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ADR mechanism in ipr conflicts - an emerging trend abstract-

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ADR mechanism in ipr conflicts - an emerging trend abstract-

  1. 1. 1 AN EMERGING TREND - ADR MECHANISM IN IPR CONFLICTS ” to be submitted to MEWAR UNIVERSITY, NH-76, GANGRAR, CHITTORGARH, RAJASTHAN) INDIA in partial fulfillment of the requirements for the degree of LL.M. (Master of Laws) Compiled by: Sanjeev Kumar Chaswal LL.M 2nd year, Roll No. Enrollement No…………………
  2. 2. 2 Declaration I, Sanjeev Kumar Chaswal a student of LL.M final year of Mewar University of with roll no ………………….. and enrollment no. ………………………… do hereby declare that this dissertation paper is an original work of mine and is result of my own intellectual efforts. I have quoted titles of all original sources i.e. original documents as this is a LLM resrach research and name of the authors whose work has helped me in writing this research paper have been placed at appropriate places and I have not infringed copy rights of any other author. Date ------------- ( ………………………… ) Place -
  3. 3. 3 CERTIFICATE This is to certify that the dissertation entitled “ADR MECHANISM IN IPR CONFLICTS - AN EMERGING TREND” which is being submitted by Mr. Sanjeev Kumar Chaswal for the award of the degree of Master of Laws is independent and original research work carried out by him. The dissertation is worthy of consideration for the award of LL.M. Degree of MEWAR UNIVERSITY, NH-76, GANGRAR, CHITTORGARH, RAJASTHAN INDIA. Mr. Sanjeev Kumar Chaswal has worked under my guidance and supervision to fulfill all requirements for the submission of this dissertation. The conduct of research scholar remained excellent during the period of research. Signature
  4. 4. 4 ACKNOWLEDGEMENT I feel proud to acknowledge the able guidance of our esteemed.. I acknowledge with pleasure unparallel infrastructural support that I have received from Law Department, Mewar University. In fact this work is the outcome of outstanding support that I have received from the faculty members of the college, in particular Vice Principle Mr. Karun kaushik who has guided me to finish my research. I find this opportunity to thank the library staff of the Law Department, Mewar University. This research work bears testimony to the active encouragement and guidance of a host of friends and well- wishers. In particular mention must be made of Hon’ble Mr. Bharat Bhushan It would never have been possible to complete this study without an untiring support from my family. I am greatly indebted to the various writers, jurists and all others from whose writings and work I have taken help to complete this dissertation “ADR MECHANISM IN IPR CONFLICTS - AN EMERGING TREND” Date…………. …………………………………. Place: (Sanjeev Kumar Chaswal)
  5. 5. 5 PREFACE Thus, like any other emerging field of law, IP conflict resolution also has a plenty of debatable issues before it. In this research paper, It will be my endeavor to delve deep into these issues like ADR: arbitration and mediation can be real alternative to IP disputes litigation, and further IP right disputes like any other commercial disputes can be brought under ADR procedure and alternative dispute resolution procedures can play effective role in resolving IP conflicts. The subject research work has been divided in six major chapters and further divided into various sub topics and sub to sub topics. The first topic which is named as Introduction and this dissertation further consists of eight chapters. The first and second chapter of this work attempts to defined Alternative Dispute Resolution and history of ADR- in Indian perspective. The third chapter and Four Chapter deals with overview of ADR mechanisms and after independence The fifths and Sixth chapter of this research work is an endeavour to put more stress on Intellectual Property Enforcement and scope of ADR in IPR disputes Chapter seventh and eighth Chapter deals in respect to IP disputes for ADR mechanisms attempts to international disputes. The Ninth chapter of this dissertation gives final view on The WIPO Arbitration and Mediation Center and lastly conclusion of the research work and certain valuable suggestions to manage disputes under ADR mechanism. Date…………. …………………………………. Place: (Sanjeev Kumar Chaswal)
  6. 6. 6 ABBREVIATIONS AIR All India Reports AGICOA Association of International Collective Management of Audiovisual Works ADR alternative dispute Resolution Cr LJ Criminal Law Journal C.P.C Civil Procedure Code CILAS Committee for Implementing Legal Aid Schemes GATT General Agreement on Tariffs and Trade ICA International Centre for Arbitration ICADR International Centre for Alternative Dispute Resolution. ICANN Internet Corporation for Assigned Names And Numbers IPR Intellectual Property Rights LL.M. Master of Laws NALSA National Legal Services Authority PWC Price Water house Coopers SCC Supreme Court Cases TRIPS Trade Related Aspects of Intellectual Property Rights UNCITRAL The United Nation Commission on International trade laws UDRP Uniform Domain Name Dispute Resolution Policy and Rules Vs. Versus WLR Weekly Law Reports WIPO The World Intellectual Propoerty Organistion WIPO Arbitration and Mediation Center:
  7. 7. 7 TABLE OF CONTENTS Chapter Page no. Declaration i Certificate ii Acknowledgement iii Preface iv Abbreviations v THE ABSTRACT 1 - 3 CHAPTER – 1. INTRODUCTION 4 - 8 1.1. What is Alternative Dispute Resolution 4 CHAPTER – 2 HISTORY OF ADR- IN INDIAN PERSPECTIVE 9 - 15 2.1 Prevalance of justice in ancient india 9 - 13 2.2 The system of ADR under British Company Raj 13-15 CHAPTER – 3 OVERVIEW OF ADR MECHANISMS 16 - 36 3.1. What is ADR Mechanism 16-17 3.2. ADR Mechanisms and IP Disputes. 17-20 3.2.1. Arbitration 20-21 3.2.2. Mediation 21-22 3.2.3. Conciliation 22 3.2.4. Negotiation 23 3.2.5. Mini-trial 23- 24 3.3. Early Neutral Evaluation (ENE) 24- 27 3.3.1. What an ENE Covers 27- 28 3.3.2. The Timing and Scope of an ENE 28 -29 3.3.3. The Distinctive Benefits of an ENE 29- 30 3.4. Lok Adalat 30- 32 3.5. How to make ADR system more viable 32- 33 3.6. How to make Arbitration Mechanism truly effective: 33- 36 CHAPTER – 4 ADR SYSTEM AFTER INDEPENDENCE 37 - 71 4.1. The Emergence of ADR system in independent India 42- 46 4.2. Court approach towards ADR mechanism 46- 55 4.3. Legislative efforts in India 55- 57
  8. 8. 8 4.4. Court approach towards legal reform 57- 60 4.5. Need and the purpose of ADR in india 60 -63 4.6. Implementation of ADR in India 63 -71 CHAPTER – 5 OVERVIEW OF IPR AND LITIGATION IN INDIA 72 – 90 5.0. Introduction 72- 74 5.1. Intellectual Property Enforcement 75 -76 CHAPTER – 6 SCOPE OF ADR IN IPR DISPUTES 77 -110 6.1. Mechanism in the intellectual Property regime 77 6.1.1. Commercial Copyright and Software Disputes 77-78 6.1.2. Commercial Patent Disputes 79 -80 6.1.3. Commercial Trade mark and Trade Dress Disputes. 80- 82 6.1.4. Commercial Trade Secret and Unfair Competition Disputes 82-83 6.1.5. Commercial Intellectual Property Licensing Disputes 83-85 6.1.6. A copyright infringement 85 6.1.7. Economic rights 85-86 6.1.8. Moral rights 86 6.1.9. Copyright dispute resolution 87 6.1.10. Copyright litigation 87-88 6.1.11. The current approach: patent litigation 88-90 6.1.12. Domain Name 90-94 6.1.13. International Intellectual Property Disputes 94 6.1.14. Fundamental Problems of International IP Disputes 94-95 CHAPTER – 7 IP DISPUTES FOR ADR MECHANISMS 96 - 118 7.0. The IPR disputes and ADR: 96-101 7.1. Reasons to Consider ADR for IPR Disputes 101-102 7. Certainty as to Forum. 102 7.3. The Relative Speed of ADR. 103 7.4. Arbitration and mediation of IP disputes as alternatives to litigation. 103 -104 7.5. Initial considerations in selecting Litigation Alternatives: 104-106 7.6. What form of ADR should be pursued 106-107 7.7. The advantages of ADR have been recognized 107-108 7.8. Mediation and Arbitration are different forms of ADR 108 7.9. Other approaches to ADR 108-109 7.10. The value of IPR disputes in ADR mechanisms 109-110 7.10.1. Professional 110-111 7.10.2 Low cost 111-112 7.10.5. Flexibility 112-113
  9. 9. 9 7.11. Confidentiality 113-114 7.12. To maintain beneficial relationships 114-115 7.13. The adequacy of the results 115-116 7.10.6 The specific modalities of intellectual property disputes ADR 117 7.10.7. The specific modalities of IPR comparison of ADR 117 7.10.8. That size and importance of the dispute 117-118 CHAPTER 8 INTERNATIONAL DISPUTES 119-125 8.1. Dispute Scenarios 121 8.2. Research collaboration: ownership dispute 121-122 8.3. Patenting of research outputs from genetic material 122 8.4. Claims based on traditional rights 122-123 8.5. Agricultural products and patents 123 8.6. Rat v. elephant 124 8.7. The Arbitration Option 124 8.8. Arbitration procedure 124- 125 CHAPTER 9 THE WIPO ARBITRATION AND MEDIATION CENTER 126-134 9.1. History of WIPO 126 9.2. Strategic Direction and Activities 126-127 9.3. WIPO Arbitration and Mediation Center (WIPO Center). 127-128 9.4. Tailored ADR services 128-129 9.5. Services of the wipo arbitration and mediation center 129-130 9.6. Trends in WIPO mediation and arbitration 130-131 9.7. A wipo expedited arbitration relating to a banking 131-132 software dispute 9.8. Settlement trends 132-134 10. CONCLUSION 135-136 11. Table of Cases 137 12. Bibliography 138 13. Appendixes 139
  10. 10. 10 TABLE OF CASES Sitanna Vs Viranna, the Privy Council Rajasthan State Road Transport Corporation v. Krishna Kant , 54 The Privy Council Sitanna v. Viranna, AIR 1934 SC 105, 58 Sundaram Finance Ltd. v. NEPC India Ltd. (reported in AIR 1999 SC 565) Salem Advocate Bar Association v. U.O.I AIR 2003 SC 189, 2002 E.Venkatakrishna Vs Indian Oil Corporation Ltd AIR 1989 Kant 35 In PT Thomas vs. Thomas Job 2005 AIR 3575, 2005(2) In Oil and Natural Gas Commission vs. CCE 104 CTR (SC) Bhasheer vs. Kerala State Housing Board AIR 2005 Ker 64, 2005 In Deco Mica Ltd Vs UOI 2000 (68) ECC 554 Atari Games Corp. v. Nintendo of Am., Inc., 975 F.2d 832, 837 (Fed. Cir. 1992); see also Jessica Litman, Copyright As Myth, 53 U. Pitt. L. Rev. 235 (1991). Atari Games, 975 F.2d at 837-38; See, e.g., Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167, 1169 (7th Cir. 1997); Repp and K & R Music, Inc. v. Webber, 132 F.3d 882, 891 (2d Cir. 1997); Grubb v. KMS Patriots, L.P., 88 F.3d 1, 6 (1st Cir. 1996). Atari Games, 975 F.2d at 844. Shaw v. Lindheim, 919 F.2d 1353, 1361 (9th Cir. 1990). Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1464 (Fed. Cir. 1997). Jay E. Grenig, Alternative Dispute Resolution § 1.2 (2d ed. 1997 & Supp. 1998).
