304 of the Criminal Procedure Code provides that where in a trial before the Court of
Session, the accused is not represented by a pleader and where it appears to the court that the
accused has not sufficient means to engage a pleader; the court shall assign a pleader for his
defence at the expense of the State.

Section 304 makes it clear that the State is under an obligation to provide legal assistance to a
person charged with offence triable before the Court of Session. It enables the State Government
to direct that these provisions shall apply in relation to any class of trials before other courts in
the State.

Legal aid under Civil Procedure Code

Order 33 of the Civil Procedure Code provides in respect of a suit by indigent person. When the
application to sue as indigent person has been granted, the plaintiff shall not be liable to pay
court fee. In case a pleader does not represent him, the court may, if the circumstances of the
case so require, assign him a pleader as well.

Khatri vs State of Bihar

In this case, the Supreme Court has held that the state is constitutionally bound to provide legal
aid at not only the stage of trial, but also when they are first produced before the magistrate or
remanded from time to time. Such a right cannot be denied on the ground of financial constraints
or administrative inability or that the accused did not ask for it. Magistrates and sessions judges
must inform the accused of such rights. The right to free legal services is an essential ingredient
of reasonable, fair and just procedure for a person accused of an offence. This right is implicit in
the guarantee of Article 21 and the State is under a constitutional mandate to provide a lawyer to
an accused person, if the circumstances of the case and the needs of justice so require.

MH Hoskot vs State of Maharashtra

If a prisoner sentenced to imprisonment is unable to exercise his constitutional and statutory right
of appeal inclusive of special leave to the Supreme Court for want of legal assistance, there is
implicit in the court, the power to assign counsel for such imprisoned individual for doing
complete justice.2)

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Abdul Hasan vs Delhi Vidhyut Board
Legal system should be able to deliver expeditiously on the basis of equal opportunity and
provide free legal aid to ensure that opportunities for securing justice are not denied to any
citizen by reason of economic or other disabilities.3)

THE LEGAL SERVICES AUTHORITY ACT, 1987

Legal aid is an essential part of the Administration of Justice. Access to Justice for all is the
motto of the Authority. The goal is to secure justice to the weaker sections of the society,
particularly to the poor, downtrodden, socially backward, women, children, handicapped etc. but
steps are needed to be taken to ensure that nobody is deprived of an opportunity to seek justice
merely for want of funds or lack of knowledge.

The Legal Services Authority Act, 1987 was enacted to effectuate the constitutional mandates
enshrined under Articles 14 and 39-A of the Constitution of India. The object is to provide
‘Access to Justice for all’ so that justice is not denied to citizens by reason of economic or other
disabilities. However in order to enable the citizens to avail the opportunities under the Act in
respect of grant of free legal aid, it is necessary that they are made aware of their rights.

By the Constitutional 42nd Amendment Act of 1976, a new provision was incorporated in the
Constitution under Article 39-A, for providing free Legal Aid and enhancing the concept of
equal justice found a place in our constitution Article 39-A which was incorporated under part
IV-Directive Principles of State Policy reads as under:-
Equal justice and free legal aid-The State shall secure that the operation of the legal system
promotes justice, on a basis of equal opportunity, and shall, in particular, provide free legal aid,
by suitable legislation or schemes or in any other way, to ensure that opportunities for securing
justice are not denied to any citizen by reason of economic or other disabilities.

LEGAL AID reasoned in the Act - The Court has been approached by an organization deeply
engaged in rendering social and judicial services for securing justice and equal opportunity to the
needy. They have approached the Court for mandamising the State to carry out the objectives
and obligation of Article 39-A of the Constitution of India as well as the mandate of the Act,
introduced with tall claims. The Court held that the petitioner are entitled to ask the High Court
to issue directions sought for in the writ petition for proper implementation of the provisions of
the Act and to carry out the purposes of the Act in true sense and spirit and not to scuttle it by
resort to any pretences and/or treat the constitutional directives as an empty slogan.

With the object of providing free legal aid, the Government of India had, by a resolution dated
26th September, 1980 appointed a Committee known as Committee for Implementing Legal Aid
Schemes (CILAS) under the chairmanship of Chief. Justice P.N. Bhagwati to monitor and
implement legal aid programs on a uniform basis in all the States and Union Territories. ‘CILAS’
evolved a model scheme for legal aid programs applicable throughout the country by which
several legal aid and advice Boards were set up in the States and Union Territories.

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The National Legal Services Authority is a statutory body which has been set up for
implementing and monitoring legal aid programs in the country. The Supreme Court Legal
Services Committee has also been constituted under the Act. In every High Court also, The High
Court Legal Services Committees are being established to provide free legal aid to the eligible
persons in legal matters coming before the High Courts. The Legal Services Authorities Act,
1987 also provides for constitution of the State Legal Services Committees, High Court Legal
Services Committees, District Legal Services Committees and Taluk Legal Services Committees.
According to Section 2(1) (a) of the Act, legal aid can be provided to a person for a 'case' which
includes a suit or any proceeding before a court. Section 2(1) (a) defines the 'court' as a civil,
criminal or revenue court and includes any tribunal or any other authority constituted under any
law for the time being in force, to exercise judicial or quasi-judicial functions. As per Section
2(1)(c) 'legal service' includes the rendering of any service in the conduct of any case or other
legal proceeding before any court or other authority or tribunal and the giving of advice on any
legal matter.

Legal Services Authorities after examining the eligibility criteria of an applicant and the
existence of a prima facie case in his favour provide him counsel at State expense, pay the
required Court Fee in the matter and bear all incidental expenses in connection with the case.
The person to whom legal aid is provided is not called upon to spend anything on the litigation
once it is supported by a Legal Services Authority.

Under The Legal Services Authorities Act, 1987 every citizen whose annual income does not
exceed Rs 9,000 is eligible for free legal aid in cases before subordinate courts and high courts.
In cases before the Supreme Court, the limit is Rs 12,000. This limit can be increased by the state
governments. Limitation as to the income does not apply in the case of persons belonging to the
scheduled castes, scheduled tribes, women, children, handicapped, etc.

Concept of Legal Aid

Legislative History - The right to assignment of counsel at Government expenses was
emphasized in the 14th Law Commission Report. Thereafter, in 1969, the Law Commission
again strongly recommended that the right of the accused to representation at the cost of
Government should be placed on statutory footing in relation to trials for serious offences and as
a first step in this direction, the Commission proposed that such a right should be available in all
trials before the Court of Session.

In order to achieve the objective enshrined in Article 39-A of the Constitution, Government had,
with the object of providing free legal aid, by a Resolution appointed a committee for
implementing Legal Aid Scheme to monitor and implement Legal Aid Programmes on a uniform
basis in all States and Union Territories. The said Committee evolved a model scheme which
was accordingly implemented by the Government. But on review, certain deficiencies were
found and it was considered desirable to constitute statutory legal authorities at National, State
and district levels so as to provide effective monitoring of Legal Aid Programmes.

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For the disposal of large number of cases expeditiously and without much cost Lok Adalats have
been constituted and they have been functioning as a voluntary and conciliatory agency without
any statutory backing for its decisions. In order to provide for the composition of statutory legal
authorities and to provide statutory backing to Lok Adalats and its awards the Legal Services
Authorities Bill, 1987, was introduced in the Lok Sabha on 24th August 1987.

Article 39-A of the Constitution provides that the State shall secure that the operation of the legal
system promotes justice on a basis of equal opportunity, and shall, in particular, provide free
legal aid, by suitable legislation or schemes or in any other way, to ensure that opportunities for
securing justice are not denied to any citizen by reason of economic or other disabilities. With
the object of providing free legal aid, Government had, by Resolution, appointed the “Committee
for Implementing Legal Aid Schemes” (CILAS) under the Chairmanship of Mr. Justice P.N.
Bhagwati (as he then was) to monitor and implement Legal Aid Programmes on a uniform basis
in all the States and Union territories CILAS evolved a model scheme for Legal Aid Programme
applicable throughout the country by which several Legal Aid and Advice Boards have been set
up in the States and Union territories, cilas in funded wholly by grants from the central
Government.

Object of the enactment of the said Act - In our democratic set-up, all laws are made for all
men - common or uncommon. By common man, in common parlance, we understand a man on
the street. A man who may not have any status, office, post or rank in society. He is only a
human being, an ordinary citizen with expectations of a just and human order. He may be a Tom,
Dick or Harry, Ram, Rahim or Shyam. The Expression includes a cobbler, sweeper, baker,
butcher, a priest, or a soldier.

A person of whatever name and nomenclature known in the society. A legal system and its
effectiveness has to be gauged or measured by the extent of its usefulness to the common man.
The failure of law for common man is due to no change of hear or outlook of other fellow beings
who are privileged and have a better status in the society. There has been no emotional
integration between haves in the society and have nots. The society cannot be improved by laws.
Social reforms are done not by laws but by leaders in the society who are virtuous, wise and of
high moral character. Before making the laws or along with them, no attempts have to be made
on behalf of the State of their agencies to spread moral education to encourage science with
spirituality. The spirituality and science alone can rule the world including the government based
on democracy in the absence of any effort in proper direction, the common man is deprived of
the benefit of the laws enacted for him which do not reach him due to inefficient bureaucracy
and mal-administration.

PERSONS WHO ARE ENTITLED TO GET FREE LEGAL AID UNDER THE LEGAL
SERVICES AUTHORITIES ACT, 1987
Criteria for giving legal service are prescribed under the Section 12 of the said Act. Every person
who has to file or defend a case shall be entitled to legal services under this Act if that person is
a. a member of a Scheduled Caste of Scheduled Tribe;

12
 b. a victim of trafficking in human beings or beggar as referred to in Article 23 of the
Constitution;
c. a women or a child;
d. a person with disability as defined in Clause (i) of Section 2 of the person with
Disabilities (Equal Opportunities, Protection of Rights and Full Participation)'; Act, 1995
e. a person under circumstances to the underserved want such as being a victim of mass
disaster, ethnic violence, caste atrocity, flood, drought, earthquake or industrial disaster;
or an industrial workman; or in custody, including custody in a protective home within
the meaning of clause (g) of Section 2 of the Immoral Traffic (prevention) Act, 1956 (104
of 1956), or in a juvenile home within the meaning of clause (j) of Section 2 of the
Juvenile Justice Act, 1986 (53 of 1986), or in a psychiatric hospital or psychiatric nursing
home within the meaning of clause (g) of Section 2 of the Mental Health Act, 1987 (14 of
1987); or in receipt of annual income less than rupees nine thousand or such other higher
amount as may be prescribed by the State Government, if the case is before a court other
than the supreme Court, and less than rupees twelve thousand or such other higher
amount as may be [prescribed by the Central Government, if the case is before the
Supreme Court.

Also, there are factors for disentitlement from getting legal aid - As per rules, the following
persons are not entitled to the legal aid unless the Chairman of the Committee approves it as a
special case-
1. Proceedings wholly or partly in respect of defamation or malicious prosecution or any
incidental proceedings thereto;
2. A person charged with contempt of court proceeding or any incidental proceedings thereto;
3. A person charged with perjury;
4. Proceedings relating to any election.
5. Proceedings in respect of offences where the fine imposed is not more than Rs. 50/-
6. Proceedings in respect of economic offences and offences against social laws, such as, the
protection of Civil Rights Act, 1955, and the Immoral Traffic (Prevention) Act, 1956 unless
in shc cases the aid is sought by the victim:

The legal aid is also denied where the person seeking the legal services -
(1) is concerned with the proceedings only in a representative or official capacity; or
(2) if a formal party to the proceedings, not materially concerned in the outcome of the
proceedings and his interests are not likely to be prejudiced on account of the absence of proper
representation.
In the above two circumstances even Chairman cannot sanction legal aid as a special case.

Working of The Legal Services Authorities In India – Frame Works, Functions Under The
Legal Services Authorities Act, 1987 At Different Levels
Functions of the Central Authority – According to Section 4 of the said Act, the Central
Authority shall perform all or any of the following functions, namely :-
1. lay down policies and principles for making legal services available under the
provisions, of this Act;

13
 2. frame the most effective and economical schemes for the purpose of making legal
services available under the provisions of this Act;
3. utilize the funds at its disposal and make appropriate allocations of funds to the
State Authorities and District Authorities;
4. take necessary steps by way of social justice litigation with regard to consumer
protection, environmental protection or any other matter of special concern to the weaker
sections, of the society and for this purpose, give training to socials workers in legal skills;
5. organize legal aid camps, especially in rural areas, slums or labour colonies with
the dual purpose of educating the weaker sections of the society as to their rights as well as
encouraging the settlement of disputes though Lok Adalats;
6. encourage the settlement of disputes by way of negotiation, arbitration and
conciliation;
7. undertake and promote research in the field of legal services with the special
reference to the need for such services among the poor;
8. to do all things necessary for the purpose of ensuring commitment to the
fundamental duties of citizens under Part IVA of the Constitution;
9. monitor and evaluate implementation of the legal aid programmes at periodic
intervals and provide for independent evaluation of programmes and schemes implemented
in whole or in part by funds provided under this Act;
10. provide grants-in-aid for specific schemes to various voluntary social service
institutions and the State and District Authorities, from out of the amounts placed at its
disposal for the implementation of legal services schemes under the provisions of this Act';)
11. develop, in consultation with the Bar Council of India, programmes for clinical
legal educations and promote guidance and supervise the establishment and working of legal
services clinics in universities, law colleges and other institutions;
12. take appropriate measures for spreading legal literacy and legal awareness
amongst the people and, in particular, to educate weaker sections of the society about the
rights, benefits and privileges guaranteed by social welfare legislations and other enactments
as well as administrative programmes and measures;
13. make special efforts to enlist the support of the voluntary social welfare
institution, working at the grass-root level, particularly among the Scheduled Castes and the
Scheduled Tribes, women and rural and urban labour; and
14. co-ordinate and monitor the functioning of (State Authorities, District Authorities,
Supreme Court Legal Services Committee, High court Legal Services Committees, Tuluk
Legal Servives Committees and voluntary social service institutions) and other legal services
organizations and give general directions for the proper implementations of the legal
services programmes.

Under Section 5 of the said Act, the Central Authority is required to work in co-ordination with
other agencies. In the discharge of its functions under this Act, the Central Authority shall,
wherever appropriate, act in coordination with other governmental and non-governmental
agencies, universities and other engaged in the work of promoting the cause of legal services to
the poor.

14
Under Section 7 of the said Act, the Functions of the State Authority are prescribed which are as
follows
(1) It shall be the duty of the State Authority to give effect to the policy and directions of the
Central Authority.
(2) Without prejudice to the generality of the functions referred to in sub-section (1), the State
Authority shall perform all or any of the following functions, namely:
# give legal services to persons who satisfy the criterial laid down under this Act;
# conduct (Lok Adalats including Lok Adalats for High Court cases)undertake preventive and
strategic legal aid programmes; and perform such other
Under Section 8 of the said Act, the State Authority is required to act in co-ordination with other
agencies etc., and be subject to directions given by the Central Authority - In the discharge of its
functions the State Authority shall appropriately act in co-ordination with other governmental
agencies, non-governmental voluntary social service institutions, universities and other bodies
engaged in the work of promoting the cause of legal services to the poor and shall also be guided
by such directions as the Central Authority may give to it in writing)

Under Section 10 of the said Act, Functions of the District Authority are –
1. It shall be the duty of every District Authority to perform such of the functions of the State
Authority in the District as may be delegated to it from time to time by the State Authority.
2. Without prejudice to the generality of the functions referred to in sub-section (1), the District
Authority may perform all or any of the following functions, namely:
# co-ordinate the activities of the Taluk Legal Services Committee and other Legal Services in
the District);
# organize Lok Adalats within the District; and
# perform such other functions as the State Authority may (***) fix by regulations.

Under Section 11 of the said Act, the District Authority is required to act in coordination with
other agencies and be subject to directions given by the Central Authority, etc.- In the discharge
of its functions under this Act, the District Authority shall, wherever, appropriate, act in
coordination with other governmental and non-governmental institutions, universities and other
engaged in the work of promoting the cause of legal service to the poor and shall also be guides
by such directions as the Central Authority or the State authority may give to it in writing.

Judicial Decisions
A. The Supreme Court in Hussainara Kathoon V. Home Secretary, State of Bihar, AIR 1979 SC
1369: 1980 [1] SC 98: 1979 [3] SCR 532: 1979 Cri LJ 1045 : 1980 SCC [Cr] 40, had called upon
the Government to frame appropriate scheme for providing legal aid to the poor. The following
observations were made by the Supreme Court:
“We may also take this opportunity of impressing upon the Government of India as also the State
Governments, the urgent necessity of introducing a dynamic and comprehensive legal service
programme with a view to reaching justice to the common man. Today, unfortunately, in our
country the poor are priced out of the judicial system with the result that they are losing faith in
the capacity of our legal system to being about changes in their life conditions and to deliver
justice to them. The poor in their contact with legal system have always been on the wring side

15
of the law. They have always come across ‘law for the poor'; rather than ‘law of the poor';. The
law is regarded by them as something mysterious and forbidding-always taking something away
from them and not as a positive and constructive social device for changing the socio-economic
order and improving their life conditions by conferring rights and benefits on them. The result is
that the legal system has lost its credibility for the weaker sections of the community. It is,
therefore, necessary that we should inject equal justice into legality and that can be done only by
dynamic and activist scheme of legal services.

We also recall what was said by Leeman Abbot years ago in relation to affluent Americas –
“If every a time shall come when in this city only the rich can enjoy law as a doubtful luxury,
when the poor who need it most cannot have it, when only a golden key will unlock the door to
the court-room, the seeds of revolution will be sown'; the fire-brand of revolution will be lighted
and put in to the hands of men and they will almost be justified in the revolution which will
follow”.

We would strongly recommend to the Government of India and the State Governments that it is
high time that a comprehensive legal service programme is introduced in the country. That is not
only a mandate of equal justice implicit in Article 14 and right to life and liberty confirmed by
Article 21, but also the compulsion of the Constitutional directive embodied in Article 39-A.

B. As pointed out by the Court in Rhem v/s Malclm [377 F. Supp. 1995] the State cannot be
permitted to deny the constitutional right of speedy trial to the accused on the ground that the
State has no adequate financial resources to incur the necessary expenditure needed for
improving the administrative and judicial apparatus with a view to ensuring speedy trial. The
State may have its financial constraints and its priorities in expenditure, but, the law does not
permit any Government to deprive its citizens of constitutional rights on a plea of poverty.

C. In Abdul Hassan Vs. Delhi Vidyut Board [AIR 1999 Del 88: 1999 (77) DLT 640 : 1999 (2)
AD (Del) 105 : : 1999 RLR 100 : 1999 (2) RCR (Civil) 291], the Delhi High Court observed that
“it is emphasized in Article 39A that the legal system should be able to deliver justice
expeditiously on the basis of equal opportunity and provide free legal aid to ensure that
opportunities for securing justice are not denied to any citizen by reasons of economic or other
disabilities. It was in this context that the parliament enacted Legal Services Authority Act, 1987.
One of the aims of the Act is to organize Lok Adalat to secure that the operation of legal system
promotes justice on the basis of an equal opportunity. The provisions of the Act, based on
indigenous concept are meant to supplement the court system. They will go a long way in
resolving the 0dispute at almost no cost to the litigants and with minimum delay. The Act is a
legislative attempt to decongest the courts of heavy burden of cases.”

