With a deep sense of reverence I express my gratitude to my guide Dr. Y. F. JayaKumar, Dean, Professor, Osmania University College Law Hyderabad for his able guidance in completing my thesis. I am immensely benefited by the discussions I had with him at various stages of the work.
He has been very kind to spare his valuable time and resources to give a final shape to this thesis. I consider it as my cherished privilege to thank respectfully principal, Dr. K. Panth Naik, Osmania University College Law, Hyderabad for his invaluable support and encouragement in the completion of this thesis. I am also thankful to the other faculty members of the college. I am also grateful to, Dr. Venkateshwarlu, Faculty of Law, Osmania University and Dr. Dwarkanath, Faculty of Law, Osmania University, for their academic patronage which was a source of encouragement to me.
I am also thankful to my friends especially Mr. B. Srinivas & others for their help and encouragement in completion of the work. My sister Miss. Vandana Rajan deserve special thanks for creating that kind of congenial and peaceful environment at home which enable me to accomplish this assignment with single minded devotion. Accordingly I express my grateful thanks to each of them. Last but not least I am greatly Indebted to my parents without their cooperation this work could not have completed. Hyderabad P.
KALYAN RAM GOUD Date: 100611839020 CONTENTS Chapter Particulars of the Topic Page Nos. Nos. Acknowledgement . . . . . . i INTRODUCTION I. CONCEPTUAL STUDY ON ALTERNATIVE DISPUTE RESOLUTION AND ITS FORMS IN INDIA II. ARBITARTION IN INDIA III MEDIATION ITS ORIGIN & GROWTH IN INDIA IV CONCLIATION AS AN EFFICTIVE MODE OF ALTERNATIVE DISPUTE RESOLUTION SYSTEM V NEGOTIATION
VI LOK ADALATS IN INDIA CONCLUSION AND SUGGESTIONS BIBLIOGRAPHY ii – iii INTRODUCTION Traditional legal disputes occur in a fairly straightforward manner. Two parties start with a dispute where one party harms another. At this point, the harmed party (plaintiff) can either take no action (which ends the dispute) or make a claim about the injury experience. The parties may or may not try informal methods of coming to an agreement. If this step fails, then the plaintiff can choose to file a suit.
According to the Federal Rules of Civil Procedure, the plaintiff needs to submit a statement of jurisdiction, a statement of the claim, and a demand for relief. The defendant must admit to or deny every claim made by the plaintiff. If the court does not make a summary judgment (a decision made without a full trial), then the lawsuit will proceed on to a trial. Once a verdict is reached, a party may appeal the decision, and if that is unsatisfactory then the case can move up to a court of last resorts. Alternative dispute resolution provides a way for disputing parties to settle out of court.
ADR offers parties a way of reaching an agreement without going through the all strict regulations of a real trial. It also serves as a way for courts to reduce the number of cases while still settling legal disputes. It is important to note that ADR has not displaced traditional litigation; hundreds of thousands of lawsuits are filed annually in state and federal courts.? h1 Rather than a substitute, ADR functions for as a complement to litigation. In addition, ADR may serve as a way for unclaimed injury experiences to actually be reported.
A plaintiff may see the potential time and monetary costs associated with the legal process and decide not to even make a claim, but if the plaintiff knew of ADR, then the likelihood of making a claim could increase. Before going into the specific models, discussing the historical background will provide information that can be used in the synthesis section. A. History of ADR How did ADR begin? According to Deborah Hensler, no one has yet written a comprehensive history of the dispute resolution movement in the United States.? h But the ? community justice movement? 2 gives some insight into the beginnings of ADR. The movement began in the late 1960s and early 1970s. The community justice movement believed that formal legal institutions like courts and lawyers monopolized dispute resolution and served as a way for the elite to maintain power. This seems like a bold statement, but it does make sense. If within a community, two disputing parties can only resolve legal disputes through one specific institution, then that institution can impose its unique power over the community. To break free of this monopoly, the followers of the movement argued the need for ? rassroots justice institutions that apply community based norms to disputes, and rely on community members to resolve disputes (Hensler 2003). Based on this ideology, many communities began establishing community or neighborhood justice centers. These centres were funded by a variety of sources3 and run by volunteers to settle local neighbor and family disputes. But how did these centers ? apply community based norms to disputes and did they really have community members work out disputes themselves? As it turns out, the community justice centers embraced ? ediation and other conciliatory approaches, rather than adjudication (Hensler 2003). The formal legal institution relied on a combative method to solving disputes, but mediation put the power of Hensler states that the modern history of alternative dispute resolution in the law has multiple strands, which have been woven together in a complex fashion over the past several decades. The community justice movement is one of those strands. These sources include federal government, local government, national foundations, and local foundations according to Hensler. The idea of funding will be an important factor later.
Resolutions into the hands of the disputing parties and their willingness to come to an agreement. This fits the community movement ideology perfectly because it would allow for disputes to be settled in a way that stood in contrast to what the formal legal institution promoted. But these community justice centers faced one big unseen problem: much fewer disputing parties turned to these centers than anticipated. Hensler attributes this problem to barriers to dissemination of information about the centers existence and what they offered and to the fact that disputing parties ? alue public vindication of their rights or positions.? h4 Centers frequently turned to courts for referrals, and this set a precedent for the relationship between courts and these centers. Courts would refer ? minor cases to the community centers, and over time adopted this practice as an alternative to trial. After filing a suit, cases could be referred to court arbitration. Parties and their lawyers would present their respective claims in front of arbitrators who made a decision. If the parties agreed, they would settle with the decision.
If the parties did not agree, they would request a trial and the suit would continue through the formal process, but the parties would pay a small fee for the arbitrators. 5 This system began to spread, and ? judges and lawyers began referring to these arbitration programs and judicial settlement conferences as ? alternative dispute resolution or ADR (Hensler 2003). But this community justice movement is only one strand of the rise of ADR, and there are other origins to consider. In Alternative Dispute Resolution: An Empirical Analysis, Rosenberg and Folberg mentions that ADR processes ? egan as an experiment in the methods used to resolve family disputes. Hensler supports this family law strand because ? movies like Kramer v. Kramer that dramatized the negative effects on children of adversarial processes helped build support for family mediation.? h Whereas in the community justice movement the adversarial 4 The information cost and the value of the public aspect will be important to later discussion. 5 This specific process is an example of mandatory non binding arbitration or court annexed arbitration.
Process monopolized power away from disputants, in terms of family law the adversarial process damaged the wellbeing of the involved parties. 6 State courts adopted methods for families to meet with counselors, psychologists, and lawyer who did not use combative methods to resolve disputes and would provide advisory opinions. 7 In addition to grassroots movements and experimental forays, ADR has also had federal government support through federal statutes. The Civil Justice Reform Act of 1990 focused on ? expanding and enhancing the use of alternative dispute resolution.? h8 The Negotiated Rulemaking Act in 1990 provides ? tructure for using consensus-based negotiations while the Administrative Dispute Resolution Act sought to ? designate an in-house dispute resolution specialist; provide ADR training for agency personnel; review all programs for ADR opportunities; adopt dispute resolution policies; and examine grant and contract language to identify means of promoting ADR over litigation.? h9 Despite Hensler? statement about no comprehensive history, Jerome Barrett in the recent A History of Alternative Dispute Resolution: The Story of a Political, Cultural, and Social Movement makes a successful attempt at a comprehensive history.
Barrett disagrees with other authors who believe that ADR was movement born of the social unrest. And progress of the 1960s.? h He traces the roots of ADR as far back as 1800 B. C. when the Mari Kingdom uses mediation and arbitration to settle disputes with other kingdoms. He includes an extensive timeline starting from this point. Many elements of the timeline are outside the scope of this paper, but there are relevant events that I should mention: 6 This idea of damage to disputing parties through litigation will also be important later. Folberg et al, Divorce Mediation: Theory and Practice (1988) and Folberg, A Mediation Overview: History and Dimensions of Practice (1983). 8 Bernstein, Understanding the Limits of Court Connected ADR: A Critique of Federal Court? ] Annexed Arbitration Programs (1993). The Act made the federal courts complete a ? cost and delay reduction plan and ? specifically consider the possibility of instituting court? ] connected ADR programs.? h 9 Manring, ADR and Administrative Responsiveness: Challenges for Public Administrators (1994) 1888: Arbitration Act Passed.
Probably the first ADR statute in the US providing voluntary arbitration and ad hoc commissions to investigate the cause of specific railway labor disputes. 1913: Department of Labor created and mediates first labor dispute; mediates thirty-three disputes in its first year 1914. 1918: World War I uses ADR process to resolve labor disputes and establish labor agreements to aid war effort. 1920: New York state passes first modern arbitration law; within five years, fifteen other states would follow. 1942: War Labor Board created; uses ADR. 947: Taft-Hartley Act creates Federal Mediation and Conciliation Service, prohibits some union activities, and establishes ADR for national emergency disputes. 1962: President Kennedy Executive Order 10988 required federal agencies to engage in collective bargaining with unionized employees 1962: Steel Trilogy: U. S. Supreme Court recognizes labor arbitrators expertise as final authority. 1968: Ford Foundation creates National Center for Dispute Settlement and Center for Mediation and Conflict Resolution to apply labor-management ADR to civil rights, campus, and community disputes. 972: Society of Professionals in Dispute Resolution (SPIDR) created as membership organization for all ADR practitioners. It would merge to become the Association of Conflict Resolution in the late 1990s. 1974: Federal Mediation and Conciliation Service expands mission statement beyond labor management. 1983: National Institute for Dispute Resolution established to encourage ADR with foundation funds. 1985: National Institute of Dispute Resolution funds pilot programs to encourage state governments to use ADR. This timeline tells a different origin story of ADR.