  11. 11. 11 BIBLIOGRAPHY 125-140 Books John R. Kahn, Negotiation, Mediation and Arbitration in the Computer Program Industry: Why play hardball with software, pt. III.B (1989).128 Resolving Intellectual Property Disputes Outside of Court: Using ADR to Take Control of Your Case By Alan W. Kowalchyk 128 Reports The Indian Judicial System A Historical Survey By Mr. Justice S. S. Dhavan High Court, Allahabad 98 News Week, Dec. 19. 1959, Challenge of Communism 55 Articles, Papers and Transcripts The justice dispensation system in India1 ICADR88 58 Mr. H. D. Shourie, Founder Director of COMMON CAUSE, continued his exertions to this end till his last breath. In his letter to Mr. Justice S. M. Raza, Lokayukta, Uttaranchal, dated June 22, 2005, 58 News papers Supreme Court chides itself, govt for judicial backlog Dhananjay Mahapatra, TNN Jan 12, 2012, 05.57AM
  12. 12. 12 APPENDIXES The regulation of 1781 22 Regulation of Act 1787 22 Regulation of Act 1793 23 The Madras Presidency Regulation VII of 1816 23 Bombay Presidency Regulation VII of 1827 23 Under the Charter Act of 1833 23 Act IX of 1840. 23 The Act VIII of 1857 24 The Act XIV of 1882 24 The Indian Arbitration Act IX of 1899: 25, 53, Information Technology Act, 2000 27 Arbitration and Conciliation Act, 1996 15,16,46 The Arbitration Act of 1940 61, 63 Industrial Disputes Act, 1947 53, Section 23(2) of the Hindu Marriage Act, 1955 53 The Family Court Act, 1984 54 The Legal Services Authority Act,1987 The Code of Civil Procedure, 1908 47 The Geneva Protocol on Arbitration Clauses, 1923, 75 The Geneva Convention on the Execution of Foreign Award, 1927 75 Legal Services Authorities (Amendment) Act, 2002
  13. 13. 13 ABSTRACT India is country habitants having many religion and cultures, since centuries habitants of India has evolved with several forms of dispute resolution mechanisms and over period of time, they have customized, varied according to needs. Even though Britisher’s rulers had left Indian shores almost half a century ago, still several of these laws exist till date without any major changes. Wide Internet usage has rendered boundaries of the states meaningless. The people across the globe have realized its potentiality as an effective tool for communication, dissemination of information and e-commerce and enjoying to unrestricted access to multifarious interactions, transactions inevitably thereby raising many new issues in the nature of e-disputes to virtual sale / purchase of products through e-auctions or otherwise, domain disputes, trademark infringement, patents, software infringement, copyright, defamatory writings, fraud, privacy, etc In this scenario the Intellectual Property Rights are becoming fundamentally exigent to get in to research collaborations and thereby making Intellectual property rights tool as valuable business assets for technological entities. The people across world over frequently involve in cross-border transactions having different backgrounds and different national laws or within different states of India. Some time disputable transactions create multi-jurisdictional disputes between the nationalities of different countries having different social backgrounds, mindsets. Usually those business
  14. 14. 14 entities having familiarity with alternative dispute resolution (ADR) are able to resolve such conflicts efficiently. As the determination of commercial or non commercial disputes before different national courts can result in to high legal and other costs as well as conflicting awards. Therefore, the ADR has a potential to provide business entities belonging to distinct nationalities a single unified forum of arbitration thereby having a final and enforceable award binding across multiple jurisdictions. Hence, increasingly, IP owners and users are approaching to many of known alternative dispute resolution (ADR) procedures like arbitration and mediation to resolve their IP disputes In this scenario the World Intellectual Property Organization (WIPO) has been playing pivotal role since its inception in strengthening ADR procedures for IP conflicts and forefront in resolving IP conflicts through their specialized ADR procedures. The Intellectual Property conflicts are not that conflicts which cannot be adjudicated or resolved through ADR. As Intellectual Property conflicts being a specialised in its nature and it require specialised services of ADR experts in resolving IP conflicts, mainly due to non availability of IP experts in India is the main obstacle in resolving IP conflict through arbitration or through ADR. Thus, like any other emerging field of law, IP conflict resolution also has a plenty of debatable issues before it. In this research paper, It will be my endeavor to delve deep into these issues like amongst mainly i) Whether ADR: arbitration and mediation can be real alternative to IP disputes litigation, ii) whether IP right disputes like
  15. 15. 15 any other commercial disputes can be brought under ADR procedure or not If so, to what extent?. Iii) When is ADR to be preferred, when is it to be avoided; and, if ADR is preferred, what form of ADR should be pursued? iv) Whether, an alternative dispute resolution procedure can play effective role in resolving IP conflicts if so to what extent? v) Whether the parties to IP conflicts can reap overall benefits by invoking ADR procedures in comparison to traditional litigation, if so, to what extent? vi) Whether the use of a private consensual mechanism like arbitration or mediation procedures pose any threat to the resolution of such specialised disputes, if so, to what extent?
  16. 16. 16 CHAPTER – 1 INTRODUCTION A large part of my time during the twenty 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 - MAHATMA GANDHI It is an attorney’s responsibility to “persuade his neighbors to compromise whenever he can. Point out to them how the nominal winner is often, a real loser -- in fees, expenses and waste of time.” - ABRAHAM LINCOLN 1.1 What is Alternative Dispute Resolution: Every society, every community, every culture has some or the other form/s of resolving the disputes faced by their constituents. Often, the longer and more prosperous the lineage, the more refined and varied the mechanisms. India is a country of many cultures and hence several dispute resolution mechanisms had evolved and been customized over time. One of the several benefits of the British rule over India was that we got some very robust laws. Several of these exist till date (after over 60 years of Independence) without any major amendments. However, the flip side was that at the altar of ‘Uniformity’ were sacrificed all the then existing dispute resolution mechanisms, which were by and large enabling satisfactory outcomes. What was worse was that the system
  17. 17. 17 that replaced them soon started showing its colors - the formal procedures of the Courts of Law not only took their own time but also provided umpteen loop-holes to the ingenious lawyers to stretch that time even further if that suited their clients’ interests. This had a telling effect on the backlogs in court registries across the nation. To give an extreme example, the Bombay High Court is currently taking up Final Hearing of Plaints filed in the ‘80s and 90’s. An Appeal from an Order/Judgment in these cases will take roughly another 5 to 7 years from date of filing and a further Appeal to the Supreme Court could take an additional 2 years. Arbitration too has seen its name sullied thanks to the Ad Hoc version adopted by the lawyers drafting their clients’ contracts. With no institution to keep a check on their schedule, the Arbitrators become masters unto themselves. Arbitral hearings, when held, are often as prolix as the court hearings and one can’t blame the Arbitrators for that, as they are usually retired judges and that’s the only way they know how to conduct hearings. By and large, in the initial period, the scheduled hearings are held only to give fresh dates of hearings on some or the other ground ranging from non-completion of records to the ill-health of someone connected to the proceedings or related to that someone – and this continues till the parties’ patience is found to be wearing thin. Thereafter, substantive work is done at the arbitral hearings, but they go on for only half a day i.e. 2 to 3 hours, with considerable time going in recaps and agenda
  18. 18. 18 settings for future hearings. There are of course exceptions to this trend; especially amongst arbitrators who are either newly retired judges, practicing lawyers or those coming from a non- legal back-ground. The parties and their lawyers, due to fear of antagonizing their Arbitrators, refrain from attempting to rein them in. Some lawyers see this as a ‘win-win’ situation between themselves and the Arbitrators as they get to charge for the whole day (plus for the earlier days’ preparation) for the hour or so of arbitral hearing on a given day. And if the hearing is at an out- of-town location, it’s a paid holiday. Going further down the line, when an Award is published, one must expect it to be challenged in Court and it could take years for it to pass through that channel. Introduction of the new Arbitration and Conciliation Act, 1996 has not helped much as the Supreme Court has rolled back the benefit of limited grounds of Appeal by suggesting a broader interpretation of the term ‘Public Policy’, which is one of the few grounds on which an Award can be sought to be challenged under this new Act. Alternative dispute resolution has greatly expanded over the last several years to include many areas in addition to the traditional commercial dispute in the form of arbitration; mediation has become an important first step in the dispute resolution process. Arbitrators and mediators have an important role in resolving disputes. Mediators act as neutrals
  19. 19. 19 to reconcile the parties’ differences before proceeding to arbitration or litigation. Arbitrators act as neutral third parties to hear the evidence and decide the case. Arbitration can be binding or non-binding. What is ADR? In simple terms it is Alternate Dispute Resolution the conventional Courts use formal system of redressal applying various rules of law, as we have erstwhile mentioned that our system is adversial. The concept of Conflict Management through Alternative Dispute Resolution (ADR) has introduced a new mechanism of dispute resolution that is non adversarial. A dispute is basically ‘lis inter parties’ and the justice dispensation system in India has found an alternative to Adversarial litigation in the form of ADR Mechanism in which two parties contest their case and one party wins and the other party looses, but in case of alternate dispute resolution (Section 89 – Code of Civil Procedure), which can be categorized in four broad heads which are- 1. Arbitration; 2. Mediation; 3. Conciliation; 4. Lok Adalat. It is win – win situation and no party wins no party looses, today the need of time is that we resort to non conventional systems as well, we should not forget that its not something new to us, we had for ages, like panchayats etc, it was self sufficient, every village has panchayat and it was a powerful authority for redressing the disputes. The best part of ADR is that since both parties come face to face and they work out
  20. 20. 20 the modalities and reach to an amicable solution, there is no likelihood of winning or losing the case, i.e. it’s a win – win situation and thereafter no appeal, and thus it reduces the burden of appellant courts as well, the arbitration and conciliation Act, 1996 provides for Arbitration and the award given by the arbitrator is deemed to be a decree. It was step towards the ADR. The purpose of this special provision seems to help the litigant to settle his dispute outside the Court instead of going through elaborate process in the court trial. This is a special procedure for settling the dispute outside the courts by a simpler and quicker method. The litigants on the institution of the suit or proceedings may request the Court to refer the disputes and if the court feels that there exist any element of settlement which may be acceptable to the parties; it may refer them to any of the forums abovementioned at any stage of the proceedings. In fact new rules in Order X were inserted in consequence to the insertion of the sub section (1) of section 89. These new rules namely 1A, 1B and 1C have been inserted by the Amending Act. The settlement can be made by adopting any of the modes specified in the section 89 of the CPC inserted by the Amendment Act. As per the Rule 1A the parties to the suit are given an option for settlement of the dispute outside court. When the parties have exercised their option it shall fix the date of appearance before such person as may be opted by the parties. As per the Rule 1-B the parties are required to
  21. 21. 21 appear before such forum opted by them. Rule 1c provides for the Presiding Officer of the Forum to refer the matter again to the Court in case he feels that in the interest of justice he should not proceed with the matter.
