Mediation and Arbitration in Asansol — Alternative Dispute Resolution Guide

Alternative Dispute Resolution (ADR) refers to the methods of resolving disputes outside the traditional court litigation, and it has emerged as a critical component of the justice system in Asansol, where the courts are burdened with a large pendency of cases. The principal methods of ADR are mediation, arbitration, conciliation, and the Lok Adalat, each of which offers a faster, less expensive, and less adversarial route to the resolution of the disputes. The legal framework for ADR in India is provided by the Arbitration and Conciliation Act, 1996, the Legal Services Authorities Act, 1987, Section 89 of the Code of Civil Procedure, 1908 (now Section 143 of the Bharatiya Nagarik Suraksha Sanhita, 2023), and the Commercial Courts Act, 2015, which together promote and regulate the ADR.

The policy of the law is to encourage the ADR and to reduce the burden on the courts. Section 89 of the CPC empowers the court to refer the dispute to the arbitration, the conciliation, the judicial settlement (including the settlement through the Lok Adalat), or the mediation, where it appears to the court that there exists an element of the settlement that may be acceptable to the parties. The court is required to formulate the terms of the possible settlement, refer the parties to the chosen ADR mechanism, and, on the failure of the settlement, resume the proceedings. The Supreme Court, in the landmark judgment of Salem Bar Association, has elaborated the procedure for the Section 89 reference and has encouraged the courts to actively explore the ADR.

The advantages of the ADR over the litigation are several. The ADR is faster, with the arbitration award required to be made within a defined period and the mediation typically concluding within a few sessions. The ADR is less formal, and the procedure can be tailored to the needs of the parties. The ADR is confidential, and the proceedings and the outcome are not public, which is important for the commercial and the family disputes. The ADR is less adversarial, and the focus is on the mutual solution rather than the victory of one party over the other. The ADR is also less expensive, and the Lok Adalat is free of cost. An advocate in Asansol advises on the suitability of the ADR for the particular dispute, the choice of the method, and the procedure, and represents the party through the ADR process.

Mediation is a voluntary, confidential, and non-binding process in which a neutral third party, the mediator, assists the parties in reaching a mutually acceptable settlement of their dispute. The mediator does not impose a decision; he facilitates the communication, the understanding of the issues, and the exploration of the options, and the parties themselves decide the terms of the settlement. The mediation is governed by the Mediation Act, 2023, the Supreme Court Mediation Rules, and the principles derived from the Model Law of the UNCITRAL. In Asansol, the mediation is conducted by the mediators empanelled by the court, the Legal Services Authority, or the private mediation centres, and the mediators are typically the senior advocates, the retired judges, or the subject-matter experts.

The process of the mediation begins with the agreement of the parties to mediate, which may be by a pre-dispute mediation clause in the contract or by a post-dispute agreement, or by the reference of the court under Section 89 of the CPC. The mediator conducts the introductory session, where the rules and the procedure are explained, and then the joint and the separate sessions, where the issues, the interests, and the options are explored. The mediator helps the parties to move from the positions to the interests, to understand the perspective of the other, and to find the common ground. Where the parties reach a settlement, the terms are reduced to writing, signed by the parties, and, where the mediation is court-referred, the settlement is filed before the court and recorded as a decree under Section 74 of the Arbitration and Conciliation Act, 1996 (for the conciliation) or the relevant provision of the CPC.

The mediation is particularly suitable for the disputes where the ongoing relationship between the parties is important, such as the family disputes, the business-partner disputes, the property disputes between the family members, and the workplace disputes. The mediation is also suitable for the disputes where the parties seek the creative solutions that a court may not be able to grant. The mediation is not suitable for the disputes that involve the public interest, the criminal cases (except the compoundable offences), or the cases that require the authoritative interpretation of the law. The settlement reached in the mediation is binding on the parties and can be enforced as a decree, and the failure to comply can be challenged. An advocate in Asansol advises on the suitability of the mediation, represents the party through the sessions, drafts the settlement agreement, and ensures that the settlement is legally valid and enforceable.

Arbitration is a binding form of the ADR in which the parties agree to refer their dispute to one or more private arbitrators, who hear the parties and make an award that is enforceable as a court decree. The arbitration in India is governed by the Arbitration and Conciliation Act, 1996, which is based on the Model Law of the UNCITRAL and which provides a comprehensive framework for the domestic and the international commercial arbitration. The Act is divided into the four parts — the domestic arbitration, the enforcement of the foreign awards, the conciliation, and the supplementary provisions — and the principal features of the Act are the party autonomy, the minimal court intervention, the speed, and the enforceability of the award.

The arbitration begins with the arbitration agreement, which may be a clause in the contract or a separate agreement, and which must be in writing. The parties appoint the arbitrator or the arbitrators, who may be a sole arbitrator or a panel, and the arbitrator conducts the proceedings in the manner agreed by the parties or, in the absence of the agreement, in the manner he deems appropriate. The arbitrator hears the evidence, the arguments, and the submissions, and makes the award. Under Section 29A of the Act, the award must be made within twelve months from the date of the constitution of the arbitral tribunal, extendable by a further six months with the consent of the parties, and beyond that only with the court's permission. This timeline makes the arbitration faster than the court litigation, where the cases often take years.

