ADR is simply the abbreviation of Alternate Dispute Resolution. The concept of Alternate Dispute Resolution presupposes that there is a primary mode of dispute resolution. That primary mode is generally considered to be litigation, which is approaching the court of law and getting a resolution to a dispute from the Judge. The Judge passes an order determining the rights of each party and also the responsibilities thereof. This final decision is arrived at after listening to the arguments of the lawyers of the parties to the dispute and occasionally, the parties themselves when they choose to argue the matter on their own.
If we go back into the history of dispute resolution, we can see that the community leader or the King/Queen or the religious leader would generally be the person who resolve the disputes and then later on the system of courts came to be established. That the courts have not been the most effective or efficient form of different dispute resolution is evidenced by the fact that there was a need for an alternate mode of dispute resolution and thus was born the concept of Alternate Dispute Resolution. Today, this concept of ADR includes Arbitration, Conciliation and Mediation. The process of Arbitration has gained tremendous popularity and is being used all across the world for small disputes to disputes wherein billions of dollars are at stake.
It is important to understand what Arbitration is, to understand what Conciliation and Mediation are. Arbitration is a process wherein there is an impartial, neutral third-party who is called the ‘Arbitrator’, who passes a judgement after hearing the disputing parties. This judgement is called the ‘Award’. Usually, the grounds of the challenge of such an Award are limited. In India, the Arbitration and Conciliation Act, 1996 is what governs the processes of Arbitration and Conciliation in India. There have been several amendments to this Act since it was enforced and there is a constant endeavour to ensure that it is in line with international standards. It is important to have a strong and efficient Arbitration legal framework in India as Arbitration is seen to be the preferred choice of dispute resolution for international entities when they have a dispute with other international entities. The New York Convention on Arbitration, as it is popularly known, is followed by countries when they enact their legislation on Arbitration. This Convention provides guidelines on how international disputes can be settled through Arbitration and provides a framework on how legislation on Arbitration can be enacted in different countries to ensure that international disputes are settled in a more standardised manner so that all the parties to the dispute are on the same footing and no unfairness is caused to anyone. The essence of Arbitration is that the complicated process of court proceedings are avoided but the fundamental principles of litigation still remain ingrained in Arbitration. To elaborate this further, it needs to be understood that even in Arbitration, just like in Litigation, parties submit their claims and then there is either a counterclaim or a reply or which is also called a ‘written statement’; there are stages where issues are framed and then there is the all-important stage of evidence and finally, there’s the stage of final arguments. After all these stages are concluded, the Arbitrator passes the Award.
Unlike Arbitration, the Conciliation process is different and in India, Conciliation and Mediation are often confused to be the same. In the Act of 1996, very surprisingly, the term Conciliation has not been defined. All the same, Conciliation is similar to Mediation. Although the term Conciliation has not been defined in the Act of 1996, parallels can be drawn based on the provisions under Section 67 of the Act of 1996, under the title ‘Role of Conciliator’, which are given below:
The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, 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.
The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
The conciliator may, at any stage of the conciliation proceedings, made proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.
If we go by the provisions above, the essence is that of Mediation, and in fact of that of Evaluative Mediation. In Evaluative Mediation, the Mediator has the freedom to express his opinion and make proposals for a settlement. This form of Mediation is used mostly when the parties themselves express their wishes for the Mediator to play a more involved role in arriving at a resolution to the dispute. Because of the role played by the Mediator in this style of Mediation, the parties are more inclined to get influenced by the opinion expressed by the Mediator.
The other style of Mediation that is very popular is that of Facilitative Mediation. In this style, the Mediator does not express his opinion or make suggestions of any kind. His role is that of guiding the parties to arrive at a resolution to the dispute by using different techniques to address the underlying interests of the parties and helping them to realise those and work towards finding a resolution through which the underlying interests or goals will be achieved. Through this style, the parties are independent and do not get influenced by the role of the Mediator as he does not express his opinion or make any suggestions. The counterargument of this style of Mediation is that the parties would not find much value if the Mediator does not express his opinion or make any suggestions. However, it is my opinion, really want a legal opinion on their dispute, they are free to take the opinion of a preferred lawyer or a Retired Judge. The process of Mediation has to remain completely independent of all external influences and pressures. The locus of control has to lie with the parties.
Having said this, the ultimate decision of the style of mediation that the parties want what of lies with them. The Mediator may or may not agree to mediate in a particular style. Whichever style of Mediation is adopted, the end result is a Settlement Agreement/Mediation Agreement. This Agreement can be formalised in the form of an Arbitration Award or a Consent Decree or just like any other Contract.
The Conciliation proceedings under the Act of 1996 are confidential nature and this confidentiality extends to the Settlement Agreement. There is a bar on the parties that during the conciliation proceedings, they shall not initiate any arbitral or judicial proceedings in respect of the subject matter of the dispute before the Conciliator. However, there is an exception that any party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights. Mediation proceedings too are completely confidential and nature. There is no law yet on Mediation in India but the Central Government has recently stated that the law on mediation is in the offing. It is not known what that law would provide for but even without the law, initiation of any arbitral or judicial proceedings during the Mediation process would probably mean that the Mediation has failed.
Just like in Mediation, the parties are not allowed to rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject matter of the conciliation proceedings, the views expressed of suggestions made by the other party in respect of a possible settlement of the dispute, admissions made by the other party in the course of the conciliation proceedings, proposals made by the Conciliator and the fact that the other party had indicated his willingness to accept a proposal for settlement made by the Conciliator.
There are various other provisions of the Act of 1996 relating to Arbitration and Conciliation. However, this article intends to convey the main differentiating factors between the different forms of Alternate Dispute Resolution (ADR) mechanisms. Arbitration, Conciliation and Mediation are the 3 main forms of ADR, where, Conciliation and Mediation are similar to each other.
The main difference between Arbitration and Conciliation and Mediation is that, in Arbitration, the third party who is the Arbitrator, passes an Award that is binding upon the parties. Once the Arbitration proceedings are initiated, except for circumstances where the parties do not cooperate with the Arbitrator or do not pay the fees, there is no success or failure. Even if one party continues with the Arbitration proceedings, cooperates with the Arbitrator and also pays all the fees, the Arbitrator will pass an Award. In Conciliation or Mediation, if the parties do not cooperate or if they do not pay the fees of the Conciliator/Mediator, even with the cooperation, participation or the readiness of one of the parties to pay the fees, the Conciliation/Mediation will fail because the objective of these two mechanisms is to arrive at a mutually agreeable settlement resulting into a written agreement.
I hope that this clears any questions that you may have had about ADR. If you wish to seek more clarification on these concepts or if you have any other questions regarding ADR, you may reach us at info@mediationinitiative.com.
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