I noticed a trend that ADR was used in many labor related disputes. In addition to being a community justice movement and a family law experiment, ADR can also be seen as a solution to labor disputes. The point I want to make is that ADR works in labor management for the same reasons it works for family law and community justice. The combative nature of litigation limits its effectiveness in cases where both parties have a relationship that could be harmed. If employers won every lawsuit, then employees would be unsatisfied, but if employees succeeded in every lawsuit then employers would suffer.
A lawsuit could bring an end to conflicts between two parties, but the parties All printed from Barrett, A History of Alternative Dispute Resolution: The Story of a Political, Cultural, and Social Movement (2004). May still feel as if the issue still remained, and this would sour the relationship. In the context of employer/employee relations, it is imperative that both parties reach a solution they agree to; otherwise recurring problems will create friction within their relationship. B. ADR Policies and Principles
Before going into specific models, it is necessary for me to cover the actual practices that constitute ADR. The traditional litigation system follows an adjudication process with several distinguishing characteristics: the judge is a neutral party that holds the power and responsibility over the process, the procedure is highly structured with formal rules, the decisions are binding on the parties, and the process itself is public. ADR consists of mediation, arbitration, and a variety of ? hybrid processes by which a neutral facilitates the resolution of legal disputes without formal adjudication (Mnookin 1998).
Arbitration involves an arbitrator as the neutral party who plays a similar role as the judge and has the responsibility to run the process and make decisions. But unlike the judge, the arbitrator is a private figure12, not a public official, and instead of being appointed by the courts, an arbitrator can be chosen. The parties present arguments and claims at a hearing, but in a much less formal manner, and the arbitrator makes a binding decision. Before disputes begin, parties may contract to arbitrate future all future disputes, and this is classified as ex ante agreements.
Conversely, ex post refers to the situations where during a dispute the parties agree to arbitrate. Mnookin discusses potential benefits to arbitration relative to adjudication. Since arbitrators can be chosen, an expert in whatever field the dispute arises in is preferable to a judge who is ? typically a generalist who is knowledgeable about legal procedures but may have no relevant experience and background relevant to the dispute. The more informed arbitrator can Have glower transaction costs and higher quality results.? The informality of the process may cause arbitration to continue more quickly than a trial. Mediation also involves a third party, but the mediator has no authority to make binding decisions. Mediators seek to help parties negotiate and reach a mutually acceptable settlement on their own. Mediation is usually voluntary and always a private experience, but otherwise there are no standard, fixed rules. The community justice centers described by Hensler are prime examples of mediation. Hybrid processes use neutrals in ways that represent variations on the basic alternatives (Mnookin 1998).
This category combines elements of adjudication, arbitration, and mediation in different ways. For example, court-annexed mediation describes the mandatory process where a mediator tries to negotiate a resolution. An important subset of court-annexed mediation to remember for later is early neutral evaluation which consists of neutrals helping parties to arrange for efficient discovery and also provides an early, impartial report evaluating the strengths and weaknesses of each disputant claims and defense (Mnookin 1998).
In summary, ADR can be binding or nonbinding, voluntary or mandatory, and ex ante or ex post. Like adjudication, ADR can have a neutral third party, but is typically much less formal and more private. CHAPTER I CONCEPTUAL STUDY ON ALTERNATIVE DISPUTE RESOLUTION AND ITS FORMS IN INDIA INTRODUCTION 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 cliche “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: · 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: 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. . 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 · 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 Arbitration – It is one of the cardinal mechanism 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. 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” 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. 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. 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.
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”. 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 India, USA, UK and the list goes on with the inclusion of countries such as France, Germany, Austria, Australia, Scotland, Switzerland, Hong Kong etc. CHAPTER II ARBITARTION IN INDIA Background to arbitration legislation: The Indian law of arbitration is contained in the Arbitration and Conciliation Act 1996 (Act). The Act is based on the 1985 UNCITRAL Model Law on International Commercial Arbitration and the UNCITRAL Arbitration Rules 1976.
The Statement of Objects and Reasons of the Act recognizes that India’s economic reforms will become effective only if the nation’s dispute resolution provisions are in tune with international regime. The significant increase in the role of international trade in the economic development of nations over the last few decades has been accompanied by a considerable increase in the number of commercial disputes as well. In India too, rapid globalization of the economy and the resulting increase in competition has led to an increase in commercial disputes.
At the same time, however, the rate of industrial growth, modernization, and improvement of socio-economic circumstances has, in many instances, outpaced the rate of growth of dispute resolution mechanisms. In many parts of India, rapid development has meant increased caseloads for already overburdened courts, further leading to notoriously slow adjudication of commercial disputes. As a result, alternative dispute resolution mechanisms, including arbitration, have become more crucial for businesses operating in India as well as those doing businesses with Indian firms.
Keeping in mind the broader goal of exploring links between the quality of legal performance and economic growth, this paper is an attempt to critically evaluate arbitration in India as a legal institution. To this end, this paper presents an empirical inquiry into the state of arbitration, as well as a more theoretical examination of the political economy and arbitration as developed and practiced in India. In sum, although the huge influx of overseas commercial transactions spurred by the growth of the Indian economy has resulted in a significant increase of commercial disputes, arbitration practice has lagged behind.
The present arbitration system in India is still plagued with many loopholes and shortcomings, and the quality of arbitration has not adequately developed as a quick and cost-effective mechanism for resolution of commercial disputes. The Statement of Objects and Reasons set forth the main objectives of the Act as follows: “i) To comprehensively cover international and commercial arbitration and conciliation as also domestic arbitration and conciliation. ii) To make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration? ii) To provide that the arbitral tribunal gives reasons for its arbitral award. iv) To ensure that the arbitral tribunal remains within the limits of its jurisdiction. v) To minimize the supervisory role of courts in the arbitral process. vi) To permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings to encourage settlement of disputes. vii) To provide that every final arbitral award is enforced in the same manner as if it were a decree of the court. iii) To provide that a settlement agreement reached by the parties as a result of Conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal. ix) To provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which one of the two International Conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award. ” Arbitration has a long history in India.
In ancient times, people often voluntarily submitted their disputes to a group of wise men of a community—called the panchayat—for a binding resolution. Modern arbitration law in India was created by the Bengal Regulations in 1772, during the British rule. The Bengal Regulations provided for reference by a court to arbitration, with the consent of the parties, in lawsuits for accounts, partnership deeds, and breach of Contract, amongst others. Until 1996, the law governing arbitration in India consisted mainly of three statutes: (i) The 1937 Arbitration (Protocol and Convention) Act, ii) The 1940 Indian Arbitration Act, and (iii) The 1961 Foreign Awards (Recognition and Enforcement) Act. The 1940 Act was the ‘Alternative Dispute Resolution in Construction Industry’, International Council of Consultants (ICC) papers, www. iccindia. org. at p 2. K Ravi Kumar is assistant executive engineer, Salarjung Museum, Hyderabad. General law governing arbitration in India along the lines of the English Arbitration Act of 1934, and both the 1937 and the 1961 Acts were designed to enforce foreign arbitral awards (the 1961 Act implemented the New York Convention of 1958).
The government enacted the Arbitration and Conciliation Act, 1996 (the 1996 Act) in an effort to modernize the outdated 1940 Act. The 1996 Act is a comprehensive piece of legislation modeled on the lines of the UNCITRAL Model Law. This Act repealed all the three previous statutes (the 1937 Act, the 1961 Act and the 1940 Act). Its primary purpose was to encourage arbitration as a cost-effective and quick mechanism for the settlement of commercial disputes. The 1996 Act covers both domestic arbitration and international commercial arbitration.
The Arbitration Act, 1940 The Arbitration Act, 1940, dealt with only domestic arbitration. Under the 1940 Act, intervention of the court was required in all the three stages of arbitration, i. e. prior to the reference of the dispute to the arbitral tribunal, in the duration of the proceedings before the arbitral tribunal, and after the award was passed by the arbitral tribunal. Before an arbitral tribunal took cognizance of a dispute, court intervention was required to set the arbitration proceedings in motion.
The existence of an agreement and of a dispute was required to be proved. During the course of the proceedings, the intervention of the court was necessary for the extension of time for making an award. Finally, before the award could be enforced, it was required to be made the rule of the court. While the 1940 Act was perceived to be a good piece of legislation in its actual operation and implementation by all concerned – the parties, arbitrators, lawyers and the courts, it proved to be ineffective and was widely felt to have become outdated.
The New York Convention of 1958, i. e. the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, is one of the most widely used conventions for recognition and enforcement of foreign awards. It sets forth the procedures to be used by all signatories to the Convention. This Convention was first in the series of major steps taken by the United Nation since its inception, to aid the development of international commercial arbitration. The Convention became effective on June 7, 1959. The 1996 Act, Section 85.
