ANALYSIS ON THE DEVELOPMENT OF ADR IN DIFFERENT COUNTRIES

Snigdha Shandilya and Pritish Kumar Pattnaik, both 5th year law students from KIIT School of Law, Bhubaneswar discusses the development of dispute resolution through Arbitration in different countries.

Introduction

With the recent development in the legal system, most of the disputes are resolved, more convenient than any formal trial.[1] Most of the disputes relating to energy, financial services, aviation are settled through the Alternative Dispute Resolution mechanism. In different countries, development in ADR has been made through amendments in the Arbitration law. This is not only a better mechanism for settlement of the dispute, but also it offers better efficiency, flexibility, empowerment of parties, and justice. Today, there are more than 200 countries in the world to have negotiation treaties and prefer the International platform to resolve disputes that arise at any point in time.[2] Arbitration offers a platform for resolving cross border commercial disputes between two countries through negotiation and mediation mechanisms. 

INDIA 

The Arbitration Law of India underwent three amendments in the years 1940, 1935, and 1961.[3] Recently, the bill has been passed in legislation to amend laws relating to domestic, international, and commercial arbitration. It aimed to encourage foreign trade and make New Delhi as the headquarters of International Arbitration. There has been a High-level committee set up by the central government. The committee had introduced the Arbitration and Conciliation (Amendment) Bill in the year 2019. The main objective was to deal with the dispute’s speedy resolution with minimum cost expenditure and less court interference.[4]

The Arbitration in the Conciliation Act was introduced after the amendment in 1996. It stated powers to Supreme Court and High court to designate the Arbitral institution. It also gave powers to CJI of the High Court to appoint the arbitral panel and review arbitrators’ conduct.

The parties got privileges to choose arbitrators through the application to institution directed by the Supreme Court. In the cases of International Commercial Arbitration, the arbitrators’ appointment shall be made on the application. It sets the parties free to decide the procedure of arbitration.[5] The legislation has also introduced the power of appeal in the new amendment. In contrast, Part 1A is included in the Act to establish the Arbitration Council of India. Lastly, section 26 has been repelled under the new amendment.

AUSTRALIA

There has been a lot of development made in the International Arbitration Act 1974. The change in the Australian Arbitration laws mainly focuses on international trade and commerce. Most of the amendments are inspired by the amendments made in the year 2006 to the UNCITRAL Model. These developments are made to restrict foreign arbitral awards. Arbitral courts of Australia has the power to make interlocutory orders. The threshold test has been removed under the recent changes in the Arbitration Act of Australia.[6] The new enactments also provide optional provisions to the parties to accept or exclude the jurisdiction made by the Federal Court of Australia. Under the UNCITRAL Model Law, the tribunals have the power to make interim orders that may be necessary for the subject matter of the institution.[7] However, Article 17B of the UNCITRAL Model law has not been included in the Act’s recent amendments. The recent amendment also provides a regime of confidentiality, which enables the parties to seek permission to disclose such information.

CHINA

The new developments in ADR from the past few years have bought immense relief to the parties. Earlier they tend to visit court, and even after spending considerable time and effort, most of them end up losing because of the time-consuming proceedings. This disadvantage by civil dispute resolution gave rise to other mechanisms. The new developments under the Chinese ADR mechanism aim to self, social, and public -relief by improving the quality of mass media and giving the best effects. The major development can be seen in the era of 2006 during the Shanghai Pudong Area People’s court.[8] Here, it was mandated to consider mediation for the pre-trial stage during the civil and criminal cases. The next development was regarding mediation, which majorly focuses on personal rights. Earlier, the parties had to give up on their interest and compromise in traditional mediation.

 Earlier, the focus was on the betterment of the group and not on the individual’s right, which was constructed in providing relief. One cause for such was also no professional training of mediators, which resulted in poor mediation committees. The sole reason for this job is part-time was due to low pay and funds. The change bought more resources to train and educate them. The professional mediation committees have expanded in the many other sectors, including insurance, securities, and intellectual properties. The third change was collaborating the non -judicial organizations with courts, which led the settlement confirmed by the court. The courts have also been seeking advice for mediation organizations and assistance. Now comes the fourth change, which talks about the amendments, enactment, and legalization of “People’s Mediation Law.”  The law includes the selection and qualification of mediation and mediators.