D. The Hon';ble Apex Court found and observed in the case of State of Haryana v. Smt.
Darshana Devi [AIR 1979 SC 855 : 1979 [2] SCC 236: 1979 [3] SCR 184 : 81 Punj LR 472 :
1979 Ker LT 269 : 1979 UJ 389 : 1989 RLR : 1979 Rev LR 312 : 1979 ACJ 205 : 1979 Cur LJ
[Civ] 343], no State, it seems, has , as yet, framed rules to give effect to the benignant provision
of legal aid to the poor in Order XXXIII Rule 9-A, Civil Procedure Code, although several years

16
have passed since the enactment. Parliament is stultified and the people are frustrated. Even after
a law has been enacted for the benefit of the poor, the State does not bring into force by willful
default in fulfilling the condition sine qua non. It is public duty of each great branch of
Government to obey the rule of law and uphold the tryst with the Constitution by making rules to
effectuate legislation meant to help the poor.

E. Also, as observed in Moni Mathai v. Federal Bank Ltd., [AIR 2003 Ker 164 at 170] by the
Kerala High Court, the Lok Adalats are also bound to follow the principles of natural justice,
equity, fair play and other legal principles. Had the Committee taken care to issue notice to the
petitioners and obtain a written statement containing their version and placed the same before the
Lok Adalat all these unfortunate disputes could have been avoided. The Lok Adalats shall also
not forget that their duty is not to dispose of cases some how but settle cases amicably.

LEGAL LITERACY MISSION

About 70% of the people are living in rural areas and most of them are illiterate and even more
than that percentage of the people are not aware of the rights conferred upon them by law. Even
substantial number of the literate people living in the cities and villages do not know what are
their rights and entitlements under the law. It is this absence of legal awareness which is
responsible for the deception, exploitation and deprivation of rights and benefits, from which the
people suffer in the state. The miserable condition in which the people find themselves can be
alleviated to some extent by creating legal awareness amongst the people.

National Legal Services Authority (NALSA) has formulated National Plan of Action on
spreading Legal Literacy across the country and launched the National Legal Literacy Mission
for a period of 5(five) years i.e. 2005 to 09 at the National level in Delhi on the "6th day of
March, 2006" in presence of the Hon’ble Prime Minister of India, the Hon’ble the Chief Justice
of India and the Hon’ble Union Minister of Law and Justice.

There is a lack of awareness amongst the general public about the free legal services being
provided to them under the Legal Services Authorities Act, 1987. The objective of the Mission is
to organize Legal Literacy Campaign at all level to achieve maximum benefit in the given period
of five years.

The purpose of the Mission is to visualize knowledge through legal education that lends dignity
to people. The Mission aims at education on legal rights, constitutional obligation, right to
information on the benefits of legal aid and the system of accessing legal aid through the Legal
Services Authorities / Committees. By taking law to the masses through informal learning
technique, the legal education to be imparted will help in rising consciousness of the citizen and
thereby make justice accessible and affordable to the people.

The main features of the Mission are as under:

a) To achieve 100% legal literacy.
b) To target the most disadvantaged, distraught, disintegrated, vulnerable and victimized
populace first and progress further in the grass-root level.

17
c)To prepare State Specific Plan of Actions for implementation of objective of the Mission.
d)To undertake survey, research, documentation drive, social investigation reporting and social
audit as a learning exercise of people’s problems, grievances and to understand the nature of
redressal required.
e)To sensitize the Judicial Officers to people’s cause particularly to that of women and children,
dalit and minorities, tribal and such other most vulnerable groups as well as persons in custody in
addition to implementation of the Acts pertaining to mentally and physically challenged, the
destitute and beggars, the orphans and neglected citizens, the abandoned elderly citizens,
discrimination in case of any caste, communal violence, disaster and disease outbreak.

In line with the directives of the NALSA, State Specific Plan of Action for implementation of the
Mission has been prepared having estimated cost of Rs.71.23 lakh and activities as per guide-
lines of NALSA in this regard are in progress to achieve the goal.

Legal Literacy and Legal Awareness Programme (LLLP)

1. What is Access to Justice?
Access to Justice is the ability of people to seek and obtain a remedy through formal or informal
institutions of justice for grievances. There is no access to justice where citizens (especially
marginalized groups) fear the system, see it as unfamiliar, and do not access it; where the justice
system is financially inaccessible; where individuals have no lawyers; where they do not have
information or knowledge of rights; or where there is a weak justice system. Access to justice
involves legal protection, legal awareness, legal aid and counsel, adjudication and enforcement.

2. What is the Legal Literacy and Legal Awareness Programme?

Since 2012, Ministry of Law and Justice, Government of India has been implementing Access to
Justice Scheme in North Eastern States including Arunachal Pradesh, Assam, Manipur,
Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and in UT of Jammu & Kashmir. Major focus
of these programmes are on Legal Empowerment of community, dissemination of simplified
Information, Education and Communication (IEC) materials in local languages and dialects and
capacity development of Panchayati Raj Functionaries and Village Chiefs on formal justice
delivery system.

The Legal Literacy and Legal Awareness Programme aims to empower the poor and
disadvantaged sections of society to seek and demand justice services. The Programme also
seeks to improve the institutional capacities of key justice service providers to enable them to
effectively serve the poor and disadvantaged

3. What is the Duration of the Programme?

DoJ has formulated a scheme on Access to Justice named ‘Designing Innovating Solutions and
Holistic Access to Justice (DISHA)’ to be implemented during the period of 2021 to 2026.
DISHA aims to merge different Access to Justice (North East & Jammu and Kashmir)
programmes being implemented by DoJ while simultaneously upscaling them to all India level.
One of the key objectives of DISHA is implementation of Pan India Legal Literacy and Legal
Awareness Programme.

18
4. What are the Broad Objectives of the Programme?
With the overall objective of increasing access to justice for disadvantaged sections the
Programme has the following broad deliverables:
 Use of Technology for enhanced delivery of legal literacy, its Knowledge Products and
implementation of Innovative and Holistic ideas.
 Mainstreaming legal literacy through building and forging partnerships across Ministries and
allied Departments, Institutions, Schools etc.
 Capacity Building and Utilization of Existing Grassroot/frontline Workers/ Volunteers.
 Developing of Indicators to measure Legal Literacy and Legal Awareness in India.
 Concurrent Evaluation and Assessment of Legal Literacy and Legal Awareness
Programmes.

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TECHNIQUES OF ADR
MEDIATION
“Mediation” denotes to a method of non-binding dispute resolution where the neutral third party
tries to help the disputing parties to arrive at a negotiated settlement. It is synonymous to the
term `conciliation’. Mediation is a client-driven process. Here the parties appoint a neutral third
party to mediate in a dispute that has arisen between the parties.

Mediation is considered to be one of the types of Alternative Dispute Resolution(ADR). A case

can be referred to mediation in the pre-litigation stage or even during litigation if the judge thinks
it fit for the case to be referred to a mediator. Mediation is a completely private endeavour where
the parties and their facts are kept confidential. The process of mediation is not based on any
code or law. However, there are certain common principals which are followed by the mediators
at the time of the mediation session.

Mediation is a confidential process in which an independent and neutral third party (the
mediator) is appointed by the parties to help them reach a negotiated settlement of their dispute,
principally through structured settlement discussions. The process can be conducted before the
commencement of formal legal or arbitration proceedings or alongside such proceedings.

The mediator does not act as a judge and has no power to make binding decisions. Rather,
mediator will explore options for settlement with the parties and attempt to broker a deal
between them.

The key goal of mediation is to reach a settlement that brings the dispute to an end on terms that
are acceptable to both parties – not to determine the parties' legal rights or arrive at the 'correct'
legal position.

Mediation is similar to a settlement conference between the parties and their attorneys who are
facilitated by a neutral third-party whose remuneration is given by the parties.

The process involves an exchange of positions through statement of counsel in a group session
with all in attendance, and then private “caucuses” are held at the mediator’s discretion through
which the mediator explores positions, wants, and needs, and from this creates or solicits offers
and counter-offers and if a settlement is not reached after exhausting discussions and there is no
plan and perceived benefit in continuing discussions, then an “impasse” is declared.

The settlement through mediation is that it may bring about a solution which may not only be to
the satisfaction of the parties and, therefore, creates a win-win situation, the outcome which
cannot be achieved by means of judicial adjudication.
Settlement by `mediation’ means the process by which a mediator who is appointed by parties or
by the Court mediates the dispute between the parties to the suit.
Settlement is reached by the application of the provisions of the Mediation Rules, 2003 in Part II,
and in particular, by facilitating discussion between parties directly or by communicating with
each other through the mediator, by assisting parties in identifying issues, reducing

20
misunderstandings, clarifying priorities, exploring areas of compromise, generating options in an
attempt to solve the dispute and emphasizing that it is the parties’ own responsibility for making
decisions which affect them.

What are the main advantages compared to litigation or arbitration?

1. Speed – most mediation’s last one day and can be set up within weeks
2. Flexibility and informality – the extent to which lawyers are involved (if at all) is largely
subject to the will and confidence of the parties. In fact, it is often the case that the more direct
communication between the clients at the mediation, the more effective the mediation
3. Cost Savings resulting from the above – in both legal expenses and management time
4. Confidentiality – anything said or done or any documents created for the purpose of the
mediation are 'without prejudice' and, except in very limited circumstances, cannot be relied
upon in subsequent litigation or arbitration
5. better chances of preserving business relationships due to the conciliatory nature of the
process
6. the range of potential outcomes – mediation can result in any terms that suit the parties,
unlike court orders which are limited to particular legal remedies

Features of Mediation
1. Confidentiality – Confidentiality plays a crucial role in making the parties come to a
settlement. “The International Chamber of Commerce (ICC)” mediation rules provide that
“unless otherwise agreed by the parties or required by applicable law, the mediation is private
and confidential”.
Section 75 of the “Arbitration and Conciliation Act, 1996” which is an adoption of the
UNCITRAL Model Law requires the Conciliator and the confidentiality is to be maintained by
all the parties relating to the process and the proceeding.
2. Voluntary – Mediation is considered to be a voluntary process to reach a mutual settlement of
issues in dispute. Voluntary generally refers to two important aspects
- Something that is freely chosen participation and freely made agreements between the parties
and
- That there is no force or influence from anywhere regarding the settlement of disputes. This
makes the process party-friendly and very adaptable.
3. Non-Coercive - Since mediation is a voluntary process it is non-coercive in nature, no person
from holding an influential position can coerce any party to agree to a settlement. Pressure can
be created in a mediation process to reach an agreement but the until the parties are satisfied no
conclusive agreement can be reached regarding the process of mediation.
4. Non-Aggressive - In a mediation procedure, the mediator ensures that the parties do not
engage in abusive behaviour whether verbally or otherwise. In litigation, the atmosphere in the
courtroom is intense for the reason that the parties openly hurl abuses at each other. This not only
strains their relationship permanently but patronizes the parties.
5. Sustains Good Relationship - Mediation can build and improve the relationships of the
parties in a disputable cause after the completion of the process of process.
The objective of mediation is to let the parties strike a settlement and hence the atmosphere of
mediation is similar to a counselling session where the parties can freely discuss things with each

21
other. The cases where relationships have turned bitter, mediation has been successful in
restoring peace and friendly relations between the parties.
6. Informal - The mediation is an informal process whereby the parties participate in meaningful
interaction with one another. The process of mediation is placed in informal surrounding so as to
facilitate the process of interaction between the parties.

Disadvantages of Mediation
1. No Established Rules - Mediation lacks established rules of law to govern its procedural
intricacies. There are certain guidelines in institutional mediation but they are not strictly
enforceable because the work of the mediation is that of a facilitator and not a
decider/adjudicator. Since the rules are not present therefore it becomes extremely difficult for
framing the entire process of mediation keeping in mind its legal aspect.
2. Linguistic Problem - Since language is a tool for communication, the difference in language
and style of communication is the major impediment in cross-culture mediation. It is difficult to
conduct a mediation in which the parties have no knowledge of the language of the opposite
party. In addition to it, there is always a possibility of the fallibility of the interpreters. It takes
time for such parties to built camaraderie with each other.
3. Cultural Problem - Culture is an abstract character that can be used to define a person’s
action in the past, the present and the future. Every human being identifies themselves with a
particular culture. When parties in mediation have different cultural integrities it is difficult for
them to reach a common ground that would pave the way for an agreement. Cultural differences
thus act as a major impediment in the successful completion of the mediation process.
4. Impasse - A situation that arises when two parties are adamant on their point of view. They do
not shift their positions. The probability of reaching common ground dwindles when the parties
out of sheer adamancy fail to agree. An impasse is the situation of stagnation reached during the
process of mediation where no productive position can be achieved. It is similar to a session
being adjourned sine-die.

Scope of Mediation
Mediation has transcended boundaries and has traversed various fields related to law. Now,
mediation is used to solve numerous disputes in the national and international level which
include marital, corporate, commercial, insurance-related, disputes related to maritime issues,
issues of colleagues in a workplace.

Culture and language previously posed a problem in the process of mediation. Through research
and the use of various contemporary technologies, the scope of mediation has widened to the
extent that the mediation is preferred as a means of resolution of disputes over any other method.

The scope of mediation has been further increased by the multi-faceted organizations providing
mediation facilities at the national as well as the international level.

At the national level, the ADR cells in the respective district courts serve as an easily accessible
source of mediation to the rural population. At the international level the organizations like PCA,
WIPO, ICC provide cutting edge mediation services.

22
As rightfully said, mediation is the past the present and absolutely the future of amicable dispute
settlement.

Ethical Standards in Mediation

The Following Are the Common Ethical Principles Followed in the Mediation Process:
1. Impartiality - The mediators should be in the position of a neutral third party ensuring that
no biasness of any kind is conducted from the part of the mediator. At any time of the pro -
ceeding of the mediator cannot let any party feel that she is in favour of a particular part.
The mediator should be professional enough to not attach any feeling towards anyone which
could relegate impartial behaviour towards the mediator.

A mediator is not supposed to express any matter of concern or express what she personally
feels for that particular case. The mediator should sit in a mediation proceeding in a manner
that she has no knowledge of the case and her only objective would be to facilitate the pro-
ceeding and to ensure that the parties come to a common ground.

No mediator is allowed to have personal gains arising out of the mediation agreement. This
would relegate the cancellation of the process of mediation and declare its nullity. The medi-
ator should not show any favoritism towards the language, colour, caste, background, ide-
ologies of any party. Furthermore, it is unwise for a mediator to accept any gifts.

2. Integrity - Since mediation is a client-driven process the mediators do not have any author-
ity to make a decision, the mediator should ensure that the parties are aware of the function
of the mediator in the process of mediation. The mediator is meant to facilitate engagement
between the parties and to help them reach decisions for courses of action.

3. Confidentiality - The parties in a dispute are generally at daggers drawn and any breach of
their confidentiality would mean that would further embitter the relations of the parties. The
mediators are ethically bound to maintain confidentiality and ensure that the parties feel that
their secret information would be protected. At the beginning of the process, the mediator
should inform the parties about their rights to maintain confidentiality.

In case the parties are not in a situation to reveal their original details in front of the other
party the mediator can call for a caucus where the other party would be prevented from hear-
ing anything that would reveal the confidential information of the party.

The mediator should ensure that there no relevant information is leaked to the third party.
When a third party is brought into the mediation process for assisting purposes the mediator
should ensure that the third party is bound not to reveal anything that would infringe the
confidentiality of the parties. In a private session, the mediator should ensure that the infor-
mation of the other party is not being leaked to the party.

23
4. Honesty - Honesty is one of the most important factors leading to the success of the process.
At the beginning of the mediation process, the mediators tell the parties about the process of
mediation and come clean with everything. It is the responsibility of the mediator to ensure
that the parties feel comfortable in each other’s presence and are ready to share their confi-
dential information.

The mediators should constantly ask the parties whether to speak and hence to reduce the
tension that prevails between the parties in a dispute. the mediator should ensure that the
parties have proper knowledge of the legal principals which are is essential to make an in-
formed choice.

5. Self-determination - The principle of self-determination is an essential factor to be fol-

lowed during the mediation process. Self-determination is the process in which the parties
come to an agreement voluntarily, without any influence and came to an informed conclu-
sion. Self-Determination is a tool used by the parties when they want to ensure that they are
not being influenced and to have a firm stand.

The parties in a mediation are given the benefit of choosing to apply the principle of deter-
mination at any time or any part of the mediation. The mediator’s role in the process would
then be to ensure that both the principal is not hampering the usual process of setting up.

The mediator should not undermine or personally go forward to determine the stance of self-
determination in the process. The mediator can also go on to ask for professional guidance to
the parties to help them make choices that are free from prejudice.

6. Personal interest - The mediator should ensure that she does not have a person underlying
interest in the matter at hand. A conflict of interest arises when the mediator is found to
have any personal interest included in the subject matter of the mediation or when the medi-
ator is found to have any related relationship with that of the parties.

Neither the issue, not the parties are not supposed to have any connection with that of the
mediator. The mediator should investigate carefully and disclose the information obtained to
ensure to the parties that she is a clean slate. If the parties are not convinced about the medi-
ators involvement the mediator is supposed to leave the mediation.

After the completion of the mediation, the parties and the mediator are strongly discouraged
to maintain any relationship that could harm the integrity of the agreement.

7. Eligible Mediator - A mediator shall mediate only when he has the competence that the
parties think fit. Any person who is the choice of the parties can be chosen as a mediator.

The mediator should possess the required qualification, background, competence, experience
to consider him as a choice for a mediator. A person who voluntarily wishes to become a
mediator is assumed to have all the qualities necessary.

24
 To keep up with the dynamics of the process of mediation a mediator is required to be
abreast of the techniques, tricks, and ways to facilitate the process of mediation. The media-
tor should be aware of all the important aspects of the process of mediation like self-deter -
mination, confidentiality, and impartiality. According to the ethical standards, a mediator
under the effect of narcotics or drugs cannot undertake a mediation session.

8. The termination of the mediation process - The mediator can call off the process of medi-
ation and thus lead to its termination if he analyses that there is no scope of settlement or
that the process is not being respected by any of the parties. In the case of termination, the
mediator is obliged to inform the parties about the termination of the process and the suit-
able reason regarding it.

9. Fee Structure - The mediator should be open about his remuneration. The preferred time is
that of before the mediation. The mediator is strictly not allowed to accept any remuneration
which is contingent on the happening of the argument.

10. Publicity - The mediator should not indulge in any advertisement techniques with the par-
ties in the mediation process. The mediator should not mention his qualifications, experi-
ence, learning, etc to influence the parties to consider him popular.

ROLEPLAY OF MEDIATOR
1. Introductory sentence
The introductory sentence of a mediator would include introducing oneself to the parties in a
negotiation. The mediators should remind the parties about the process of mediation and the
neutrality of the mediator. In order to ensure confidence among the parties, the mediators should
ask them to introduce themselves and remind them of the objective of the process of mediation.
The parties should be informed of the fact that the entire procedure is a party-oriented procedure
and also acquaint the parties with the fact that whatever they choose to agree over would be
accepted.
2. Setting of agenda
The mediators should set the agenda of the process of the mediation which shall be in the form of
questions to ensure that in the process the parties are mot diverted to some other direction. The
agenda should be short and understandable. While making the agenda the mediators should ask
the parties whether they that is in consonance with their agenda and make alterations thereto.
Throughout the process of mediation, the mediators and the parties should remember to base
their arguments in the lines of the given agenda.
3. Finding the common ground
The mediators should start the process by finding the contention between the parties after which
the mediator should try to find a common ground which could resolve the issue at once. For
example, there are two sisters fighting over an orange. One wants to use it for making a face
pack and the other wants to eat it.
A mindful mediator would try to resolve the issue by dividing the orange giving the peel to one
sister to make the face pack and the pulp to the other to eat. Once the common ground is reached

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between the parties, the entire process of mediation becomes very simple.
4. Facilitating conversation
The major work of the mediator is to bring the parties o a common ground and thus help them to
strike an agreement. Thus the mediator should ensure that the parties are talking to each other.
Along with the process of mediation, the mediator should try to preserve the relationships of the
parties in a conflict.

