Definition of ADR Basic features of ADR Purpose of ADR Advantage and dis Advantage of ADR Common types of ADR mechanism Negotiatin Mediation Arbitration

1. ADR
Alternative Dispute Resolution (Mechanisms)

2. Discussion outlines
Definition of ADR and its components
Basic features of ADR
Advantages or purposes of ADR mechanisms
Disadvantages of ADR mechanisms
Common Types of ADR mechanisms
• Negotiation
• Mediation/ Conciliation
• Arbitration

3. Definition of ADR
• What is ADR?
• Definitional Components of ADR
• ADR encompasses three operational words( alternative, dispute and resolution)
 Alternative:-
-Something that can be chosen instead of something else or existing
-It shows a choice ,options or another opportunity
-refers “a thing that you can choose out of two or more possibilities.”
(Oxford Advanced Learners Dictionary)
In the context of ADR- Alternative refers to :
-all permitted dispute resolution mechanisms other than litigation, be it in
court or administrative tribunal
-connotes the existence of dispute settling mechanisms other than formal
litigation

4. Dispute:-
 It is disagreement or controversies that arise from the claim of right or
interest by one parties against the other
It shows the existence of clear points of difference between two or more
parties having an interest over one or more issues or claims
Resolution
- Is the act of resolving or settling a problem or dispute
- It is the act or process of finding an answer or solution for the
controversies between the disputant parties

5. Generally ADR :-
• is a generic term used to describe a range of procedures
designed to provide a way of resolving a dispute as an
alternative to court or administrative Tribunals
• refers to a set of practices and techniques aimed at permitting the
resolution of legal disputes outside the courts without involving
lawsuit or any other litigation process
• is a set of methods or techniques that allow parties to a dispute to
reach an amicable settlement

6. Basic Features or Characteristics of ADR, Includes
 Informality
 ADR processes are less formal than judicial processes
 It‟s rules of procedure are flexible, without formal pleadings,
extensive written documentation, or rules of evidence that are
the basic requirements in court litigation
This informality is important for increasing access to dispute
resolution for parts of the population who may be intimidated by
or unable to participate in more formal systems
It is also important for reducing the delay and cost of dispute
resolution

7. Application of Equity
ADR programs are instruments for the application of equity
rather than the rule of law.
 Each case is decided by a third party, or negotiated between
disputants themselves, based on principles and terms that seems
equitable in the particular case, rather than on uniformly applied
legal standards.
Therefore ADR systems cannot be expected to establish legal
precedent or implement changes in legal and social norms.
ADR systems tend to achieve efficient and flexible settlements at
the expense of consistent and uniform justice

8. Direct Participation and Communication between Disputants
ADR systems include more direct participation by the disputants in the
process and designing of appropriate dispute settlements procedures
 It facilitates face to face dialogue and opportunity for reconciliation
between disputants based on mutual understanding and consensus.
This helps the disputing parities to come up with convincing and more
flexible ways of dispute resolution at their own discretion
It depends on Consent or Agreements of Disputant parties
Compared to formal litigation ADR is voluntary dispute resolution
mechanism which depends on the consensus of a party to dispose cases
The procedure of entertaining dispute and the outcome of dispute
resolution process in certain ways of ADR mechanisms especially in
negotiation and mediation is determined based on the prior consent or
agreements of disputants

9. Advantages or purposes of ADR mechanisms
1. Cost and time effectiveness
One of the largest reasons parties choose to resolve their disputes outside of the courts is
cost.
Judicial process for resolving any disputes involves court fees, documentation fees,
advocate‟s fees and many other extra costs.
ADR does not involve expert fees or courts costs. It usually costs much less than litigation,
allowing smaller financial disputes a financially viable way to be settled.
ADR also saves the resource of government, as the ADR shares the load of court
proceedings which requires government budget and time
Litigation can take over a year to resolve because of different timing and dates involved.
Matters that are being solved using the ADR method may take weeks or even just days to
be resolved.
 Law suits are expensive, some times the cost goes even the extent of making the victory
of a party insignificant or exceeding of the amount of judgment
In contrast the disputants usually share the cost of the mediator or arbitrator in ADR