  22. 22. 22 CHAPTER – 2 HISTORY OF ADR - IN INDIAN PERSPECTIVE 2.1 Prevalence of justice in ancient India: Though the term of ‘ADR’ Alternate Dispute Resolution system is basically originated and derived from developed countries and is a recent phenomena but has gained impetus in its workability, solely in the recent years that to specifically said to be the resultant of globalisation and liberalisation, though oldest form of the ADR was very much present and well organized in the Ancient Indian Legal System more particularly the Hindu society. The conflict / disputes as well as its settlement have been going around for many thousands of years rather since the evolution of humans being on earth adding its new workability solution in accordance to development of the society. The techniques of negotiation best option in resolving the conflict / disputes and the negotiation have been a basic technique being around for many centuries. It is a fact of life whether the dispute / conflict between individuals or in entities is right or wrong but it is most important and relevant how we are able to manage or handle it with in parameters of aspirations of both litigant parties. India is known for having one of the oldest legal systems in the world and the present modern legal system prevalent in India can be traced back to the centuries, the roots of the present day human institutions lie deeply buried in its past as Indus civilization flourished around 2500 BC known as
  23. 23. 23 Harappan culture in the Indus river valley in Indian sub continent and remained in existence for 1000 years. Another thousands of years, India’s social and religious society structures withstood and countered many invasions, famines, religious persecutions and many other political upheavals, despite of tyranny of many invasions of other countries our ancient society have able to maintained respective regional identities with such a long, vibrant history. The definition of law in ancient India was meant in broader term “Dharma”. The ancient society regarded vedas as source of divine light and was the ultimate source of authority for all codes, which contained dharma as law, the law and Justice was administered according to the rules provided in the Manusmriti. Its law and jurisprudence stretches back to many centuries, forming a living tradition, which has grown and evolved with the lives of its diverse people, in the later years, the Justice was use to be administered by Kings courts and also through grass root system called Panchayats and which is still continuing, prevalent even today in our villages, where village elders of the village or community sit together and resolve disputes involving of villagers and issue diktats on many social issues to their community. However, as far as the legal system in ancient India is concerned, a liberal outlook is evident in the Indian Puranas and Manu Smiriti.
  24. 24. 24 1 According to Brihaspati Smiriti, there was a hierarchy of courts in Ancient India beginning with the family Courts and ending with the King. The lowest was the family arbitrator. The next higher court was that of the judge; the next of the Chief Justice who was called Praadivivaka, or adhyaksha; and at the top was the King’s court. The jurisdiction of each was determined by the importance of the dispute, the minor disputes being decided by the lowest court and the most important by the king. The decision of each higher Court superseded that of the court below. According to Vachaspati Misra, "The binding effect of the decisions of these tribunals, ending with that of the king, is in the ascending order, and each following decision shall prevail against the preceding one because of the higher degree of learning and knowledge". It is noteworthy that the Indian judiciary today also consists of a hierarchy of courts organized on a similar principle-the village courts, the Munsif, the Civil Judge, the District Judge, the High Court, and finally the Supreme Court which takes the place of the King’s Court. We are following an ancient tradition without being conscious of it. The institution of family judges is noteworthy. The unit of society was the joint family which might consist of four generations. Consequently, the number of the member of a joint family at any given time could be very large and it was necessary to settle their disputes with firmness combined with sympathy and tact. It was also desirable that disputes should 1 The Indian Judicial System A Historical Survey By Mr. Justice S. S. Dhavan High Court, Allahabad 98 News Week, Dec. 19. 1959, Challenge of Communism
  25. 25. 25 be decided in the first instance by an arbitrator within the family. Modern Japan has a somewhat similar system of family Courts. The significance of the family courts is that the judicial system had its roots in the social system which explains its success. The ancient concept of settlement of dispute through mediation, negotiation or through arbitral process known as "Peoples' Court verdict" or decision of "Nyaya-Panch" philosophy is conceptualized and institutionalized in the present form of Lok Adalat. Some people equate Lok Adalat to conciliation or mediation; some treat it with negotiations and arbitration. Those who find it different from all these, call it "Peoples' Court". It involves people who are directly or indirectly affected by dispute resolution. In ancient times the village elders, other influential individuals used to sit together and use to hold panchayat calling interested or disputing parties of that particular village to come in to conclusion of settling their disputes or with the help of village elders, other influential individuals, hence it is ADR in its early form was very much prevalent, well-known tool to settle disputes to ancient Indian societies. In Ancient India the disputes were peacefully decided by the intervention of Kulas (family assemblies), Srenis (guild so men of similar occupation), Parishad, etc., the primary object of ADR movement is avoidance of vexation, expense and delay and promotion of the ideal of “access of justice” for all.
  26. 26. 26 That particularly during the British rule, actual formation of certain rules for arbitration were incorporated and brought in the form of the Regulation of Act 1787, empowering the court to refer suits to arbitration with the consent of parties and further more the Regulation Act of 1793 authorised the court to promote references of cases not exceeding Rs. 200 in value to arbitration and disputes relating to partnership account, debts, disputed bargain and breach of contract. The procedure for conducting the arbitration proceedings was also stipulated. So the law and jurisprudence represents the cumulative effect of generations. It cannot be said that Arbitration as a concept or Alternate Dispute Resolution is a foreign import on the Indian legal system. 2.2 The system of ADR under British Company Raj The system of Alternate dispute redressal was found not only as a convenient procedure but was also seen as a politically safe and significant in the days of British Company Raj. Hence, there were several regulations and legislations that were brought by British Company in resulting considerable changes from 1772. Few among them are: The regulation of 1781: the year 1781 regulation had contained a provision that “the judge do recommend, and so far as he can without compulsion, prevail upon the parties to submit to the arbitration of one person to be mutually agreed upon by the parties.” And that “no award of any arbitrator of arbitrators, can be set aside, except upon full proof made by oath of the credible witness that arbitrators have been guilty of
  27. 27. 27 gross corruption or partiality to the cause in which they had made their awards.” The Regulation of 1787: It empowered the court to refer suits to arbitration with the consent of parties. The Regulation of 1793 : It authorised the court to promote references of cases not exceeding Rs. 200 in value to arbitration and disputes relating to partnership account, debts, disputed bargain and breach of contract. The procedure for conducting the arbitration proceedings was also stipulated. In the year 1795: the regulation of 1793 was extended to Benaras and the regulation of 1802, 1814, 1822 and 1883 extended the limits and jurisdiction of arbitration proceedings in various manner. The Madras Presidency Regulation VII of 1816 : It authorised the Districts Munsiffs to convene districts panchayats for the determination of Civil Suits relating to real and personal property. The Regulation was repealed by Act VII of 1870. Bombay Presidency Regulation VII of 1827: It provided for arbitration of civil disputes. The arbitration had to be in writing to a named arbitrator, wherein the time for making the award had to be mentioned. Under the Charter Act of 1833: The Legislative Council for India was established in 1834. Act IX of 1840. But the aforesaid Regulations of Bengal, Madras and Bombay continued to operate till 1859. The Act VIII of 1857: It codified the procedure of Civil Courts except those established by the Royal Charter. The sections
  28. 28. 28 312 to 325 dealt with arbitration in suits. The sections 326 and 327 provided for arbitration without the intervention of the court. The Act VIII of 1857 was replaced by Act X of 1877. The Act XIV of 1882: the Code of Civil Procedure was revised in the year 1882 by the Act XIV of 1882 the provisions relating to arbitration were reproduced verbatim in sections 506 to 526. No change in the law of arbitration was effected by the said acts of 1877 and 1882. The Indian Arbitration Act IX of 1899: It was based on the English Arbitration Act of 1889. Act IX of 1899. It was the first substantive law on the subject of arbitration but its application was limited to the Presidency – towns of Calcutta, Bombay and Madras. Act, however suffered from many defects and was subjected to severe judicial criticisms.