Justice Ashok Bhan in his inaugural speech delivered at the conference on ‘Dispute Prevention and Dispute Resolution’ held at Ludhiana, India, October 8, 2005. Arbitration and Conciliation Act, 1996, Statement of Objects and Reasons. The Arbitration and Conciliation Act, 1996 The 1996 Act, which repealed the 1940 Act, was enacted to provide an effective and expeditious dispute resolution framework, which would inspire confidence in the Indian dispute resolution system, attract foreign investments and reassure international investors in the reliability of the Indian legal system to provide an expeditious dispute resolution mechanism.
The 1996 Act has two significant parts – Part I provides for any arbitration conducted in India and enforcement of awards there under. Part II provides for enforcement of foreign awards. Any arbitration conducted in India or enforcement of award there under (whether domestic or international) is governed by Part I, while enforcement of any foreign award to which the New York Convention or the Geneva Convention applies, is governed by Part II of the 1996 Act. The 1996 Act contains two unusual features that differed from the UNCITRAL Model Law.
First, while the UNICITRAL Model Law was designed to apply only to international commercial arbitrations, the 1996 Act applies both to international and domestic arbitrations. Second, the 1996 Act goes beyond the UNICITRAL Model Law in the area of minimizing judicial intervention. The changes brought about by the 1996 Act were so drastic that the entire case law built up over the previous fifty-six years on arbitration was rendered superfluous. Unfortunately, there was no widespread debate and understanding of the changes before such an important legislative change was enacted. 2 The Government of India enacted the 1996 Act by an See Article 1 of the UNICITRAL Model Law. 11 (1999) 2 SCC 479 (Sundaram Finance vs. NEPC Ltd. ). The Supreme Court held at p 484 thus: ‘The provisions of this Act (the 1996 Act) have, therefore, to be interpreted and construed independently and in fact reference to the 1940 Act may actually lead to misconstruction. ’ ordinance, and then extended its life by another ordinance, before Parliament eventually passed it without reference to a Parliamentary Committee—a standard practice for important enactments. 3 In the absence of case laws and general understanding of the Act in the context of international commercial arbitration, several provisions of the 1996 Act were brought before the courts, which interpreted the provisions in the usual manner. The Law Commission of India prepared a report on the experience of the 1996 Act and suggested a number of amendments. 15 Based on the recommendations of the Commission, the Government of India introduced the Arbitration and Conciliation (Amendment) Bill, 2003, in Parliament for amending the 1996 Act. 6 It has not been taken up for consideration. In the meantime, Government of India, the Ministry of Law and Justice, constituted a Committee popularly known as the ‘Justice Saraf Committee on Arbitration’, to study in depth the implications of the recommendations of the Law Commission of India contained in its 176th Report and the Arbitration and Conciliation (Amendment) Bill, 2003. The Committee submitted its report in January 2005. WORKING OF ARBITRATION IN INDIA Arbitration in India is still evolving.
One of the objectives of the 1996 Act was to achieve the twin goals of cheap and quick resolution of disputes, but current ground realities indicate that these goals are yet to be achieved. The ground realities can be ascertained from the study and analysis of the various aspects in conducting arbitration, which are discussed in the following paragraphs. Types of Arbitration Practice – Institutional Arbitration and Ad Hoc Arbitration Arbitrations conducted in India are mostly ad hoc. The concept of institutional arbitration, though gradually creeping in the arbitration system in India, has yet to make an impact.
The advantages of institutional arbitration over ad hoc arbitration in India need no emphasis and the wide prevalence of ad hoc arbitration has its ramifications in affecting speedy and cost effectiveness of the arbitration process. There are a number of advantages of institutional arbitration over ad hoc arbitration in India, some of which are discussed below: • In ad hoc arbitration, the procedures have to be agreed upon by the parties and the arbitrator. This requires co-operation between the parties and involves a lot of time. When a dispute is in existence, it is difficult to expect cooperation among the parties.
In institutional arbitration, on the other hand, the procedural rules are already established by the institution. Formulating rules is therefore no cause for concern. The fees are also fixed and regulated under rules of the institution. • In ad hoc arbitration, infrastructure facilities for conducting arbitration pose a problem and parties are often compelled to resort to hiring facilities of expensive hotels, which increase the cost of arbitration. Other problems include getting trained staff and library facilities for ready reference.
In contrast, in institutional arbitration, the institution will have ready facilities to conduct arbitration, trained secretarial/administrative staff, as well as library facilities. There will be professionalism in conducting arbitration. • In institutional arbitration, the arbitral institutions maintain a panel of arbitrators along with their profile. The parties can choose the arbitrators from the panel. Such arbitral institutions also provide for specialized arbitrators. These advantages are not available to the parties in ad hoc arbitration.
Scheme of the Act: The Act is a composite piece of legislation. It provides for domestic arbitration; international commercial arbitration; enforcement of foreign award and conciliation (the latter being based on the UNCITRAL Conciliation Rules of 1980). The more significant provisions of the Act are to be found in Part I and Part II thereof. Part I contains the provisions for domestic and international commercial arbitration in India. All arbitration conducted in India would be governed by Part I, irrespective of the nationalities of the parties.
Part II provides for enforcement of foreign awards. Part I is more comprehensive and contains extensive provisions based on the Model Law. It provides inter alia for arbitrability of disputes; non-intervention by courts; composition of the Arbitral tribunal; jurisdiction of arbitral tribunal; conduct of the arbitration proceedings; recourseagainst arbitral awards and enforcement. Part II on the other hand, is largely restricted toenforcement of foreign awards governed by the New York Convention or the Geneva Convention. Part II is thus, (by its very nature) not a complete code.
This led to judicial innovation by the Supreme Court in the case of Bhatia International v. Bulk Trading. Here the Indian courts jurisdiction was invoked by a party seeking interim measures of protection in relation to an arbitration under the ICC Rules to be conducted in Paris. The provision for interim measure (section 9) was to be found in Part I alone (which applies only to domestic arbitration). Hence the Court was faced with a situation that there was no proprio vigore legal provision under which it could grant interim measure of protection.
Creatively interpreting the Act, the Supreme Court held that the “general provisions” of Part I would apply also to offshore arbitrations, unless the parties expressly or impliedly exclude applicability of the same. Hence by judicial innovation, the Supreme Court extended applicability of the general provisions of Part I to off-shore arbitrations as well. It may be stated that this was premised on the assumption that the Indian Court would otherwise have jurisdiction in relation to the matter (in the international sense). This became clear in a subsequent decision of the Supreme Court in Shreejee Traco (I) Pvt. Ltd. v.
Paperline International Inc. Here the Court’s assistance was sought for appointing an arbitrator in an offshore arbitration. The power of appointment by court exists under Section 11 of Part I of the Act. The Court declined to exercise jurisdiction. It found that the arbitration was to be conducted in New York and that the law governing the arbitration proceedings would be the law of seat of the arbitration. Hence, the extension of Part I provisions to foreign arbitrations sanctified by Bhatia could not be resorted to in every case. The Indian Courts would have to first determine if it hasjurisdiction, in the international sense.
Subject matter of arbitration: Any commercial matter including an action in tort if it arises out of or relates to a contract can be referred to arbitration. However, public policy would not permit matrimonial matters, criminal proceedings, insolvency matters anti-competition matters or commercial court matters to be referred to arbitration. Employment contracts also cannot be referred to arbitration but director -company disputes are arbitral (as there is no master servant relationship here)5. Generally, matters covered by statutory reliefs through statutory tribunals would be non-arbitral. Role of the court:
One of the fundamental features of the Act is that the role of the court has been minimized. Accordingly, it is provided that any matter before a judicial authority containing an arbitration agreement shall be referred to arbitration (Section 8 provided the non – applicant objects no later than submitting its statement of defense on merits). Further, no judicial authority shall interfere, except as provided for under the Act (Section 5). In relation to arbitration proceedings, parties can approach the Court only for two purposes: (a) For any interim measure of protection or injunction or for any appointment of receiver etc. b) For the appointment of an arbitrator in the event a party fails to appoint an arbitrator or if two appointed arbitrators fail to agree upon the third arbitrator. In such an event, in the case of domestic arbitration, the Chief Justice of a High Court may appoint an arbitrator, and in the caseof international commercial arbitration, the Chief Justice of the Supreme Court of India may Carry out the appointment. A court of law can also be approached if there is any controversy as to whether an arbitrator has been unable to perform his functions or has failed to act without undue delay or there is a dispute on the same.
In such an event, the court may decide to terminate the mandate of the arbitrator and appoint a substitute arbitrator. Jurisdiction of the arbitrator: The Act provides that the arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. The arbitration agreement shall be deemed to be independent of the contract containing the arbitration clause, and invalidity of the contract shall not render the arbitration agreement void.
Hence, the Arbitrators shall have jurisdiction even if the contract in which the arbitration agreement is contained is vitiated by fraud and/or any other legal infirmity. Further, any objection as to jurisdiction of the arbitrators should be raised by as party at the first instance, i. e. , either prior to or along with the filing of the statement of Defence. If the plea of jurisdiction is rejected, the arbitrators can proceed with the arbitration and make the arbitral award.
Any party aggrieved by such an award may apply for having it set aside under Section 34 of the Act. Hence, the scheme is that, in the first instance, the objections are to be taken up by the arbitral tribunal and in the event of an adverse order, it is open to the aggrieved party to challenge the award. In SBP & Co. v. Patel Engg Ltd. 8 the Supreme Court of India (in a decision rendered by a Bench of Seven Judges) held that the nature of power conferred on the Court under Section 11 of the Act is judicial (and not administrative) in nature.
