DIFFERENCE BETWEEN ARBITRATION, MEDIATION AND CONCILIATION

INTRODUCTION:

                         With the advancement of technology, the world has become more globalized and commercial. People from all over the world can now communicate with one another and settle business deals and disputes. Most people no longer have the time to go to court, file papers, and then wait for a hearing. Due to the inefficiencies and drawbacks of litigation, we are rapidly approaching a point where it will be replaced by alternative dispute resolution (ADR). Although India has not yet reached the point where ADR methods have completely replaced litigation, the legal system is beginning to recognize the benefits of ADR. This blog will provide you with an overview of ADR methods and how they work.

WHAT MAKES ALTERNATE DISPUTE RESOLUTION A UNIQUE ONE:

      Usually in India victims feels afraid to file a complaint against a person just because it takes a very long time. If it was a civil case, it could drag on for years. To solve this issue, ADR plays an important role because it consumes very little time when compared to the other courts. The cost involvement is very low when compared to the litigation process. Here the procedure is different from the court procedure, and people feel free to express their views and facts truly and fairly. Both parties have a decent relationship and coordinate well for the better settlement of disputes.

HOW ADR ROLE CAME INTO THE INDIAN JUDICIARY:

      Since a lot of cases were pending for many years in Indian courts. To solve the issue and make the people have a strong belief in the Indian judiciary. Alternative Dispute Resolution is a method that provides speedy justice, as well as it, is less expensive than going to Court. To deal with the situation of pendency of cases in the courts of India, ADR plays a significant role in India through its diverse techniques. The alternative Dispute Resolution mechanism provides scientifically developed techniques to the Indian judiciary

IS ADR A NEW CONCEPT FOR OUR SOCIETY?

   The concept of ADR is not new to society it has been in existence for several thousands of years. Chanakya is a Hindu statesman and philosopher who wrote Artha sastra (350-275 BCE).In Kautilya’s Arthasatra he mentioned four upayas to maintain peace in a country by giving solutions to state politics. It briefly detailed the method of Dispute Settlement. The four  Upayas are Sama- Which means conciliation or alliances. Dana-gifts or compensation, Danda – usage of force, Bheda- usage of logic or trickery or influencing the mind. The holy book of Islam which is known as the Quran detailed the concept of the Dispute Settlement Method. However, it is a new concept it always needs to be supervised by the judiciary system. It cannot be left as a baby without a mother, and how mother supervision is essential for a baby likewise the supervision by Judiciary is also a necessary one.

FIVE TYPES OF ALTERNATE DISPUTE RESOLUTION

There are five types of alternative dispute resolution mechanisms. They are

1. Arbitration
2.   Mediation
3.   Conciliation
4. Negotiation
5. Lok Adalat

1.     ARBITRATION:

                     When you see the history you can know that arbitration was started during the period of king Solomon. So the very first arbitration case emerged between two mothers claiming for a single baby boy. Arbitration is the first form of alternate dispute resolution method in which two parties come together and coordinate with each other and then appoint a third party or a person who is known as an arbitrator. The main purpose of the arbitrator is to avoid court proceedings. Usually in India, An arbitrator is appointed in dispute matters like labor disputes, business disputes, consumer disputes, and family matters. Businessmen go with alternate dispute resolution just too speedy the case matters and to sort out immediately.

The only difference between arbitration and trial is arbitration takes place outside of the court. Document verification, hearings, evidence reviews, and the decision are the same as in court manner. It is formal and legally binding in nature. According to section 2 of the Arbitration and Conciliation Act 1996, “Arbitration means any arbitration whether or not administered by permanent arbitral institution”. Due to certain issues and disadvantages ‘The Arbitration and Conciliation Act, of 1996’ was recently amended in the year 2015. As arbitration happens between both parties and the arbitrator remains Privacy and confidentiality of both party matter remain secret. Also, arbitration is more flexible because here the rules are set by the parties in the case of international arbitration the place time and date will be fixed by the parties which makes the people choose arbitration.

CHALLENGES FACED BY THE ARBITRATION

  There is a chance of being biased by the arbitrator which the respect of the arbitration may lose. Not all time the cost of arbitration is lesser sometimes in certain cases the cost is higher than the litigation.

ILLUSTRATION:

                     X a trade union is conducting a strike action against the employer Y because they can’t agree with the decision made by the employer so here the trade union move to the independent arbitrator Z to solve the issue as soon as possible.

2.     MEDIATION:

                 The second dispute-resolution method is known as mediation. It differs from the rest of the others. Because in mediation the parties have the power to agree or not agree. The mediation procedure completes only when both parties agree with each other. But honestly speaking, a mediator cannot issue orders, find fault, or cannot make a decision. Then what the mediator does is try to get a settlement. It is less formal in nature. If the dispute between the parties is not so serious then the parties can choose the mediation process. In mediation, both parties get to benefit from the final decision. Here also the same thing like the parties can choose the mediator, time, place, and structure of the proceedings.