In comparison, the fifth change is about having the usage of modern technology and online dispute resolutions. Parties can easily apply for mediation and choose their mediator over it through video. The parties need to sign in with their cell phone or computer. There was also an establishment of the first Internet court, which deals explicitly with online dispute cases.

There was also a new treaty imposed on cross-border mediation, which was signed by China. This treaty encourages cross-border mediation.

RUSSIA

The Hong Kong International Arbitration Centre (HKIAC) has been granted a license for being the authorized committee. The laws undergo major amendment on March 29, 2019.[9] These amendments focused majorly on the dispute arising out of the shareholder’s agreement of the contracts by state companies[10] These began affecting arbitral and ad hoc arbitration. The amendment also provided relaxation in terms of compensation for the parties who incurred loss or those who claimed invalidation. These could only be referred to as the ones licensed by the Russian government. Later, the Russian institution also announced the grant of license to the sports arbitration in April 2019. 

These amendments consisted of some requirements, which are as follows. The first was that the party to the arbitration should be administered under a permanent institution and seated in Russia.[11] The parties were not needed to include the entity itself, and the arbitration procedure must be confidential. The amendments also expanded the scope of disputes to be referred to in international arbitration institutions. The ones arising out of the procurement of contract concluded by the state-owned under Law 223-FZ had gone under the restrictive approach adopted by Russian courts.

Conclusion 

In light of the recent development in the Arbitration laws, it has provided a better platform for resolving the dispute through Arbitration. The impact of arbitration has been increasing throughout the world, as it is the modern way of delivering justice. It will bring efficiency, flexibility, and tailored outcome through arbitration by eliminating the lengthy court procedures. Legislations of different countries make more significant efforts for arbitration laws to resolve disputes with the minimum period effectively. The rising technology in Arbitration has also changed people’s perception, especially at the time of COVID 19. With the development in the arbitration laws, it has benefited both nationally and internationally.


Snigdha Shandilya and Pritish Kumar Pattnaik are final year law students from KIIT School of Law, Bhubaneswar.


[1]Findlaw. 2020. Alternative Dispute Resolution: Which Method Is Best For Your Client – Findlaw. [online] Available at: <https://corporate.findlaw.com/litigation-disputes/alternative-dispute-resolution-which-method-is-best-for-your.html> [Accessed 15 September 2020].

[2]Lawshelf.com.(2020) History of Alternative Dispute Resolution [online] Available at https://lawshelf.com/coursewarecontentview/history-of-alternative-dispute-resolution/ [Accessed  10th August 2020]. 

[3]Indianlegallive.com (2020) Recent developments and impact of changes in arbitration[online] Available at: https://www.indialegallive.com/top-news-of-the-day/news/recent-developments-and-impact-of-changes-in-arbitration/ [Accessed 10th August 2020].

[4]Jamsadr.com (2020) Recent Trends in Alternative Dispute Resolution. [online] Available at: https://www.jamsadr.com/publications/2002/recent-trends-in-alternative-dispute-resolution [Accessed 10th August 2020].

[5]Mondaq.com.(2020) Recent Developments In India-Related International Arbitration – International Law – India. [online] Available at: https://www.mondaq.com/india/international-courts-tribunals/737816/recent-developments-in-india-related-international-arbitration [Accessed 10th August 2020].

[6]Jonesday.com (2020) [online] Available at: https://www.jonesday.com/en/insights/2010/08/arbitration-in-australia-how-recent-reforms-have-improved-the-conduct-of-international-arbitration-and-the-enforcement-of-awards [Accessed on:11th August 2020]. 

[7]Mediate.com.(2020) the Australian Experience Of Pre-Litigation ADR Requirements [online] Available at: https://www.mediate.com/articles/RooneyG3.cfm.

[8]Nortonrosefulbright.com. (2020). Alternative Dispute Resolution ADR. (Sept. 4,2020, 10:24 pm) [online] Available at: <https://www.nortonrosefulbright.com/en-cn/services/357d79cb/alternative-dispute-resolution-adr [Accessed 11th August 2020].

[9]Lexology.com.(2020) A Glimpse into The Future Of Alternative Dispute Resolution In China | Lexology. (Sept. 4,2020, 10:24 pm) [online] Available at: Lexology.com (2020) [online] Available at:https://www.lexology.com/library/detail.aspx?g=50d68969-e072-4186-951e-c890ecc7e598 [Accessed 11th August 2020].