Accordingly, if parties approach the Court for appointment of arbitral tribunal (under Section 11) and the Chief Justice pronounces that he has jurisdiction to appoint an arbitrator or that there is an arbitration agreement between the parties or that there is a live and subsisting dispute to be referred to arbitration and the Court constitutes the Tribunal as envisaged, this would be binding and cannot be re-agitated by the parties before the arbitral tribunal. In S. B. P & Co. case the Supreme Court has defined what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage.
The Chief Justice has the power to decide his own jurisdiction in the sense whether the party making the motion has approached the right court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. He can also decide the question whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection.
The Court in SBP & Co case, inter alia, concluded as follows: (i) The power exercised by the Chief Justice of the High Court or the Chief Justice of India under Section 11(6) of the Act is not an administrative power. It is a judicial power. (ii) The power under Section 11(6) of the Act, in its entirety, could be delegated, by the Chief Justice of the High Court only to another Judge of that Court and by the Chief Justice of India to another Judge of the Supreme Court. (iii) In case of designation of a Judge of the High Court or of the Supreme
Court, the power that is exercised by the designated Judge would be that of the Chief Justice as conferred by the statute. (iv) The Chief Justice or the designated Judge will have the right to decide the preliminary aspects as indicated in the judgment. These will be, his own jurisdiction to entertain the request, the existence of a valid arbitration agreement, the existence or otherwise of a live claim, the existence of the condition for the exercise of his power and on the qualifications of the arbitrator or arbitrators.
The Chief Justice or the designated Judge would be entitled to seek the opinion of an institution in the matter of nominating an arbitrator qualified in terms of Section 11(8) of the Act if the need arises but the order appointing the arbitrator could only be that of the Chief Justice or the designated Judge. (v) The District Judge does not have the authority under Section 11(6) of the Act to make appointment of an arbitrator. vi) The High Court cannot interfere with the orders passed by the arbitrator or the Arbitral Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Section 37 of the Act (appealable orders) or in terms of Section34 of the Act (setting aside or arbitral award). (vii) Since it is a judicial order, an appeal will lie against the order passed by the Chief Justice of the High Court or by the designated Judge of that Court only under Article 136 of the Constitution to the Supreme Court. viii) No appeal shall lie against an order of the Chief Justice of India or a Judge of the Supreme Court designated by him while entertaining an application under Section 11(6) of the Act. (ix) Where an Arbitral Tribunal has been constituted by the parties without having recourse to Section 11(6) of the Act, the Arbitral Tribunal will have the jurisdiction to decide all matters as contemplated by Section 16 of the Act. Challenge to arbitrator: An arbitrator may be challenged only in two situations.
First, if circumstances exists that give rise to justifiable grounds as to his independence or impartiality; second, if he does not posses the qualifications agreed to by the parties. A challenge is required to be made within 15 days of the petitioner becoming aware of the constitution of the arbitral tribunal or of the circumstances furnishing grounds for challenge. Further, subject to the parties agreement, it is the arbitral tribunal (and not the court – unlike under the old Act of 1940) which shall decide on the challenge.
If the challenge is not successful the tribunal shall continue with the arbitral proceedings and render the award, which can be challenged by an aggrieved party at that stage. This is another significant departure from the Model Law, which envisages recourse to a court of law in the event the arbitral tribunal rejects the challenge. The Indian courts have held that “the apprehension of bias must be judged from a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. Vague suspicions of whimsical, capricious and unreasonable people are not our standard to regulate our vision. Conduct of arbitration proceedings: The arbitrators are masters of their own procedure and subject to parties agreement, may conduct the proceedings “in the manner they consider appropriate. ” This power includes- “the power to determine the admissibility, relevance, materiality and weight of any evidence”. The only restrain on them is that they shall treat the parties with equality and each party shall be given a full opportunity to present his case, which includes sufficient advance notice of any hearing or meeting. Neither the Code of Civil Procedure nor the Indian Evidence Act applies to arbitrations.
Unless the parties agree otherwise, the tribunal shall decide whether to hold oral hearings for the presentation of evidence or for arguments or whether the proceedings shall be conducted on the basis of documents or other material alone. However the arbitral tribunal shall hold oral hearings if a party so requests (unless the parties have agreed that no oral hearing shall be held). Arbitrators have power to proceed exparte where the respondent, without sufficient cause, fails to communicate his statement of Defence or appear for an oral hearing or produce evidence.
However, in such situation the tribunal shall not treat the failure as an admission of the allegations by the respondent and shall decide the matter on the evidence, if any, before it. If the claimant fails to communicate his statement of the claim, the arbitral tribunal shall be entitled to terminate the proceedings. Taking of evidence in arbitral proceedings: The Indian Oath’s Act 1969 extends to persons who may be authorized by consent of parties to receive evidence. This Act thus, encompasses arbitral proceedings as well.
Section 8 of the said Act states that every person giving evidence before any person authorized to administer oath “shall be bound to state the truth on such subject. ” Thus, witnesses appearing before an arbitral tribunal can be duly sworn by the tribunal and be required to state the truth on oath and upon failure to do so, commit offences punishable under the Indian Penal Code. However, the arbitrators cannot force unwilling witnesses to appear before them and for this court’s assistance is provided for vide Section 27 of the Act.
Under this provision the arbitral tribunal or a party with the approval of the tribunal may apply to the court seeking its assistance in taking evidence (this is also provided for in the Model Law). However, Section 27 of the Indian Act goes beyond the Model Law as it states that any person failing to attend in accordance with any order of the court or making any other default or refusing to give evidence or guilty of any contempt of the arbitral tribunal, shall be subject to like penalties and punishment as he may incur for like offences in suits tried before the court.
Further, the court may either appoint a commissioner for taking evidence or order that the evidence be provided directly to the arbitral tribunal. These provisions extend to any documents to be produced or property to be inspected. Section 26 provides for appointment of experts by the arbitral tribunal for any specific issue. In such situation a party may be required to give the expert any relevant information or produce any relevant document, goods or property for inspection as may be required.
It will be open to a party (or to the arbitral tribunal) to require the expert after delivery of his report, to participate in an oral hearing where the parties would have an opportunity to put questions to him. Governing Law: In an international commercial arbitration, parties are free to designate the governing law for the substance of the dispute. If the governing law is not specified, the arbitral tribunal shall apply the rules of law it considers appropriate in view of the surrounding circumstances. For domestic arbitration, however, (i. e. between Indian parties), the tribunal is required to decide the dispute in accordance with the substantive laws of India. The Supreme Court in TDM Infrastructure (P) Ltd. v. UE Development India (P) Ltd. held that irrespective of where the ‘central management and control is exercised’ by a company, companies incorporated in India, cannot choose foreign law as the governing law of their arbitration. The nationality of companies incorporated in India being Indian, the intention of the legislature is that Indian nationals should not be permitted to derogate from Indian law as it would be against public policy.
The Court was of the view that “international commercial arbitration” meant arbitration between parties where at least one of it is a body corporate incorporated in a country other than India. Where both companies are incorporated in India (and thereby had Indian nationalities), then the arbitration between them cannot be said to be an international commercial arbitration (even though the central management and control of the company may be exercised from a country other than India). Form and content of awards:
The arbitrators are required to set out the reasons on which their award is based, unless the parties agree that no reasons are to be given or if it arises out of agreed terms of settlement. The tribunal may make an interim award on matters on which it can also make a final award. Indian law provides for a very healthy 18% interest rate on sums due under an award. Thus, unless the arbitral tribunal directs otherwise, the award will carry interest at 18% per annum from the date of the award till the date of payment.
The tribunal is free to award costs, including the cost of any institution supervising the arbitration or any other expense incurred in connection with the arbitration proceedings. Setting aside of awards: The grounds for setting aside an award rendered in India (in a domestic or international arbitration) are provided for under Section 34 of the Act. These are materially the same as in Article 34 of the Model Law for challenging an enforcement application. An award can be set aside if: a) A party was under some incapacity; or ) The arbitration agreement was not valid under the governing law; or c) A party was not given proper notice of the appointment of the arbitrator or on the arbitral proceedings; or d) The award deals with a dispute not contemplated by or not falling within the terms of submissions to arbitration or it contains decisions beyond the scope of the submissions; or e) The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; or f) The subject matter of the dispute is not capable of settlement by arbitration; or ) The arbitral award is in conflict with the public policy of India. A challenge to an award is to be made within three months from the date of receipt of the same. The courts may, however, condone a delay of maximum 30 days on evidence of sufficient cause. Subject to any challenge to an award, the same is final and binding on the parties and enforceable as a decree of the Court. Considerable controversy has been generated as to whether an award is liable to be challenged under Section 34 on merits.
The earlier view, as expounded by the Supreme Court in Renu Sagar Power Co. Ltd. v. General Electric Co. 20 was that an award could be set side if it is contrary to the public policy of India or the interests of India or to justice or morality – but not on the grounds that it is based on an error of law or fact. The Supreme Court in that case was faced with the issue to determine the scope of public policy in relation to proceedings for enforcement of a foreign award under the Foreign Awards (Recognition and Enforcement) Act, 1961.
The Court also held that in proceedings for enforcement of a foreign award the scope of enquiry before the court in which the award is sought to be enforced would not entitle a party to the said proceedings to impeach the award on merits. However, in a later Supreme Court of India decision in Oil and Natural Gas Corporation vs. Saw Pipes the Court added an additional ground of “patent illegality”, thereby considerably widening the scope of judicial review on the merits of the decision.