Illustration

              M person has a disputed issue with person N. Both M and N agree to choose a mediator because in mediation the parties have the power to appoint and to agree or not to agree with the settlement. In this case M and N dispute sort out and at the end of the day both parties get benefits.

3.     CONCILIATION:

             Conciliation is the process of resolving disputes without resorting to litigation. It is a non-binding process in which a conciliator, or third party, attempts to bring the disputants to an agreement. He resolves disputable issues by reducing tension, improving communication, interpreting issues, providing technical assistance, exploring potential solutions, and presenting the negotiated settlement to the parties. Conciliate uses his method to resolve the dispute, and his steps are not strict or legal. There is no need for an agreement such as an arbitration agreement. Both parties must agree to the terms of the settlement

CONCILIATION METHODS:

1.     Voluntary Conciliation- In this method, parties can voluntarily participate in the conciliation process to resolve their dispute.

2.     Compulsory Conciliation- If parties do not want to pursue voluntary conciliation, they can pursue compulsory conciliation. If the parties do not want to meet with the other party to resolve the dispute, the process is said to be mandatory. This method is frequently employed in labor cases.

Illustration:

X a trade union has issues regarding the payment of wages so they went against management Y. The case came in front of Z conciliation officer for conciliation. Z needs to complete the matter within 90 days.

4.NEGOTIATION

                     Any form of direct or indirect communication in which parties with divergent interests debate potential collaborative actions to manage and ultimately resolve their conflict is referred to as negotiation. Negotiations can be used to establish a future relationship between two or more parties or to settle an issue that has already arisen. As the “preeminent mode of dispute resolution negotiation has also been described as being present in almost every facet of daily life, whether at the individual, institutional, national, or international levels. Every negotiation is different from the next in terms of the topic, the number of participants and the method employed.

ILLUSTRATION

    A person discussing with the other person B regarding salary negotiation. Here bargaining the salary is considered a negotiation.

 Negotiation characteristics:

Voluntary: None of the parties to a negotiation are required to participate. The parties are free to accept or reject the results of the negotiations and to halt the procedure at any time. Parties have the option of taking part in the negotiations personally or choosing to have a third party, such as a relative, friend, attorney, or other professional, represent them.

Bilateral/Multilateral: There may be two, three, or even dozens of parties involved in negotiations. They can range from discussions involving diplomats from dozens of States (like the World Trade Organization (WTO)) to two people trying to reach an agreement on the sale of a house.

Non-adjudicative: Only the parties to the negotiation make decisions. The parties to a negotiation decide on the outcome collectively, without using a third party.

5.LOK ADALAT

                     Lok Adalat is one of the alternative dispute redressal mechanisms, it is a forum where disputes/cases pending in the court of law or at the pre-litigation stage are settled/ compromised amicably. Lok Adalats have been given statutory status under the Legal Services Authorities Act, of 1987. Under the said Act, the award (decision) made by the Lok Adalats is deemed to be a decree of a civil court and is final and binding on all parties and no appeal against such an award lies before any court of law. If the parties are not satisfied with the award of the Lok Adalat though there is no provision for an appeal against such an award. lies before any legal tribunal. Even though there is no mechanism for an appeal against a Lok Adalat award, the parties are allowed to commence litigation by going to the court with the relevant jurisdiction, filing a complaint, and completing the necessary steps, as long as they are exercising their right to sue. When a matter is filed before a Lok Adalat, there is no court fee due. The court money initially paid in the court on the complaints/petition is also reimbursed to the parties if a case that is currently before the legal system is referred to the Lok Adalat and resolved later.

ILLUSTRATION

X a person went to Lok Adalat as it is informal in nature and justice will be speedy. Here person X can have direct contact or interaction with the judge which is absent in the normal court of law also there are no court fees in Lok Adalat.

DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION:

1. The arbitrator is the person chosen to oversee the arbitration process. Section 11 of the Arbitration and Conciliation Act of 1996 governs the appointment of arbitrators. While the term “conciliator” refers to the person chosen to facilitate the conciliation procedure. Section 64 of the Arbitration and Conciliation Act of 1996 specifies the procedures for conciliator appointment.
2. An arbitrator can have a decision enforced. However, the individual chosen to resolve the conflict is powerless to carry out his decision.

3 . A prior agreement is necessary to resolve the dispute through the arbitration process. While no prior agreement is necessary to resolve the disagreement through the Conciliation process.

4. Conciliation is accessible but arbitration is also an option for current and future disputes.      

DIFFERENCE BETWEEN MEDIATION AND CONCILIATION:

   1 . Mediation is a technique for resolving disputes between parties in which a third party assists them, as opposed to conciliation, which appoints an expert to resolve disputes between the parties.