The award is binding on the parties and is enforceable as a decree under Section 36 of the Act, after the expiry of the time for the challenge. The award can be challenged under Section 34 of the Act, but only on the limited grounds — the incapacity of the party, the invalidity of the agreement, the lack of the proper notice, the excess of the jurisdiction, the violation of the public policy, and the fraud. The challenge is not a appeal on the merits, and the court does not re-examine the facts or the law. The enforcement of the foreign awards is governed by the New York Convention and the Geneva Convention, as incorporated into the Act. An advocate in Asansol drafts the arbitration agreement, advises on the choice of the arbitrator and the procedure, represents the party through the arbitration, drafts the pleadings and the submissions, and, where necessary, challenges or enforces the award before the court.

Conciliation is a process of the ADR in which a neutral third party, the conciliator, assists the parties in reaching a settlement, and it differs from the mediation in that the conciliator plays a more active role in proposing the terms of the settlement. The conciliation is governed by Part III of the Arbitration and Conciliation Act, 1996, Sections 61 to 67, which provide a self-contained code for the conciliation proceedings. The conciliation is voluntary, and it may be resorted to where the parties agree to it, either before or after the dispute arises, and the conciliator is appointed by the parties or by a third party nominated by the parties.

The conciliation proceedings are confidential, and the conciliator, the parties, and the others involved are not permitted to disclose the information received or the offers made during the conciliation in any subsequent proceedings. The conciliator may meet the parties jointly or separately, and he may, with the consent of the parties, propose the terms of the settlement at any stage of the proceedings. The conciliator is guided by the principles of the objectivity, the fairness, and the justice, and he takes into account the circumstances of the case, the needs of the parties, and the usages of the trade. Where the parties reach a settlement, the conciliator draws up the settlement agreement, which is signed by the parties and authenticated by the conciliator.

The settlement agreement reached in the conciliation has the same status and the effect as an arbitral award on agreed terms under Section 74 of the Act, and it is enforceable as a decree. The conciliation proceedings terminate either by the signing of the settlement agreement or by a written declaration of the conciliator that further efforts at the conciliation will not be fruitful, or by a written declaration of the parties. The conciliation is suitable for the commercial disputes, the family disputes, and the workplace disputes, and it is particularly useful where the parties seek an amicable settlement but also value the input of a neutral expert. An advocate in Asansol advises on the suitability of the conciliation, the choice of the conciliator, and the procedure, and, where the settlement is reached, drafts and reviews the settlement agreement to ensure that it is legally valid and enforceable, and, where the conciliation fails, advises on the next steps.

The Lok Adalat, or the people's court, is a unique and powerful institution of the ADR in India, established under the Legal Services Authorities Act, 1987, and it is one of the most accessible forums for the dispute resolution in Asansol. The Lok Adalat is a forum where the disputes are settled through the compromise and the conciliation, and the awards of the Lok Adalat are final and binding on the parties, with no provision for the appeal. The Lok Adalats are organised at the national, the state, the district, and the taluka levels by the NALSA, the SLSA, the DLSA, and the Taluka Legal Services Committee, respectively, and they are held periodically at the Asansol Court and at the other venues.

The Lok Adalat has the jurisdiction over a wide range of cases, including the cases pending before the courts, the matters at the pre-litigation stage, and the compoundable criminal offences. The matters that are commonly taken up in the Lok Adalat include the motor-accident claims, the cheque-bounce cases, the property disputes, the family disputes, the labour disputes, the consumer complaints, and the utility disputes. The parties can refer the matter to the Lok Adalat on their own, or the court can refer the pending matter under Section 89 of the CPC. The Lok Adalat does not decide the case on the strict legal rights; it facilitates the compromise, and the settlement reflects the practical and the fair solution that is acceptable to both the parties.

The most significant feature of the Lok Adalat is that it is free of cost, and there is no court fee. Where the matter is pending before a court and is referred to the Lok Adalat, the court fee paid is refunded. The award of the Lok Adalat, called the Lok Adalat award, is deemed to be a decree of the civil court and is enforceable as such. The award is final and binding, and it cannot be challenged in the appeal, except in the limited cases of the fraud or the lack of the jurisdiction. The Lok Adalat also has the power to summon the parties, to examine the witnesses, and to call for the documents. An advocate in Asansol advises on the suitability of the Lok Adalat for the particular dispute, prepares the matter for the Lok Adalat, represents the party before the Lok Adalat, and ensures that the settlement is fair and that the award is properly recorded and enforced.

The difference between the arbitration and the court litigation is fundamental, and the residents of Asansol should understand it to choose the appropriate forum for their dispute. The first difference is the origin of the jurisdiction. The court derives its jurisdiction from the law, and the parties are compelled to submit to the court if the dispute falls within its jurisdiction. The arbitration, by contrast, derives its jurisdiction from the agreement of the parties, and the parties choose to submit their dispute to the arbitration by the arbitration agreement. The arbitration cannot be imposed on a party without the agreement.