In Saw Pipes case the court accepted that the scheme of Section 34 which dealt with setting aside the domestic arbitral award and Section 48 which dealt with enforcement of foreign award were not identical. The court also accepted that in foreign arbitration, the award would be subject to being set aside or suspended by the competent authority under the relevant law of that country whereas in domestic arbitration the only recourse is to Section 34. The Supreme Court observed: But in a case where the judgment and decree is challenged before the Appellate Court or the Court exercising revision jurisdiction, the jurisdiction of such Court would be wider. Therefore, in a case where the validity of award is challenged there is no necessity of giving a narrower meaning to the term ‘public policy of India’. On the contrary, wider meaning is required to be given so that the ‘patently illegal award’ passed by the arbitral tribunal could be set aside.
Similarly, if the award is patently against the statutory provisions of substantive law which is in force in India or is passed without giving an opportunity of hearing to the parties as provided under Section 24 or without giving any reason in a case where parties have not agreed that no reasons are to be recorded, it would be against the statutory provisions. In all such cases, the award is required to be set aside on the ground of ‘patent illegality’. ” The court in Saw Pipes case although adopted the wider meaning to the term ‘public policy’ but limited its application to domestic awards alone.
The Saw Pipes case has generated some controversy, and it remains to be seen if it will stand the test of time. The position of a foreign award has also undergone some recent controversy. A foreign award is enforceable under Part II of the Act if it is rendered in a country that is a signatory to the New York Convention or Geneva Convention and that territory is notified by the Central Government of India. Once an award is held to be enforceable it is deemed to be a decree of the court and can be executed as such. Under the Act there is no procedure for setting aside a foreign award.
A foreign award can only be enforced or refused to be enforced but it cannot be set aside. This fundamental distinction between a foreign and a domestic award has been altered by the Supreme Court in the recent case of Venture Global Engineering v. Satyam Computer Services Ltd. (Venture Global). Here the Supreme Court was concerned with a situation where a foreign award rendered in London under the Rules of the LCIA was sought to be enforced by the successful party (an Indian company) in the District Court, Michigan, USA.
The dispute arose out of a joint venture agreement between the parties. The respondent alleged that the appellant had committed an “event of default” under the shareholders agreement and as per the said agreement exercised its option to purchase the appellant’s shares in the joint venture company at book value. The sole arbitrator appointed by the LCIA passed an award directing the appellant to transfer its shares to the respondent. The respondent sought to enforce this award in the USA. The appellant filed a civil suit in an Indian District Court seeking to set aside the award.
The District Court, followed by the High Court, in appeal, dismissed the suit holding that there was no such procedure envisaged under Indian law. However, the Supreme Court in appeal, following its earlier decision in the case of Bhatia International v. Bulk Trading held that even though there was no provision in Part II of the Act providing for challenge to a foreign award, a petition to set aside the same would lie under Section 34 Part I of the Act (i. e. it applied the domestic award provisions to foreign awards).
The Court held that the property in question (shares in an Indian company) is situated in India and necessarily Indian law would need to be followed to execute the award. In such a situation the award must be validated on the touchstone of public policy of India and the Indian public policy cannot be given a go by through the device of the award being enforced on foreign shores. Going further the Court held that a challenge to a foreign award in India would have to meet the expanded scope of public policy as laid down in Saw Pipes (supra) (i. e. meet a challenge on merits contending that the award is “patently illegal”).
The Venture Global case is far reaching for it creates a new procedure and a new ground for challenge to a foreign award (not envisaged under the Act). The new procedure is that a person seeking to enforce a foreign award has not only to file an application for enforcement under Section 48 of the Act, it has to meet an application under Section 34 of the Act seeking to set aside the award. The new ground is that not only must the award pass the New York Convention Grounds incorporated in Section 48, it must pass the expanded “public policy” ground created under Section 34 of the Act.
In practice, the statutorily enacted procedure for enforcement of a foreign award would be rendered superfluous till the application for setting aside the same (under Section 34) is decided. The statutorily envisaged grounds for challenge to the award would also be rendered superfluous as notwithstanding the success of the applicant on the New York Convention grounds, the award would still have to meet the expanded “public policy” ground (and virtually have to meet a challenge to the award on merits).
The Venture Global case thus largely renders superfluous the statutorily envisaged mechanism for enforcement of foreign awards and substitutes it with a judge made law. The Judgement thus is erroneous. Moreover, in so far as the Judgment permits a challenge to a foreign award on the expanded interpretation of public policy it is per incuriam as a larger, three Bench decision in the case of Renu Sagar (supra) holds to the contrary.
Further Saw Pipes (on which Venture Global relies for this proposition) had clearly confined its expanded interpretation of public policy to domestic awards alone (lest it fall foul of the Renu Sagar case which had interpreted the expression narrowly). The Supreme Court in Venture Global did not notice this self-created limitation in Saw Pipes nor did it notice the narrower interpretation of public policy in Renu Sagar and therefore application Of the expanded interpretation of public policy to foreign awards is clearly per incuriam. The decision thus needs to be reviewed. CHAPTER III
MEDIATION: ITS ORIGIN & GROWTH IN INDIA ORIGIN OF MEDIATION IN INDIA: Mediation is not something new to India. Centuries before the British arrived, India had utilized a system called the Panchayat system, whereby respected village elders assisted in resolving community disputes. Such traditional mediation continues to be utilized even today in villages. Also, in pre-British India, mediation was popular among businessmen. Impartial and respected businessmen called Mahajans were requested by business association members to resolve disputes using an informal procedure, which combined mediation and arbitration.
Another form of early dispute resolution, used by one tribe to this day, is the use of panchas, or wise persons to resolve tribal disputes. Here, disputing members of a tribe meet with a pancha to present their grievances and to attempt to work out a settlement. If that is unsuccessful, the dispute is submitted to a public forum attended by all interested members of the tribe. After considering the claims, defenses, and interests of the tribe in great detail, the pancha again attempts to settle the dispute. If settlement is not possible, the pancha renders a decision that is binding upon the parties.
The pancha’s decision is made in accordance with the tribal law as well as the long-range interests of the tribe in maintaining harmony and prosperity. All proceedings are oral; no record is made of the proceedings or the outcome. Despite the lack of legal authority or sanctions, such mediation processes were regularly used and commonly accepted by Indian disputants. Mediation bears a striking resemblance, in some respects, to the ancient dispute resolution processes. In mediation the parties are encouraged to participate directly in the process.
The expanded framework of discussion in mediation consists of both the applicable law and the underlying interests of the parties. The mediator, an expert in the process of dispute resolution, controls the proceedings, much like a tribal chief serving in the role of peacemaker. But under the ancient methods if mediation failed, the same person was authorized to render a binding decision. After the British adversarial system of litigation was followed in India, arbitration was accepted as the legalized ADR method and is still the most often utilized ADR method.
Mediation (as is now understood globally and unlike the ancient methods, which is by definition non-binding, and encourages the parties to voluntarily reach an agreement that meets all the parties’ needs) has only in the past few years begun to become familiar to lawyers and judges generally, except in traditional community settings and except where mediation has been court-directed or statutorily-prescribed, such as in the intra-governmental disputes between government agencies and undertakings, in labor disputes and in public utility services disputes.
So when we compare the US and Indian system, over the last twenty (20) years, American lawyers and judges have warmly embraced mediation as a primary tool for resolving conflicts in court and out of court, while Indian lawyers and judges are still warily examining mediation, discussing whether and in which types of cases mediation should be used – similar to what was happening in the US in the 1980’s.
Mediation is no panacea, no magic solution to overcome the institutional challenges of national court systems. Similar to other alternative dispute resolution techniques, however, it does offer a cluster of features that differ from the formal judicial systems of Europe that have had global influence over the primary ways in which legal conflicts are resolved. In this regard, mediation both builds and diversifies the capacity for resolving conflicts in society.
With many qualifications and exceptions, European-style courts are state institutions, conducting public, formal proceedings, that presuppose literacy, posture the parties in a conflictual, legal position-based, backward-looking fact finding processes that result in binary, win-lose remedies, subsequently enforced through social control over the losing party. In contrast, mediation and other clusters of consensual dispute resolution techniques, except for arbitration are private, informal, oral, more collaborative, facilitative, future-looking, interest-based processes that bring parties to a calibrated, multi-dimensional, win-win emedy that is more durable because of the parties consent in the outcome. Because of these basic contrasting features, for many non-European legal cultures, mediation bears a comforting alternative and similarity to traditional forms of dispute resolution that predate colonial influence. Reformers have grown increasingly interested in reviving or extending traditional forms of dispute resolution (such as the methods used by the traditional panchayats in India) and integrating them into the formal litigation system. Another dispute resolution process, lok adalat, has received more favorable attention since its re-introduction in the 1980s.
Originally, lok adalat was an ancient method for dispute resolution used by tribal people. The Legal Services Authority Act (1987) promoted the resurgence of lok adalat to provide litigants with the means to resolve their disputes early and affordably. In essence, lok adalat may be compared to settlement conferences as they are traditionally conducted in the United States, except that the neutrals in lok adalat are senior members of the Bar. These lok adalat “judges” preside in panels over a lengthy calendar of cases that are set on a single day and are usually heard in open court (in the presence of other parties and attorneys).