2. Conciliation refers to the 1996 Arbitration and Conciliation Act, whereas mediation primarily refers to the Code of Civil Procedure of 1908.
3. Reliability Confidentiality is governed by law and is dependent on public faith in mediation.
4. The conciliator serves as both a facilitator and an assessor, while the mediator serves as both
5. The parties settled during mediation. However, through conciliation, the parties come to a settlement agreement.

         6  . Mediation is enforceable by law and is executable as a  decree of civil courts.

DIFFERENCE BETWEEN ARBITRATION, MEDIATION, AND CONCILIATION:

CASE LAWS

Ajay Kumar Dixit and Others v. R.V. Solutions Pvt. Ltd.

                In this case, the Delhi High Court ruled that a non-signatory or third party can be subjected to arbitration without its consent only in exceptional circumstances. The arbitrator must have a direct relationship with the agreement’s signatory party, with the parties to the agreement, or with the equality of the subject or the overall transaction.

The court stated in Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd that the High Court should stop the instrument that 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 within a period of three months

Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited v. BHEL.

                  The Supreme Court ruled that where the parties do not insist on the exclusive jurisdiction clause in an agreement or raise a such objection, and instead waive such condition / submit to the jurisdiction of another court, it cannot be said that exclusive jurisdiction is without jurisdiction except in the court in which it is vested.

M/S IL & FS Engineering & Construction Company Limited O.M.P. v. Paschimanchal Vidyut Vitran Nigam Limited

 The Delhi High Court was asked whether the provisions of the Fourth Schedule to the Act relating to arbitrator fees would apply to domestic ad hoc arbitration where the parties had not approached the court to form an arbitral tribunal. It was determined that the fee provision in Section 11 (14) of the Act is only a competent provision. The concerned High Court has been given the authority to draught the rules if it so desires. Because the parties did not approach the court to form the Arbitral Tribunal, the Court would have no role in determining the Arbitral Tribunal’s fees because the Court lacks such authority. Furthermore, the provisions of Section 11’s sub-section (14) clearly show that the fee prescribed in the Act’s fourth schedule is merely indicative.

CONCLUSION

The aforementioned procedures and techniques are the most commonly used ADR methods. However, there are numerous ADR methods, many of which modify or combine the abovementioned methods. Each type of ADR aims to resolve the dispute through round table discussions. ADR is the most effective method of reducing the burden on the courts. ADR fosters harmonious relationships between the parties. ADRs are so effective and widely accepted that courts have recognized some of them, such as mediation, as more frequently used. This avoids the procedure of litigation and the award for fair and impartial resolution of an individual’s doubtful issues on a legal and ethical basis based on ground reality. This is what makes ADR  unique After a court trial, there can only be one winner, whereas, after conciliation, mediation, or negotiation, all parties can be considered winners because there is no conflict between them and they go through the settlement procedure.

DO YOU KNOW?

1.whether ADR really works?

 ADR frequently speeds up the resolution and reduces costs. Parties in mediation have a significant say in how their own conflicts are resolved. This frequently leads to original solutions, enduring effects, higher satisfaction, and strengthened relationships.

2.Does alternative dispute resolution cost nothing?

 Some arbitration plans are open-access. You must pay a fee if you choose independent arbitration. If you win the case, you might be able to recover the fee from the arbitration judgment.

3.What distinguishes ADR from dispute resolution?

The main thing that makes dispute resolution and alternative dispute resolution different is it Guards the interests of both parties: Unlike judicial dispute resolution, alternative dispute resolution (ADR) aims to resolve disputes so that both parties receive the outcomes they want.

4.Is ADR resolution legally binding in nature?

          Alternative dispute resolution (ADR) provides a way to resolve conflicts without going to court with the aid of an unbiased third party. Results may be advisory in nature and non-binding, or they may be enforced without the ability to appeal.

5.which method is best in ADR?

          Therefore, mediation gives the parties a chance to agree to settle their dispute on conditions that a judge could not impose if they went to court. The parties might decide, for instance, to carry on doing business with one another under new conditions.

6. What drawbacks does Alternative dispute resolution have?

Disadvantages of Alternative Dispute Resolution:

           Awards do not allow for an appeal. There is no room for appeal or rectification in the event that there is an issue with the awards. Selecting between the several ADR procedures and institutions offering the arbitration facility is frequently challenging.

7. what way does alternative dispute resolution give a solution to family matters?

            It encompasses a number of “hybrid” processes, like negotiation, conciliation, mediation, arbitration, and so on, in which the parties to the conflict designate an impartial third party to help the resolution of their differences.

8. Does ADR work in India?

           ADR, with its variety of methodologies, plays a vital role in India in dealing with the problem of cases that are pending in Indian courts. Alternative Dispute Resolution mechanisms give the Indian judiciary scientifically established tools that aid in lightening the load on the courts.