  29. 29. 29 CHAPTER – 3 OVERVIEW OF ADR MECHANISMS 3.1. What is ADR Mechanism A dispute is basically ‘lis inter parties’ and the justice dispensation system in India has found an alternative to Adversarial litigation in the form of ADR Mechanism in which two parties contest their case and one party wins and the other party looses, but in case of alternate dispute resolution (Section 89 – Code of Civil Procedure), which can be categorized in four broad heads which are 1. Arbitration; 2. Mediation; 3. Conciliation; 4. Negotiation 5. Lok Adalat. 6. Early Neutral Evaluation (ENE) That through ADR means the entering party is win – win situation and no party wins no party looses, today the need of time is that we resort to non conventional systems as well, we should not forget that its not something new to us, we had for ages, like panchayats etc, it was self sufficient, every village has panchayat and it was a powerful authority for redressing the disputes. The best part of ADR is that since both parties come face to face and they work out the modalities and reach to an amicable solution, there is no likelihood of winning or losing the case, i.e. it’s a win – win situation and thereafter no appeal, and thus it reduces the burden of appellant courts as well, the arbitration and conciliation Act, 1996 provides for
  30. 30. 30 Arbitration and the award given by the arbitrator is deemed to be a decree. It was step towards the ADR. The labor legislation has already incorporated conciliation and mediation system in their enactments, to have an amicable solution in case of tussle between the labor and the management. 3.2. ADR Mechanisms and IP Disputes. As part of the process of specialization, since it is difficult to get judges experienced in Intellectual Property (IP) rights or matters relating thereto, arbitration has to be a preferred course for dispute resolution because the parties can choose an arbitrator knowledgeable and experienced in the field. However, development in this direction is at an early stage, which does not provide adequate data for any realistic assessment of arbitration in intellectual property related matters. It must be borne in mind that several intellectual property related matters arise between parties who do not have an agreement inter se. In all such matters, only Courts can push the matters to Arbitration. Management of integrated securitization of IP assets on ADR /ODR While on the subject of use of information & technology in arbitration and other ADR methods, it would be worthwhile to note that arbitration and ADR can play a meaningful role in several new avenues, including integrated securitization of all types of assets (including but not restricted to intellectual property assets) and the management of such integrated securitization. However, this being a specialized subject, it
  31. 31. 31 could be well dealt with independently.ADR in the new millennium –Indian Context The most effective initiatives for implementing ADR have probably been found to be in the State of California, USA. There, several modes of ADR have been implemented, some of which are nonbinding and some being of binding nature, judicial arbitration, private arbitration, settlement conference (before the Judge assigned to the case), early neutral evaluation, mediation and conciliation. Though some of these concepts are today alien in the Indian context, one will very soon find several of them being implemented in varying forms and degrees in the courts in India. Those who have implemented them in several other countries have already realized the benefits of these available alternatives and India too shall realize their potentials and benefit from making these available to the litigating masses. Along with popularization of ADR, which has gained statutory recognition by the introduction of the new Section 89 of the CPC and the introduction of the new Information Technology Act, 2000,the passage for implementation of ODR too has been smoothened. The latter statute extends recognition to generation and storage of electronic data as also gives recognition to electronic communication. This is a real shot in the arm for implementation of ODR. In the days of “time being money”, even in games like cricket, we have drifted towards one day, limited overs matches instead of the five days, two inning matches. India’s business community is becoming more and
  32. 32. 32 more conscious of minimizing use of time, money and energy in dispute resolution processes and therefore, while arbitration is being preferred to court litigation, there is also a growing realization that in the long run it is advisable to perhaps suffer an adverse award rather than render the entire system of arbitration and ADR un remunerative. Law Colleges and several other Institutions have, recognizing the importance of arbitration and other ADR methods, introduced courses and training programmes and one can clearly see the writing on the wall that in the near future in India ADR methods will bring about amicable settlement between the disputants thereby saving a lot of time, money and energy for the business community as also for the professionals from legal, accounting and other disciplines so that they can concentrate more on constructive work. In this background, conciliation and mediation has a very bright prospect in India and it will be advisable for all professionals, including members of professions like law and accountancy, to get formal training as conciliators/mediators. firstly, necessary to re-position the provisions contained in Order X, Rules 1A, 1B and 1C in a manner that the courts are empowered to refer the matters to mediation as soon as the same are filed; Another aspect that requires attention is that although the ADR provisions have been introduced in Section 89 of CPC, one finds practical difficulty in implementing these provisions. One should understanding to keep in mind the dynamics of potent modes of ADR like mediation and conciliation. Although there is subtle difference between the
  33. 33. 33 two, there is no difference in the process undertaken/deployed for implementation. There is a growing awareness among the masses as well regarding ADR and people are increasingly using the same for getting their disputes settled outside the court. This will also reduce the “backlog problem’ that India is facing. It is now universally accredited that ‘Justice delayed is Justice denied’. The existing justice system is not able to cope up with the ever-increasing burden of civil and criminal litigation. There is growing awareness that in the majority of cases court action is not an appropriate remedy for seeking justice. We have to formulate effective ADR Mechanisms to ease the burden of judicial functioning. The backlog of cases is incre8asing day by day but criticizing judiciary for the same is a wrong practice. It must be noted that the backlog is a product of “inadequate judge population ratio” and the lack of basic infrastructure. The government has to play a pro-active role in this direction. 3.2.1. Arbitration: This is a procedure in which the dispute is submitted to an arbitral tribunal which makes a decision (an award) on the dispute that is binding upon the parties. Arbitration generally grows when the parties through the contract agrees to resort to arbitration process, in case of disputes that may arise in future regarding contract terms and conditions. The process of arbitration can start only if there exist a valid Arbitration Agreement between the parties prior to the emergence of the dispute. As per Section 7, such an agreement must be in
  34. 34. 34 writing. The contract, regarding which the dispute exists, must either contain an arbitration clause or must refer to a separate document signed by the parties containing the arbitration agreement. The existence of an arbitration agreement can also be inferred by written correspondence such as letters, telex, or telegrams which provide a record of the agreement. Any party to the dispute can start the process of appointing arbitrator and if the other party does not cooperate, the party can approach the office of Chief Justice for appointment of an arbitrator. A sole arbitrator or panels of arbitrators so appointed constitute the Arbitration Tribunal. The arbitration tribunal has jurisdiction over its own jurisdiction. Thus, if a party wants to challenge the jurisdiction of the arbitration tribunal, it can do so only before the tribunal itself. If the tribunal rejects the request, there is little the party can do accept to approach a court after the tribunal makes an award. Section 34 provides certain grounds upon which a party can appeal to the principal civil court of original jurisdiction for setting aside the award. Once the period for filing an appeal for setting aside an award is over, or if such an appeal is rejected, the award is binding on the parties and is considered as a decree of the court. 3.2.2. Mediation: Mediation, aims to assist two (or more) disputants in reaching an agreement. The parties themselves determine the conditions of any settlements reached— rather than accepting something imposed by a third party. The disputes may involve (as parties) states, organizations, communities, individuals or
  35. 35. 35 other representatives with a vested interest in the outcome. Mediators use appropriate techniques and/or skills to open and / or improve dialogue between disputants, aiming to help the parties reach an agreement (with concrete effects) on the disputed matter. Normally, all parties must view the mediator as impartial. Disputants may use mediation in a variety of disputes, such as commercial, legal, diplomatic, workplace, community and family matters. A third-party representative may contract and mediate between (say) unions and corporations. When a workers’ union goes on strike, a dispute takes place, and the corporation hires a third party to intervene in attempt to settle a contract or agreement between the union and the corporation. 3.2.3. Conciliation: A non-binding procedure, in which an impartial third party i.e. the conciliator or the mediator, assists the parties to a dispute in reaching a mutually satisfactory and agreed settlement of disputes. Conciliation is a less formal form of arbitration. This process does not require an existence of any prior agreement. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed. Parties may submit statements to the conciliator describing the general nature of the dispute and the points at issue. Each party sends a copy of the statement to the other. The conciliator may request further details, may ask to meet the parties, or communicate with the parties orally or in writing. Parties may even submit suggestions for the settlement of the dispute to the conciliator.