Roleplay of Negotiators
There are various strategies that negotiators can undertake that can ensure smooth negotiation
successfully leading to an agreement.
 Bargaining - Bargaining is a type of hard-negotiation strategy where the parties seek to
establish a win-lose situation. It establishes a situation of the competition among the parties.
This includes stating of offers by both the parties followed by the grant of mutual concession
and one of to be strict in one’s want.
 Method given by FISHER/URY - The method enumerated in the book Getting To Yes,
which is also known as the principled method. This includes a number of steps to successful
negotiation by the negotiators: focusing on interest, settling a final agreement and to ensure
objectivity. Through the generation of options and allowing opposite stances to rule in a
negotiation, one can also reach a successful settlement
 Analyzing BATNA - The best alternative to a negotiated agreement (BATNA) is the best
chance for the weaker section to increase the standard of the agreement it would receive in a
settlement. the weaker party should generally not consider the agreement that would leave
them worse off than their BATNA.
 Considering ZOPA - ZOPA is the abbreviated form of a “Zone of Possible Agreement”.
It is also called the bargaining range. Once found out Zopa becomes critical to the outcome
of negotiation because it is the only zone within which the parties would agree to strike a
settlement.

Importance of role play

Role-plays are important because of the several factors starting from the experience it provides to
the improvement it causes to the overall skill and character. Listed below are the reasons why
role play is important for law students.
 Implementation Of Theory - The strategies learned through theory can be applied at the
time of role play. Often, there is a vacuum between learning theory and its efficient im -
plementation. The lack of practice of implementation often leads to the problem of facing
real-life situations.
 Skill Development - With constant practice of dialogue in negotiation and finding out
solutions through mediation, the skills of the students are increased. They learn to tackle
different situations. With every practical experience, the skill enhances.
 Realistic - All-round development of a lawyer can never be accomplished until one is
subjected to real-life experiences similar to that of a court. Theory can only teach rules
pertaining to an area of law. It should always be substantiated with practice and practical
experiences. Mediation is an art that has to be learned through subsequent participation in
various practical endeavours. Once this art is learned, the theoretical aspect becomes fur-

26
 ther easy to understand. Therefore anyone who participates in role-plays is far more
equipped o face the outside world than anyone who has not.
 Encourages Further Participation - A chain of events leads to another. Once some stu-
dents benefit from role-plays the other follow suit. The inclusion of role-playing in the
academic curriculum is as important as understanding the theoretical concepts of ADR.
One should always encourage and ensure that the role-plays through competitions and
otherwise are included for all-round development and growth.

Workplace Mediation: Need, Usage and Advantages

Workplace mediation is that type of mediation followed in the disputes which are an
amalgamation of all the labour, employee and industrial disputes mainly related to the
professional arena. This includes labour strikes, professional mistakes, employer-employee
disputes, employee disputes, etc.

All kinds of organizations -public or private have three important considerations in common -
Reputation, Reliability, and Revenue.

These three considerations are the major reasons that the organizations are not bent onto using
litigation as a tool for dispute resolution and utilize other methods of dispute resolution as an
alternative. An organization’s reputation is an asset.

Reputation in the market brings in clients, increases credibility, increases the scope of a business,
enhances growth and thus regulates the economy of the organization. However, building a
reputation is a lengthy process. It takes a great amount of effort to spread through a large number
of years to ultimately gain a reputation in the market.

If there is a dispute between two people or a person and the organization or the organization and
a group of persons and the dispute is decided to be resolved by litigation it causes damage to the
reputation of the organization.

Litigation requires the organization to visit the court and at times face trial situations
The audience in the court is witness to the trial which is a major blow to the reputation of the
organization. Therefore, organizations prefer using mediation as a method of dispute resolution
because of the confidentiality of the process.

A good organization works on its reliability because reliability is a stick used by organizations
to expand its business. Any organization which is non-reliable does not gain reputation or
revenue in the market. Any dispute that arises in the market about its reliability is fatal to the
organization. Organizations are based on the trust that people have towards those, any small error
could possibly ruin the hard-earned reliability. Furthermore, reliability is a major concern of the
organizations that deal with items of food and health, including pharmaceutical medicines.

For example, in the case of Maggie, the business took a steep fall after the allegations of
excessive lead content in it. Disputes about organizations that can possibly question the

27
reliability of the organization should be handled very carefully.

Workplace Mediation is preferred by the organizations in such cases because of the advantages
that mediation has to that of litigation. The objective of all the organizations is earning profit.
Organizations work to create revenue.

In a litigation suit the organizations have to incur heavy losses not only from the successive fees
to be given to the counsels, but also the amount to be spent increases when the litigation
relegates the reputation and the reliability of the organization. In a mediation session,
confidentiality does not only save it from the losses but also prevents the drain of wealth such as
fees to the council and other court fees.

Apart from the three considerations that the organizations passionately protect labour is also
considered as one of the important considerations of any organization. Labour is the life of any
organization, the organizations intently maintain the quality and efficiency of the labour.
Litigation amongst labourers or amongst the organization and the labours would mean that the
organization does not take effective care towards its workers. It is a setback to the organization’s
reputation and an impediment in the future recruitment of workers.

Disputes that can arise in a workplace

Strikes by Labour Union - All organizations have labour unions which are groups of employees
who look after the needs of the employees and are concerned with the improvement of the
employment standards of the employees. Labour unions are normally very active. They call for a
strike whenever any employee is subjected to ruthless behaviour by the employer.

Labour unions agitate over issues such as conditions of employment, payment schemes,
subjugation or harsh behavior by an employer, administrative malpractices, granting of relief
hours, working conditions etc. The employer is in a vulnerable position when faced by the labour
union because labour unions often turn violent and hurl slogans to agitate the employer.

Workplace Mediation is the best way to solve the dispute in labour union problems because the
leader represents the union in mediation so there is no scope of violence. Furthermore, mediation
lifts up the strike quickly and restores original working conditions in the organization.

A mistake by a professional of a company - The professionals in a company in their human

capacities can be prone to mistakes, for example, overlooking of date sheets, mistakes in a
medical or legal field or even the mistakes of bankers. These mistakes can cause serious
repercussions to the extent of charging heavy compensation from the professional or even
putting a ban on his practicing for a certain period of time. The company would be vicariously
liable for the mistake caused by the professional.

The reputation and the reliability of the organization will be at risk. In such cases, mediation is
the best way to seek compensation for the mistake caused. Both parties are given a reasonable
scope of explanation after which compensation is decided upon.

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A dispute between two employees - A dispute between two employees can come about because
of a plethora of reasons, belonging to all fields of law. Cases can range from sexual harassment,
assault, slander, libel to promotional aspects and a lot more.

The dispute between two different employees tenses the environment of the entire place of work.
the organization here is liable to initiate mediation prospects between the parties because the
dispute came about at the time of their work.

Mediation is the best way to resolve the dispute between two employees and in certain
circumstances get the required compensation. The mediators act as counsellors bridging the gap
between the parties.

A dispute between employer and employee - The employer and the employee can be caught in
a dispute over the terms and the conditions of the employment, promotional aspects, examination
for induction, service schedule, number of hours, remuneration, increment in salary, etc. The
parties in a mediation session are considered to be equal. Unlike, the setting at the court, the
influential employer cannot manipulate the process of mediation.

For the successful resolution of disputes, both parties have to sacrifice and both parties should
have the intention of settling the dispute. In the dispute between the employer and the employee
until and unless both the employer and the employee are satisfied, the mediation will not be
considered successful. Mediation is a non-aggressive process and will ensure that good relations
remain between the employer and the employee even after the completion of the mediation.

Role of the mediator to resolve disputes in a workplace mediation - The arbitrator should
endeavour to bridge the gap between the parties in a dispute. The mediator has to understand the
vulnerable position of the parties in the dispute because of the dispute being related to their
source of income. The arbitrator should effectively diffuse the tensions between that prevail
between the parties. The arbitrator should ensure the participation of both parties in the
negotiation.

He should be careful about the employers who would try to assert their power to grab the best
deal. The arbitrator should ensure that there is no intimidation by any party at the opposite party.
After setting the agenda, the mediator should let the other parties feel that the process would be
absolutely confidential and private.

The mediators will have to be careful while handling the sensitive information. Leakage of
sensitive information would be a drawback to the process. In the end the arbitrator should
encourage the parties to maintain cordial relations with one another.

Advantages of workplace mediation

Mediation is a non-aggressive process - The policy of mediation is to establish a win-win
situation where both parties’ interests are equally relevant. Until both parties are satisfied with

29
the outcome the mediation will not be successful. Thus, mediation takes a completely different
principle from the win-lose principal followed in litigation. In workplace mediation, the stakes
are high for the organization as well as the workers. Workers and organizations have close
relations with one another.

In this case, it is important to maintain a decorum in the dispute resolution process. Unlike
litigation in mediation, the parties do not hurl abuses at each other and bring out each other’s
faults. It is detrimental to the relationship between an employer and an employee or between
employees in the future. Mediation tries to cover up the damage and does not cause additional
damage.

Mediation sessions are confidential in nature - As mentioned above the 3 Rs which are
essential considerations to the organization require the dispute resolution to be confidential and
in private. Confidentiality is not always feasible in a litigation suit. Mediation promises that the
parties feel comfortable that the process will be in absolute secrecy.

In addition to this, there may be an engagement of some confidential information regarding the
functioning of the organization revealed during the time of the mediation which is highly
classified. Revealing such information in the courtroom might lead to the loss on the part of the
company.

Mediation is a client-driven process - In a mediation session, the parties actually have a scope
of talking to each other. The ambiance and the setting facilitate the clearing of doubts and sorting
of allegations hurled at from both sides. An employee may have many allegations against the
employer and vice-versa. Both of them can effectively resolve their disputes without any
courtroom drama in a mediation session.

The mediators are welcoming and make it easy for the parties to open up their hearts to each
other. The parties in a dispute can control the process of mediation, and effectively schedule
dates that would be comfortable for both parties.

Mediation is a speedy way of dispute resolution - Mediation is considered to be a speedy

process of dispute resolution because it does not depend on lengthy processes, paperwork,
evidence, and trials. This is beneficial in the case of labour strikes where the workers stop
working until the organization bends to their demands because the shutdown situation of an
organization would lead to its loss.

However, in certain cases neither of the parties agrees to accept the proposal by the other party in
such situations the parties can walk-away and an impasse is created. In such situations, mediation
is unsuccessful.

Mediation is cheaper than litigation - Litigation involves drainage of wealth from both parties
in the form of fees for the council and court-related fees. Workplace disputes often involve

30
workers who are not financially strong enough to afford the lengthy and costly litigation process.
Mediation comes to the rescue.

The only price to bear in the process of mediation is that of the fees of a mediator.

Good relations can be sustained even after the dispute - Since mediation is a non-aggressive
process, it does not widen the gap between the parties. The parties in a dispute can be colleagues
who would be working with each other after the dispute is resolved.

Mediation serves as the perfect platform for discussion and negotiating ways of arriving at a
position which would be beneficial for both the parties.

Since talking is the best way to resolve any dispute mediation helps one understand the problem
of one’s opponent. Thus, dispute is resolved through understanding which ultimately paves the
way for the preservation of good relations.

International Mediation: Cases Of Successful Mediation

Border disputes - A dispute in the context of sharing borders is the most extensive sort of
dispute in the international community. There are several challenges faced at the borders such as
infiltration, occupancy, espionage, smuggling, etc. Many of the borders drawn between the
countries were after or during the time of revolution and disturbance, the tensions along the
borders sometimes remain fresh while sometimes with the passage of time the countries evolve
good relationships.

Borders include all types of borders including aerial, marine and land. Landmark examples of the
settlement are the resolution of the border by the Vatican which successfully mediated a
territorial and maritime dispute over Cape Horn and the Beagle Channel islands, disputed
between Argentina and Chile and the mediation sessions between Ecuador and Peru stimulated
by Professor Simmons.

Resource issues - Since 1946, at least 40 % of intrastate conflicts have been linked to natural
resources. Resource issues include the issues of the issues regarding the mineral, biological and
other types of natural resources. The dispute between nations for possessing areas rich in natural
resources has always been dominant.
The nations have always fought for oil, mineral ore, coal, cut timber, and access to fish, mineral
resources are important because they help in the financial development and are highly beneficial
and profitable for the country.

For example at the time of the partition of India and Bangladesh, there was a dispute between the
jute rich area which was subsequently divided into half, the production area went to Bangladesh
and the industrial area came to India. Similar was the case for the Kutch area of Gujarat, a
constant dispute between India and Pakistan. Landmark cases are the Ogoni communities and
Shell case in 2005 regarding the Niger Delta.

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Political post-colonial mediation - The European nations had started a wide colonization
campaign from the 15th century onwards out of which most was disintegrated in the 20th century
from the control of the British. After the formation of independent national states, some of the
neighbouring states were at daggers drawn because of disputes ranging from territorial identity to
boundary disputes. Their disputes sometimes took a violent turn with the involvement of the
military.

The European states sometimes tried to resolve the disputes between these neighboring states out
of the prevailing relations between them. For example, Great Britain tried diplomatic efforts to
defuse the Cyprus dispute between Greece and Turkey, Henry Kissinger’s mediation of the 1974
Syrian-Israeli disengagement.

Refugee issues - The treatment of refugees, and humans in general, is often the source of grave
international disputes. Several sensitive refugee issues have arisen in different countries. For
example, the Bangladesh refugee crisis, the crisis over the Rohingya Muslims, etc. There are
several issues that are intertwined with the refugee problem which include trafficking, drug
abuse, rackets which are generally related to the field of human rights.

The nations try to resolve the dispute by signing bilateral treaties and conventions, and mediation
to shorten the process of dispute resolution. For example, the Chinese Government served as the
mediator in solving disputes regarding the Rohingya Muslims between Bangladesh and Myanmar.

Corporate Mediations - There are several companies with wide-scale business ventures who
often get into trouble waters with each other. Mediation is the best way to encourage a solution
to disputes arising between international companies having their base in a particular country.

Cases Of Successful International Mediation

In the period from 1945 to 1947, according to Haas, the UN operated in a duopolistic system,
with consensus between the Soviet Union and the United States facilitating its success in conflict
resolution.[5] In the period between 1948 and 195 “Uniting for Peace” norm of using the General
Assembly to authorize conflict resolution efforts was initiated by the UN.

The UN resolved 24% of interstate disputes in the 1950-55 early 1990s, the end of the
ideological conflict between the East and the West not surprisingly prompted many observers to
assume that the UN would enjoy greater success.

1. Tashkent declaration - The USSR served as the third party serving mediation between India
and Pakistan over the Kashmir issue The conference concluded in a positive note where and
revived hopes of the restoration of friendly relations between India and Pakistan. The declaration
stated that “Indian and Pakistani forces would pull back to their pre-conflict positions, pre-
August lines” no later than 25 February 1966” along with the other vows of non-interference in
each other’s territorial integrity, handing over the POWs between the nations and restoration of
the economic ties between the nations.

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2. Algiers Agreement in 1975 - The agreement was a step taken between Iran and Iraq to settle
their conflicts on border disputes. Algeria is said to facilitate the talks of mediation between the
two nations.

3. Algiers Accords - These are a set of accords between the United States and Iran to resolve the
Iran hostage crisis which was facilitated by Algeria. On November 4, 1979, the American
embassy was surrounded by American staff there were taken, hostage. With the advent of the
various international institutions which provide mediation services to their international
customers, confidentiality is maintained to the highest level possible of the counties. However,
there are successful case counts showing internationally successful mediation sessions
concerning different international parties.

NEGOTATION
What Is Negotiation?
Negotiation is the process which helps people settle their differences and disputes. It is the
method by which amicable agreement is reached avoiding arguments.

The term 'Negotiation' can be defined as a direct or indirect form of communication through
which the parties with conflicting interest deliberate a form of Joint Action aiming to resolve the
dispute between them. Negotiation can be used either to resolve any existing problem or for a
future relationship between two or more parties by setting a ground work.

The presence of negotiation can be found at all aspects of everyday life whether at individual
level, Institutional level, National level or global level. Negotiation therefore has been
characterized as the preeminent mode of dispute resolution. In compliance to the presence of
negotiation in daily life it is not astounding to find that negotiation can be applied to other
dispute resolution processes for example mediation and litigation settlement conferences.

Scope Of Negotiation:
The history of negotiation can be traced back to the times of Monarch era where Kings used to
negotiate at the time of ongoing Wars in order to prevent the bloodshed in war. After the two
great World Wars in the 20th century the negotiation rounds resulted into the creation of League
of Nations followed by United Nations.

The scope of negotiation has increased over the time. The major objective behind negotiation is
that the parties involved wishes to settle the dispute outside the court. The litigation process has
its own disadvantages such as: bulky paperwork, excessive time, delays in process, costly-
expensive and unfavorable decision.

Because of such reasons alternative dispute resolution gained fame and with increase in fame of
negotiation the demand for experienced negotiators also increased. Negotiation is considered to
be alternative dispute resolution as an informal process which helps the parties to resolve that
differences through mutual understanding and agreement.

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Some situations in which negotiation is applicable:
Marital Deadlock: Where a dispute involves a relationship of marriage the pre litigation process
includes negotiation. In such disputes sentiments and ego between husband and wife in a
conjugal relationship are often settled by communication during negotiation process.

Business Negotiation: Business negotiation aims to manage business and corporate matters. The
skill which are required in such negotiation includes making deals discussion on profits of the
company team building negotiation of contracts negotiations with employees and laborer's
efficiently handling cases of disputes between clients and employees.

In order to establish a business agreement, the art of negotiation is essential full stop business
negotiation can be considered as a skill where in the big problems are drop down to small chunks
and to every touch problem a solution is carefully found out.

Contract-Based Negotiations: Before entering into a contractual relationship, the parties

negotiate the terms condition of dispute. This type of negotiation is the most famous type of
negotiation and is in somewhat line with that of business negotiation. After a breach of contract,
the deadlock can also be settled with the help of negotiations.

International Negotiations: The conflict between different nations can easily turn into scandals
that needs to be resolved immediately. The international negotiations generally take a longer
time than other negotiation processes as this process is complicated and involve various steps s
bureaucrats are involved in the process. The major objective of International Organization is
primarily to allow a smooth interconnectivity and interrelations between Nations in such a way
that it is beneficial for both for all countries in the economy.

Characteristics Of Negotiation Process:

Voluntary: Process of negotiation is conducted through free consent of parties. No party is
forced to participate in the process. The outcome of negotiation can be freely accepted or
rejected at the will of parties. Also, at any point of process it can be withdrawn. The parties can
directly negotiate or they may choose anyone to be represented.
Bilateral/ Multilateral: The process of negotiation can involve two or more parties. The parties
can range from two individuals seeking to agree on sale of house to negotiation involving
diplomate from dozens of States.

Non-Adjudicative: Negotiation is an informal process which only involve the parties. The
outcome is amicable reached by the parties together without any records to a third party through
mutual understanding.

Informal: Unlike arbitration negotiation is an informal process which has no prescribed rules
and regulations. The parties get a free will to adopt whatever rules they choose if any. Generally,
the parties agree on the issues such as the subject matter timing and location for the process.

34
Other rules may include metals such as confidentiality number of negotiating sessions and which
documents may be used can be addressed.

Flexible: The scope of negotiation is dependent upon the choice of parties where determine not
only the topic which will be the subject matter of negotiation but also if they will adopt a
positional based bargaining approach or interest-based approach.