[10]Walker, T.,Mediation (2020) | ADR in Russia | Weinstein International Foundation. [online] Weinstein International Foundation. (Sept. 4,2020, 10:24 pm) Available at: https://weinsteininternational.org/russia/ [Accessed 11th August 2020].

IMPORTANT – Opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the views of IJOSLCA.

IN THE MIDDLE OF DIFFICULTIES LIES AN OPPORTUNITY: TIME FOR MEDIATION TO STEP UP AS AN EFFECTIVE MECHANISM FOR DISPUTE RESOLUTION IN INDIA

Raja Reeshav Roy and Aditya Anand, both students of National Law University, Jodhpur discusses Mediation as a mechanism for Dispute Resolution in India.

“Discourage litigation. Persuade your neighbours to compromise whenever you can point out to them how the nominal winner is often a real loser, in fees, expenses, and waste of time.” – Abraham Lincoln

The sudden arrival of Corona Virus epidemic and partial closure of courts for a long time has forced us to think over alternative dispute resolutions methods with mediation being the most viable alternative. It can also be said that in recent times, Mediation might have found a new interest in India and at its forefront is Our Apex court. Recently a three-judge mediation panel placed a report in front of the Supreme Court of India with regards to the ongoing protest at Shaheen Bagh in New Delhi.[1] Last year as well a constitution bench of the Supreme Court-appointed a three-member mediation panel in the Ayodhya dispute which also submitted a report before the judgement was produced.[2] In another instance last year, a division bench of the Supreme Court asked the central government to look over the feasibility of Motor Accident Mediation Authority so that it can be set up in every district to look over the cases of Motors Accidents and further speeding the process of compensation in accident cases.[3] In this article, we will be analysing the importance of mediation in the modern world and how a recognised system for mediation might act as a solution to India’s Overburdened Judicial system. 

Introduction 

The term “mediation” is defined as an intervention between conflicting parties to promote reconciliation, settlement, or compromise.[4] Mediation is seen as a means of resolving disputes outside of the judicial system by voluntary participation in negotiations structured by agreement of the parties and usually conducted under the guidance and supervision of a trained intermediary.[5] 

Mediation is derived from a Latin word ‘mediare’ where the word simply meant to be ‘in the middle.’[6] It is a well-known non-binding alternative dispute mechanism all over the world involving a neutral third party to find a midway point amongst the dispute between the parties, intending to reach at a mutually acceptable solution.[7] It facilitates the affected parties to communicate realistically and in a problem-solving manner, elucidate the concerns and empower them to envisage their own solutions.[8] In other words, it insists the parties for choosing what is right for them in a pragmatic manner by bringing objectivity to the dispute.[9] 

The concept of mediation reminds one of those dispute mechanisms which were widely prevalent in ancient and pre-British India. In the ancient Indian legal system, we had made use of a system called ‘Panchayat System’ or ‘Nyaya System’ where the respected and impartial individuals played a crucial role in resolving the community dispute.[10] Besides in the pre-British period, the combined process of mediation and arbitration was popular amid business community to resolve their conflicts.[11] Even today, the tribal community in some part of India make use of panchas or wise individuals to reach an amicable solution to their dispute.[12]  

Why Mediation is an important tool for overly burdened Indian legal system?

‘Justice delayed is justice denied,’ the frequently cited words of William Goldstone best describe the condition of present justice delivering system. For instance, in 25 high courts of our country, more than 43 lakh cases are pending and over 8 lakh cases are ten years old.[13] India has been ranked at 68th place amongst 126 nation in world justice report 2019 (rule of law index).[14] 

In the case of Kartar Singh v. the State of Punjab[15], the SC declared that right to a speedy trial is a fundamental right embedded in the guarantee of life and personal liberty preserved under article 21 of Indian constitution.[16]  Mediation provides for a system of a speedy trial and can be used to achieve the objectives that were expressed by the Supreme Court in the Kartar Singh case.[17] Mediation also involves minimal cost when we compare it to arbitration or litigation.[18] The core benefit of mediation is that it encourages parties to communicate, negotiate and reach at harmonious compromise while protecting their concerned interest.[19] In contrast, adversarial litigation does not advocate such facilities even if the parties are willing to do.[20] If the mediation procedure is well-established and deep-rooted, it portrays a scenario where people can settle the dispute while incurring least losses.[21]