10. 2. Maintaining and preserving the Relationship between
disputant parties
All ADR services take place in a more informal, less confrontational
atmosphere. This is more conducive to maintain a positive business or other
social relationship between the two parties
ADR is a process that looks into the best interest of both parties in order
to conclude a compromised mutual decision for satisfaction of both parties
Generally, ADR allows the parties to work together with the neutral
arbitrator or mediator to resolve the dispute and come to a mutually
acceptable remedy without affecting their future relationship
In contrast Court proceedings create a winner and a loser parties which may
potentially harm the future relationship between disputant parties.

11. 3. Confidentiality and Privacy
Privacy is also fully securitized in ADR mechanisms as it is conducted in
private, avoiding publicity from the media
The public are also unable to attend. On the other hand disputes resolved
in court are public and the judgments awarded are also in public
ADR provides certain resolution processes that are conducted in private
maintaining strict confidentiality
The parties can agree that information disclosed during negotiations or
arbitration hearings cannot be used later even if litigation follows
 The final outcome can also be made private if the parties so stipulate and
agreed

12. 4. Parties autonomy and control over cases
Usually parties have a considerable control over the processes in ADR, in selecting the
method of ADR, selecting the panelist for the dispute resolution; the length of the process;
and, in a mediations and negotiation case, even the outcome are controlled and maintained
by the parties.
 Parties can set terms in their arbitration contract governing how the process will work.
This includes establishing rules regarding discovery, hearings, time limitations and other
matters
In contrast, in case of lawsuit process the control is totally possessed by the court and
supreme authority.
Parties can choose an arbitrator with subject matter expertise as opposed to being
assigned a judge randomly. This is particularly important in complex cases requiring
specialized knowledge.
ADR allows the parties the opportunity to tell their side of the story and have more control
over the outcome than normal trials overseen by a judge.

13. 5. Provides more Simple and flexible procedure of Dispute Adjudication
ADR grants parties the ability to resolve disputes during a single
procedure without lengthy and ongoing courtroom hearings.
The informality of ADR procedures enable parties to resolve their disputes
by any convenient process suitable to specific issues based on the parties
choice
Unlike court decisions, which can generally be contested through one or
more rounds of litigation, arbitral awards are not normally subject to appeal
the strict rules of evidence are not required in ADR
legal and non-legal disputes can be addressed during this process proving
it to be more flexible. This is a suitable package in the sense that it takes
into account fundamental concerns of the parties and offers remedies not
available when at court
Generally, opposed to the court system, where the legal system and the
judge control every aspect, ADR is much more flexible

14. 6. Supports and Complement the formal Judicial system
ADR systems can be created as an option within the judicial system, either
associated with the courts as a way of managing existing caseloads,
or separate from the courts to provide dispute resolution for disputes not
well served by the courts
ADR complement court by increasing access to dispute resolution services
for disadvantaged groups (e.g., rural areas, Illiterate or poors who cannot
afford the courts or manage their way within them. ),
Specialized ADR programs focused on particular types of technical or
complex disputes can be more effective and produce better settlements
than courts.
e.g. complex commercial disputes, Labor-management disputes or other
special cases which requiers expertise arbitrator in certain feilds

15. 7. Satisfaction of Outcome
The aim of ADR is to find a compromised solution which is
satisfactory to both parties
As the ADR procedures and outcomes are influenced by the
disputing parties active participation and determination, the final
outcome is relatively satisfactory for both side of parties
ADR procedures help to afford chance that the parties can make
real progress on the case to reach in mutually agreeable and
balanced outcome

16. Disadvantage/Shortcomings of ADR
1. Unequal Bargaining Power/ Imbalance of Power
 In certain situations one side is able to control the other. Therefore a significant
imbalance of power may exists
For example, employment and divorce cases, making the courts a better
option for a weak party, but in ADR this may not be achieved
 ADR programs do not work well in the context of extreme power imbalance
between parties
These power imbalances are often the result of discriminatory norms in society,
and may be reflected in ADR program results
Even when the imbalance is not a reflection of discriminatory social norms,
most ADR systems do not include legal or procedural protections for weaker
parties