The Two Types of Negotiation

There are two possible types of negotiation, depending on the point of view and leadership styles
of each negotiating party:
1. Distributive negotiation: Also, sometimes called “hard bargaining,” distributive negotiation
is when both parties take an extreme position and one side’s win is believed to be the other side’s
loss (a win-lose solution). This operates on a “fixed pie” principle, in which there is only a set
amount of value in the negotiation, and one side will walk away with the better deal. Examples
include haggling prices in real estate or at a car dealership.
2. Integrative negotiation: Parties engaging in integrative negotiation don’t believe in a fixed
pie, instead asserting that both sides can create value or mutual gains by offering trade-offs and
reframing the problem so that everyone can walk away with a win-win solution

Stages Of Negotiation (Process)

Each negotiation has its own unique characteristics. Therefore, there is no such uniform and
exclusive method of negotiation and bargaining session. A structured approach has to be
followed in order to come at a desired outcome. Therefore, various steps have to be followed in
the negotiation process so that the parties with conflicting ideas and differences reach to an
amicable solution.

The process includes following stages:

1. Preparation 4. Negotiate towards a Win-Win
2. Discussion outcome
3. Clarification of goals 5. Agreement
6. Implementation of course of action
1. Preparation/ Initial Assessment - The process of negotiation begins with the signal of
communication from one party to the other showing a willingness to bargain. As negotiation is a
voluntary process it is of primary importance to know that whether the other party is interested in
negotiation or not. Some of the important factors should be ensured before moving on. They are:
 if there is desire to resolve the dispute
 the credibility of other parties
 the willingness of parties to preserve or establish the relationship
 whether there is disparity between the parties that it would be impossible to bargain equal
or not
 desirability of using any other form of dispute resolution system.

This stage involves ensuring the important facts of the dispute and its situation in order to clarify
the position of both the parties. Before any negotiation takes place, a decision shall be taken as to

35
when and where the meeting for negotiation shall happen and as to who will attend the
discussion and negotiation sessions. During this time setting of a limited timescale can help
prevent this agreement continuing.

2. Discussions - Once it has been established that negotiation is the appropriate course of action
the further arrangement shall be made in that course with the other party included. The
arrangement must include:
 outlining the scope of negotiation
 forming a time table as to whether or not that will be a fixed duration of negotiation
 ensuring that all the interested parties are identified and have been consulted
 choosing a location Which is feasible to both the parties.

During this stage the parties of other side put forth their case as they see it and try to understand
the vice-versa situation. Clarification as to misunderstandings and disagreements shall be spoken
and heard. An equal opportunity shall be granted to both the side.

3. Clarification Of Goals - From the second stage of discussion whatever goes interest and
viewpoints of the parties of this agreement needs to be clarified. To clarification it becomes easy
and possible to identify and establish a common ground post settlement. Clarification is one of
the crucial parts of negotiation process is without a doubt the misunderstanding and
disagreements are likely to continue which main result to cause problems and barrier in reaching
a beneficial outcome.

This can lead to harmonizing and Reconcile the bearing and competing interest of the parties.

4. Negotiating Towards A Win-Win Situation - It is not always possible to reach to a Win-Win

situation but it shall be the ultimate goal. this stage focuses on which can be termed as Win-Win
outcome wherein both the parties may have the satisfaction that they have gained something
positive through the process and both the parties may feel that their point has been considered.

5. Agreement - A proper agreement can be achieved only when both the parties understand each
other’s point of view and interest are considered simultaneously. Every member involved in the
negotiation process it is essential to keep an open mind so that an acceptable solution can be
reached full stop such agreement needs to be clearly communicated so that no for the dispute can
occur.

6. Implementation of Action: Once agreement is reached a proper course of action has to be

implemented so that the decision can be carried out.

Advantages Of Negotiation
1. Party-based Dispute Resolution: One of the primary reasons for success of negotiation is
that it only involves the stakeholders and does not involve any other party as a result of which
the process remains a private affair and confidential. The parties decide the subject matter
duration of process locations papers to be referred etc.

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2. Freedom of Parties: The parties are at freedom to choose agendas of the choice in addition to
ensure your objective that negotiation is achieved.

3. Consent of Parties: The negotiation process ensures that both the parties involved in
negotiation have free will in participating and that no one is forced to engage in the process. this
freedom also ensure that all the parties are at equal footing and there is no play of powers.

4. No Third-Party Intervention: Unlike most of the radius system which requires a neutral
third party for dispute resolution such is not the case with negotiation.

5. Comfortable Process: Negotiation is an informal process. It is normally a speedy process

whose decisions are not binding upon the parties. Latest a completely self-build process wherein
the decision can either be accepted or rejected by the parties at their own win all the process can
be withdrawn at any point of time.

6. Improvement in Relations: Once the negotiation process is successfully completed that is a

scope of improvement in the relation between the parties. And it also facilitates the process of
negotiation for any further education.

Disadvantages Of Negotiation
1. Power Tactic: It is not always necessary that the parties to negotiations are of equal stature
and power. Therefore, in the absence of a neutral third party the party whichever is in the
position to dominate the other uses the dominance over the consent of other party and come at an
agreement. This leads to an unfair agreement which is ultimately useless.

2. Impasse: Sometimes the difference is and disagreement between the parties may lead to a
deadlock situation. And Impasse situation occurs during the negotiation process where at any
discussion the parties are stand still and cannot have any for the discussion. This stage is very
frustrating when no possible successful outcomes can happen. This generally happens when any
one party is so rigid over its goal that no middle ground can be achieved. This ultimately results
into a walkout situation.
3. Backing Off: The unsuccessful negotiation leads to creation of bad relations between the
parties along with termination of any business are contractual relations afterwards. It also
happens that sometimes the parties lose confidence in the process of negotiation as a dispute
resolution and consider the other options.

4. Not all issues are Negotiable: There are various cases which involve multiple stakeholders
for home negotiation process cannot be made applicable and such cases can directly go to the
court for the decisions.

Strategies Of Negotiation: Prerequisites & Major Strategies

No matter what is type negotiation is an art that can be perfected through the various strategies of
Negotiation. In the book ‘Art and Science of Negotiation,’ it is mentioned that negotiation is

37
both an art and a science. The Science part of negotiation consists of the ‘systematic analyses of
the problem and the art part consists of interpersonal skills and the charismatic way of
argumentation.

Prerequisites
 The voluntary consent of both parties to negotiate on the dispute.
 The dispute concerns both parties in such a way that the parties are dependent on each other.
 The parties should have the willingness to settle the dispute.
 The dispute at hand should be negotiable.
 In certain cases, there is a sense of urgency and deadline in the dispute leading to
negotiation.

Strategies Of Negotiation
There are several strategies that one can adopt to effectively continue the negotiation process but
here we will be discussing 4 major strategic techniques:-

1. Bargaining - Bargaining is a type of hard-negotiation strategy where the parties seek to

establish a win-lose situation. It establishes a situation of the competition among the parties. It is
an over-ambitious stance that often results in a deadlock.

The strategy of bargaining requires one party to be fixated or anchored in one’s offer and
allowing the other party to soften. The strategy of bargaining is also characterized by setting the
boundaries beyond which no negotiation would occur, or the ‘walk away’ situation.

The Process
The breakdown of the process of bargaining can be expressed in the following points:-

1. Starting offers are made by both the parties to each other

2. Firm commitments are made by both the parties and the walk-away position is
established
3. Grant of rewards and imposition of sanctions are issued to force the other parties to
loosen their stance and thus give concessions
4. Mutual concessions are made
5. The over-ambitious bids by one party force the other party to retract. Further concessions
are provided by the parties
6. Lastly, when both of the parties are in a position of retraction the parties tend to agree
over a middle-ground from the position they first established.
In the concluding position, both parties have a mutually beneficial, joint solution to
representation in the bargain. The system of bargaining, however, encourages the parties to play
competitively with one another. The main reason behind this is the fear that the parties will take
advantage of the situation and force upon their opponents to come to an unstable position.

This system of bargain became an important approach in international negotiations in the

decades of the late 60s and early 70s.

38
This system of bargaining is mainly adopted from the Anatol Rapoport’s book Fights, Games
and Debates in 1960. This relates closely to the ‘Game Theory’.

Anatol Rapoport in his mentioned the following lines about the game theory, thus hinting at the
negative side of bargaining and the game theory.

“At present game theory has, in my opinion, two important uses, neither of them related to
games nor to conflict directly. First, game theory stimulates us to think about conflict in a novel
way. Second, game theory leads to some genuine impasses, that is, to situations where its
axiomatic base is shown to be insufficient for dealing even theoretically with certain types of
conflict situations. These impasses set up tensions in the minds of people who care. They must,
therefore, look around for other frameworks into which conflict situations can be”.

Bargaining has a number of types one of them is positional bargaining. Positional bargaining is a
type of bargaining where the parties are fixated in their position and do not want to compromise
with the other party. Haggling is an example of positional bargaining.

2. Getting to Yes: Roger Fisher and William L. Ury

Getting to yes is the name of the 1981 non-fiction written by Roger Fisher and William l Ury.
This process of negotiation enshrined in this particular book is often called the Fisher/Ury
method of negotiation. It was the international bestselling book on negotiation in the 80s.

The method of negotiation mentioned is ‘principled negotiation’. This type of negotiation deals
with the core ethical standards of conducting a negotiation process. Fisher / Ury mentioned that
the chances of arriving at a successful negotiation increase once the parties are morally
coordinating and principled in approach.

Genesis - The origin of this book revolves around the flagship project at Harvard University
known as the Harvard Negotiation Project. Both Fisher and Ury were associated with Harvard.
Both of them singularly were negotiation activists. Fisher, was an audience to the devastating
2nd world war so when in Harvard later on, he became inclined to the art of negotiation as a
method of settlement of disputes.

The Process
The title of the book says – Getting to yes: Negotiating without giving in. The title itself
mentions how to negotiate and thus come at a middle ground and avoiding the impasse.

The book is divided into the following strategies that one should follow towards successful
negotiations:
1. That the problem should be separately treated from the people
2. The focus should be on the interest and not the position.
3. The parties should generate a number of options before settling on the final argument,
4. The parties should ensure that the agreement is finally based on objective considerations.

39
Three impediments to negotiation and consecutive ways to overcome these obstacles are also
mentioned.

Thus, the process of ‘GETTING to YES’ begins with analysis, where a careful breakdown of the
problem and the situation is done. The other parties’ interests are considered and the various
options are exploited. Finally, the agreement should be achieved in a win-win situation.

1. Separation of people and issues

People should avoid combining people and their issues. Here Fisher/Ury talks about the three
common problems encountered during the process of negotiation:
Different interpretation – the factor that brings in subjectivity to the process of negotiation is
the difference in interpretation. The best way to avoid this problem is to put themselves in the
shoes of the other person and try to understand the other’s point of view.
Emotions- human beings are characterized by the presence of feelings and emotions. This can
even lead to the outburst of emotions. Each party should be considerate enough to understand the
other party. They should try their utmost to express symbols of apathy.
Communication- during the conversations sessions the parties might get absent-minded in
planning for their stand and thus lose out on the communication. The practice of active-listening
should be practiced to ensure that there does not remain any communication gap between the
parties and the parties understand each other.

2. Focus on the interests

The parties to a negotiation can several underlying interests. It would do well, therefore, to focus
on a particular interest at a time and simultaneously consider the other persons. If one party
shows inclination in the other party’s interest then there will be an atmosphere of amity.

3. Generation of options
Fisher /Ury mentions a brilliant way to come to generate options. They ask the parties to meet in
an informal setting and conduct a session on ‘brainstorming’. The brainstorming sessions have 4
stages involves – stating the problem, analyzing the problem, approaching the problem in a
general manner and finally approaching the problem in a specific manner. The key to
reconciliation of differences is finding out the matter which is of low cost but is of high benefit
to the parties.

4. Using the objective criteria

The meaning of objective criteria includes the scientific approach, dividing the article,
determining the legal position, etc. This is a more pragmatic, sensible approach to the dispute at
hand.

The three positions that can arise out –

1. When one of the parties is more powerful: Power differences can never be bridged up.
Fisher and Ury have suggested certain process to protect the weaker party and to help the weaker

40
party make the most of their assets, where the party is asked to focus more on the BATNA (Best
Alternative To A Negotiated Agreement).

2. When one of the parties will not use Principled Negotiation: Fisher and Ury have devised a
method to control this kind of situation. The party should continue following the principled
approach. Later the principled party should use the process called negotiation jujitsu to bring to
control the action of the other party and in the end, if nothing works to bring in a third party.

3. When one of the party uses dirty tricks: When one of the parties resorts to using cheap
tricks the best way to handle is to explicitly mention that to the negotiation process itself.

3. BATNA - The weaker party should concentrate on analyzing its best alternative to a
negotiated agreement (BATNA). The weaker party is generally not considered the agreement
that would leave them worse off than their BATNA. Therefore the party should be aware of the
BATNA. BATNA is used to gain the greatest out of the assets.

The parties in a negotiation are considered powerful because they have the scope of walking
away. The party with the best BATNA is considered to be in a better stance. All the parties in a
negotiation should try to estimate and analyze not only their BATNA but also the other parties
BATNA as well because ultimately the winning edge depends on the person with the best
BATNA. The parties throughout the negotiation process should try to increase the winning
chance of their BATNA.

BATNAs are elegantly simple in concept, but notoriously difficult to execute. A BATNA is the
option a negotiating party might execute should the negotiations fail. The key is that the BATNA
must be executed without the involvement of the opposite. A BATNA is not the negotiation’s
“bottom line” – a BATNA is something you may wish to do if an acceptable “bottom line”
cannot be achieved during the negotiations. You should always know and update your BATNA
and always estimate (and update) the opposite’s BATNA. Seek ways to improve your BATNA
and make the opposite’s BATNA less valuable. There are three keys to determining a valid
BATNA:
1. It must be an option that you can execute unilaterally (without any action or interaction with
the other negotiating party). A BATNA is not a BATNA if it requires the participation of the
opposite.
2. It must be a real option. It must be something you can and would want to do (have the time,
resources, and will to execute).
3. Finally, it must be perceived as credible by the opposite. You may believe you will execute
your BATNA, but unless the opposite also believes your BATNA’s credibility, it is useless.

As an example, if you are negotiating with other base personnel on an office move, and it is
getting nowhere, a strong BATNA would be that your current office space is adequate to do the
mission, and it is available for the foreseeable future. A weak BATNA would be that your
current office area is cramped, the electrical system unsafe, and it is due to be demolished in
three weeks. A useless BATNA is telling the other side your current office space is adequate to

41
do the mission, and they know the contract to demolish your building was just awarded and
begins in 14 days.

BATNAs may change during the negotiation as information and conditions change. For example,
you may be looking for a new car with a good BATNA (your current car is in excellent
condition). However, your BATNA would change considerably if your car got sideswiped in
tomorrow’s commute.

BATNA is brought up here before the detailed discussion of the five negotiating strategies
because it is a useful tool in four of the five strategies (Insist, Evade, Settle, Cooperate but not
Comply). Of note, in the Cooperative Negotiating Strategy (CNS) there is an extra effort to
identify and manage both sides’ BATNAs. Additionally, since CNS has relatively more
engagement (in both depth and duration) than the other strategies, there is an opportunity within
CNS to better manage BATNAs (i.e. work conditions to strengthen your BATNA or weaken the
opposite’s BATNA. In short, BATNA has applicability in many negotiating strategies, but can
be exercised to its fullest potential using the CNS.

4. ZOPA - ZOPA is the abbreviated form of a “Zone of Possible Agreement”. It is also called
the bargaining range. ZOPA is the zone that would benefit both parties to the maximum apart
from the other agreements between the parties.

The ZOPA range once invented becomes critical to the outcome of a negotiation. But it generally
takes some time to determine where the ZOPA exists; it is evident known once the parties
explore their various interests and options. The major impediment leading to the prevention of
the parties from attaining he ZOPA that the parties are not ready to fully reveal their confidential
information. However, once the ZOPA is successfully found out the parties can easily come into
an agreement.

Example - Imagine a typical buyer-seller situation. Kari, the buyer, wants to buy a car for €6,000
or less. This maximum of €6,000 is his ‘reservation price’ or ‘walk away’ position. Michele, the
seller, wants to sell one for €5,000 at least. This minimum of €5,000 is the least amount she will
accept, so it’s her ‘reservation price’ or ‘walk away’ position. When, as in this case, there is
common ground or an overlap between the buyer’s and seller’s reservations - the respective low
and high of both the seller and buyer - we have a Zone of Possible Agreement (ZOPA).
However, if Michele (seller) will not go
below €6,000 and Kari (buyer) will not go
above €5,000 they have a negative
bargaining zone and there is no ZOPA. A
ZOPA only exists if there is a potential
agreement that would benefit both sides
more than their alternative options do.

Use BATNAs to identify the ZOPA - In

order for disputing parties to identify the

42
ZOPA, they must first know their BATNA (Best Alternative To a Negotiated Agreement). The
BATNA is the best course of action that a party can pursue if no negotiated agreement is
reached. For example, Michelle might have another potential buyer for her car, Alex, who is
willing to pay $6,950 (Michelle’s BATNA). If Kari will pay more than Alex, she will sell to him.
If Kari won't pay that much, she'll sell to Alex. Likewise, if Kari has found another car he likes
for $6,000, then he won't pay more than that for Michelle's car...maybe even a bit less. So Kari's
BATNA is $6,000. If both sides know their BATNAs and walk away positions, the parties
should be able to eventually identify the ZOPA. However, parties often fail to access their own
BATNAs, and are even less likely to have accessed the other side's possible BATNAs.

ZOPAs in Distributive and Integrative Negotiations

The nature of the ZOPA depends on the type of negotiation.
In a distributive (competitive) negotiation, in which the participants are trying to divide a
"fixed pie," it is more difficult to find mutually acceptable solutions as both sides want to claim
as much of the pie as possible. Distributive negotiations over a single issue tend to be zero-sum -
- there is a winner, and a loser. There is no overlap of interests between the parties; therefore, no
mutually beneficial agreement is possible. The best one can do--sometimes--is compromise by
splitting the desired outcome in half. For example, two people may be competing for one job. In
the simplest case, there is no ZOPA because both people want the full-time job and either they or
the boss is unwilling to offer them each a half time job instead. So, this is the typical win-lose
outcome: one person wins, the other loses. Or, if they do both take a 1/2 time position, each wins
half of what they wanted and loses the other half.

Integrative (collaborative) negotiations, involve creating value or "enlarging the pie." This is
possible when parties have shared interests or are dealing with multiple issues. In this case, the
parties can combine their interests and trade off among multiple issues to create joint value. That
way both parties can "win," even though neither gets all that they originally thought they wanted.
In the example above, if rewriting the job description could create an additional job, then the
distributive negotiation would change into an integrative negotiation between the employer and
the two potential employees. If both applicants are qualified, now they may both get jobs. The
ZOPA, in this case, exists when two jobs are created and each applicant prefers a different one of
the two.

BASIC NEGOTIATING CONCEPTS

Positions – Positions are “what” the negotiators say they want. They are really solutions that
have been proposed by the negotiators. Positions are based upon the interests of the parties;
interests are usually not disclosed, at least not in competitive negotiations. In most negotiations
people take and then give up a series of positions. Behind every position lie many interests.

Interests – Interests are “why” the negotiators take the positions they do. Interests lie behind the
positions of the negotiators. Interests represent the basic needs to be met. Money and price are
not interests in themselves. Money represents purchasing power, the ability to satisfy other
needs, status, or power itself. Understanding interests is the key to understanding “win-win”

43
negotiating. In many negotiations, the interests are never explicitly discussed. In fact, interests
are usually kept secret. Successful “win-win” negotiation requires finding a way to disclose
interests without being taken advantage of.