Mediation and Indian legal scenario 

The concept of mediation was introduced in Modern Indian Legal system in the latter half of the twentieth century with the implementation of Arbitration and conciliation act, 1996. Section 30 of the act insists parties utilize mediation even if the arbitration proceeding has been started and it authorizes arbitral tribunal to use mediation to resolve the dispute.. In 1999, the Code of Civil Procedure (Amendment) Act, 1999 (CPC Amendment Act) was implemented, which introduces section 89 with reference to different modes of dispute resolution. The concept of ‘judicial mediation’ was also introduced with this amendment, through which the court can encourage parties to seek out other forms of alternate dispute resolution.[22] However, there is no statutory authority which governs the process and guarantees the element of ‘confidentiality’.[23] It was only in 2011 the apex court handed out the judgment which declared that the mediation proceeding should be ‘confidential’ in nature. Furthermore, the Supreme Court held that all cases about consumer disputes, commerce and trade could be mediated.[24] The law commission of India, in its 129th report, suggested that it should be made mandatory for courts to refer the dispute to mediation.[25] 

The recent trend has suggested that mediation has emerged as the most preferred means to settle the patent dispute. Eminent intellectual property scholar Late Shamnad Basheer had appropriately said that adversarial proceeding, because of its acrimonious features, always results in a waste of time, money and resources, therefore alternative dispute mechanism should be promoted to settle down the conflicts.[26]

Mediation legislation in other countries

More than 80 countries and international organizations have established a concrete mediation law to encourage alternative dispute resolution and counterbalance the ill-effects produced by the dwindling system of litigation.[27] China has enacted people’s mediation law and published more than 70 regulation to promote and utilize mediation in resolving a dispute.[28] While hearing cases, the Supreme People’s Court has announced and adopted the policy of ‘Priority for mediation’ and combining adjudication with mediation.[29] The Russian parliament adopted laws on mediation in 2010 and since then it is an integrated part of their justice delivering system.[30] The United States of America has introduced a court ordered and court-sponsored mediation system.[31] There exist many statuary authorities which provide for more than 2500 legal rules related to mediation.[32]

Concluding remarks 

The world is slowly recognising various modes of Alternate Dispute Resolution, with mediation being an important tool of it. With an ever-increasing number of pending cases in India, It is high time that mediation is given importance over litigation. In a country like ours where litigation is tiring both physically as well as financially, a step towards making mediation a more recognised channel for solving disputes will be a welcome step. With an overburdened judiciary, we stand at a crucial juncture today where we need to find some kind of solution to the pitfalls of litigation. 

It is often seen that proceedings before the ADR forums are challenged in front of courts even after coming to some sort of consensus during mediation; this acts as a barrier at times and also shakes people’s faith in the process. The true confidence in mediation can only be fostered when some sort of legal recognition and a way to enforce it legally is provided. 

The Supreme Court has already indicated towards a need for Indian Mediation Act[33], this proposal by the Supreme Court if properly pursued and implemented can act as a game-changer for our dispute resolution mechanism.

Traditionally, Mediation in India has been used in various forms by various groups, so there won’t be any inherent problem of accepting it as such. As suggested by the Supreme Court, It is very important to set up a dedicated mediation statue. If implemented properly, it will need a large number of professionals who will be needed to bring the process of mediation at the forefront and to smoothen the whole process. India has a strong network of law schools and in our opinion, these law schools are a very important place of learning where a strong base for mediation can be set and students can be trained in a dedicated manner to pursue their careers as professionals in the field of mediation.

Taking a cue from Albert Einstein’s quote “in the middle of difficulties lies an opportunity”¸ this is the perfect time for India to look for an opportunity in promoting methods of alternative dispute resolution with mediation being its flag bearer.


Raja Reeshav Roy is a fourth year student and Aditya Anand is a second year student from National Law University, Jodhpur.


References

[1]Rautray, S., Shaheen Bagh Mediators Submit Report, Supreme Court to Hear Case Tomorrow, The Economic Times (accessed on 28 June 2020) <a href=”http://<https://economictimes.indiatimes.com/news/politics-and-nation/shaheen-bagh-protests-court-appointed-interlocutors-file-report-in-sealed-cover-in-sc/articleshow/74279250.cms?from=mdr&gt;. 