  36. 36. 36 When it appears to the conciliator that elements of settlement exist, he may draw up the terms of settlement and send it to the parties for their acceptance. If both the parties sign the settlement document, it shall be final and binding on both. 3.2.4. Negotiation: Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution. Negotiation occurs in business, non-profit organizations, and government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life. Those who work in negotiation professionally are called negotiators. Professional negotiators are often specialized, such as union negotiators, leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such as diplomats, legislators or brokers. 3.2.5. Mini-trial The mini-trial, a development in ADR, is finding its greatest use in resolving large-scale disputes involving complex questions of mixed law and fact, such as Product Liability, massive construction, and antitrust cases. In a mini-trial, each party presents its case as in a regular trial, but with the notable difference that the case is "tried" by the parties themselves, and the presentations are dramatically abbreviated. In a mini-trial, lawyers and experts present a condensed
  37. 37. 37 version of the case to top management of both parties. Often, a neutral adviser sometimes an expert in the subject area sits with management and conducts the hearing. After these presentations, top management representatives by now more aware of the strengths and weaknesses of each side, try to negotiate a resolution of the problem. If they are unable to do so, they often ask for the neutral adviser's best guess as to the probable outcome of the case. They then resume negotiations. The key to the success of this approach is the presence of both sides' top officials and the exchange of information that takes place during the mini-trial. Too often, pre-litigation work has insulated top management from the true strengths and weaknesses of their cases. Mini-trial presentations allow them to see the dispute as it would appear to an outsider and set the stage for a cooperative settlement. 3.3. EARLY NEUTRAL EVALUATION: An early neutral evaluation (ENE) is used when one or both parties to a dispute seek the advice of an experienced individual, usually an attorney, concerning the strength of their cases. An objective evaluation by a knowledgeable outsider can sometimes move parties away from unrealistic positions, or at least provide them with more insight into their cases' strengths and weaknesses. Of course, the success of this technique depends upon the parties' faith in the fairness and objectivity of the neutral third-party, and their willingness to compromise.
  38. 38. 38 Early neutral evaluation is a process, both in court and out of court, in which an experienced lawyer gives an indication, as strong and as detailed as the disclosure and representation at that stage allows, of what would be the outcome if the matter were to be finally adjudicated in court. Early neutral evaluation in court includes the FDR hearing at which the judge is required by the rules to predict what would happen if the matter were to go to a final hearing. It has its limitations for example because of time. Nevertheless there is a very high success rate. It is acknowledged as one of the primary achievements of the ancillary relief procedure. To a lesser extent, the process at the First Appointment is an early neutral evaluation as the judge is required to consider the points in dispute with a view to narrowing the issues. Early neutral evaluation out of court is much less frequent and prevalent. Indeed, there is almost only apocryphal knowledge of what is going on. In this regard, it is also, perhaps confusingly, described sometimes as private judging. The working party felt that it was now time to encourage early neutral evaluation yet to have better definition, boundaries and safeguards including within the professional context. Moreover the working party found a delightful coincidence of the collaborative law group of the ADR committee independently considering the same issue at the same time. Our recommendations do not conflict with any recommendations they make but it is hoped that the use of
  39. 39. 39 early neutral evaluation can build together, solicitors both as client representatives and as collaborative lawyers. The anecdotal evidence is that over the past 15 years or more, from time to time opposing solicitors in a case have jointly consulted senior members of the profession, often senior barristers but also senior solicitors in other firms, on a complex issue causing a stumbling block towards a settlement. Sometimes this has been the whole of the case, for instance on quantum. Sometimes it has been discreet, perhaps interlocutory, issues or one single issue separating the parties. It is believed that often the opinion has been given in conference but sometimes in writing. It is believed that on occasions it has been given on a privileged basis so that issues do not arise about the status of the evaluation, the weight to be given in the court process and similar. It is not believed that any of these early neutral evaluations or private judgings have come before the courts for consideration of their status. Specifically it is believed that when there was an incredible backlog of work due to the wardships being terminated under the Children Act by a specific date and many financial cases were taken out of the list and relisted for at least six months later, many cases in fact settled including a number through the assistance of early neutral evaluation.Private judging is sometimes used as an informal expression of early neutral evaluation. In some instances, it is identical. However early neutral evaluation is technically evaluation at an early stage in the case. Private judging has often occurred on a joint
  40. 40. 40 instruction to a senior professional towards the later stages of the case and as an alternative to a court adjudication. In this document we are referring to early neutral evaluation although private judging could also be incorporated in our recommendations. 3.3.2. What an ENE Covers Favorable and unfavorable facts Favorable and unfavorable law, as well as important but unsettled legal issues Strengths and weaknesses of each party’s case Likely successful or meritless claims and defenses Considerations of the client’s business needs, and the impact of an outcome on that Possible litigation strategies (such as the feasibility of dispositive motions) Possible end-game strategies, including mediation, settlement, and attendant demands or offers Possible legal costs and expenses, including which costs or initiatives are most worthwhile. It is quite possible that an ENE will show that the dispute is best resolved through full litigation or arbitration. The ENE may then be used as a road map for case strategy. The client can emphasize the most effective claims or defenses, thereby avoiding expenditures of valuable resources on less justified positions. The ENE thus leads to a more sharply focused case one that will have maximum impact on the judge, jury, or arbitrator. To perform the ENE, the neutral could review relevant contracts; review internal and party communications; interview the client’s personnel involved in the transaction; discuss with
  41. 41. 41 management the transaction’s place in the client’s overall business operations and strategies (both long-term and short- term); review applicable legal authority; talk with in-house or outside legal counsel about the dispute; and research or investigate the opponent’s business. The quality of the ENE will be proportional to the value and volume of the information received and analyzed by the neutral. An ENE can be done for virtually any type of case, and especially for commercial disputes. For most contractual and business disputes, a neutral with general but broad decision- making experience is fine. After all, the actual judge will likely be a generalist too. Where the subject matter of the dispute is technical – such as patents – the neutral should have experience in that area. 3.3.2. The Timing and Scope of an ENE An ENE is, by definition, done “early” in the case, before all of the facts are known. But, even then, it is widely believed (by this author too) that the parties already know or can readily access 80 percent of all of the information that exists for the case or will be offered at the hearing. Because the cost to obtain increments of evidence sometimes outweighs the value of those increments, there is good reason to perform an ENE at the outset, even if the information is incomplete. Indeed, judges frequently make very important interim decisions – such as injunctive relief – at the case’s beginning based on less than full information.
  42. 42. 42 “Early” can be even before the complaint or arbitration is filed. Once a party knows of a potential dispute, such as by receipt of a demand letter from the opponent, ENE is fairly triggered. Indeed, it is often best to assess a dispute before the parties are entrenched in pleadings. Also, as a private process, ENE can be done even while the client, with the aid of counsel, engages in pre-litigation or early-litigation posturing with the other side. Nonetheless, if the client prefers, the neutral evaluation can instead be done later, and it can also be done more than once during the case. A neutral reassessment can also be used to prepare submissions for mediation and even pre-trial briefs. ENE therefore can be, but need not be, one and done. The scope and breadth of the ENE can be determined together by the client and neutral. Obviously, a small-budget ENE may be less helpful than a more expansive one. The chosen scope can be based upon the complexity of the dispute, the volume of evidence, and the timing for the project. Given the purpose of ENE – an important guide for making critical risk analyses early in a dispute – clients should be willing to give the neutral wide latitude in order to make the best evaluation. A more truncated ENE can, however, contain a list of unexplored or undeveloped issues or points that the client can later authorize for analysis. 3.2.3 The Distinctive Benefits of an ENE For very important reasons, this “neutral” assessment is qualitatively different from the analysis of the dispute by the
  43. 43. 43 client’s lawyer. First, the neutral has no ongoing representation in that dispute (e.g., continuing fees). Rather, the neutral completes the discrete task quickly without any prospects for long-term work. That absence of any economic conflict ensures complete candor in the analysis. Second, the neutral also will not likely have any ongoing relationship with the client generally, and therefore the neutral is not concerned about rendering “bad news” about the case and possible outcomes. In this way also, candor is ensured. Thus, the neutral is able to provide a totally independent and unbiased evaluation – exactly the approach that should be taken by the actual judge. An ENE can also complement or supplement an independent expert’s financial analysis. Thus, the client can learn even more when the ENE is coupled with a financial consultant’s damage analysis that separately gauges risk. This combined evaluation provides case projections with even more rigor. The ENE adds the factual and legal assessments, too, thereby making the overall analysis much more complete. An ENE can be treated as an attorney/client communication or attorney work product. Thus, the ENE can remain confidential, even though the neutral may not be the client’s counsel in the dispute 3.3.4. Lok-Adalat : The Lok-Adalat system contributed under National Legal Service Authority Act, 1987 is a uniquely Indian approach. The Constitutional duty of the State to provide legal aid, prompted
  44. 44. 44 by the decisions of the apex court, led to the formation of a Committee for Implementing Legal Aid Schemes (CILAS). The legal legitimacy of Lok Adalat flows from the Legal Services Authorities Act, 1987. It roughly means “People’s court”. This is a non-adversarial system, where by mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences. There is no court fee and no rigid procedural requirement (i.e. no need to follow process given by Civil Procedure Code or Evi22dence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts. A case can be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party. The focus in Lok Adalats is on compromise. When no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 because it is a judgment by consent. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The
  45. 45. 45 decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal process. Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat. Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost. 3.4. How to make ADR system more viable We cannot stop the inflow of cases because the doors of justice cannot be closed, but we can increase the outflow of cases either by strengthening (both qualitatively and quantitatively) the capacity of the existing system or by way of finding some additional outlets. In this situation ADR mechanism implementation can be such a drastic step for which three things are required most: • Mandatory reference to ADRs • Case management by Judges • Committed teams of Judges and Lawyers Equal justice for all is a cardinal principle on which entire system of administration of justice is based. We cannot conceive justice which is not fair and equal. We should aim to achieve earlier and more proportionate resolution of legal problems and disputes by increasing advice and assistance to help people resolve their disputes earlier and more effectively; increasing the opportunities for people involved in court cases to settle their disputes out of court; and reducing delays in resolving those disputes that need to be decided by the courts.