Best Alternative to a Negotiated Agreement (BATNA) – BATNA is an acronym that

represents the best result that a negotiator can get somewhere else if an agreement cannot be
reached with the other party. In other words, a BATNA is the alternative that the party will select
if they must walk away from the negotiation. If the negotiation involves finalizing a deal, the
BATNA is to walk away to another party who can offer you a better deal. If, however, the
negotiation involves a lawsuit, the BATNA is to go to court.

Bottom Line – The bottom line or reservation price is the position at which the negotiator will
walk away from the negotiation. Relative to a purchaser, it is the highest price a purchaser is
willing to pay for goods or services. Relative to a seller, it is the lowest price at which a seller is
willing to sell the goods or services. The bottom line is also known as the “reservation price.” If
the negotiator cannot get at least their bottom line in the negotiation, they will vote with their feet
and walk away from the deal.

Zone of Agreement – The zone of agreement represents the difference between the bottom lines
of the parties. If there is no overlap in the bottom lines of the parties, no agreement is possible.

TYPES OF NEGOTIATION: DISTRIBUTIVE OR INTEGRATIVE NEGOTIATION

Type 1: Distributive Negotiation
Distributive negotiation is also sometimes called positional or hard-bargaining negotiation. It
tends to approach negotiation based on the model of haggling in a market. In a distributive
negotiation, each side often adopts an extreme position, knowing that it will not be accepted, and
then employs a combination of trickery, bluffing, and brinksmanship in order to give in as little
as possible before reaching a deal. This is a “zero sum” negotiation where the negotiator claims
as much of the ‘pie’ as possible. Usually there is just one issue for negotiation and more for one
party means less for the other. Although the goals of the parties are in direct conflict, a negotiator
can adopt either a competitive or cooperative negotiation style in a distributive bargaining
situation.

Distributive Negotiation works best when:

A distributive negotiation strategy is generally appropriate where:
 Parties do not know each other very well
 Parties are unlikely to work together in the future
 Negotiation is over a limited number of things or issues (e.g., price only)

Negotiation Tactics and Techniques:

Early Anchoring: Anchoring is fixing or establishing the focus of discussion around a certain
point, whether it is a figure, a range, or an issue, simply by asserting it. Early anchoring involves
being the first party to make an offer that is beyond or at the fair margin of the range of credible
or reasonable offers. This tactic has the effect of fixing the apparent bargaining range around this

44
point, which is typically favourable to the person who anchors early.

Feinting: Misleading the other party as to your true interests or objectives by stressing goals or
interests that are in fact unimportant to you and then giving them up for concessions from the
other side that are important to you. Such feints help to disguise your true bottom line and
interests.

Misleading Concession Pattern: It is common to make smaller and smaller concessions as

negotiations converge on a negotiator’s bottom line. Knowing this, negotiators can mislead the
other side by using a concession pattern that converges at a point above the actual bottom line.
The other side, reading the concession pattern, may mistakenly conclude the conceder has
reached his/her bottom line and therefore settle in order to save the deal.

Splitting the Difference: When the parties are stuck at different positions, one solution is to
each compromise half the difference. For example, with offers at $600 and $1000, the
compromise would be $800. This technique gives the “appearance” of fairness.

Ultimatum (i.e. Take It or Leave It): This occurs where a party claims to be submitting their
final offer. The other side must take the offer or the negotiation is over. In reality, nothing
prevents any party from making another offer at a later time.

Walkaway: This is a classic tactic in bazaars and markets. If you cannot get the price you want,
walk away from the deal and maybe the other party will follow you. This tactic is a bluff. To
work effectively, you have to be able to truly walk away from the deal and exercise your
BATNA.

You Will Have To Do Better Than That (YWHTDBTT): If the other side is told “you will
have to do better than that,” often, they will make you a better offer. Some people claim not to
even consider the first offer. They just ask for a better offer, no matter what the first offer was.
They assume that the person who made the offer made an excessive demand. This is a
particularly useful technique when the other side anchors first, forcing them to re-anchor
negotiations around a point closer to your own desired result.

Type 2: Integrative Negotiation

Integrative negotiation is also sometimes called interest-based or principled negotiation. It is a
set of techniques that attempts to improve the quality and likelihood of “win-win” agreements
with parties working together to increase the amount of resources to maximize mutual gain.
While distributive negotiation assumes there is a fixed amount of value (i.e., a “fixed pie”) to be
divided between the parties, integrative negotiation often attempts to create value in the course of
the negotiation (i.e., “expand the pie”). Integrative bargaining often requires two or more issues
so that trades can be made. The theory is that parties often have different underlying interests
that can be integrated or reconciled to create joint gains that improve the situation of both parties.
A negotiator can adopt either a competitive or cooperative negotiation style in an integrative
bargaining situation.

45
Integrative Negotiation works best when:
An investigative negotiation strategy is appropriate where:
 Parties know each other
 Parties are likely to have further interactions in the future

Negotiation Tactics and Techniques

Focus on Interests not Positions: “Positions” are “what” negotiators say they want; “interests”
are “why” they take the positions. The interests of the opposing party are discovered by asking
questions and putting yourself in the other’s shoes. This creates an opportunity to devise
solutions that address these underlying interests. Although problem-solving negotiators may be
willing to disclose their interests, be aware that competitive negotiators will try to learn your
interests without revealing their own in order to gain an advantage.

Expanding the Pie (i.e. Create Value): Sometimes it is possible to brainstorm and increase the
resources to be bargained for. If the resources can be increased then perhaps both sides can get
what they want, or at least find a sufficiently satisfying alternative. For instance, a cell phone
retailer may not decrease the price but might be willing to throw in voicemail and call display
into a plan package for the same cost.

Open Information Exchange: This involves freely and honestly disclosing information to help
the other side understand your underlying interests, objectives, and priorities. Sometimes
something critical to one side is a minor concession to the other, and vice versa.

Log Rolling: If two or more issues are in dispute, the negotiators may be able to do a series of
trade-offs. One side gets their top priority on the first issue and the other side gets their top
priority on the second issue.

Objective Criteria: Instead of allowing the negotiation to be determined by a contest of power

or to become a battle of wills, negotiators can select one or more objective criteria which can be
used as standards for a ‘fair’ settlement (e.g., market price).

NEGOTIATING STYLES: COMPETITIVE OR COOPERATIVE

A negotiator can adopt either a competitive or cooperative negotiation style in both distributive
and integrative bargaining situations.

1. Competitive Negotiation Style: Competitive negotiators want to “beat” their opponents.

They use high demands, threats, and make few concessions. They generally try to undermine
their opponent’s confidence and seek the maximum for themselves.

2. Cooperative Negotiation Style: Cooperative negotiators want to shift the nature of

negotiations and “work with” their counterparts to make it more collaborative. Instead of moving
from position to counter-position to compromise, negotiators try to identify their interests prior
to the development of solutions. They use reasonable opening offers, show good faith, and

46
initiate the exchange of mutual concessions. Once interests are identified, the negotiators then
jointly develop a wide-ranging set of alternatives, and then choose the best alternative.
Cooperative negotiators seek a fair and just settlement.

GOOD OFFICES
Good offices are the act through which the third party either arranges for a meeting between the
disputant parties or he acts, in ways through which a peaceful settlement can be reached. It is im-
portant to note here that the third party is not directly involved in this process. When the parties
have failed to come to terms through negotiation, it is the third party that provides for their good
offices for the peaceful settlement of disputes. Once the disputant parties are brought under one
roof the third party has no active role to play. Although Para 1 of Article 33 does not refer to good
offices as a means of settlement of dispute but it may not be read in an exhaustive manner.

The Prime Minister of the United Kingdom, James Harold Wilson, had lent his good offices to
India and Pakistan to reach an agreement in reference to the Kutch issue. In 1947, there was a
dispute between the Republic of Indonesia and the Netherlands, wherein the Security Council
rendered its good offices.

Distinction between Good offices and Mediation

Good Offices Mediation
The term "Good Offices" connotes the bringing Mediation is the conducting of negotiation
about the conflicting parties together and the between the disputing States through the
counseling of advice or the suggesting of a set- agency of the third party. In simple words,
tlement without participating in the negotiation. when the third party participates in the dis-
Such suggestions or advice may be disregarded cussion along with the disputant States and
by a party to a dispute without any compunction also gives its own proposals or suggestions
or breach of the law. in resolving the dispute, it is called as Medi-
ation.
In this case, the third state may make an inquiry In this case, the State mediating takes an act-
into the dispute or offer suggestions, but it does ive part in the deliberations conducted for
not participate in Negotiation. peaceful settlement of the dispute.
The third state only brings the conflicting parties The third State conducts the negotiations
together in negotiation. between the parties.
Strictly a State is said to offer ‘good offices’ Mediation is a consequence of the tender of
when it tries to induce the parties to negotiate good offices.
among themselves.
Example: The Prime Minister of United King- Examples: Soviet Union President Kosygin
dom, Mr. Wilson provided his good offices to mediated in the Dispute between India and
India and Pakistan which resulted the parties to Pakistan which resulted in the conclusion of
reach an agreement to refer Kutch issue to an Tashkant agreement in 196
Arbitral Tribunal.

In the year 1949, the Security Council rendered

good offices in the dispute between the Nether-
47
land Government and Republic Indonesia.

CONCILIATION
NATURE, SCOPE AND METHODS
Conciliator is the third party who is involved in settling the dispute of the parties. Generally,
there is one conciliator for the settlement but there can be more than one conciliator, if the parties
have requested for the same. If there is more than one conciliator then they will act jointly in the
matter. Section 64 deals with the appointment of conciliator which states that if there is more
than one conciliator then the third conciliator will act as the Presiding Conciliator.

NATURE OF CONCILIATION
Conciliation is an alternative out-of-court dispute resolution instrument. Like mediation, concili-
ation is a voluntary, flexible, confidential, and interest based process. The parties seek to reach
an amicable dispute settlement with the assistance of the conciliator, who acts as a neutral third
party.

The main difference between conciliation and mediation proceedings is that, at some point dur-
ing the conciliation, the conciliator will be asked by the parties to provide them with a non-bind-
ing settlement proposal. A mediator, by contrast, will in most cases and as a matter of principle,
refrain from making such a proposal.

Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt
to resolve their dispute by conciliation. The process is flexible, allowing parties to define the
time, structure and content of the conciliation proceedings. These proceedings are rarely public.

They are interest-based, as the conciliator will when proposing a settlement, not only take into
account the parties' legal positions, but also their; commercial, financial and / or personal in-
terests.

Like in mediation proceedings, the ultimate decision to agree on the settlement remains with the
parties.

61. Application and scope. —

(1) Save as otherwise provided by any law for the time being in force and unless the parties have
otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship,
whether contractual or not and to all proceedings relating thereto.
(2) This Part shall not apply where by virtue of any law for the time being in force certain
disputes may not be submitted to conciliation.

Kinds of Conciliation
1. Voluntary Conciliation- In this method parties can voluntarily participate in the
process of conciliation for resolving their dispute.
2. Compulsory Conciliation- If parties do not want to take the opportunity of volun-
tary conciliation then they can go for compulsory conciliation. In this method, if the

48
 parties do not want to meet the other party to resolve the dispute then the process is
said to be compulsory. This method is commonly used in labour cases.

Procedure of Conciliation
The objective of the conciliation proceedings is to reach upon mutual terms, speedy and cost-
effective settlement of the dispute. Section 62 discuss the initiative of conciliation will start when
one party will send Written Invitation to conciliate upon the matter to the other party. There will
be the commencement of procedure if the other party accepts the invitation in writing to
conciliate. If the other party rejects the invitation or the party who is willing for the conciliation
does not get a reply from the other party within Thirty days then it will be treated as a Rejection
of the Invitation.

Section 65 explains the submission of the statements of both the parties to the conciliators. Each
party should submit a brief written statement regarding dispute as requested by the conciliator.
The statement should describe the general nature of the dispute and the points of issue. Each
party should send a copy of their statement to the other party. The conciliator can also ask for the
submission of written statements which includes issues of the parties, grounds of settlement etc.
These statements must be supplemented by evidence, documents or visual representation. The
copy of the same statement must be sent to the other party. Conciliator can also request for
additional documents whenever he needs them. According to Section 67(3) and 69(1), the
conciliator can set up meetings for the parties or he can meet parties together or separately. The
place of meeting can be decided by parties or conciliators. He can also communicate with the
parties orally or in written form. He must also consider the party’s expressed wishes like quick
settlement of the case which also depends upon the circumstances of the case.

Advantages and disadvantages of Conciliation

Advantages
1. The conciliation procedure is of private nature. The documents, evidences or any
other information which are used during the process are Confidential.
2. One of the most important advantages is that they are Informal process and contains
Simple procedures which can be easily followed by the general people.
3. The process depends upon the circumstances of the case. In these processes the need
of the parties comes first like quick settlement of their cases so there is no chance for
delay.
4. The selection of the conciliators depends upon the parties. The parties can choose con-
ciliator on the basis of their availability, experience in particular field, previous track
records of the cases, knowledge in subject area.
5. The conciliation is cheap as compared to litigation. They are cost effective and most
opted process for resolving disputes. It purely depends upon the nature of the dispute
but is widely acceptable.
Disadvantages
1. Conciliator is not a legally qualified person for resolving disputes. His decision is not
binding upon the parties.

49
 2. As the procedure of conciliation is informal and simple there is high possibility of de-
livering injustice.
3. Miscommunication of information: The role of the conciliator to settle up the case by
giving information of one party to another and vice versa. The process of sending and
receiving information sometimes leads to mixed and incorrect information. So, by
these processes one can easily interpret the information given.

ARBITRATION
Arbitration is like a court procedure because the parties submit evidence similar to a trial where
the third party hear the entire situation and give his decision which is binding upon the parties. In
the case of Collins v Collin, the Court held that “An arbitration is a reference to the decision of
one or more persons, either with or without an umpire, of some matter or matters in difference
between the parties.” an arbitrator listens to the evidence which is brought by both parties and
makes a decision which is generally binding upon both parties. Arbitration means getting an
arbitral award on an ongoing conflict, by the arbitrator. In the process of arbitration, the cause is
heard and determined between the parties in a dispute before the person selected by the parties or
appointed under statutory authority i.e., The Arbitration and Conciliation Act, 1996. The
objective of Arbitration is to settle the dispute which arose between the parties by one or more
arbitrators appointed by them by going through the documents and evidences. According to Kurt
Brenn “The objective of arbitration is not compromise but adjudication through the parties are at
liberty to comprise.” A wise arbitrator would certainly promote such agreement, but as a rule
there is no zest, if there is compromise in arbitral awards. While taking a decision in arbitral
matter, the arbitrator must consider the fact that the decision imparted by him must be in the
interest of principle of natural justice.

Arbitration can be done by voluntary or compulsory method. In Voluntary arbitration, if a

dispute arose between the two Parties and they are unable to resolve their differences by
themselves, thereby the parties agreeing to present their Dispute to the fair authority and the
decision will be binding upon both parties. Whereas Compulsory arbitration, is the method
where the parties are required to accept arbitration without any willingness on their part. When
one party in any industrial dispute feels aggrieved by the act of the other party, it may approach
the appropriate government to refer the dispute to any organization of adjudication for the
settlement. The arbitrator or arbitral tribunal consists of a neutral person or persons responsible
for resolving the dispute that the parties have submitted before them.

The number of arbitrators and their appointments are defined in Section 10 and 11 of Arbitration
and Conciliation Act, 1996. The person from any nationality can be appointed as arbitrator,
unless agreed by the parties. The number of arbitrators must be in odd number or there can be a
sole arbitrator. The parties in conflict are free to appoint the arbitrator or they can approach the
statutory authority for the same. In arbitration, if there are three arbitrators then each party will
choose one arbitrator and the two appointed arbitrator will choose one arbitrator who will act as
presiding officer. If the parties failed to appoint an arbitrator within 30 days as requested by the
other party or the appointed arbitrators have failed to come on same page in appointing the

50
arbitrator within 30 days or they have any kind of disagreement, then they can approach the chief
justice or the other person or institution nominated by him regarding the appointment.

The Fifth Schedule to the Act (Annexure-A) are enlisted with the grounds which give rise to
justifiable doubt as to the independence or impartiality of an arbitrator. The Seventh Schedule
(Annexure-B) consists of the grounds which make a person ineligible to be appointed as an
arbitrator.

In International Commercial Arbitration, the arbitrators will be appointed by the Chief Justice of
India or by the person or institution nominated by him who will be of a nationality other than the
nationality of the parties.

ARBITRATION AGREEMENT
The arbitration agreement is defined as written under Section 2 (a) of the Arbitration Act,
1940 i.e. written agreement which present current or future dispute of parties to arbitration ,
irrespective of the name of the arbitrator in it or not. An arbitration agreement or an arbitration
clause in an agreement is sometimes termed as ‘submission’. Arbitration agreement is also
termed as ‘reference’. The arbitration agreement defined by Halsbury, ‘It is an agreement made
by two or more parties between whom some difference has arisen or may hereafter arise whereby
they appoint another person to adjudicate upon such dispute and agree to be bound by his
decision. There are some essentials which needs to follow for a valid arbitration agreement like
the agreement must be in a written form containing minimum terms of arbitration. The important
objective of written agreement is that the parties should agree to resolve the dispute through
arbitration. It must contains the essential elements of a valid contract such as offer and
acceptance, competent parties, consent, lawful consideration etc. The features of arbitration are
that it is a private tribunal chosen by the parties. A person appointed to resolve the differences or
disputes is called an ‘Arbitrator’, the proceeding is termed as ‘Arbitral Proceeding’ and the
decision imparted is termed as ‘Award’. Signing an Arbitration Agreement also leads to giving
up important rights. So, before signing the agreement, one should properly read the terms of
agreement and must reject or negotiate upon the inconvenient terms.
Landmark cases on arbitration
R.V. Solutions Pvt. Ltd. v. Ajay Kumar Dixit & Ors. In this case, The Delhi High Court held that
a non-signatory or third party can only be subjected to arbitration in exceptional cases without its
consent. The arbitrator is required to form a direct relationship with the signatory party of the
agreement, or between the parties in the agreement or the equality of the subject or the overall
transaction.
Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd, the court states
that The High Court should stop the instrument which has not imposed stamp duty and hand it
over to the authority which will then decide to implement the payment of stamp duty and penalty
(if any) at the earliest, and preferably a period of 45 days. . Within the date on which the
instrument of authority is received. As soon as the stamp duty is paid on the instrument, either
party can bring the instrument to the notice of the High Court which will then proceed to hear
and dispose of the Section 11 application expeditiously.

51
BHEL v. Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited. The Supreme Court held that
where the parties do not insist on the exclusive jurisdiction clause in an agreement or raise such
objection, and by their conduct, waive such condition / submit themselves to the jurisdiction of
another court , It cannot be said that exclusive jurisdiction shall be without jurisdiction except in
the court in which it is vested.
Paschimanchal Vidyut Vitran Nigam Limited v. M/S IL & FS Engineering & Construction
Company Limited O.M.P The question before the Delhi High Court was whether the provisions
of the Fourth Schedule to the Act relating to fees to be paid to arbitrators would apply to
domestic ad hoc arbitration where the parties have not approached the court to constitute an
arbitral tribunal.
It was held that the provision in respect of fees contained in Section 11 (14) of the Act is only a
competent provision. The concerned High Court has been given to frame the rules, if it chooses
to do so. Since the parties did not approach the court for the formation of the Arbitral Tribunal,
the Court would have no role in deciding the fees of the Arbitral Tribunal as there is no such
power vested in the Court. Further, the provisions of sub-Section (14) of Section 11 clearly show
that the fee prescribed in the fourth schedule of the Act is only suggestive.