[2]Ayodhya Mediation Panel Files Settlement Document in Supreme Court, The Hindu, (accessed on 28 June 2020),<a href=”http://<https://www.thehindu.com/news/national/ayodhya-mediation-panel-files-settlement-document-in supreme-court/article29698305.ece>. 

[3]M.R. Krishna Murthi v. The New India Assurance Co. Ltd., Civil Appeal No. 2476-2477 of 2019.

[4]Definition Of mediation, Merriam-webster.com, (Accessed 28 June 2020), https://www.merriam-webster.com/dictionary/mediation.

[5]Ibid.

[6]Law Reform Commission Ireland, Report on: Alternative Dispute Resolution: Mediation and Conciliation, (LRC 98-2010, November 2010).

[7]1070-71, Black’s Law Dictionary. (9th ed. 2009).

[8]Alexander Bevan, Alternative Dispute Resolution 18 Sweet and Maxwell, London, (1992).

[9]R.V. Raveendran, Mediation – An Introduction, (accessed on 28 June 2020),  http://bombayhighcourt.nic.in /mediation/index_articles.htm

[10]Anil Xavier, Mediation: Its Growth and Origin in India, (accessed on 28 June 2020), http://www.arbitrationindia.org/pdf/mediation_india.pdf.

[11]Ibid.

[12]Ibid.

[13]Out of 43 lakh cases pending in High Courts, over 8 lakh a decade old, (accessed on 28 June 2020), https://economictimes.indiatimes.com/news/politics-and-nation/out-of-43-lakh-cases-pending-in-high-courts-over-8-lakh-a-decade-old/articleshow/69974916.cms.

[14]Arbitration and Mediation: Need of the Hour, (accessed on 28 June 2020), https://www.indialegallive.com/constitutional-law-news/special-report-news/arbitration-and-mediation-need-of-the-hour-71112.

[15]Kartar Singh v. State of Punjab, (1994) 3 SCC 569.

[16]Ibid.

[17]Kartik Adlakha, Mandatory Mediation in India – A boon or a bane to the legal system in the country? (accessed on 29 June 2020_, https://www.ciarb.org/resources/features/mandatory-mediation-in-india-a-boon-or-a-bane-to-the-legal-system-in-the-country/.

[18]James Melamed, A View of Mediation in the Future, 1(8) the Indian Arbitrator (2009).

[19]David Spencer and Michael Brogan, Mediation law and Practice, 68 (2006).

[20]Kenneth R. Feinberg, Mediation – A Preferred Method of Dispute Resolution, 16 PEPP. L. REV. 5 (1989).

[21]Vasily Ivanovich Vlasov, Galina Borisovna Vlasova, et.al., Comparative Analysis of Mediation Procedures and the Judicial Settlement of Conflicts,  XX European Research Studies Journal,  (2017).

[22]Vyapak Desai and Sahil Kanuga, Mediation proceedings are confidential says Supreme Court (accessed on 29 June 2020), www.indialawjournal.com/volume4/issue_1/article_by_desia_kanuga.html.

[23]Ibid.

[24]Afcons Infra Ltd v. M/S Cherian Varkey Constructions, (2010) (8) SCC 24.

[25]Law Commission of India, Report on Urban legislation mediation as alternative to adjudication, Report Number 129, (August, 1988).

[26]Sagnik Dutta, Trying mediation, (accessed on 29 June 2020), http://www.frontline.in/the-nation/trying-mediation/article6189578.ece.

[27]Tang Houzi, Worldwide use of mediation, (accessed on 29 June 2020), http://www.cityu.edu.hk/slw/ADR_Moot/doc/Worldwide_Use_of_Mediation_(by_Prof_Tang_Houzhi).pdf.

[28]Jiang Heping and Andrew Wei-min Lee, from the traditional to the modern: Mediation in China, (accessed on 29 June 2020), HTTPS://weinsteininternational.org/mediation-in-china/.

[29]Ibid.

[30]Kingsley Napley, A Global Trend towards Mediation: Views from Lawyers in 13 Countries, Dispute Resolution Law Blog, (accessed on 28 June 2020), <a href=”http://<https://www.kingsleynapley.co.uk/insights/blogs/dispute-resolution-law-blog/a-global-trend-towards-mediation-views-from-lawyers-in-13-countries&gt;. 

[31]Supra, Note 22.

[32]Supra, Note 22.

[33]Supra, Note 3.

IMPORTANT – Opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the views of IJOSLCA.