Customarily, lok adalat judges are highly evaluative from the outset of each hearing. Represented parties do not play an active role in presenting or negotiating their dispute. Instead, attorneys advocate on their behalf. Importantly, litigants may participate in lok adalat without paying a fee, thereby making it accessible to parties with limited financial resources. Historically, lok adalat has been used primarily in personal injury cases and other injury claims involving insurance companies. Parties have the right to decide whether to submit their dispute to lok adalat.
Because lok adalat has resulted in the disposition of a measurable number of disputes and is considered to be an effective and affordable alternative to trial, it will continue to be an important dispute resolution tool. The development of mediation in India holds enormous promise. In particular, the neutralizing communication skills and powerful bargaining strategies of facilitated negotiation can strengthen the system’s capacity to bring justice to the society. Despite the demonstrable value of these techniques, however, several large obstacles block the path to mediation in India.
Exposure to these facilitated negotiation processes, though spreading rapidly, remains limited. PRESENT SCENARIO Statutes: After the enactment of the Arbitration & Conciliation Act, 1996, even though conciliation was given statutory recognition for the first time in India, the awareness of such an option was very limited to lawyers and litigants. The term “conciliation” even though considered synonymous and used interchangeably with “mediation” in most countries, was given a slight difference in the statute.
The concept of mediation and conciliation was made familiar or given official court recognition only in 1996 and by the amendment of the Civil Procedure Code (CPC) in1999 by inserting Section 89. The statutory language of the Arbitration and Conciliation Act, 1996 and of Section 89 of the Civil Procedure Code, demonstrates clearly the existence of differing definitions and meanings for “conciliation” and “mediation”. Generally both mediation and conciliation is the assistance of disputants by an impartial third party in resolving disputes by mutual agreement.
However, a conciliator can be a pro-active and interventionist, because of his statutory power “to make proposals for settlement of the dispute” and to formulate and reformulate the terms of the settlement agreement. The definition of “conciliator” in the statute is consistent with Rules for Conciliation promulgated by the United Nations Commission on International Trade Law (UNCITRAL). CONFLICTS & DISPUTES: Conflict is a part of life. Everyone has differing points of view and we all need to figure out how to live with each other.
No matter how trivial the conflict, it causes serious stress for everyone involved. Many of us get into situations that are not as easy to get out of as they were to get into. These range from family clashes that seem simple to solve to full-blown legal issues. No matter how we feel, think or believe, there is unity in our diversity. Finding that one thing we all have in common is the first step to solving any problem. No matter how far apart we are in our feelings, thinking or beliefs, finding that common ground would enable us to come together and find a solution that we all can live with.
People with problems, suffers from mental trauma and obviously yearns relief as quickly as possible preferably in an inexpensive way. Most people imagine a dramatic courtroom battle when they think of resolving legal issues. What they may not realize is that court is not always the best place to settle a dispute between private parties. Former US Supreme Court Chief Justice Warren Burger has said, “The notion that ordinary people want black-robed judges, well dressed lawyers and fine courtrooms as settings to resolve their disputes is incorrect.
People with problems, like people with pain, want relief, and they want it as quickly and inexpensively as possible. ” In the past, parties in dispute often felt they had no choice but to take the matter to court. Now, a growing number of people are choosing another option that allows them to avoid the aggravation and expense of a lawsuit. People have started to realize that court is not always the best place to settle their disputes. They are looking at an option to find workable solutions by sitting down and talking face to face. The option is MEDIATION! BEHIND DISPUTE RESOLUTION:
Behind almost every human conflict someone feels dismissed, discounted, disenfranchised or disrespected. Unresolved tensions that may have simmered below the surface can resurface and make situations difficult. Even if angry words are not spoken, an appearance of “peace” may not be truly peaceful at all. Underneath the still waters, there may be a turbulent bed of emotions. Mediation seeks to help parties find an authentic peace. Case adjudication or dispute settlement through conventional litigation system focus on rights and remedies and resolve the case, but not the problem.
Mediation focuses on needs, empowerment, restructures perspectives or relationships and seeks to resolve the underlying problem. Law is being utilized as a modality for healing and helping, not only for resolving problems. In our experience, we have seen that “an open mind and an extended hand will always work. ” Imagine sitting in a room in one of three chairs. A second chair is filled by someone with whom you are in conflict. The third, by a person whose intention is to provide an empathic structure for what is present in the room.
That third person creates a neutral space of openness, listens attentively and open-heartedly to each person, acknowledges the universal feelings and needs they are expressing, supports the growing connection between the two as understanding emerges and develops, helps them open to new possibilities as they create solutions which take everyone’s needs into consideration. That third person is the Mediator. THE MEDIATOR They are those who have been trained to work with people in these situations. Mediators, as the name implies, mediate between two people or groups of people and help them to reach a solution which works for everyone involved.
Through the confidential private meetings with the parties, the mediator is able to understand the needs of the party and the mediator assists the parties to arrive at a “win-win” situation with an agreement in which the solution to the dispute is favorable to both parties and thus not only resolves the problem but also strengthen the relationship among them by giving a more humane verdict. “Blessed are the peacemakers: for they shall be called the children of God”, the words may not be the same, but a similar philosophy exists in all religions. Reconciliation, love and peace have enormous moral, spiritual and ethical value.
Mahatma Gandhi has said, “My joy was boundless. I had learnt the true practice of law. I had learnt to find out the better side of human nature and to enter men’s hearts. I realized the true function of a lawyer was to unite parties riven asunder. The lesson was so indelibly burnt into me that a large part of my time during the 20 years of my practice as a lawyer was occupied in bringing about private compromises of hundreds of cases. I lost nothing thereby – not even money, certainly not my soul. ” WHAT IS MEDIATION? Of all mankind’s adventures in search of peace and justice, mediation is among the earliest.
Long before law was established or courts were organized, or judges had formulated principles of law, man had resorted to mediation for resolving disputes. Mediation is a process of dispute resolution in which one or more impartial third parties intervenes in a conflict or dispute with the consent of the participants and assists them in negotiating a consensual and informed agreement. It can also be said as a confidential process of negotiations and discussions in which a “neutral” third party or mediator assists in resolving a dispute between two or more parties.
Mediation presents the opportunity to express differences and improve relationships and mutual understanding, whether or not an agreement is reached. It is generally considered to be a non-adversarial approach to the resolution of conflicts or disputes. The general role of the mediator is to facilitate communication between the parties, assist them on focusing on the real issues of dispute and to generate options that meet the respective parties’ interests or needs in an effort to resolve the dispute.
The most important feature of Mediation is that it provides a solution that both parties can live with, instead of a verdict imposed by a court. Both parties are involved in suggesting possible solutions to the conflict. Mediation is based on the voluntary cooperation and good faith participation of all parties. The mediator cannot force the parties to resolve their differences. But the mediator can help the parties reach a solution agreeable to both of them. If the parties work out all or some of their differences, the resolution – or agreement – is put in writing and signed by both the parties.
Mediation may be able to plow beneath the surface of frequently vexatious litigations by addressing the underlying conflicts. The mediator acts as a bridge to iron the wrinkles of differences affecting the parties. Mediation differs from arbitration, in which the third party (arbitrator) acts much like a judge in an out-of-court, less formal setting but does not actively participate in the discussion. Unlike a judge or an arbitrator, a mediator does not decide what is right or wrong or make suggestions about ways to resolve a problem.
A mediator seeks to help parties to develop a shared understanding of the conflict and to work toward building a practical and lasting resolution. Mediation serve to identify the disputed issues and to generate options that help disputants reach a mutually-satisfactory resolution. It offers relatively flexible processes; and any settlement reached should have the agreement of all parties. This contrasts with litigation, which normally settles the dispute in favour of the party with the strongest argument. Mediation is different from counseling, therapy or advocacy.
The mediator does not take sides or push for any one solution. Mediators maintain a neutral role. Mediation focuses on the future, not the past, and what will resolve the conflict. Mediation does not replace the need for legal advice or counseling if your “rights” in a situation are the concern. WHY MEDIATION? If you have given up on negotiating a settlement of your dispute directly with the other party, mediation may be the best way to solve it. Compared to a lawsuit, mediation is quick, private, fair, and inexpensive.
And, if your dispute is with someone that you need to deal with in the future – such as an employer, landlord, neighbor, business partner, or co-parent – mediation will help you resolve your disagreement without destroying your relationship. In a lawsuit, no matter whether you have won or lost, it is usually a loss. Litigation is public. People lose their sense of privacy. It is slow, it is overburdening. Mediation and other forms of conflict resolution empower people to take control of their own lives and find creative solutions that work for them. Further we avoid the economic disadvantage because we spend so much on litigation.
Abraham Lincoln has said, “Discourage litigation. Persuade your neighbours to compromise whenever you can… the nominal winner are often the real loser in fees, in expenses and waste of time. ” ADVANTAGES OF MEDIATION As mentioned earlier, in addition to the fact that it is voluntary, mediation is a much less formal process than arbitration or litigation. Sessions are usually scheduled at a time and location convenient to all parties. Because the parties are directly responsible for developing the terms of an agreement, they are more likely to keep the agreement.
Participants in mediation reach agreements about 80% of the time and keep those agreements about 90% of the time. Even if a written agreement is not reached, parties may lay groundwork for future agreements by opening lines of communication. Advocates of mediation say that mediation can address each of these issues, namely, diverting cases from court, building bridges between communities and transforming society into a more tolerant, understanding people. Another benefit is that mediations remain under wraps, whereas court cases are usually in the public domain.