JURISDICTION OF THE ARBITRAL TRIBUNAL,

Arbitration was conceived as a procedure to avoid the troubles faced in the procedure of civil
litigation in courts. In India, it subsisted early in the guise of panchayats, which comprised
people who were asked to determine on matters presented before them, and their verdicts were
conceded by the parties to the dispute. The British made the first and foremost use of the concept
of arbitration for in the Bengal regulations of 1772 and 1813 provisions related to the arbitration
of disputes were applied to immovable property and the Arbitration Act of 1899 was repealed by
the Arbitration Act, 1940.

These statutes mainly focused to institutionalize the procedure of arbitration in India. But in
some duration of time, it was clear that the Arbitration Act of 1940 was not capable enough to
tackle the requirements of a rapidly changing India. Therefore, it was substituted by
the Arbitration and Conciliation Act in 1996. It is based on the UN Model Law to make our law
agreement with the law embraced and acquired by the United Nations Commission on
International Trade Law (UNCITRAL). The Act is of amending and consolidating in nature and
not exhaustive. It has a much-extended scope of the 1940 Act. It aims for the domestic
Arbitration and enforcement of foreign arbitral awards.

Jurisdiction Of Arbitration Tribunals

It would not be appropriate to say that an arbitral tribunal has statutory jurisdiction. The tribunal
determines its jurisdiction to adjust the needs of the parties. The arbitral agreement mainly
determines the ambit of jurisdiction of the arbitral tribunal. The focal of party-autonomy declares
that when the two parties have the remedy to resolve their disputes on their own then they have
the remedy to show this right to any third party, to determine overt that squabble.
Thus it is very essential to contemplate a well-drafted agreement because it results in giving
complete strength to the tribunal to determine matters related to the jurisdiction. The Arbitration

52
and Conciliation Act, 1996 also specifically mentions the jurisdiction to determine explicit
matters in Section 17 of the Act.
 Appointment of a guardian for a person who is of unsound mind or minor age in be-
tween the process of arbitration
 Safety/Security/ Confinement/ provisional injunction of the subject matter of the arbi-
tration.

There are some cases in which the competency of the arbitral tribunal is contingent on gaining
questions.

The relevant provision under the Act (Sec 16)

Section 16 of the Arbitration and Conciliation Act provides the following provisions:
 The arbitral tribunal may regulate or direct on its own jurisdiction, which also incor-
porates any objection regarding the validity or existence of the arbitration agreement,
and for that objective:
o An arbitration clause which is a term of a contract agreement must be
deemed as an agreement free and autonomous of the other terms of the con-
tract, and
o A decision of the arbitral tribunal declaring the contract as invalid does not
necessitate ipso jure the invalidity of the arbitration clause.
 A plea which emanates that the arbitral tribunal doesn’t have jurisdiction shall not be
made after the defense statement is submitted; however, a party shall not be prevented
from making such a plea only because of his participation in the appointment of, or he
appointed, an arbitrator.
 A plea claiming that the arbitral tribunal is surpassing the scope of its authority shall
be made as soon as the matter alleged to be transcended the scope of its authority is
made during the arbitral proceedings.
 In each of two cases referred to in sub-section (2) or sub-section (3), The arbitral tri -
bunal may accept a delayed plea if it concludes with an opinion that the delay is justi-
fied.
 The arbitral tribunal shall determine the plea referred to in sub-section (2) or sub-sec-
tion (3) and take up with arbitral proceedings where the arbitral tribunal takes a deci-
sion rejecting the plea.
 A party, if disgruntled by such an arbitral award, may make an application for rescind-
ing such an arbitral award according to Section 34.

Competence Of The Arbitral Tribunal

The Arbitration Act of 1940 lacked such provisions which authorized the Arbitral Tribunal to
regulate on its own jurisdiction and it was upon the court to scrutinize and decide on the
jurisdiction of the arbitral tribunal. But Section 16 of the Arbitration and Conciliation Act, 1996
grants power to the Arbitral Tribunal to look on its own jurisdiction. Section 16 (1) of the Act
provides that the arbitral tribunal may regulate or direct on its own jurisdiction, which also
incorporates any objection regarding the validity or existence of the arbitration agreement.

53
Section 16 of the Arbitration and Conciliation Act incorporates the concept of competence-
competence. It contains two facets i.e. the first one reflects that without support from the courts,
the tribunal may decide on its jurisdiction and secondly, it shows reluctance from the courts in
deciding this issue before the tribunal has decided on this issue. But questions regarding the
binding effect of the decisions made by the arbitral tribunals need to be discussed and can these
decisions be challenged in courts?

In Union of India vs. M/s. East Coast Boat Builders & Engineers Ltd., the Hon’ble Delhi High
Court observed that it was apparent from the scheme of the act that the legislature didn’t grant
appeal against the order under Section 16(5) where the arbitral tribunal decides rejects a plea that
it has no jurisdiction. Apparently, the intention is that the arbitral tribunal shall proceed with the
arbitral proceedings and make an award without any delay and without interference at any stage
in the arbitral process due to supervisory role of the court.

In the case of Nav Sansad Vihar Coop. Group Housing Society Ltd. (Regd.) vs. Ram Sharma and
Associates the Hon’ble Delhi High Court held that if the Arbitral Tribunal rejects a plea under
Section 16(5) of the Arbitration and Conciliation Act, the arbitral process shall take place and the
award shall be declared and meanwhile, the aggrieved party shall wait till the award is
announced and there is no remedy against such order.

But determination made by the tribunal to admit the plea that it doesn’t have jurisdiction or that
it is surpassing its ambit of authority is appealable and triable under Section 37(2) of the
Arbitration and Conciliation Act. In the case of Pharmaceutical Products of India Ltd. vs. Tata
Finance Ltd., the Hon’ble Bombay High Court opined that in cases where the Arbitral Tribunal
rejects the plea related to its jurisdiction, Section16(5) of the Arbitration and Conciliation Act
clearly empowers the Tribunal to resume with the arbitral proceedings and declare an arbitral
award. Section 16(5) grants procedure to challenge an arbitral award. It states that only in
accordance with Section 34, such an award can be challenged. whereas, if the Arbitral Tribunal
determines to accept the plea that it does not have jurisdiction, then such decision can be
appealed under Section 37(2) of the Arbitration and Conciliation Act.
Thus, it is clear that when the Arbitral Tribunal decides to reject a plea that it does not have the
jurisdiction then the order made related to its jurisdiction cannot be appealed but when the
Arbitral Tribunal accepts the plea that it does not have jurisdiction then such an order can be
appealed under Section 37(2) of the Arbitration and Conciliation Act.

Jurisdiction of the arbitral tribunal when contract containing an arbitration clause is declared
void

There may be cases where the arbitration agreement is not made as a separate agreement.
Instead, it is embedded, as a clause, in the agreement between the parties and such contract or the
agreement between the parties is pronounced void or illicit. The question which arises is that
what happens to the agreement in such cases and can the arbitration clause in such cases become
void?

54
In the case of Jawaharlal Burman vs. Union of India, the Hon’ble Supreme Court held that it is
theoretically possible that the contract may end and the arbitration contract may not and similarly
it is also theoretically possible that the contract may be valid whereas the arbitration agreement
may be void and in that sense, there is a difference between the contract and its part of arbitration
agreement but in the present situation, a challenge to the contract itself includes a challenge to
the arbitration agreement. If there is a concluded contract the arbitration clause is also valid and
if there is not a concluded contract the arbitration clause is also invalid. The Court also
acknowledged that there could be a vast majority of cases in which the arbitration agreement
exists as a part of the main contract itself, and challenging the validity or even existence of one
would mean a challenge to the validity or existence of others.

In the case of Waverly Jute Mills Co. Ltd. Vs. Raymon and Co. (India) Ltd. , The Hon’ble
Supreme Court opined that discourse to the legitimacy of a contract could be the subject matter
of an agreement of arbitration similarly as a debate identifying with a case made under the
contract. But such an agreement would be operative and effective only when it is distinct from
and independent of the contract which is disputed as illegal.

In the case of Jaikishan Dass Mull vs. Luchhiminarain Kanoria & Co., the Hon’ble Apex Court
of India opined that there cannot be any doubts that if a contract is void and illegal, then, the
arbitration clause must also perish along with the contract itself. As Viscount Simon, L.C. also
pointed out in Heyman vs. Darwins Ltd. that if one party to the contract contends that it is void
ab initio, and for this view, the clause itself is void and therefore the arbitration clause cannot
operate. The arbitration clause, which is an essential content of the contract, cannot stand if the
contract itself is declared to be illegal.

But the position has changed after the enactment of The Arbitration and Conciliation Act in
1996. And Section 16 (1) of this Act declares that the arbitration clause even if inserted in a
contract, shall be considered as an independent from the remaining of the contract and a
determination made by the Arbitral Tribunal regarding the invalidity of the contract shall not
require ipso jure invalidation of the arbitration clause.
In the case of Olympus Superstructures vs. Meena Vijay Khaitan, the Apex Court stated that it
shall be noticed that the arbitral tribunal is now empowered under sub-section (1) of Section
16 of the Act to look and reconsider on its own jurisdiction which also includes deciding on any
objection related to the validity or even existence of the arbitration agreement and for such
purpose, the arbitration clause which is a part of the contract and any decision by the arbitral
tribunal related to the invalidity of the contract shall not require ipso jure affect the validity of
the arbitration clause. It is clear from clause (b) of Section 16(1) which provides that a decision
by the arbitral tribunal related to invalidation of the main contract shall not require ipso
jure invalidation of the arbitration clause.

Loss Of Competence Of Arbitral Tribunal To Rule On Its Jurisdiction

Section 11(6) of the Act states that a party may appeal to the designate of Chief Justice or the
Chief Justice himself in order to take necessary steps when concurred by the parties under an
appointment procedure, one of them doesn’t act as necessary under the procedure, or the two

55
mediators fall short to stick to an agreement as contemplated of them under the procedure, or a
person or institution falls short to execute a function endowed to him under the procedure.
And Section 11(7) declares that a resolution which is taken by the Chief justice or the person
designated by him under Section 11(4), Section 11(5) or Section 11(6) shall be final. It shows
that a limit of the tribunal to reconsider its own jurisdiction when the Chief Justice has already
considered and decided it.

In the case of Konkan Railway Corporation Ltd. vs. Rani Construction Pvt. Ltd. the judgment
held that in a case when the chief justice or any person designated by him may have nominated
the arbitrator through the thirty days had not expired then the Arbitral Tribunal would not have
been constituted properly and therefore be without jurisdiction. The aggrieved party, in that case,
could require the Arbitral Tribunal to rule on its jurisdiction and Section 16 provides provision
for this and declares that the Arbitral Tribunal may look on its jurisdiction.

In the case of Sundaram Finance Ltd. vs. NEPC India Ltd., the Hon’ble Supreme Court held that
an order stated under Section 11 of the Act is an administrative order. It means that no appeal
could exist under Article 136(1) of the Constitution. This case shows unwillingness on the part of
the Court to affect the freedom enjoyed by the arbitration process and by declaring that the
functions of the Chief Justice are administrative, the Court had essentially forbidden the Chief
Justice from adjudicating questions such as the validity or existence of the arbitration agreement.
Section 16 of the act cannot be declared to empower the Arbitral tribunal to take no notice of the
decision which is given by the judicial authority or the Chief justice before the reference to it
was made. The authority to decide does not permit the Arbitral tribunal to ignore the finality
granted to an order passed earlier to its entering upon the reference by the very statute which
creates it.

Thus, if the Chief Justice or a person designated by him has looked into the validity or presence
of the arbitration provision and on its jurisdiction then the Arbitral Tribunal can’t rethink the
topic of its jurisdiction. It would in such a case be forbidden from looking into the matter of its
jurisdiction.
Jurisdiction For Enforcement Of The Arbitral Awards
The procedure for execution of decrees in India is governed through the Code of Civil Procedure,
1908 whereas that of arbitral awards is governed through the Arbitration & Conciliation Act,
1996 (“Act”) as well as the CPC.

In the case of Sundaram Finance vs. Abdul Samad & Anr, a two-Judge Bench of the Hon’ble
Apex Court of India had cleared the doubts related to the jurisdiction for the enforcement of the
arbitral award. The Supreme Court removed the doubt by mentioning that an arbitral award
under the Arbitration and Conciliation Act, 1996 can be discharged in any court of competent
jurisdiction and that getting a transfer order from any court. It was certainly a landmark judgment
that extended the ambit and power of the arbitral tribunal.

The Appeal of Arbitral Awards

56
There can be no appeal of arbitral awards against the jurisdiction related to the merits of the
arbitral award. The Hon’ble Supreme Court has observed that an arbitrator should be deemed as
a judge which is appointed by the parties and an award passed by him should not be lightly
interfered with. In one judgment, the Supreme Court declared that the consideration of the award
being satisfactory cannot be decided solely on the premise of the impulse of any person.
However, this doesn’t mean that the arbitral award is absolute and it does not prevent from
questioning the result of arbitration.

There are certain remedies which are made by the law to ensure proper and efficient conduct of
proceedings. The repealed Arbitration and Conciliation act 1940 Act provided three remedies
against an arbitration award which are modification, remission and setting aside which has been
further amended by the Arbitration and Conciliation Act, 1996 and the remedies are divided into
two parts. And the remedy for rectification of errors has been handed over the Tribunal and to
the parties to decide.

The remedy for setting aside is amended and the award after the arbitration process will be
returned back to the tribunal for removal of defects. Section 34 provides some grounds to set
aside the arbitral award which includes an invalid agreement, the incongruity, inefficiency on the
part of one of the parties, incapacity in the subject of the arbitration process and the arbitral
award, opposing the public policy, a discrepancy in the appointment of the arbitrators etc.

The Act of 1996 specifies that an arbitral award cannot be overturned by the court merely
because of re-appreciation of evidence or an erroneous application of the law. In the case
of Brijendra Nath vs. Mayank, the Hon’ble Supreme court declared that if during the pendency
of the application challenging the validity of the arbitral award, the parties have acted upon it,
then it would lead to estoppel against attacking the award.

Conclusion
The arbitration started as a procedure to avoid the troubles of civil litigation. British Government
spread it in India. The Arbitration Act, 1940 focused to institutionalize the procedure of
arbitration in India. Later this act was amended by the Arbitration and Conciliation Act of
1996. An arbitral tribunal does not have statutory jurisdiction. The tribunal determines its own
jurisdiction to adjust the needs of the parties. The arbitral agreement mainly determines the ambit
of jurisdiction of the arbitral tribunal. There can be no appeal of arbitral awards against the
jurisdiction related to the merits of the arbitral award. Section 11(7) declares that a resolution
which is taken by the Chief justice or the person designated by him under Section 11(4), Section
11(5) or Section 11(6) shall be final. It shows that a limit of the tribunal to reconsider its own
jurisdiction when the Chief Justice has already considered and decided it.

APPLICABLE LAW; IIC, UNCITRAL, KSID.

MEDIATION
Mediation is one of the alternative dispute resolutions which are voluntary and informal process
for resolution of disputes. Mediation is a process which is under the control of the parties. The

57
mediator acts as a middle person who helps to come on a negotiated common point of their
dispute. They are trained professionals or sometimes attorneys who assist the parties in dispute to
meet at a common place where they can discuss their issues and can try to negotiate to reach at a
common output. A mediator uses special kind of conversation and communication to resolve the
parties dispute.

The parties can appoint the mediators themselves with mutual consent or the court may appoint
the arbitrators in pending litigation. In Mediation, the parties are the decision makers. Mediators
don’t decide what is right or wrong or what is fair or unfair. Mediator can’t impose his opinion
upon the parties but he can suggest and help the parties to reach a mutual accepted agreement.
Mediators may hold joint meetings or can meet with the disputed parties together or separately
and can suggest some possible solutions, provide options to compromise, or provide advice and
guidance but they cannot impose their opinion or try to solve the dispute forcefully. In
mediation, both parties are responsible for reaching the outcome. The role of the parties in
mediation is not to convince the mediator but to come up with a common solution which is
acceptable by both the parties.

Mediation is an informal method of settling disputes, while it consists of basic rules or

procedures. The decision of the mediation is non-binding upon the parties. If the disputed parties
have agreed for the process of mediation then it is not binding upon them to agree upon the
proposed opinion of the Mediator. The mediator can suggest, give opinions and can tell what to
do or what not but he can’t force the parties to attend the mediation if they are not interested to
continue.

Mediation can be divided into two categories which is commonly followed in India:
1. Court referred mediation
The court may refer the pending case to a mediator for mediation if they think there is possibility
for the settlement of the case. The act of referring cases is given in Section 89 of the civil
procedure code, 1908. These kinds of mediation are used in matters like divorce cases or cases
which deals under Negotiable Instrument Act, 1881.
2. Private mediation
In this kind of mediation, the professional and trained person works as Mediator. The general
public, government authorities, personnel from corporate sector or anyone from court can
approach them for settling their dispute through mediation.

Mediation in India
Mediation is one of the ancient methods of resolving disputes between the parties.Various forms
of Mediation among businessmen gained recognition during Pre-British rule in India. The
Mahajans were respected, impartial and wise businessmen who resolved disputes between
merchants through mediation. The informal process practiced in India’s western province of
Gujarat was a combination of Mediation and Arbitration, now known as Med-Arb in the Western
world. Despite of getting widespread acceptance in the business world, arbitration had no legal
sanction.

58
The East India Company gained control from England and divided Indian rulers and converted
their commercial purpose in political aggression. By 1753, Britishers established their colonies
and British-style courts came into existence in India. By 1775, Britishers ignored the local
indigenous processes for settling disputes and set up courts based on British laws of that period.
However, there was an underground dispute going on between British values which gives clear
decision on cases and Indian values which promote the parties to work with their differences and
end it with some kind of settlement. British courts slowly became recognized for their integrity
and by gaining people’s confidence. Even after the Independence of India in 1947, the Indian
judiciary has been declared as Nation’s Pride. Commerce, trade and industry began to expand
rapidly in the 21st century the British system quickly dispensed justice while maintaining respect
and honour. In Independence, mediation has also played an important role in awareness of
fundamental and individual rights, Government’s participation in the growth of trade, commerce
and industry of the nation, establishment of Parliament and State Assemblies, Government
Corporation, Financial Participation in institutions, fast growing international commerce and
public sector business.

The explosion in litigation resulted from the increase of civil litigation, Business opportunities
beyond local borders, increase in population, creation of new acts, new rights and measures and
increase dependence on sole Judicial Forum of Courts.. Due to lack of facilities there was a
challenge to handle the overload of cases efficiently and effectively by the judicial forum. The
concept of Arbitration got legislative recognition for the first time in India through Industrial
Disputes Act, 1947. Almost all democratic countries of the world have faced similar problems
regarding access to justice. The United States faced the most major changes in their law reform
in 30 years and the same was being followed in Australia. United Kingdom has also adopted
alternative dispute resolution as part of its legal system. European Union also favoured the
arbitration for the settling of commercial disputes between member states.
Differences between Arbitration and Mediation
Arbitration Mediation
Arbitration is like a court
procedure because the parties
Mediation refers to a process of settling
submit evidence similar to a trial
disputes by independent and impartial third
Meaning where the third party hear the
party who assists the parties to reach a
entire situation and give his
common outcome.
decision which is binding upon
the parties.
It is a formal procedure like court
Procedure It is an informal procedure.
proceedings.
Third party is termed as
Third party The third party is termed as mediator.
arbitrator.
One arbitrator is known as sole
Number of
arbitrator and there can be more One mediator.
third party
than one arbitrator.