17. A more powerful or wealthy party may press the weaker into accepting an
unfair result, so that the settlement may appear consensual, but in fact result
from coercion.
For the same reason, ADR programs may not work well when one party is
the government
2. Lack of Legal Proficiency
Where a dispute involves difficult legal points a mediator or arbitrator is
unlikely to have the same legal expertise and knowledge as a judge
Dispute can be of various situations such as, commercial conflicts, social
conflicts, legal conflicts and many others which require specialized
mediator
Most of the cases the mediator or arbitrator does not possess a judge‟s point
of view as a legal professional.

18. 3. No system of precedent or uniformity of outcomes
ADR mechanisms mostly do not set precedent, refine legal
norms, or establish broad community or national standards, nor
do they promote a consistent application of legal rules
ADR results are private and rarely published. As a result it is
difficult to predict the outcome of a dispute decided through ADR as
there is no system of precedent
ADR mechanisms are tools of equity rather than tools of law.
They seek to resolve individual disputes on a case-by case
basis, and may resolve similar cases in different ways if the
surrounding conditions suggest that different results are fair or
reasonable according to local norms.

19. 4. Difficulty of Enforcement
Most forms of ADR are not legally binding, making any award difficult to
enforce
 Pure ADR mechanisms depends on the consensus of parties lacking
compelling legal duty to enforce the final decision given under certain ADR
process
Unless certain ADR mechanisms are backed by the court orders or required
under specific laws , the enforcement of ADR outcomes or decision depends on
the willingness of Parties
5. ADR programs may not correct systemic injustice, discrimination, or
violations of human rights
• ADR systems often reflect the accepted norms of society. These norms may
include discrimination against certain groups and populations.
• When this is true, ADR systems may hinder efforts to change the
discriminatory norms and establish new standards of group or individual rights

20. 6. ADR settlements may not have any punitive or deterrent effect on
the population
Since the results of ADR programs are not public, ADR programs are not
appropriate for cases which ought to result in some form of public
sanction or punishment
This is particularly true for cases involving violent offenders, such as in
many cases of domestic violence
Societal and individual interests may be better served by court sanctioned
punishment, such as imprisonment
It is important to note, however, that victim offender mediation or
conciliation may be useful in some cases to deal with issues unresolved
by criminal process

21. 7. It is inappropriate to use ADR to resolve multi-party cases in which
some of the parties or stakeholders do not participate
This is true because the results of most ADR programs are subject to
standards of fairness other than the acceptance of all the participants
When this happens, the absent stakeholders often bear an unfair burden
when the participants shift responsibility and cost to them
ADR is more able than courts to include all interested stakeholders in
disputes involving issues that affect many groups, such as environmental
disputes
When all interested parties cannot be brought into the process, however,
ADR may not be appropriate for multi-stakeholder public or private
disputes

22. Reading Assignment
Historical Development of ADR
The disadvantage or limitation of Litigation- Mostly it is the reverse
for the advantage of ADR

23. Common Types of ADR Mechanisms

24. I. Negotiation
Is a consensual bargaining process in which parties attempt to reach
agreement on a disputed or potentially future disputable matter
Is a non-binding procedure involving direct interaction of the
disputing parties where in a party approaches the other with the
offer of a negotiated settlement based on an objective assessment of
each others position
any form of direct or indirect communication whereby parties who
have opposing interests discuss the form of any joint action which
they might take to manage and ultimately resolve the dispute
between them

25. Negotiations may be used to resolve an already-existing problem or to lay
the groundwork for a future relationship between two or more parties
It is the process of evolving communication to get from opposition to
consensus, manage conflict and reach agreement
As negotiation conducted between two or more independent parties to
accord their own interest in a given dispute, the parties needs to have a
bargaining power to negotiate
What is Bargaining Power?
• is the power to engage in agreement in which people or groups say they
will do or give something in exchange for something else
• A relative power of parties in a situation to exert influence over each other