The process is also far less intimidating than a courtroom. Most often, the parties feel empowered by the process as they have been directly involved in negotiating the outcomes. The driving motivation behind mediation is to find a solution. Mediation need not be viewed as a process by which the mediator helps people come to a resolution. It could be viewed as a process by which the mediator helps people go to the next step; whether it is clarifying a thought process, communicating with another person, or simply organizing a person’s thinking.
The mediator can support and focus the party’s thinking. WHO CAN MAKE A GOOD MEDIATOR? There is no simple answer to this question. There can be no one predictor of success as a mediator. Successful mediators come from many different backgrounds and have varied life experiences. A competent mediator is an effective conflict manager. Competence depends partly on the type of the dispute and the parties’ expectations. It also depends on whether the mediator has the right mix of acquired skills, training, education, experience and natural abilities to help resolve the specific dispute.
A good mediator will probably have many of the following qualities, Overall “people” skills, good verbal and listening skills, ability to think “out of the box”, helping people work together as a team, impartial, respect for the parties, the ability to gain the parties’ confidence, knowledge of the mediation process, bringing about a balanced approach to control of the process, initiative and the confidence to use it, reflective, trustworthy, dependable, keeping information confidential and the ability to remain calm under pressure.
I have often found that one of the core strengths of a mediator is to have a sense of humor and the ability to use humor appropriately to lighten the tone or refocus people away from a slide into some very unhelpful place. It is a skill that parties appreciate but it is not necessarily one that they think of when they look to appoint a mediator. Apart from the above qualities, knowledge on mediation process, ethical standards and the code of conduct are some of the important norms that a mediator should possess. Before we go further, I would like to give one discussion of mediation in history shortly before world-war II. Far East: Mediation: It’s Wonderful5 The war between Thailand and French Indo-China ended last week. The victor was Japan. Nobody had asked Japan to mediate the quarrel, which had gone on intermittently in the swampy jungles along the Mekong River since October, but fortnight ago Tokyo offered its services. When the offer was not immediately accepted, Japan became insistent, threatening. Nipponese warlords insisted that, as “the most stabilizing power in the Far East,” Japan alone had the right to settle Oriental differences. Under duress Vichy, then Thailand, accepted.
Last week the stage was set for mediation, Nipponese style. The Japanese cruiser Natori steamed into Saigon harbor. Off the southeast Indo-Chinese coast appeared two Japanese aircraft carriers, two cruisers and two torpedo boats. Planes from the carriers cruised low over the city. At an appointed hour six French and six Thai delegates were taken aboard the Natori, where seven white-uniformed Japanese officers headed by Chief of the Japanese Military Mission in Indo-China Major General Raishiro Sumita received them with bows and toothy smiles.
Tea was served; then the delegates prepared to mediate. Before either Thailand or Indo-China could present a claim or grievance, Japan handed both a bill for her services as mediator – to be paid in advance. She demanded: a virtual monopoly over Indo-China’s production of rice, rubber and coal; a free hand to exploit Indo-China’s natural resources; military garrisons along the Chinese frontier; Japanese inspectors at all Indo-Chinese customs houses; a naval base at strategic Camranh Bay and defense concessions at Saigon; air bases throughout Indo-China.
From Thailand she demanded a naval base in the Gulf of Siam for a fleet of 15 battleships, cruisers and auxiliary craft. Unless the terms were accepted on the spot, it was intimated, naval units would go into action and invasion of both countries would follow. The delegates signed. Smiles returned to Japanese faces, tea cups were refilled and an armistice creating a twelve-mile buffer zone between the Indo-Chinese and Thai forces was quickly arranged. Peace talks were postponed for a later meeting in Tokyo, when claims would be settled and peaceful collaboration in the New Asiatic Order discussed.
The bows were deeper and smiles toothier as Japan’s mediators sent the delegates ashore. ” Reading it now, many mediators may wonder, how this could ever happen. We should understand that people are not born into this world knowing how to solve conflicts. As we grew up we observed others: our parents, teachers, elders, leaders etc. as to how they resolved conflicts. We copied them, imitated them or tried to improve on them and we began to use different strategies out of the different problem-solving methods we saw and copied.
But when we were faced with bigger issues, more complicated issues, we found nothing worked to resolve the dispute. But we continued doing the best we could, having no idea there could possibly be other methods that could have more peacefully and successfully resolved our disputes. I firmly believe that to make mediation effective and professional, appropriate training on mediation techniques should be mandatory. If conflict resolution skills and mediation strategies are taught to all people, humanity would be able to live in peace with themselves, each other, and our environment.
Michael McIlwrath, Chairman of the International Mediation Institute at the Hague has stated, “To emerge as a profession, mediation must be globally understood and accepted; where competent mediators apply transparent high standards, and are instinctively regarded as professionals regardless of their background; where users see mediation as an opportunity and are more inclined to accept than reject a proposal to engage a mediator; where there are enough competent mediators from all cultures and technical fields that the most suitable mediator can easily be identified.
The creation of IMI is an opportunity for mediation to leave behind its status quo as a local niche activity and become a truly global profession. But can the leading players drive the necessary changes to the current environment to make it happen? ” TECHNIQUES OF MEDIATION A. FACILITATIVE STYLE OF MEDIATION In a classic mediation, the mediator’s mission is purely facilitative. The mediator does not give an opinion on the likely outcome at trial or legal issues, but only seeks to help the parties find solutions to the underlying interests or problems giving rise to the litigation.
Generally, in this kind of mediation, the mediator’s expertise in the process of mediation, rather than in the subject matter of the litigation, is viewed as paramount. Some mediation professionals view facilitative mediation as the preferred approach because the mediator preserves the principle of complete impartiality by not giving an assessment or prediction of the outcome of the case at trial. A facilitative mediator creates an environment in which parties work together collaboratively as problem-solvers. The mediator uses echniques that place full responsibility for resolving the dispute on the shoulders of the participants. B. EVALUATIVE STYLE OF MEDIATION In the evaluative approach, the mediator is more likely to give a view of the case. The mediator’s opinion – including, for example, a legal and/or factual evaluation of the case, and sometimes an assessment of potential legal outcomes – is used as a settlement tool. An evaluative mediator assists the participants in breaking impasses by contributing her views of the merits of the legal case, the consequences of failure to settle, and the benefits of particular settlement proposals.
For instances, if each side has strongly conflicting views of the legal merits, the neutral might try to break the impasse by giving An evaluation of the merits of the dispute. By predicting the likely outcome in the adjudicatory forum, the neutral gives the participants a basis against which to assess the attractiveness of emerging options for settlement. If the case is not settling, the neutral might suggest how failure would impact on the interests of each party. If each side has strongly conflicting views of the benefits of a particular settlement proposal, the neutral might give an assessment of how the proposal benefits each side.
The neutral might even present a proposal for adoption by the participants. This approach generally requires mediators who are experts in the subject matter of the case. Most evaluative mediators also consider the interests of the parties in attempting to facilitate a settlement. Many mediators blend facilitation and evaluation, applying each approach in varying degrees at different times during the mediation process, depending on the needs of a given case. There is a third model, which is also popular, called the Transformative style. In their 1994 publication, “The Promise of Mediation”, Robert A.
Baruch Bush and Joseph Folger explicitly outlined a framework for the practice of transformative mediation. As stated earlier, problem-solving mediation is aimed at resolving specific disputes between parties and coming up with a mutually acceptable solution to the immediate, short-term problem. In problem-solving mediation, the mediator normally plays a very active role in guiding the process. Instead, Bush and Folger proposed that mediation can effect much deeper changes in people and their interpersonal relationships, beyond just remedying a short-term problem.
They proposed a way of practicing mediation that seeks to address deeper levels of social life. In the preface of their seminal work, they stated that, “mediation’s greatest value lies in its potential not only to find solutions to people’s problems but to change people themselves for the better, in the very midst of conflict. ” By employing a specific perspective on mediation practice as well as specific techniques, they believe mediation possesses the power to change how people behave not only toward their adversary in a particular conflict, but also in their day-to-day lives thereafter.
Mediation, in their opinion, can transform individuals. For mediators who adhere to the framework of transformative mediation, achieving this type of long-term change is more important than solving a specific problem between parties. Typically, settlement-oriented mediation is not considered successful unless a settlement is reached. Transformative mediation, however, is successful if one or both parties becomes empowered to better handle their own situation or the parties better recognize the concerns and issues of the other side.
Transformative mediation is a relatively new concept, though many mediators had been acting in this way for a long time, but did not have a name for their style until Bush and Folgers defined transformative mediation as a concept. Because empowerment and recognition are phenomena that happen to people, the transformative approach is usually thought to be useful in interpersonal conflicts such as family conflicts, conflicts between neighbors, and conflicts between co-workers. ROLE OF MEDIATION The legal system rarely takes the psychological or emotional factors of either party into account.
Litigation is said to be cold, hard, and uncaring. Both parties are instructed not to talk to each other and neither side gets to voice their concerns. Mediation uses the psychological power of empathy to create mutual understanding between parties to address concerns, promote emotional healing, and preserve ongoing relationships. The role of mediation is not confined to bring in social harmony but also communal harmony. The development of a more proximate, indigenous mediation mechanism will help to prevent deeply rooted conflicts from erupting into communal violence.