59
Nature of They are binding upon both the
They are non binding in nature.
award parties.
The outcome of the arbitration
Control
depends upon the evidence, The outcome of the mediation depends upon
over
documents etc the decision the parties.
outcome
depends upon the arbitrators.
During arbitration, both parties
are given the opportunity to
Arbitrators do not issue orders, find fault, or
present their case to the
make determinations. Instead, help the
Decision arbitrator. The arbitrator does not
parties with communication, obtain relevant
pass any decision, but only
information and develop alternatives.
disposes with the approval of the
parties.
Difference between Mediation and Conciliation
Conciliation Mediation
Conciliation is an alternative
dispute resolution method in Mediation refers to a process of settling
which an expert is appointed to disputes by independent and impartial third
Meaning
resolve a dispute by party who assists the parties to reach a
convincing the parties to agree common outcome.
upon an agreement.
By The Civil Procedure Code,
Regulation Arbitration and Conciliation Act, 1996.
1908.
Number of
One or more conciliator. One mediator.
Third party
In mediation confidentiality depends upon
In Conciliation Confidentiality
Confidentiality thrust, and it is advised for all parties to sign
is determined by the law.
a Confidentiality Clause for extra measure.
In mediation, the mediator should be
Nature of third In conciliation the conciliator
impartial and objective to the parties’
party plays a more active role.
dispute.
In Conciliation, the conciliator
also plays the role of In Mediation, the mediator does not give
Third party
evaluation and intervention for any judgement.
settling the dispute.
Difference between Arbitration and Conciliation
Arbitration Conciliation
Meaning Arbitration is like a court Conciliation is an alternative dispute
procedure because the parties resolution method in which an expert is
submit evidence similar to a appointed to resolve a dispute by convincing
trial where the third party the parties to agree upon an agreement.

60
 hear the entire situation and
give his decision which is
binding upon the parties.
That decision made by the
Enforceability However, a conciliator has no right to
arbitrator is binding in the
of decision enforce his decisions.
same way as a court decision.
Arbitration is a formal
process and follows similar
procedures as court
Nature of It is an informal process and usually
proceedings where witnesses
process involves a discussion on table.
can be called and evidence
can be presented in respective
cases.
Prior agreement Prior agreement is required. No need of prior agreement.
Available for existing and
Availability Available for only existing dispute.
future dispute.
Conciliation does not always ensure that a
Arbitral award is final and
Outcome mutually agreed result will arise between
binding upon parties.
the parties.

Conclusion
The procedures and techniques discussed above are the most commonly used methods of ADR.
However, there are countless various ADR methods, many of which modify or combine the
above methods. With each type of ADR, the objective is to resolve the dispute by method of
round table discussion . ADR is the most effective process which lessens the burden of courts.
ADR promotes harmonious relationship among parties. The settlement of disputes through
ADRs is so effective and globally accepted that courts have recognized some of them like
mediation more often. This avoids procedure of litigation and the award for fair and impartial
settlement of doubtful issues of an individual on legal and ethical basis which is based upon
ground reality.
This is what distinguishes ADR methods from general litigation. There can be only one winning
party after a court trial, while all parties can be treated as winner after conciliation, mediation or
negotiation, as there is no conflict between them and they go through the settlement procedure.

THE ARBITRATION AND CONCILIATION ACT 1996

With a view to consolidate and amend the law relating to domestic arbitration, international
commercial arbitration and enforcement of foreign arbitral awards as also to define the law
relating to conciliation and related matters, a new law called Arbitration and Conciliation Act,
1996 has been passed. The law is based on United Nations Commission on International Trade
Law (UNCITRAL), Model Law on International Commercial Arbitration.

61
Aim – Streamlining the process of arbitration and facilitating conciliation in business matters.
The Act recognizes the autonomy of parties in the conduct of arbitral proceedings by the arbitral
tribunal and abolishes the scope of judicial review of of the award and minimizes the supervisory
roles of Courts.

Difficulties in Applicability of the Arbitration and Conciliation Act, 1996

- Interpretation of the provisions of the Act by Courts in some cases have resulted
in delay of disposal of arbitration proceedings and increase in interference of
Courts in arbitration matters, which defeat the object of the act.
- With the view to overcome the difficulties, Arbitration and Conciliation
(Amendment) Act, 2015 has been passed which facilitate and encourage
Alternative Dispute Mechanism, especially Arbitration for settlement of disputes
in a more user-friendly, cost effective and expeditious disposal of cases
- The promotion of the institutional arbitration in India by strengthening Indian
Arbitral institutions has been identified critical to the dispute resolution through
arbitration. Though arbitral institutions have been working in India, they have not
been preferred by parties, who have leaned in favour of ad hoc arbitration or
arbitral institution located abroad. In order to strengthen the Indian arbitral
institutions Central Government constituted a High Level Committee, who
recommended for the establishment of an independent body for grading of arbitral
institutions and accreditation of arbitrators, etc. The committee has also
recommended certain amendments to the said Act, to minimize the need to
approach the Courts for appointment of arbitrators. Accordingly with a view to
make India a hub of institutional arbitration for both domestic and international
arbitration, the Arbitration and conciliation (Amendment) Act, 2019 has been
passed by the Parliament.

Objectives of the Arbitration and Conciliation Act, 1996

 Cover international and domestic commercial arbitration and conciliation compre-
hensively.
 Make a procedure which is fair, efficient and capable of meeting the needs of the soci-
ety for arbitration and conciliation.
 Provides reasons by the tribunal for granting any arbitral award.
 Ensure that the tribunal does not exercise its jurisdiction beyond the limits.
 Minimise the role of courts and reduce the burden on the judiciary.
 It permits the tribunal to opt for arbitration and conciliation as a method of dispute set-
tlement.
 It makes sure that every award is enforced in the same manner as the decree of the
court.
 It provides that the conciliation agreement reached by the parties has the same effect
as the award granted by an arbitral tribunal.
 It also works on the enforcement of foreign awards.

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Definitions under the Arbitration and Conciliation Act, 1996
Section 2 of the Act gives various definitions of some important terms given in the Act. These
are:
1. Arbitration – Section 2 (1)(a) of the Act defines arbitration as to any arbitration
which is either administered or not by a permanent arbitral institution.
2. Arbitrator – It is not defined in the Act. But, Arbitrator is a person who is appointed
to determine differences and disputes between two or more parties by their mutual
consent. The parties who appoint an arbitrator must also give his consent to act as an
arbitrator. His appointment is not complete till he has accepted the reference. His deci-
sion is binding on the parties. Any interest of the arbitrator either in one of the parties
or in the subject – matter of reference unknow to either of the parties or all the parties,
as the case may be is a disqualification for the arbitrator.
3. Arbitration agreement – Section 2(1)(b) of the Act says that for arbitration agree-
ment Section 7 of the Act must be referred.
U/S 7, the Arbitration agreement has been defined to mean an agreement by the par-
ties to submit to arbitration all or certain disputes which have arisen or which may
arise between them in respect of a defined legal relationship, whether contractual or
not.
- An arbitration agreement may be in the form of an arbitration clause in a contract
or in the form of a separate agreement.
- Arbitration agreement shall be in writing
- An arbitration agreement is in writing if it us contained in,
 a document signed by the parties
 an exchange of letters, telex, telegrams, or other means of telecommunica-
tions including communication through electronic means which provide a
record of the agreement
 an exchange of statements of claim and defense in which the existence of
the agreement is alleged by one party and not denied by the other.
- The reference in a contract to a document containing an arbitration clause
4. Arbitral award – this has not been defined clearly in Section 2(1)(c) but mentions
that it includes interim award. Taking into account other provisions of the Act, the fol-
lowing features are noticed:
- Written and Stamped: Agreement should be in writing. A reference to arbitra-
tion and award is also required to be made in writing. The arbitral award is re -
quired to be made on stamp paper of prescribed value and in writing. An oral de-
cision is not an award under the law.
- Signed: The award is to be signed by the members of the arbitral tribunal. Signa-
ture of the majority of the members of the tribunal is sufficient if the reason for
any omitted signatories is stated.
5. Arbitral tribunal – it means a sole arbitrator or panel of arbitrators who help in arbi-
tration. (Section 2(1)(d))
6. International commercial arbitration – defined under Section 2(1)(f). It means arbi-
tration in disputes arising out of a legal relationship, whether contractual or not and

63
 where one party is a national of another country, a body corporate in another country,
company under the control of any other country or government of a foreign country.

Legal analysis of the Arbitration and Conciliation Act, 1996

Arbitration (Part I)
It is defined under Section 2 (1)(a) of the Act. It is an alternative to litigation in courts and is
advantageous as it provides flexibility and confidentiality. According to Black Law Dictionary, it
means a method of resolving disputes which includes two parties and a neutral third party whose
decision is binding on both parties.
Section 8 of the Act talks about the powers of any judicial authority to refer a case to arbitration.
It must be followed by an arbitration agreement. The Hon’ble Supreme Court in the case of P.
Anand Gajapati Raju v. P.V.G Raju (2000) gave certain requirements necessary for referring
parties to arbitration:
 An arbitration agreement must be there.
 A party must bring an action in court against others.
 The subject matter must be the same as in arbitration.
 One party demands arbitration in court.
In another case of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. (2011), it was held
that there is no time limit to file an application but it should be filed before submission of the
first statement related to the dispute. Further, Section 9 provides that the parties to arbitration
may at any time refer to the court for interim measures.

Types of Arbitration
1. Domestic arbitration – It means that the proceedings of arbitration will take place as
per Indian laws and be subject to Indian jurisdiction.
2. International and commercial arbitration – This is done in cases involving disputes
out of a legal relationship where one of the parties is a foreign national, body corpo-
rate in some other country, a company or group which is under the control of some
other country and government of a foreign country.
3. Institutional arbitration – It is administered by arbitration institutions like the Indian
Council of Arbitration, the International Centre for Alternative Dispute Resolution
(ICADR) etc.
4. Statutory arbitration – some acts provide for the resolution of disputes by arbitra-
tion. In case there is any inconsistency between any Act and Part I of the Arbitration
Act then the provisions given in that Act will prevail.
5. Ad hoc arbitration – It means an arbitration where parties agree without any assis-
tance from the Arbitral tribunal.
6. Fast track arbitration – It is also called documentary arbitration. The arbitration pro-
ceedings are very fast and time-saving. It is solely based on the claim statement by
one party and its written reply by another.
7. Look–sniff arbitration – It is a combination of an arbitral process and the opinion of
an expert. There are no formal submissions and hearings under this.
8. Flip–flop arbitration – It is also called pendulum arbitration. The parties in this type
of arbitration create the cases before and then invite the arbitrator to decide any one of

64
 the two options.

Advantages of arbitration
 A person appointed as arbitrator is based on the whims of the parties.
 If parties agree only then an arbitral tribunal is taken into matter.
 It is inexpensive and saves time.
 It ensures a fair trial.
 Gives freedom to the parties from judicial intervention.
 Parties choose the place of arbitration themselves (Section 20).
 The proceedings are kept private and confidentiality is maintained.
 The arbitral award is enforced in the same way a decree of the court is enforced.
Disadvantages of arbitration
 It does not always guarantee an expeditious resolution.
 The procedure is at times uncertain.
 It cannot give remedies like punishment, imprisonment, injunction, etc. which are
given in courts.
 Due to flexibility, it is ineffective.
 The method cannot be easily used in disputes involving multiple parties.

Cases not referred to arbitration

Generally, cases of civil rights where the remedy is the damages are referred to arbitration
but Section 2(3) of the Act gives the list of such cases which cannot be submitted to arbitration.
These are:
 Winding up proceedings of any company. (Haryana Telecom Ltd. v. Sterlite Indus-
tries (1999);
 Disputes that have to be determined by any particular tribunal as the law may provide;
 Proceedings related to insolvency;
 Probate proceedings;
 Question of will and genuineness;
 Guardianship matters;
 Succession disputes;
 Disputes related to immovable property;
 Illegal transaction cases;
 Proceeding under Section 145 of the Code of Criminal Procedure; and
 A criminal case cannot be referred to arbitration;

Arbitral tribunals
Composition of tribunals
It is the creation of an agreement which conforms with the law. Section 10 of the Act enables the
parties to determine freely the number of arbitrators to settle their dispute. The only restriction is
that the number of such arbitrators must not be even. If the parties are not able to decide then
there will be only 1 arbitrator. But if there are even number of arbitrators then the agreement
cannot be held invalid merely on this ground. (Narayan Prasad Lohia v. Nikunj Kumar Lohia,
2002)

65
Procedure for appointment of arbitrators
Further, Section 11 of the Act provides the procedure for the appointment of arbitrators. The
valid requirements for any such appointment are:
 Party must give proper notice of appointment to the other party. If it does not do so,
the appointment is held invalid.
 A person appointed as an arbitrator must be duly informed and his consent must be
taken.
 The consent must be obtained before finalising his appointment.
It also says that if the parties fail to appoint an arbitrator within 30 days of the request or if two
arbitrators are appointed and not the third one, then the appointment will be made by Chief
Justice or any person on his behalf designated by him but with the prior request of the parties.

Termination of arbitrator
The grounds for termination are given under Section 14 and Section 15 of the Act. These are:
 If he is not able to perform his functions without undue delay (whether de jure or de
facto),
 If he withdraws or is terminated by the parties,
 He shall be terminated where he withdraws himself or by agreement of the parties.
 On his termination, a substitute arbitrator will be appointed as per Section 15.

Jurisdiction
Section 16 of the Act provides that the tribunal will act in its jurisdiction. If the arbitral tribunal
has no jurisdiction then a plea will be raised but not later than when the statement of defence is
submitted. It also provides that in case a party is not satisfied with the arbitral award, it can make
an application to set it aside according to Section 34 of the Act. The Supreme Court in the case
of Centrotrade Minerals and Metals v. Hindustan Copper Ltd. (2006), held that any issue related
to the jurisdiction can be raised by people in the proceedings or anyone from outside. But if it is
made by the party then it must be done during the proceedings or at the initial stage.

Arbitral award
It is a final determination of a claim or a part of it or a counter-claim awarded by the arbitral
tribunal. It must be written and duly signed by the members of the arbitral tribunal as given
under Section 31 of the Act. The Section further gives the power to the tribunal to make interim
awards for any matter. In case of payment of money, it can award the interest which seems
reasonable, just and fair to the tribunal.
Section 32 of the Act empowers the arbitral tribunal to terminate the proceedings by making a
final arbitral award. The procedure for any correction in the award or its interpretation is given
under Section 33 of the Act. It also gives the power to the tribunal or the arbitrator to amend,
correct or remove any errors of any kind within 30 days but is silent on judicial review. The
tribunals cannot exercise their jurisdiction beyond whatever has been mentioned in this section.

66
Types of arbitral awards
1. Interim award – It is the determination of any issue arising out of the main dispute. It
is a temporary arrangement to satisfy a party and is subject to the final award.
2. Additional award – According to Section 33 of the Act, if the parties find that certain
claims have been missed out by the arbitral tribunal and they were present in the pro-
ceedings then it can after notifying other parties, make a request to the arbitral tribunal
to make an additional award and cover the claims which have been left.
3. Settlement awards – It is made if the parties agree on certain terms of the settlement.
As per Section 30 of the Act, the arbitral tribunal may use any method of dispute reso-
lution like mediation, conciliation or negotiation to bring a settlement between the
parties.
4. Final award – It is an award which finally determines all the issues in a dispute. It is
conclusive unless set aside by courts and binding on the parties.

Recourse against arbitral awards

Under Section 34 of the Act, a party if not satisfied can make an application to set aside the
award granted by an arbitral tribunal. The time limit to make such an application is not more than
3 months from the date the arbitral award was made. The grounds are:
 Incapacity of parties.
 Non-existence of the agreement of arbitration.
 Did not follow the due process.
 Error on the part of the arbitral tribunal to exercise its jurisdiction.
 Improper composition of the arbitral tribunal.
 The subject matter is not capable of being referred to arbitration.
 It is against public policy.
 Fraud or corruption.
Section 37 of the Act provides that if a person is not satisfied with the order passed by the
tribunal, he/she can appeal to the court. However, there are no provisions for a second appeal
once an appeal has been made. In the case of Pandey and Co. Builders Pvt. Ltd. v. State of Bihar
(2007), it was held that the appellate authority in any case which is referred to arbitration must be
decided from the definition of court given under Section 2 of the Act.

Foreign awards (Part II)

Foreign awards are given in the disputes arising out of some legal relations which can either be
contractual or not and are considered under any commercial law of the country. In simple terms,
it means the awards given in International commercial arbitration. Foreign awards are granted in
foreign countries and are enforceable in India under the Act. It is divided into two chapters:
 The New York Convention (1958)
 The Geneva Convention (1927)

The foreign award related to the New York Convention is given under Section 44 of the Act and
that related to the Geneva Convention under Section 53 of the Act. The conditions to enforce
these awards in the country are given under Section 48 and Section 57 of the Act respectively.

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Conciliation (Part III)
It is a process in which a third party helps the parties in dispute to resolve it by way of
agreement. The person authorised to do so is called a Conciliator. He may do it by giving his
opinion regarding the dispute to help parties reach a settlement. In other words, it is a
compromise settlement between the parties.

Features of conciliation
 The person assisting the parties to come to a compromise is called a conciliator.
 Conciliators give their opinion regarding the dispute.
 The process of conciliation is voluntary.
 It is a non-binding process.
 The main difference between arbitration and conciliation is that, unlike arbitration, the
parties in this process control the whole procedure and the outcome.
 It is a consensual party and the desired outcome is the final settlement between the
parties based on their wishes, terms and conditions.
 A conciliator can become an arbitrator on the wish of the parties if no compromise
could be reached by the process of conciliation. This is known as Hybrid Concilia-
tion.
 The settlement agreement will have the same importance and status as the arbitration
award. (Section 74)

Proceedings of Conciliation under the Act

 Section 62 of the Act provides that in order to initiate the conciliation proceedings one
party to the dispute has to invite the other party in writing for conciliation. However,
there will be no proceedings if the other to whom notice/invitation is sent, reject it or
does not reply.
 The general rule states that there must be one conciliator but in the case of more than
one conciliator they have to function together with each other as per Section 63 of the
Act.
 The appointment of the conciliator like an arbitrator will be done by the parties them-
selves under Section 64 of the Act.
 A party according to Section 65 of the Act is under an obligation to submit in writing
the nature of the dispute and all the necessary information related to it to the concilia-
tor.
 The proceeding can be terminated following any of the procedures given under Sec-
tion 78 of the Act.

Role of conciliator
It is mentioned under Section 67 of the Act:
 He must be independent and impartial.
 He must assist the parties to come to a settlement.
 He is not bound by the procedure given under the Code of Civil Procedure, 1908.
 He must adhere to the principles of fairness and justice.

68
Supplementary provisions (Part IV)
 Section 82 empowers the High Court to make rules relating to any provision of the
Act.
 The Central Government has the power to remove any kind of difficulties and make
rules in the Act as per Section 83 and Section 84 respectively.
 There were 3 Acts dealing with the arbitration in India which have now been repealed
by the Act of 1996. These were:
o The Indian Arbitration Act, 1940
o The Arbitration (Protocol and Convention) Act, 1937
o Foreign Awards (Recognition and Enforcement) Act, 1961

Appointment of conciliators-
Section 64 deals with the appointment of the conciliators. When the invitation to the conciliation
is accepted by the other party, the parties have to agree on the composition of the conciliation
tribunal. In the absence of any agreement to the contrary, there shall be only one conciliator. The
conciliation proceeding may be conducted by a sole conciliator to be appointed with the consent
of both the parties, failing to which the same may be conducted by two conciliators (maximum
limit is three), then each party appoints own conciliator, and the third conciliator is appointed
unanimously by both the parties. The third conciliator so appointed shall be the presiding
conciliator. The parties to the arbitration agreement instead of appointing the conciliator
themselves may enlist the assistance of an institution or person of their choice for appointment of
conciliators. But the institution or the person should keep in view during appointment that, the
conciliator is independent and impartial.