26. • It is party„s capacity in influencing the out- comes of negotiation towards
its own goals.
• For instance, Chamberlain explained that, bargaining power is the ability
to secure another agreement on one„s own terms
• If one party has no power over the other, there is no bargaining relationship
• Where the parties have some thing to exchange and have alternative to
submitting to the other„s will, they have bargaining power
• Essential elements of bargaining are lacking in situations in which one
party has total control over the other
Read about the Elements affecting bargaining power

27. Advantage of negotiation
it implicitly recognizes the dignity and worth of all participants since
negotiated resolution requires the parties consent to have bargaining power
takes in to account unofficial as well as official values –that is, it can reflect
values that are important to the parties even though these values not have
legal status.
difference to be adjusted in a way that either maximum mutual gains or
meets at least some needs of all parties to settlement
More relaxed and confidential settlement of dispute between disputing parties
without the involvement of third party

28. Disadvantage of negotiation
no assurance of dispute settlement as negotiation depends on the
bargaining power of two independent parties having different interests
No guarantee of outcome- the soundness of the resolution may be
impaired if the parties miss present their goal or the back ground
information or if after agreement is reached, circumstances change from
what one or more parties anticipated during bargaining
In some complicated situations, the process of negotiation may requires
long time, effort, and often other expenses
The negotiation outcome may not satisfy community or lawful
interest of third parties and thus, may be unenforceable or subject to
one or more participants to criminal penalties.
This is mostly if the outcome of the negotiation is not enforceable
because it is against the law, morality and established custom

29. The Legal Effect of Negotiation
If the parties conclude negotiation in line with the law, this agreement will
have effect on the agreed parties provided that parties respect what the law
prescribed as requirements
The law may imposes limitations that shape both the procedure and
substance of negotiation and its effects among the negotiating parties
The law may nullify the outcome of negotiation depending on its
substance and enforceability.
For example if the negotiation agreement requires one or more parties to
engage in unlawful conduct such as a non complete agreement or agreement
that can not be enforced in normal circumstance of the thing

30. the terms of agreement lawfully concluded by the negotiating parties
are binding on them as though they were law.
An agreement which is established with the free consent of the parties
in dispute and as to the specific requirement specified by the law at
hand , the agreement will be binding upon the parties.
See for example art 1731 of the civil code- contractual agreement is a
law between contracting parties and parties are duty bound to respect
their promise

31. 2. Mediation/ Conciliation
Mediation /Conciliation is a process in which a third party (usually neutral
and unbiased) facilitates a negotiated consensual agreement among parties,
without rendering a formal decision
 is an assisted and facilitated negotiation carried out by a third party”
mediator/ Conciliator
Some times it is termed as "negotiation plus." That is, it takes the
principles of negotiation (i.e., evaluation and persuasion) and adds a third
party to facilitate an agreement.
It emphasizes the participants‟ own responsibility for making decisions
that affects their intrest.
It is therefore a self-empowering process, however purely different from
negotiation so long as there exist a third party involvement

32. Some slight difference between mediation and conciliation
The difference between a conciliator and a mediator is conciliators usually
play a more active role in the dispute resolution process than mediator,
Conciliator provides specialist expertise, make suggestions to both parties
based on expert advice, and may even actively encourage parties involved to
reach an agreement while the mediator role is limited to facilitation purpose
A conciliator may not, however, provide private counseling, choose sides,
or make decisions. They may only provide expert advice or suggestions
in some literatures there is the consideration that the term „mediation‟ should
be used where the practitioner has no advisory role on the content of the
dispute and the term „conciliation‟ where the practitioner does have such a
role.

33. In short, „mediation‟ is a purely facilitative process, whereas
„conciliation‟ may comprise a mixture of different processes including
facilitation and advice
Notes however that, both „mediation‟ and „conciliation‟ are now used to
refer to a wide range of processes and that an overlap in their usage is
inevitable
Under both ADR mechanisms neutral third party facilitate the dispute
resolution between two independent parties with out the power to
determine the outcome of the case