The second difference is the procedure. The court follows the procedure prescribed by the Code of Civil Procedure and the Evidence Act, which is formal, detailed, and rigid. The arbitration, by contrast, follows the procedure agreed by the parties or determined by the arbitrator, which is flexible, informal, and tailored to the dispute. The strict rules of the evidence do not apply to the arbitration, and the arbitrator is not bound by the procedural formalities of the court, which makes the arbitration faster and less technical. The third difference is the speed. The court cases often take years, while the arbitration, under Section 29A of the Arbitration and Conciliation Act, 1996, must be completed within twelve months, extendable by six months, which makes the arbitration substantially faster.

The fourth difference is the confidentiality. The court proceedings are public, and the records are accessible. The arbitration proceedings are confidential, and the award and the evidence are not public, which is important for the commercial disputes where the parties wish to keep the matter private. The fifth difference is the appeal. The court decree can be appealed on the merits, through the hierarchy of the courts. The arbitral award can be challenged only on the limited grounds under Section 34 of the Act, and there is no appeal on the merits. The sixth difference is the cost. The arbitration, while faster, can be expensive due to the fees of the arbitrator and the institutional fees, while the court litigation, though slower, has a lower official cost. An advocate in Asansol advises on the choice between the arbitration and the litigation, the drafting of the arbitration clause, and the strategy, ensuring that the dispute is resolved in the most appropriate forum.

The enforcement of the awards and the settlements under the ADR is a critical aspect, and the law provides for the effective mechanisms to ensure that the outcome of the ADR is not rendered meaningless. The arbitral award, under Section 36 of the Arbitration and Conciliation Act, 1996, is enforceable as a decree of the civil court, and it can be executed before the court of the competent jurisdiction. The enforcement of the award is stayed only where a challenge is pending under Section 34, and even then, the court may grant the stay subject to the conditions, including the deposit of the amount or the security.

The settlement agreement reached in the conciliation, under Section 74 of the Act, has the same status and the effect as the arbitral award on agreed terms, and it is enforceable as a decree. The settlement reached in the court-referred mediation, under the Mediation Act, 2023 and the relevant rules, is recorded by the court and is enforceable as a decree. The settlement reached in the private mediation, where the parties have agreed to the enforcement, is enforceable as a contract, and, where it is filed before the court with the consent of the parties, it is enforceable as a decree. The Lok Adalat award, under Section 21 of the Legal Services Authorities Act, 1987, is deemed to be a decree of the civil court and is enforceable as such, and it is final and binding with no appeal.

The enforcement proceedings are conducted before the civil court that has the jurisdiction over the assets of the debtor, and the court may attach the property, the bank accounts, and the other assets of the debtor for the recovery of the amount. The court may also order the arrest and the detention of the debtor in the civil prison, where the debtor has the means to pay but refuses to do so. Where the award or the settlement is a foreign award, the enforcement is governed by the New York Convention and the Geneva Convention, as incorporated into the Act, and the foreign award is enforceable in India as a decree. An advocate in Asansol assists in the enforcement of the awards and the settlements, prepares the execution application, marshals the evidence of the assets, and pursues the execution, ensuring that the outcome of the ADR is actually realised by the client.

A lawyer in Asansol plays a central role in the ADR, advising on the suitability, the choice, and the procedure, and representing the party through the process. The lawyer begins by examining the dispute, the relationship between the parties, the urgency, and the desired outcome, and advises on whether the ADR is suitable and, if so, which method — the mediation, the arbitration, the conciliation, or the Lok Adalat — is the most appropriate. The lawyer also advises on the legal framework, the enforceability of the outcome, and the costs and the timeline.

Where the arbitration is chosen, the lawyer drafts the arbitration agreement or the clause, advises on the choice of the arbitrator and the institution, and represents the party through the proceedings. The lawyer drafts the statement of the claim and the defence, presents the evidence and the arguments, examines the witnesses, and makes the submissions to the arbitrator. Where the award is passed, the lawyer advises on the enforcement, and, where the award is adverse, on the challenge under Section 34 of the Act. Where the mediation or the conciliation is chosen, the lawyer prepares the case, identifies the interests and the options, represents the party through the sessions, and drafts the settlement agreement, ensuring that it is legally valid and enforceable.

Where the Lok Adalat is chosen, the lawyer prepares the matter, represents the party before the Lok Adalat, and ensures that the settlement is fair and that the award is properly recorded. The lawyer also handles the enforcement of the awards and the settlements, by the execution proceedings before the civil court, and, where the ADR fails, advises on the resumption of the litigation or the alternative remedy. By combining the knowledge of the ADR law, the skills of the negotiation and the representation, and the procedural expertise, the lawyer in Asansol ensures that the dispute is resolved in the most efficient and the effective manner, and that the outcome is legally valid, fair, and enforceable.