Principles of Procedure
1) Independence and impartiality [Section 67(1)]-
The conciliator should be independent and impartial. He should assist the parties in an
independent and impartial manner while he is attempting to reach an amicable settlement of their
dispute.

2) Fairness and Justice [Section 67(2)]-

The conciliator should be guided by the principles of fairness and justice. He should take into
consideration, among other things, the rights and obligations of the parties, the usages of the
trade concerned, and the circumstances surrounding the dispute, including any previous business
practices between the parties.

3) Confidentiality [Section 70]-

The conciliator and the parties are duly bound to keep confidential all matters relating to
conciliation proceedings. Similarly when a party gives a information to the conciliator on the
condition that it be kept confidential , the conciliator should not disclose that information to the
other party.

4) Disclosure of the information[Section 70]-

69
When the conciliator receives a information about any fact relating to the dispute from a party ,
he should disclose the substance of that information to the other party.The purpose of this
provision is to enable the other party to present an explaination which he might consider
appropriate.

5) Co-operation of the parties with Conciliator [S. 71]-

The parties should in good faith cooperate with the conciliator. They should submit the written
materials , provide evidence and attend meetings when the conciliator requests them for this
purpose.

Procedure of conciliation
1) Commencement of the conciliation proceedings [Section 62]-
The conciliation proceeding are initiated by one party sending a written invitation to the other
party to conciliate. The invitation should identify the subject of the dispute. Conciliation
proceedings are commenced when the other party accepts the invitation to conciliate in writing.
If the other party rejects the invitation, there will be no conciliation proceedings. If the party
inviting conciliation does not receive a reply within thirty days of the date he sends the invitation
or within such period of time as is specified in the invitation, he may elect to treat this as
rejection of the invitation to conciliate. If he so elects he should inform the other party in writing
accordingly.

2) Submission of Statement to Conciliator [Section 65] –

The conciliator may request each party to submit to him a brief written statement. The statement
should describe the general nature of the dispute and the points at issue. Each party should send a
copy of such statement to the other party. The conciliator may require each party to submit to
hima further written statement of his position and the facts and grounds in its support. It may be
supplemented by appropriate documents and evidence. The party should send the copy of such
statements , documents and evidence to the other party. At any stage of the conciliation
proceedings , the conciliator may request a party to submit to him any additional information
which he may deem appropriate.

3) Conduct of Conciliation Proceedings[Section 69(1),67(3)]-

The conciliator may invite the parties to meet him. He may communicate with the parties orally
or in writing. He may meet or communicate with the parties together or separately. In the
conduct of the conciliation proceedings, the conciliator has some freedom. He may conduct them
in such manner as he may consider appropriate. But he should take in account the circumstances
of the case, the express wishes of the parties, a party’s request to beheard orally and the need of
speedy settlement of the dispute.

4) Administrative assistance [S. 68]-

Section 68 facilitates administrative assistance for the conduct of conciliation proceedings.
Accordingly , the parties and the conciliator may seek administrative assistance by a suitable
institution or the person with the consent of the parties.

70
The number of conciliators- (Section -63)
1)There shall be one conciliator if the parties agree that there shall be two or three conciliators.
2) Where there is more than one conciliator, they must act jointly according to the general rule.
a)Both the parties may agree on the name of a sole conciliator
b)There are two conciliators then each party may appoint one conciliator in conciliation proceed-
ings.
c)There are three conciliators, then each party may appoint one conciliator and both parties may
agree on the name of the third conciliator who shall act as the presiding conciliator.
d) The parties may enlist the help of the appropriate organisation or individual in the appoint-
ment of conciliator.
e)The party may request such organization or person to recommend the names of suitable per-
sons to act as a conciliator.
Duties and Powers of Conciliator
1)Submission of statements to conciliator-(Section -65)
After the appointment of the conciliator, he may request both parties to submit to him a brief
written statement describing the issues and general nature of the dispute. At any stage of
conciliation, the conciliator may request a party to submit additional information to him.
2)Conciliator not bound by certain enactment (Section -66) Conciliator is not bound by the
Code of Civil Procedure, 1908 or Indian Evidence Act, 1872.

3)Role of conciliator (Section -67) The conciliator shall assist the parties independently and im-
partially and reach an amicable settlement of their dispute. In conciliation proceedings, at any
stage conciliator propose settlement of the dispute.
4)Administrative assistance (Section – 68) In conciliation proceedings, arrange for administrat-
ive assistance by a suitable institution to conduct proceedings, with the consent of parties.
5)Communication between conciliators and parties (Section -69) In conciliation proceedings,
the conciliator may invite the parties to communicate with parties orally or in writing.
6)Disclosure of information (Section -70) Conciliator shall disclose the information to be the
other party when he receives factual information concerning the dispute from a party.
7)Cooperation of parties with conciliator (Section -71) Parties shall cooperate with the con-
ciliator and shall attempt to comply with requests by the conciliator to submit written materials,
provide evidence, and attend meetings.
8)Suggestions by parties for settlement of the dispute (Section – 72)
9)The settlement agreement (Section -73)
When parties reach an agreement and a settlement of the dispute then parties may draw up
and sign a written settlement agreement.
It shall be final and binding on the parties.
10)Status and effect of the settlement agreement (Section -74)
11)Confidentiality (Section -75)
In conciliation proceedings, the conciliator and parties shall keep confidential all matters relating
to conciliation proceeding confidentiality shall extend also to the settlement agreement.
12)Termination of conciliation proceedings (Section -76) The conciliation proceedings shall
be terminated -When parties singing the settlement agreement, on the date of the agreement.
By a written declaration of the conciliator with parties after consultation.

71
By a written declaration of the parties to the conciliator.By a written declaration of the parties to
the other party.
13)Report to arbitral or Judicial proceedings (Section -77)
It is a duty of conciliator to report to arbitral or Judicial proceedings.
14)Costs (Section -78)
After termination of the conciliation proceedings,
the conciliator shall fix the costs of the conciliation and its borne equally by the parties,
and the conciliator gives written notice to both the parties.
15)Deposite (Section -79)
Conciliator may direct both parties to deposit amount as an advance for the costs referred
to in section 78 and conciliator may direct supplementary deposits in an equal amount from both
parties.
16)Role of conciliator in other proceedings (Section -80)
Agreed by the parties-In any arbitral tribunal or judicial proceeding conciliator shall not be
presented by
the parties as a witness and he shall not act as an arbitrator or
as a representative or counsel of party.
17)Admissibility of evidence in other proceedings (Section -81)

Landmark case laws

Haryana Space Application Centre (HARSAC) v. Pan India Consultants Pvt. Ltd. (2021)
Facts of the case
In this case, an application was filed under Section 29 A(4) of the Act wherein it was stated that
the decision of the arbitral tribunal was ready to be pronounced by the authorities. Also, the
required cost was paid to the tribunal. On this, the other party argued that the application must be
denied on the ground that it lacks reasons for extension under the Section. However, the
argument was rejected and an extension of 3-months was granted. HARSAC in a response filed a
revision in the High Court. But it again granted a four-month extension. To this, a special writ
application was filed to the Supreme Court.
Issue involved in the case
Whether the extension be given to the party or not?
Judgement of the Court
It was ruled by the court that the clause given in Section 12 is obligatory when it is dealt together
with the Schedule of the Act. It was also held that the Principal Secretary is not qualified to be an
arbitrator. If been the one, he would probably influence HARSAC. The court also directed to
appoint another arbitrator who will continue the proceedings and help them come to an
agreement within 6 months.
Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund (2021)
Facts of the case
Indus Biotech issued some preference shares which are convertible at the option to funds of
Kotak India. A clause was added in the agreement of shareholders but they could not agree on
how to convert these shares into paid-up equity shares. As a result, Kotak India filed an
application when the other party failed to redeem those shares.

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Issue involved in the case
Whether the subject matter of the dispute falls in those that could be referred to arbitration if the
case is pending in NCLT?
Judgement of the Court
The Supreme Court opined that the case cannot be referred to arbitration if the process is in rem.
It further stated that if any proceedings are pending before NCLT under Section 7 of IBC, then
any application under the Arbitration and Conciliation Act, 1996 will not be entertained. In the
instant case, the Supreme Court held that the decision of NCLT was reasonable and
the case (Indus Biotech Pvt. Ltd. v. Kotak India Venture Fund, 2021) was successfully referred
to an arbitral tribunal.

Oriental Structural Engineers Pvt. Ltd. v. State of Kerala (2021)

Facts of the case
In this case, there was a contract to upgrade the segments of roads. The contractor demanded
extra interest for any late payment. But in the letter, there was no such provision of any interest
on late payments.
Issue involved in the case
Whether the contractor must get such interest even when it is not mentioned in the letter?
Judgement of the Court
The Supreme Court held that if the tribunal wishes, it can grant interest as a compensatory award
to the contractor. It also referred to the case of G.C. Roy v.Secretary Irrigation Department
(1991). The fact that the payment of interest in such cases was not excluded particularly in the
agreement was taken into consideration. But the rate on such payment was missing and not
agreed upon by the parties. The High Court in this same asked the parties to fill up the blank
details that they left in the appendix. The Supreme Court held that this decision was incorrect
and impermissible. It ruled that the tribunal was right in providing compensation as there was no
clause in the contract which mentioned exclusion of payment of interest if the payment was
delayed.

Conclusion
The Act deals with alternate dispute resolution methods which are effective, cost-friendly, and
time-saving. Due to the pendency of cases and rigid procedural laws of the courts and to prevent
litigation, people nowadays generally prefer settling a dispute outside the courts with the help of
ADRs like arbitration, conciliation, mediation etc. The Act provides the procedure to be followed
in arbitration proceedings, arbitral tribunal, the conduct of the tribunal along with the arbitral
awards to be made in a dispute. The decision is binding on the parties and given in the form of an
arbitral award in an arbitration agreement. It also prescribes the procedure of appeal to courts in
case of discrepancies.

Recognition and Enforcement

a. Indian Practice
b. International Practice

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Globalization has been a great stimulation in the process of integration of economies and
societies of different countries across the globe. It has been a great tool for breaking economic
barrier and envisioning world as a market for trade.
When economies and societies integrate it indubitably leads to the rise in various types of
disputes such as:-
a) Industrial disputes,
b) Commercial disputes,
c) International disputes etc.
The remedy is not in avoidance of these disputes but rather in building mechanisms to resolve
these disputes amicably. It is a sine qua non for growth and for maintaining peace and harmony
in every society.

Ubi jus ibi remedium – This legal maxim rightly laid down the foundation of legal system in
every human society. It means whenever any wrong is done to a person, he has a right to
approach the court of law. This legal pattern of resolving dispute has resulted in abundance of
pending cases, which rightly justifies the cliché “justice delayed is justice denied”. The legal
proceedings in a court of law get stretched down the years consuming oodles of money and
which ultimately leads to disruption in business and career.

These interminable and complex court procedures have propelled jurists and legal personalities
to search for an alternate to conventional court system. The search was a great success with the
discovery of alternate forum known as Alternate Dispute Resolution, which is commonly called
by its generic acronym “ADR”.

ADR is being increasingly acknowledged in the field of law and commercial sectors both at
national and international levels. Its diverse methods have helped parties to resolve their disputes
at their own terms cheaply and expeditiously.

At National Level
Benjamin Franklin once said; “when will mankind be convinced and settle their difficulties by
arbitration”. I think Indian community can aptly answer him by providing the example of
Panchayat System, which in reality is not very different from modern ADR system. Infact,
panchayat system is vogue in India from centuries. It is a process by which a neutral third party
usually a person of higher stature and reputation deemed to be unbiased during adjudication will
be rendering legally binding decision. Unfortunately, this system has lost its credibility due to
intervention of politics and communal hatred among people.

Litigation in India is generally longitudinal and expensive. Hence, there has been considerable
amount of efforts by legislature and judiciary to make ADR more prevalent among societies.

Legislative efforts towards ADR in India:

In India credit for springing up ADR goes to East India Company. It gave the statutory
recognition to the said forum under various acts such as:

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Bengal Regulation Act of 1772 and Bengal regulation act of 1781 which provided parties to
submit the dispute to the arbitrator, appointed after mutual agreement and whose verdict shall be
binding on both the parties.

Alternate dispute redressal received legislative recognition in India, after the enactment of Civil
Procedure Code, 1859 which provided –
# Sec 312 - reference to Arbitration in pending suit.
# Sec 312 – 325 – laid down the procedure for arbitration.
# Sec 326 – 327 – provided for arbitration without courts intervention.
#Arbitration is also recognized under Indian Contract Act, 1872 as the first exception to Section
28, which envisages that any agreement restraining legal proceedings is void.
# The Legal Service Authorities Act, 1987 brought another mechanism under ADR with the
establishment of Lok Adalat system.
# The Industrial Dispute Act, 1947 statutorily recognized conciliation as an effective method of
dispute resolution.
# Indian Electricity Act, 1910 and A.P Co-operative Societies Act, 1964 are few more examples
in this regard.

The Arbitration Act of 1899 was the first exclusive legislation on arbitration. Subsequently the
said act was repealed and was replaced by Arbitration Act 1940. Arbitration Act of 1940 also
failed to give desired result and in realizing its objective of enactment. Then various
recommendations of successive Law Commissions and policy of liberalization in the field of
commerce acted as a catalyst in the growth of ADR mechanism. After the liberalization of Indian
economy which opened the gates for inflow of foreign investment; Government of India on the
UNCITRAL model enacted the Arbitration and Conciliation Act 1996 which repealed the 1940
Act.

The main objectives of the Act are:-

A) To cover international and domestic arbitration comprehensively.
B) To minimize the role of courts and treat arbitral award as a decree of court.
C) To introduce concept of conciliation.
D) Lastly, to provide speedy and alternative solution to the dispute.
Code of Civil Procedure 1908 carries section 89 which formulates four methods to settle disputes
outside the court. These are:-
a) Arbitration
(b) Conciliation
(c) Lok adalat
(d) Mediation.

At the same time the Constitution of India puts arbitration as a Directive Principle of State
Policy. Article 52(d) provides that the state should encourage settlement of international disputes
by arbitration.

Judicial effort towards ADR in India:

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Indian judiciary has also played a substantial role in upgradation of ADR mechanism. The apex
court has recognized the alternate forum in its various decisions. In Guru Nanak Foundation V/S
Rattan & Sons court observed that “Interminable, time consuming, complex and expensive court
procedures impelled jurists to search for an alternative forum, less formal, more effective and
speedy for resolution of disputes avoiding procedure claptrap…”

The realization of concepts like speedy trial and free legal aid by apex court in various cases has
also helped in the upgradation of alternate dispute redressal mechanism. One of the biggest step
in the lines of development of the said machinery was maintaining the validity of “fastrack
courts” scheme as laid down in Brijmohan v/s UOI.

Fastrack court scheme has done wonders in disposing number of pending cases. These courts
have disposed of 7.94 lakh cases out of 15.28 lakh cases transferred at the rate of 52.09% and
recent statistics show that the number of pending cases has reduced to 6 lakhs.

Another major step in the growth of ADR services in India is the establishment of institutions
such as:
IIAM - Indian Institute of Arbitration and Mediation
ICA - Indian Council for Arbitration
ICADR – International Centre for Alternate Dispute Resolution.

These institutions provide services of negotiation, mediation, conciliation, arbitration, settlement

conferences etc. They also help in finding lacunae in existing ADR laws and recommended
reforms to overcome them.

At International Level
The history of Alternate dispute resolution forum at international level can be traced back from
the period of Renaissance, when Catholic Popes acted as arbitrators in conflicts between
European countries. One of the successful examples of the said mechanism is the international
mediation conducted by former U.S President Jimmy Carter in Bosnia. ADR has given fruitful
results not only in international political arena but also in international business world in settling
commercial disputes among many corporate houses for e.g. Settlement of a longstanding
commercial dispute between General Motors Co. and Johnson Matthey Inc., which was pending
in US District Court since past few years.

The biggest stepping stone in the field of International ADR is the adoption of UNCITRAL
[United Nation Commission on International Trade Law] model on international commercial
arbitration. An important feature of the said model is that it has harmonized the concept of
arbitration and conciliation in order to designate it for universal application. General Assembly
of UN also recommended its member countries to adopt this model in view to have uniform laws
for ADR mechanism. Other important international conventions on arbitration are:-

The Geneva Protocol on Arbitration clauses of 1923.

The Geneva Convention on the execution of foreign award,1927

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The New York Convention of 1958 on the recognition and enforcement of foreign arbitral
award.
In India Part III of Arbitration and Conciliation Act, 1996 provides for International Commercial
Arbitration

Another step in strengthening the international commercial arbitration is the establishment of

various institutions such as:-
A) ICC – International Court of Arbitration of the International Chamber of Commerce.
B) Arbitration and mediation centre of World Intellectual Property Organization.
C) AAA – International centre for dispute resolution of the American Arbitration Association
and others have explored new avenues in the ADR field.

Alternate Dispute Resolution Mechanism

Ø Arbitration – It is one of the cardinal mechanisms in alternate dispute machinery. Whereby
the dispute is submitted to one or more arbitrators, who is duly appointed by both the parties.
They give their verdict in the form of “Arbitral Award”, which is legally binding on disputed
parties. Arbitration is very common in business transactions, but unknown to many that it is the
oldest method of resolving disputes, which had been enshrined since ancient history.
Ø Mediation – It is a non-binding process in which a third party called “Mediator” helps the
disputed parties to reach a settlement. “Mediation is the technical term in international law
which signifies the interposition by a neutral and friendly state between two states at war or on
the eve of war with each other, of its good offices to restore or to preserve peace.
Ø Conciliation – This mechanism is also non binding on the parties. It is a process by which a
third party called “Conciliator” meets disputed parties separately in order to resolve their
differences. He neither gives verdict nor makes any award. It is also called “Shuttle diplomacy”.
Most mediators consider it as a specific type of mediation practice. Part III of Arbitration and
Conciliation act, 1996 provides for this mechanism.
Ø Lok Adalat – Lok Adalat is also called “people’s court”. It was established by the
Government under Legal Services Authorities act, 1987 to facilitate inexpensive and prompt
settlement of pending suits by conciliation and compromise. This forum is very effective in
settlement of money claims, partition suits, matrimonial cases etc.
Ø Ombudsman – It is an external agency appointed by government to probe into administrative
mishaps. It is a mechanism by which an aggrieved party can claim relief against abuse of
discretionary power by government authority. Sweden was the first country to adopt this
institution in 1809 A.D followed by Finland, Denmark, Norway, New Zealand, Australia and
Scandinavian countries.
Ø Negotiation – It is a non binding process of resolving disputes, by which parties to dispute
interact with one another and try to work out a settlement without the intervention of third party.
Importance of Negotiation in concise can be aptly put in words of former US President John F.
Kennedy – “Let us negotiate with fear but let us not fear to negotiate”.
Ø Collaborative Law – It is a voluntary dispute resolution process by which parties to dispute
are represented by their own lawyers, to facilitate the discussion in accordance with an
agreement. It has been an effective mechanism in the context of divorce and family law.
Collaborative law is practiced internationally in countries like USA, UK and the list goes on with

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the inclusion of countries such as France, Germany, Austria, Australia, Scotland, Switzerland,
Hong Kong etc. in number of law school courses, diplomas, seminars, etc. focusing on alternate
dispute resolution and rationalizing its effectualness in processing wide range of dispute in
society.

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