  46. 46. 46 To implement the noble ideas and to ensure the benefits of ADR to common people, the four essential players (government, bench, bar litigants) are required to coordinate and work as a whole system. Case management includes identifying the issues in the case; summarily disposing of some issues and deciding in which order other issues to be resolved; fixing time tables for the parties to take particular steps in the case; and limiting disclosure and expert evidence. 3.5. How to make Arbitration Mechanism truly effective: With a very laudable objective of speedy disposal of cases, Alternative Dispute Resolution Mechanism (ADR) is mooted. Among the modes of Alternative Dispute Resolution Mechanism, Arbitration is most discussed issue always as many agreements or contracts contain an Arbitration Clause now-a-days. The difference between Arbitration Mechanism and the adjudication through Civil Court etc. issues can be summed up as follows: There is no need of paying court fee when a dispute is adjudicated by an Arbitrator. Arbitrator is less burdened compared to Civil Court and the parties have the liberty of choosing their own judge. Arbitrator need not follow the procedure prescribed under Civil Procedure Code, 1908 though he will follow the principles of natural justice. The procedure, the fees, the place of Arbitration etc. can be mutually agreed by the Parties and in the absence of any consensus, the Court or the Arbitrator will take a decision on the issues. Despite so much relaxation in the established civil procedure, the adjudication before the Arbitrator or the issue
  47. 47. 47 of getting an Arbitrator appointed is delayed very often. The general issues or challenges to the adjudication through Arbitrator are as follows: Even when there is no real lis between the parties, one party to an agreement containing Arbitration clause, may initiate Arbitration proceedings with untenable claim. The issue is settled to some extent now in view of the recent development that the Court entertaining an application under section 11 of Arbitration and Conciliation Act, 1996 discharges judicial function and can look into the issues as to whether there is any existing agreement prima facie, whether there is any lis between the parties and whether the subject matter is capable of being arbitrated. When there exist a special mechanism dealing with certain issues, the adjudication before the Arbitrator may not appear to be effective. For example, Rent Control Laws provide many reliefs to the tenants and also the landlords. There is a provision for deposit of rent by the tenant when the landlord refuses to receive the rent under the Rent Control Laws. When it comes to depositing rent, the Arbitrator may not be effectively deal with the issue. When there is no specific provision under the Arbitration and Conciliation Act, 1996, litigants who wants to drag the case may file many interim applications. When an interim application is filed, the same can be rejected by the Arbitrator when it is found that the interim application is unnecessary and motivated to drag the case. But, in many cases, the Arbitrator entertains the interim applications and disposes the
  48. 48. 48 same in accordance with law and it consumes time as is the case before the Civil Court. Against the order in the Interim Application, an aggrieved party tends to approach the High Court under section 34 as we see practically. When hearing fees is fixed or agreed to the Arbitrator, then, at times, the Arbitrator may feel it convenient to grant so many adjournments and it is happening as we wee. Even, when a fixed fee is ordered to pay to the Arbitrator or agreed upon, the parties usually not pay the entire fee in the beginning. Till the fee is paid the Arbitration proceedings will go on at times, though the Arbitrator can exercise his right of lien over the award until his agreed remuneration or fee is paid. Looking at the pendency of cases before various courts in India, if we think about the time to be taken for disposing all the pending cases, it is recently reported that it will take some 320 years to dispose of the pending cases or to clear the backlog. Arbitration mechanism is always Alternative, but, still we depend on the Civil Courts and the procedure lay down under the Code of Civil Procedure, 1908 for getting the civil disputes adjudicated. We need many reforms in our judicial system in India to ensure speedy disposal of cases and it will certainly take years to bring the proper reforms. Simultaneous to bringing the proper reforms or initiating measures to bring the reforms in our Indian Judiciary aiming at speedy and effective disposal of cases, we also need to
  49. 49. 49 concentrate as to how make the Arbitration Mechanism truly effective. The measures to make the Arbitration Mechanism truly effective, as I think, are as follows: Rather practicing to appoint retired judges as Arbitrators, it is better to have panel of Arbitrators who are talented and with very good legal knowledge. There is nothing wrong if a practicing legal advocate is appointed as an Arbitrator when he is willing to act as such. When it comes to the fee or the remuneration to be paid to the Arbitrator, it is better to fix lump sum remuneration for deciding an issue and having mechanism that the entire fee is paid to the Arbitrator at once. It is better to avoid the practice of paying sitting fees to the Arbitrators if one needs to make the adjudication through arbitration really speedy. Applications under section 34 of Arbitration and Conciliation Act, 1996 to be carefully gone into and the implications of entertaining an application under section 34 on the main Arbitration claim before the Arbitrator to be carefully considered. Present legal position with regard to appointment of Arbitrators to be continued and the process of appointment of arbitrators to be judicial always. I am of the strong opinion that with few reforms, Arbitration Mechanism can be made truly effective and I don’t think that the mechanism is truly effective as of now for the few among many reasons referred to above.
  50. 50. 50 CHAPTER – 4 ADR- AN INDIAN PERSPECTIVE Alternative Dispute Resolution was conceived of as a dispute resolution mechanism outside the courts of law established by the Sovereign or the State. In this sense, it included arbitration, as also conciliation, mediation and all other forms of dispute resolution outside the courts of law, which would all fall within the ambit of ADR. However, with passage of time, the phrase “Arbitration and ADR” came in vogue, which implied that arbitration was distinct from other ADR forms. In arbitration, there is a final and binding award, whether the parties consent to it or not, but in other forms of ADR (which came to be more commonly associated with phrase “ADR”) there would be no finality except with the consent of the parties. The protagonists of ADR in this sense claimed that, whereas in arbitration one party may win and the other(s) may lose – may be both may lose-as in a court case, in ADR it is a “win-win” situation because the parties would agree to a disposal of the matter on terms comfortable to each of them; In ADR, in this sense, it is not the “dispute” or “difference” between the parties that is addressed, but the mindset of the parties, so that with gradual change in the mindset eventually both sides come to a meeting point. The most practiced forms of ADR, in this sense, are “conciliation” and “mediation”. In western countries, neutral evaluation is also frequently resorted to but in India this or other forms of ADR have not yet come in vogue. Conciliation and mediation are often used as interchangeable terms although there is a subtle difference between the two. In
  51. 51. 51 both the forms, the conciliator or mediator (often known as “neutral”) endeavors to bring both sides closer to each other, but in one he plays a more proactive role whereas in the other his role is only to enable the parties to come closer to each other and for that purpose, at times, the word “facilitator” is used instead of the word “neutral”; In India, ADR has an important place because of historical reasons. If one bears in mind our heritage, tradition and culture, one fails to understand as to why arbitration and other ADR methods should not succeed admirably in India. To think of challenging the Panchas’ decision was considered a sacrilege and to suspect or to even think of the Panchas being partial was like blasphemy. With this background, it should not be difficult to identify the areas, which are obstacles in our goal to once again reach the ideals of ADR. ADR in global perspective The international business community realized that court cases were not only time consuming but also very expensive businessmen always want to make best use of their time, money and energy, with the result that arbitration was preferred to court litigation. Besides, in arbitration, the parties to the dispute usually got a person of their choice to decide the matter and thereby the parties avoided decision-making at the hands of a judge, who may not be conversant with the subject matter of the dispute. However, in course of time, even arbitration proceedings became protracted, with the result that the man of commerce internationally resorted to other forms of ADR, viz. conciliation, mediation or neutral evaluation. Throughout the
  52. 52. 52 world, efforts are being made to bring about dispute resolution in as informal a manner as possible speedily and with least expense. In certain areas even such ADR was avoided. For example, in insurance, a good part of the risk is passed on to the reinsurer. In some cases, whether the insurer of one insured had to bear the loss or the insurer of the other insured made little difference because both risks were largely covered the same reinsurer. This brought about the concept of knock- for-knock, which one finds in vogue even in India – at least in car insurance where it is not the insurer of the insured whose driver is negligent who bears the loss but the loss is borne where it falls. Emerging trends in preventing court litigation at the beginning of the British regime, when the courts were established, there were few cases and the concepts like “courts delays” were unknown but by the time the British left us there were arrears in courts which resulted in elongation of the lifespan of any matter in court. Further, with our achieving independence, our legislators kept on passing laws, at times, in a language that was neither simple nor clear, which brought about a spate of litigation contributing to congestion of courts. In 2-3 decades, a stage was reached when everyone started apprehending that our judicial system would collapse because of the arrears and unduly long time taken for disposal of any matter. With high rates of interest, the non-claimant always had a vested interest in delaying the disposal of court cases because the rate of interest to be awarded by the courts in normal circumstances was only 6% simple interest per annum
  53. 53. 53 whereas trade and industry had to borrow at two to three times that rate of interest and that too on quarterly compounded basis. Recent amendments in the Code of Civil Procedure, 1908 (“CPC” for short) and provisions for pushing commercial matters to arbitration or other forms of ADR coupled with formation of tribunals for handling specific types of cases has resulted in arresting further elongation of time for disposal of court cases but it will take a few years before the full impact of these changes is known. As of date, trends in online, ADR/ODR there have been several Internet service providers who have provided platforms for Online resolution of disputes by parties, which they can pursue irrespective of their geographical locations. Quite a few of these have closed down, may be due to their’s being a bad business model or probably due to their system/platform not living up to the expectations of the end user. But this certainly does not reflect on the popularity or utility of the concept of ODR (On line Dispute Resolution), in some places also referred to as “e ADR”(electronic Alternative Dispute Resolution). This is evident from the fact that the number of service providers has increased this year to over a hundred. The benefits of ODR are manifold. Being accessible online, the dispute resolution platform can be availed of sitting in one’s own office or residence or even while being on the move. In addition, the process, being conducted online, affords the parties an opportunity to appoint neutrals from anywhere in the world. This widens their CHOICE rather than restricts it;
  54. 54. 54 Though not widely heard today, even in most metropolitan cities in India, ODR is an idea whose time has come. But we must understand that it cannot be implemented unless we first popularize the different modes of ADR, as also remove the stigmas that arbitration (especially ‘ad hoc’ arbitration) is gathering. But the night is not too long. Already the Bombay High Court has taken initiatives in that direction. It has not only initiated training programmes for lawyers and judges It is too early to assess Courts behavioral pattern on this count because amendments in the CPC are recent. in several parts of Maharashtra and has even started an ADR course jointly with the Mumbai University(the first batch of which is nearing completion but it is also chalking out plans for implementing mediation, conciliation and arbitration at several courts in Maharashtra. The Bombay High Court itself has separate Panels of Arbitrators and Mediators whose fees are stipulated at very nominal rates; With India having its own unique place in information & technology and the younger generation being computer-savvy, ODR has already started. Several Arbitration Institutions have framed Rules in this behalf and video-conferencing has been accepted as a workable solution for minimizing the cost. Here again, it is somewhat premature to make any realistic assessment. One can only say with confidence that the use of technology in arbitration and ADR has already made a good start and the trend is that in the near future, it would be utilized to expedite arbitration and other ADR methods as also to minimize the cost.