34. The role of Mediator /Conciliator
The primary role of Mediator or Conciliator in dispute resolution is helping
disputing parties to reach a voluntary, mutually agreed solution
The only function of mediator is to assist the disputants to over come any
obstacles during their negotiation, to determine the dispute in the hope that
disputants and mediator will develop creative solutions that satisfy their
interest.
Hence, deciding on the outcome of the case is left to the disputing parties
 Lawyers also may act as mediators between their clients.
Two arguments- 1st As Lawyers mediation raises ethical values (interest
conflict ) the practice of lawyers mediation should be prohibited
2nd supports the role of lawyer as mediator in carefully prescribed
conditions
Which argument do you support?
oRead the various stages of mediation (mediation proceeding) and the
function of mediator in each stage- in your module

35. Advantage and disadvantage of Mediations/ Conciliation
Advantage- Similar to other forms of ADR it is less expensive, faster
dispute resolution, confidential, offers wide range of settlement options,
allows the parties to present their arguments in an informal manner and
freedom to opt out mediation proceedings without any valid or justified
reason.
- Parties of a dispute are entitled to determine the process of mediation in
accordance with interest and needs of each party
Disadvantage- Absence of Due Process Protection for parties
-Lack of Standardized Rules and Process which makes mediation
inconsistent, unpredictable and unreliable,
-inappropriate where parties to a dispute are not volunteer or at an imbalance
of power
- it may also increase cost if mediation fails and arbitration or litigation
follows

36. The Legal Effect of Mediation or Conciliation
- the mediation agreement, is considered to be a contract and is enforced under
the general principle of contract law
- Compromise - Art. 3307 C.C define compromise as a contract whereby
the parties, through mutual concession, terminate an existing dispute or
prevent a dispute arising in the future.
-parties in their compromise contract may renounce all of their rights ,actions
and claims
See also art.1731 of the C.C - contractual agreement is a law between
contracting parties and parties are duty bound to respect their promise

37. 3. Arbitration
Arbitration is a dispute resolution process that involves a third party with
settlement authority. It leads to a final and binding determination of the
rights and obligations of the parties
is typically an out- of- court method for resolving a dispute in which parties
submits a disputed matter to impartial person for decision.
During arbitration, a neutral party named the “arbitrator” listens to
arguments and observes evidence presented by each side of a dispute and
then determines the outcome.
Arbitration is similar to the litigation process in some ways, wherein the
arbitrator decides the outcome, but is still less formal than a trial.

38. Like a court trial ,the arbitrator controls the process; listen to both sides
and make a decision. Only one side will prevail, but unlike court
litigation appeal on the merit of the case is limited.
Provides two primary benefits over litigation- relaxed rules of
evidence and a relaxed adversarial setting
Arbitration may be “binding” or “nonbinding” depending on
the terms agreed upon by all parties before the arbitration
process begins.
-A binding agreement means the parties involved relinquish
their right to a trial and will agree to the arbitrator‟s decision.
-A non-binding agreement means the parties involved may opt
to litigate if they do not accept the arbitrator‟s decision.

39. Preliminary requirements to conduct Arbitration
 Arbitrability of the dispute
 Arbitrability concerns whether a type of a dispute can or cannot be settled
by arbitration.
In practical terms, arbitrability answers the question of whether a subject
matter of a claim is reserved or not reserved to the sphere of domestic
courts, under the provisions of the law.
is concerned with whether a particular type of dispute is amenable to
settlement by arbitration or instead its jurisdiction lies exclusively with the
domestic courts or state organs
The parties to a dispute in arbitration must ensure that the subject matter is
arbitrable, conforming the laws and public policy of the governing law of a
given country

40. There may be restrictions regarding the capacity of a party to enter into
arbitration agreements,
which means that certain entities, (e.g., States or State entities) due to policy
considerations, may not be allowed to enter into arbitration agreements
Certain disputes may involve such sensitive public policy issues that are left
exclusively to the jurisdiction of domestic courts by domestic law
If the dispute is not arbitrable, the arbitral tribunal is limited in its jurisdiction
and the claim must instead be submitted to domestic courts
The non-arbitrability of a dispute renders the arbitration agreement invalid.
As a result, the tribunal would lack jurisdiction and the award might not be
recognized and enforced.
Is there the principle of arbitrablity in Ethiopia?
See Article 7 of Arbitration and Conciliation Working Procedure
Proclamation No. 1237 /2021