Mediation seeks to handle such situations more effectively than the courts which end in a win for a section at the expense of the other section. However in the case of mediation, it is a win-win situation that is involved which benefits both sections. Here again, the aspect of peaceful and amicable settlement of disputes becomes the best way to tackle such sensitive and volatile issues affecting the people at large. Mediation also helps in restorative justice through its variety approaches and restoring the offender in community by giving correctional practice thereby giving everyone a second chance.
Sometimes victims of crime need answers and apologies more than they need to know perpetrators are being punished; and sometimes offenders need to find out just who they’ve hurt to realize what they’ve done is wrong. There is no conflict without emotion. There can be no resolution of a conflict without addressing the underlying emotions that gave rise to it and sustained it. Matrimonial disputes can shake the entire social fabric of existing families. They have such an effect upon the society and impact the whole society as such.
Such matrimonial disputes arise mainly out if minor differences which seeks adjustment from husband and wife or even parents. These disputes when coming to the court will assume such dangerous proportions that lead to an adverse result. It is essential for the sustenance of a family which has been declared by many international conventions as the basic fabric of the society. It is here the role of mediation comes to the forefront. Through mediation such minor differences are solved amicably even before attaining dangerous proportions.
Through the confidential private meetings with the parties, the mediator is able to understand the needs of the party and the mediator assists the parties to arrive at a “win-win” situation and thus not only resolves the problem but also strengthen the relationship among them. This avoids hostility within the community and improves harmony. A conflict free environment makes the community more focused, optimized and disciplined by setting up standards and values and principles. Mediation helps to maintain peace and solidarity among the members by facilitating settlements among conflicting parties.
COMMUNITY MEDIATION The roots of community mediation can be found in a community which is concerned to find better ways to resolve conflicts, and efforts to improve the system. It gives people in conflict an opportunity to take responsibility for the resolution of their dispute and control of the outcome. But where do people go to get the problem resolved by mediation? The system has to be authentic, legally acceptable and the mediators should be trained and under ethical guidelines and review.
Even though, presently there are court-annexed mediation centres, they cater the requirements of litigants, whose cases are pending before courts and referred to the centre. Where do people find good mediators, who can assist the parties to settle the issue before it aggravates to a litigation? Moreover the system should function as a vehicle to create harmony in the society and promote legal compliance in general. Community Mediation service should not be too late or too remote from the community level to nip the budding emergence of conflicts.
It is in this context that the Indian Institute of Arbitration & Mediation (IIAM) thought of the possibility of establishing Community Mediation Clinics as an inexpensive option. The motto is; “Resolving conflicts; promoting harmony. ” IIAM Community Mediation Service will serve as a mechanism in bringing into the consciousness of the society the effectiveness of grassroots-level arrangements to bring forth harmony in community, providing a safe environment for people to air grievances to reach a peaceful resolution.
Community mediation means neighbors helping neighbors to solve problems and resolve disputes. Setting up of Community Mediation Clinics in all villages of each state with a view to mediate all disputes will bring about a profound change in the Indian Legal system. Conflict management programs with the formation of such centers will serve to defray tensions in societies and prevent them from erupting into violence. It is also a process that can mould a more peaceful society.
Community Mediation Clinics enhances access by helping to bring justice to the society. It aims to prevent the underlying conflict (or the need to go to court) and advance compliance with the law in general. People would get a platform near home to settle their cases without the trappings of a court. It helps preserve relationships by avoiding the embarrassment of being hauled into court, and by giving people the opportunity to air concerns that a court would rightly ignore when evaluating a legal claim.
Through a system that resolves disputes before it requires adjudication, it is hoped the legal system will be freed up to deal with more serious cases. The Mediation Clinics would function with an efficient team of mediators who are selected from the local community itself. The people so selected would be given an orientation program by IIAM, and a certificate of recognition would be issued. IIAM will also implement high standards of ethics as laid down by the International Mediation Institute (IMI), The Hague, Netherlands (which has endorsed the IIAM Community Mediation Service).
The mediators so selected will be persons who will be having a good repute in the local area to whom people shall have faith because of his/her integrity and sense of fairness in public dealing; and shall include educated youth, ladies and elders. People having experience in dispute resolution and community interactions will be preferred. Peacekeeping is a profession and can be a vocation. It is a belief, a value and a way of life. We have many people in our community who believe in peace and practice peacemaking.
IIAM Community Mediation Service has the potential to shape powerful conflict transformation partnerships. Such approaches often have the power to heal even profound social wounds, so that the system can become a vehicle for creating a loving and caring world. We are mindful that cultural “clicks” do not happen overnight. We must devise workable ways of implementing them and build broad public support for those changes. As Mahatma Gandhi has said, “There is not a single virtue which aims at, or is content with, the welfare of the individual alone.
Conversely, there is not a single moral offence which does not, directly or indirectly, affect many others besides the actual offender. Hence, whether an individual is good or bad is not merely his own concern, but really the concern of the whole community, nay, of the whole world. ”10 While launching the IIAM Community Mediation Service, the Chief Justice of India, Hon’ble Mr. Justice K. G. Balakrishnan had hoped that Community Mediation Clinics could be established in at least 100 villages by 2010 and in every village by 2015.
Such peace building processes could be greatly strengthened if organizations, people and society join together and cooperate. As a business opportunity and simultaneously to fulfill the Corporate Social Responsibility, we urge corporate houses, public spirited individuals, associations and clubs to join in implementing the IIAM Community Mediation Program, which has a clearly defined mission and a vision statement, combined with a sound implementation strategy and a plan of action firmly rooted in ground realities.
We can join together for an enduring process of positive social transition. MEDIATION COURTS: In 1994-95, the Indian Supreme Court initiated an Indo-US exchange of information between high-ranking members of the judiciary. As part of this effort, former Indian Supreme Court Chief Justice A. M. Ahmadi met with US Supreme Court Justices Ruth Bader Ginsburg and Antonin Scalia. Another integral member of the US team was then Chief Judge J. Clifford Wallace, of the 9th US Circuit Court of Appeals.
In 1996, Ahmadi formed a national study team to examine case management and dispute resolution as part of a joint project with the United States. This Indo-US study group suggested procedural reforms, including legislative changes that authorized the use of mediation. New procedural provisions eventually were enacted in 2002, providing for case management and the mandatory reference of cases to alternative dispute resolution, including mediation (Code of Civil Procedure Section 89).
Even though the Arbitration & Conciliation Act, 1996 was enacted to give impetus to conciliation and giving statutory recognition to conciliated settlements, giving the same status of a court decree for its execution, no real effort was taken by the courts or by the lawyers to utilize the provisions and encourage the litigants to choose the method. Even though some mediation training and familiarization programs were conducted it did not create the real effect. The amendment of the CPC referring pending court matters to ADR was not welcomed by a group of lawyers and the amendment was challenged.
The modalities to be formulated for effective implementation of Sec. 89 also came under scrutiny. For this purpose, a Committee headed by former Judge of the Supreme Court and Chairman of the Law Commission of India, Justice M. Jagannadha Rao, was constituted to ensure that the amendments become effective and result in quick dispensation of justice. The Committee filed its report and it was accepted and the Hon’ble Supreme Court of India has pronounced a landmark decision “Salem Advocate Bar Association, Tamil Nadu v.
Union of India” (2005), where it held that reference to mediation, conciliation and arbitration are mandatory for court matters. This judgment of the Supreme Court of India will be the real turning point for the development of mediation in India. But the growth of mediation should be carefully molded so that the system gains the faith and recognition of the litigants. ] In the United States, lawyers and the local and state bar associations, as well as the American Bar Association and the Federal Bar Association, were as enthusiastic as the judges in their promotion and utilization of mediation.
American lawyers understood that the legal system was overloaded and on the point of collapse from the courts being wrongly utilized for disputes that could be better and more efficiently handled by mediation and other ADR procedures. By the mid-1980’s, lawyers and State Bar Associations had professionalized mediation in the US, by developing mediator training standards, by providing lawyer training in mediation and by prescribing ethical standards for lawyers when acting as mediators and when acting as advocates in mediation.
As a result, trained lawyer mediators made mediation a substantial part of their law practice. By responding positively and emphatically to incorporate mediation as a welcome and useful ADR tool in the American legal system, lawyers have not lost business to mediation, but have rather become ensconced as mediators and as the gatekeepers for mediation in the US legal systems. In the US, although lawyers initially felt threatened by mediation and resisted it as an unwanted change in the status quo, the lawyers quickly realized that mediation was just another tool in their lawyer tool bag.
In India, while judges have been quick to recognize increased use of mediation as a helpful mechanism for reducing case backlogs and delays, Indian lawyers have not rushed to embrace mediation. As with American lawyers in the early 1980’s, Indian lawyers are conservative. They do not like change and are reluctant to expose their clients to the uncertain risks of an unknown ADR process. Also, understandably, Indian lawyers view mediation as potentially depriving them of income by settling cases prematurely and thereby obviating legal fees that would otherwise be earned.
The same has been true for American lawyers during the growth of mediation in the US over the last twenty (20) years. In the first place, by their early acceptance and use of mediation, lawyers became not only the best trained and most qualified mediators (incorporating their mediator work into their law practices), but the lawyers who did not become mediators became the gatekeepers for mediation, selecting over 80% of the cases that are