  55. 55. 55 4.1 The emergence of ADR system in independent India: That are bound to happen in group of people and human are adaptable to such situations in finding out and devising novel ways and means for amicable resolution of conflicts. The human have been embodied with rationality to solve adverse situations with ease and the human nature has been constantly evolving in establishment of a congenial atmosphere as such the dispute resolution is one of the major tool, which is being always used by a stable society. In India, intricacies of the formal legal system has continuously emanated dissatisfaction for citizens of India, wherein the disputes were got involved in the legal wrangling resulting to dissatisfaction and criticism of the Courts firstly, due to the unsavory conduct of legal professionals , secondly, sometimes due to inordinate delay of delivery of justice by the courts has lead to a sense of alienation of litigants from the whole judicial system, thus a need was felt for initiation of ADR system to resolve many trivial pending disputes, some of trivial disputes or on the pending cases, which can be resolved through intervention of ADR techniques, thereby lessening the crumbling judicial system as well as over burdened Courts with cases. That the Arbitration Act of 1940 was enacted replacing the Indian Arbitration Act of 1899 and section 89 and clauses (a) to (f) of section 104(1) and the Second Schedule of the Code of Civil procedure 1908. It amended and consolidated the law relating to arbitration in British India and remained a
  56. 56. 56 comprehensive law on Arbitration even in the Republican India until 1996. Though, in early years the industrial Disputes Act, 1947 provided the provision both for conciliation and arbitration for the purpose of settlement of disputes. That in Rajasthan State Road Transport Corporation v. Krishna Kant, the Supreme Court had observed: “The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute-resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute.” The section 23(2) of the Hindu Marriage Act, 1955 also mandated or casted the duty on the courts that the Court shall in the first instance must make an endeavor to bring about reconciliation between the parties of the case, where it is possible according to nature and circumstances before granting relief under this Act. For the purpose of reconciliation the Court may adjourn the proceeding for a reasonable period and refer the matter to person nominated by court or parties with the direction to report to the court as to the result of the reconciliation, section 23(3) of the Act. The Family Court Act, 1984 was also enacted to provide avenues for the establishment of family Courts with a view to
  57. 57. 57 promote conciliation and secure speedy settlement of disputes relating to marriage, family affairs and for matter connected therewith by adopting an approach radically different from the ordinary civil proceedings. The section 9 of the Family Courts Act, 1984 has further lays down the duty of the family Court to assist and persuade the parties, at first instance, in arriving at a settlement in respect of a dispute. The family Court has also been conferred with the power to adjourn the proceedings for any reasonable period to enable attempts to be made to effect settlement if there is any reasonable possibility of settlement. Shri M.C.Setalvad, former Attorney General of India has observed: “….equality is the basis of all modern systems of jurisprudence and administration of justice… in so far as a person is unable to obtain access to a court of law for having his wrongs redressed or for defending himself against a criminal charge, justice becomes unequal …Unless some provision is made for assisting the poor men for the payment of Court fees and lawyer’s fees and other incidental costs of litigation, he is denied equality in the opportunity to seek justice.” To check and to cope up with its enormous load of growing cases, the Constitutional duty of the State to provide legal aid, prompted by the decisions of the apex court, led to the formation of a Committee for Implementing Legal Aid Schemes (CILAS) and the National Legal Service Authority Act, 1987 was adopted as a uniquely Indian approach for creation of Lok-Adalat system. The legal legitimacy of Lok Adalat flows from the Legal Services Authorities Act, 1987. It roughly
  58. 58. 58 means “People’s court”. This is a non-adversarial system, where by mock courts (called Lok Adalats) are held by the State Authority, District Authority, Supreme Court Legal88 Services Committee, High Court Legal Services Committee, or Taluk Legal Services Committee, periodically for exercising such jurisdiction as they thinks fit. These are usually presided by retired judge, social activists, or members of legal profession. It does not have jurisdiction on matters related to non-compoundable offences. There is no court fee and no rigid procedural requirement (i.e. no need to follow process given by Civil Procedure Code or Evidence Act), which makes the process very fast. Parties can directly interact with the judge, which is not possible in regular courts. A case can be transferred to a Lok Adalat if one party applies to the court and the court sees some chance of settlement after giving an opportunity of being heard to the other party. The focus in Lok Adalats is on compromise. Usually when no compromise is reached, the matter goes back to the court. However, if a compromise is reached, an award is made and is binding on the parties. It is enforced as a decree of a civil court. An important aspect is that the award is final and cannot be appealed, not even under Article 226 because it is a judgment by consent. All proceedings of a Lok Adalat are deemed to be judicial proceedings and every Lok Adalat is deemed to be a Civil Court. Main condition of the Lok Adalat is that both parties in dispute should agree for settlement. The decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of execution through legal
  59. 59. 59 process. Lok Adalat is very effective in settlement of money claims. Disputes like partition suits, damages and matrimonial cases can also be easily settled before Lok Adalat. Lok Adalat is a boon to the litigant public, where they can get their disputes settled fast and free of cost. 4.2. The court approach towards ADR mechanism: That for last two decades not only in India but remote in other corner of the world rather everywhere rapid development in the societies as whole is creating an multiplying human urges as well as expectations, as a result this, the conflict of interests bound to increase day by day all over the world over, no exception to India, in India due to slackness of judicial discipline in courts and litigating parties having litigation in Indian courts has over burdened the judicial mechanism and the said judicial mechanism finding extremely difficult to manage to cope up with its enormous load of pending cases, which has further compounded and eroded judicial creditability. In current scenario the Alternative Dispute Resolution (ADR) refers to a variety of streamlined resolution techniques designed specifically to resolve issues in controversy more efficiently and in better manner, wherein the normal bilateral negotiation process fails. In view of the fact, presently, the third party alternative dispute resolution (ADR) is being touted and being thought as effective alternative for the contesting parties to the litigation, who are hotly involved to the formal legal intricacies.
  60. 60. 60 With wide spread implementation of ADR techniques in the developed and developing world. The usage and penetration of ADR systems techniques are proving to much viable option in reducing cost factor in Litigation and delays. The success of ADR systems in bringing resolution of their conflicts in amicable manner, thus due to success of it, The ADR system has entered in to many untouched subjects or issues of laws, as of now, ADR penetration is being increases in legal battle and many new cases are added day by day under ADR system for its resolution. Hence due to successful resolution of legal conflicts / disputes through ADR systems, due to successful resolution of legal conflicts / disputes through ADR systems has improved the lives of as such individuals and their business entities thus ADR systems have been able to achieve broad social / societal goals to the large extent. That the Privy Council2 affirmed the decision of the Panchayat and Sir John Wallis observed that the reference to a village panchayat is the time-honoured method of deciding disputes. It avoids protracted litigation and is based on the ground realities verified in person by the adjudicators and the award is fair and honest settlement of doubtful claims based on legal and moral grounds. 3 The justice dispensation system in India has come under great stress for several reasons; chief reason of them being the huge pendency of cases in Courts. The denial of justice through delay is the biggest mockery of law, but in India it is 2 The Privy Council Sitanna v. Viranna, AIR 1934 SC 105, 3 ICADR88
  61. 61. 61 not limited to mere mockery; the delay in fact kills the entire justice dispensation system of the country. In India, the number of cases filed in Courts has shown tremendous increase in recent years for a variety of reasons resulting in pendency and delays underlining the need for alternative dispute resolution methods. The justice dispensation system in India has hit rock bottom. The system crawls in its rotten rut of ineptitude and corruption. This has led to people settling scores on their own, resulting in a growing number of criminal syndicates in the country and reflecting the loss of people's confidence in the rule of law. That Late H.D Shourie wrote in Letter Mr. Justice S. M. Raza4 , he wrote, "We believe that there is need of bringing about the judicial reforms which would deal with huge pendency of cases in the courts of the country. The figures presently being mentioned are that there are 2.27 crore ca2ses in the District and Subordinate Courts; 35 lakhs in High Cou5rts and 25000 in the Supreme Court. There are about 2 crores cases pending in the courts of India. If there are 4/5 members of the family on one side and 4/5 members on the other side, almost about 12 to 15 crores persons are involved in pending cases. At the last count the backlog of cases in the courts of India had gone up t88o nearly 3 crore cases, including more than 37 lakh cases pending in the High Courts and over 46,000 cases awaiting disposal by the Supreme Court. 4 Mr. H. D. Shourie, Founder Director of COMMON CAUSE, continued his exertions to this end till his last breath. In his letter to Mr. Justice S. M. Raza, Lokayukta, Uttaranchal, dated June 22, 2005,
  62. 62. 62 Drawbacks and suggested amendments in Arbitration and Conciliation Act, 1996 (i) Arbitration, as practiced in India, instead of shortening the lifespan of the dispute resolution, became one more “inning” in the game. Not only that, the arbitrator and the parties’ lawyers treated arbitration as “extra time” or overtime work to be done after attending to court matters. The result was that the normal session of an arbitration hearing was always for a short duration and a part of the time, at the beginning, was taken for recapitulating what had happened till that point of time and at the end for fixing the next date of hearing. Absence of a full-fledged Arbitration Bar effectively prevented arbitrations being heard continuously on day-to-day basis over the normal working hours, mviz. 4-5 hours every day. This resulted in elongation of the period for disposal. Besides, most of the arbitrations were ad hoc as there were no Arbitration Institutions. With the establishment of such Institutions (for example the Indian Council of Arbitration which was established in 1965), institutional arbitrations made a beginning but it was difficult to bring about any effective change in the culture and mindset of the arbitrators or the lawyers appearing before them. Besides, with long delays in court matters, and consequent vested interest in the non-claimant to delay matters for as long as possible, pending the arbitration, the matter was often taken to the court for taking arbitration off the track on technical grounds. In many cases, the court gave an interim injunction restraining the arbitrators from continuing with the arbitration and took a