41.  Arbitration Agreements
Is an agreement or contract in which two or more parties intend to resolve
their current or potential future dispute by arbitration outside of court
In arbitration agreement parties need to have a willingness to abide by the
decision of the arbitrator(s).
Essentials of arbitration agreement providing for arbitration are that there
must be an agreement b/n the parties and the parties must have an
intention that their dispute or differences referred and decided through
arbitration.
According to Arbitration and Conciliation, Working Procedure
Proclamation No. 1237/2021 article 2(1)
“Arbitration Agreement” is an agreement to be implemented in order to
partly or wholly settle future or existing dispute that may arise from
contractual or non-contractual legal relationship

42. The Role and Responsibility of Arbitrator
• the role of arbitrator(s) is more or less similar to the role of judge,
hence the ethical rules which applied on judges are also applicable
on arbitrators(s) to certain extent
Therefore,
 As judges required to render decision in impartial way ,similarly
arbitrator is expected to be impartial in conducting arbitration
while leading the arbitration process and giving arbitral award the
arbitrator should be unbiased and avoid the conflict of interest

43. Arbitrator(s) need to avoid circumstances which create
reasonable suspicion on his/her impartiality such as his/her
relation ship with disputing party; his/her direct interest with the
out come of the arbitration award and other similar
circumstances
The arbitrator(s) should also lead the process of arbitration and
provide arbitral award independently with out the direct and
indirect influence of third party or the disputing party

44. Validity requirements for arbitration agreement
As far as arbitration agreement is a contract the requirements for the validity of
contract have to be ensured
• Art 1678 of CC Elements of contract.
• Person capable of contracting and give their consent sustainable at law.
• object of the contract is sufficiently defined and possible and lawful.
• The contract is made in the form prescribed by law, if any.
According to Arbitration and Conciliation, Working Procedure Proclamation No. 1237/2021
article 6 Arbitration agreement shall be made
- In written form where its content is recorded, signed by all parties and two
witnesses even where it was made orally, by conduct or any other means
- By electronics media where it is accessible for use when the information is needed

45. Advantage and Disadvantage of Arbitration
Advantage:-Similar to Mediation and Negotiation it is less expensive,
confidential, more flexible ,less confrontational ,maintains parties
relationship, increase the parties satisfaction of outcome and recognizes
parties autonomy and consent on the arbitration process
• more efficient proceeding and results, if experts in certain specialized field
are used as arbitrators,
Disadvantage:-May lead to extra costs or time consuming if the parties are
not agreed in the final result
• The arbitrator(s) decision is normally not subject to appeal for errors of
fact or error of law, which may lead to unfair results
• Absence of clear laws to govern the qualification and professional ethics of
arbitrators

46. • If the matter is complicated but the amount of money involved is modest,
then the arbitrator‟s fee may make arbitration uneconomical
• Rules of evidence may prevent some evidence from being considered by
a judge or a jury, but an arbitrator may consider that evidence. Thus, an
arbitrator‟s decision may be based on information that a judge or jury
would not consider at trial.
• The standards used by an arbitrator are not clear, although generally the
arbitrator is required to follow the law.
However, sometimes arbitrators may consider the “apparent fairness” of
the respective parties‟ positions instead of strictly following the law, which
would result in a less favorable outcome for the party who is favored
by a strict reading of the law.

47. Legal effects of Arbitration
Subject to the validity of arbitration agreements concluded between the
parties the final decision of the arbitrator is binding on the parties. This is
in case where the nature of the arbitration is binding
most dominant effect of arbitration is producing an arbitration award
which is binding upon parties as if it were court judgment
Arbitral award -is the decision of an arbitrator which decides the
dispute and the rights of the parties with respect to it. It can be said
interim and final awards
- Interim award -disposes one or more issues in the arbitration but
which does not dispose of all issues
-Final award- Where the award of the arbitrator eventually settles all
issues which were forwarded for him

48. Reading Assignment
• Formation of Arbitral Tribunals
• Similarities and difference between arbitration and litigation