  63. 63. 63 long time to dispose of the matter finally. Even when applications objecting to the continuation of arbitration on the ground of there being no jurisdiction were dismissed, appeals from such orders of dismissal resulted in further delay. Several technical objections were being taken by the lawyers, which eventually led the Supreme Court of India to observe in Guru Nanak’s case on 29th September, 1981, as under (ii) With the apprehension of courts collapsing under pressure of work, and India’s decision to liberalise, it became absolutely necessary to amend or replace its Arbitration Law so as to qualify India to sit in the global village. This led to a meeting of the Prime Minister of India and the Chief Ministers of all the States, on 8th December, 1993, where a Working Group was constituted to suggest a new Arbitration Law for India. The result of that Working Group’s efforts was the Bill which eventually became The Arbitration and Conciliation Act, 1996, which was on the UNCITRAL (United Nations Commission on International Trade Law) Model and was widely acclaimed the world over as being an ideal piece of legislation. However, due to absence of Arbitral Institutions and the bulk of arbitrations being ad hoc, even the provisions of the new Act did not show any immediate results because the mindset of the arbitrators and lawyers continued as before; (iii) In the Indian Arbitration Act, 1940, there was a provision for time period, viz. four months, for giving the award. Experience showed that this period of four months was illusory because in almost every case extension was given and the very act of getting such extension became time-consuming and expensive. The Working Group therefore suggested the deletion of time-frame
  64. 64. 64 for giving award but considered it to be a matter of culture and suggested effective steps to be taken in that direction. However, since most of the arbitration matters were ad hoc there was little possibility of any substantial change in handling arbitrations, particularly because the arbitrators, many of whom were retired judges, continued to oblige the parties and their lawyers by giving adjournments under an erroneous apprehension that if they did not do so they would not get new arbitration cases. For this purpose, it is suggested that institutional arbitrations should be encouraged and a full- fledged Arbitration Bar should come into existence so that arbitration proceedings can be heard on day-to-day basis with at least 4-5 hours working on every day. (iv) Apart from this, the judiciary’s approach to the 1996 Act is not consistent. To illustrate, in Sundaram Finance Ltd. v. NEPC India Ltd. (reported in AIR 1999 SC 565) the Supreme Court said: “The 1996 Act is very different from the Arbitration Act, 1940. The provisions of this Act have, therefore, to be interpreted and construed independently and in fact reference to 1940 Act may actually lead to misconstruction. In other words the provisions of 1996 Act have to be interpreted being uninfluenced by the principles underlying the 1940 Act. In order to get help in construing these provisions it is more relevant to refer to the UNCITRAL Model Law rather than the 1940 Act.” Unfortunately, later on, even the Apex Court forgot this replacement of statute and its avowed objects, with the result that the judicial mindset continued to remain as it was under
  65. 65. 65 the Arbitration Act, 1940; (v) It is trite to say that once the parties have removed the lis (dispute) from the courts of law and agreed that the same would be decided by arbitration and that such decision would be final and binding, it was for the courts to compel the parties to adhere to their agreement and to interfere with the award not to “do justice” between the parties but only for the purpose of ensuring that such private administration of justice did not contravene the basic ethos of the society, viz. “public policy” so that transactions like money laundering, drug trafficking, flesh trading and the like are not able to get the support of such private disposal of justice. Instead, the courts (or at least some of them in some cases) forgot this aspect of the matter and, obsessed by the mindset which was prevalent under the Arbitration Act, 1940, looked at the matter as if it was the courts’ bounden duty to ensure that “justice is done” according to the courts assessment and inclination. This is an entirely erroneous approach. The matter would be clear if one looks at it as a game of cricket. Earlier, we were playing five days’ cricket match with two innings but then we evolved a single day, limited (normally 50) over match. Supposing in such a match, on a given occasion, a batsman is wrongly given out by the umpire, then neither the batsman nor, for that matter, the entire cricket community can bring about a reversal of the decision on the ground that injustice was done to the batsman and that he will not get another chance to bat because it is only a single day, single inning match.
  66. 66. 66 Consider what would be the chaotic effect if reversal on such a ground were permitted. The only course is that while even a wrong decision is acquiesced into, such umpire is not again appointed as an umpire. Applying the same analogy, an arbitrator’s (apparently) wrong decision should be accepted and the injustice between the parties should be tolerated and acquiesced into but such person may not be appointed as an arbitrator thereafter and since this is the function of the parties, the parties would obviously, in their own interest, follow the course of avoiding such an arbitrator. This approach is not only logically concomitant with accepting arbitration as an effective justice delivery system as an alternative to the judicial process by the courts but is the very essence of arbitration and if this essential principle is overlooked, arbitration, as also the other ADR methods, can never be successful. Even modern international commercial trend not only recognizes this but also practices it in the long-term interest of the international business community. The choice is between having protracted delays and heavy expenses for resolving each and every dispute and difference on the one hand or some members of the commercial community having (perhaps) to suffer wrong decisions on the other. It is in the long term interest of the business community as a whole that in such individual cases the decisions appearing to be wrong are suffered instead of making the entire system of effective alternative dispute resolution method lose its very purpose and reaching a level requiring its rejection. Prudence demands that
  67. 67. 67 one should not throw away the baby with the bath water; (vi) It is in the interest of the society, community and business that counter-productive dispute resolution process, or for that matter, any process, which does not ensure “value for money” in terms of time, money and energy, is to be avoided, even at the possible cost of suffering some wrong decisions in individual cases. Once this aspect is clearly perceived and understood, it will not be difficult to put arbitration and other ADR methods on the ideal pedestal to which they belong; (vii) The Supreme Court, despite having recognized this sea change in the law, in ONGC v. Saw Pipes (reported in (2003) 5 SCC 705) read the phrase “public policy of India” in a manner which upset the apple cart. There has been serious criticism of this judgment as it is putting the clock back. However, the Supreme Court itself is reconsidering this view and in the meantime an amendment has been proposed whereby the rigorous impact of this judgment would stand largely undone. Commercial arbitration in India Before the advent of the British, while at the village level “Panchas” would dispose of a matter as soon as any difference or dispute arose, at the level of towns and cities, the trade bodies effectively dealt with the disputes and differences arising between men of commerce. However, with the growth of trade and commerce, and there being many occasions when all the parties were not from the same locality, disposal of differences and disputes in an informal way became impossible and formal commercial arbitration came into vogue in India. Even today, in Commodity
  68. 68. 68 Exchanges, disputes are resolved almost within hours an22d in some Exchanges, like for example the Cotton Exchange of Mumbai, even appeals are disposed of in 2-3 days. This is so because the matters are decided by men of commerce having rich experience in the trade and its different aspects and enjoying a reputation for their long standing in the business. It is often said that arbitration is as successful as the arbitrator. Since the arbitrators in Commodity Exchanges are men having a quick grip on the subject, the disposal of arbitrations in such exchanges is quick and inexpensive - with almost no likelihood of challenge in court. In matters not so simple as disputes and differences between the members of a Commodity Exchange, well-experienced arbitrators, even today, bring about a quick result in an inexpensive manner but it is the need of the day to have trained arbitrators because with the court matters being pushed to arbitration there is bound to be a greater demand for good arbitrators available at reasonable fees. 4.3 Legislative efforts in India Article 215 of the Constitution of India declares in a mandatory tone that ‘no person shall be deprived of his life or his personal liberty except according to procedure established by law.’ The words “life and liberty” are not to be read narrowly in the sense drearily dictated by dictionaries; they are organic terms to be construed meaningfully. Further, the procedure mentioned in the Article is not some semblance of a procedure but it should be “reasonable, fair and just”. Thus, the Right to 5 Constitution of India88
  69. 69. 69 Speedy Trial has been rightly held to be a part of Right to Life or Personal Liberty by the Supreme Court of India. The Supreme Court has allowed Article 21 to stretch its arms as wide as it legitimately can. The reason is very simple. This liberal interpretation of Article 21 is to redress that mental agony, expense and strain which a person proceeded against in criminal law has to undergo and which, coupled with delay, may result in impairing the capability or ability of the accused to defend himself effectively. Thus, the Supreme Court has held the Right to Speedy Trial a manifestation of fair, just a8nd reasonable procedure enshrined in Article 21. This is obviously a matter which needs a very serious consideration for determining as to what judicial reforms can be made effective for meeting the requirements of reducing pendency of cases in the court of India.6 Anguished over the state of affairs of the justice delivery system, the Supreme Court has said people's faith in judiciary was dwindling at an alarming rate, posing a grave threat to constitutional and democratic governance of the country. The Constitutional philosophy propounded as Right to Speedy Trial has though grown in age by almost two and a half decades; the goal sought to be achieved is yet a far-off peak. The failures of prosecuting agencies and executive to act and to secure expeditious and speedy trial have persuaded the Supreme Court in devising solutions which go to the extent of almost enacting by judicial verdict bars of limitation beyond which the trial shall not proceed and the arm of law shall lose 6 Supreme Court chides itself, govt for judicial backlog Dhananjay Mahapatra, TNN Jan 12, 2012, 05.57AM IST

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