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Alternative Dispute Resolution (ADR)- History and Conventions

Any method of resolving disputes without litigation i.e. outside the courtroom is known as Alternative Dispute Resolution (ADR). ADR is an umbrella term that includes all legally permitted processes of dispute resolution, other than litigation.

As per Tania Sourdin, “it is a method that usually involves a third party that is a skilled helper who either assists the parties of the dispute to reach at a decision by agreement or facilitates in arriving at a solution to the problem between the parties to the dispute”.
As per H.K. Saharay, “Arbitration is a process for settlement of disputes fairly and equitably through a person or persons or an institutional body without recourse to litigation by the disputing parties pursuant to an agreement”.

So, let us look at how the various ADR mechanisms entered the legal system in most developed countries in the world, in brief :)

ADR in ancient times:

ADR or some of its processes have been used in India since ancient times, some of these processes are:

1. Panchayats:

Panchayats were/are usually prevalent in rural areas. It is a place where the chosen people from the area gather to hear the matter of two parties and try to settle them amicably.

2. Gathering or Family Council:

In case of a dispute arising in a family, the elders of the family intervene by hearing the matter and then providing a solution to it.

3. Adhikrita and Nripa. (Courts appointed by Kings):

Kings of states used to select the courts and in those courts, matters were heard to fix the said problems. The examples of King’s Council members gathering to hear matters were found to have been happening since the Mauryan era at Patliputra (present-day Patna).

4. Mughal Period :

Even from the onset of the Mughals arriving in India they were determined to administer the values of justice and law in their administrations. Judges, known as Kazee, used to follow Hedaya (guidance) to try and guide the two parties to resolve a matter.

ADR in India during British Era:

The regulation of 1787 empowered the then courts to refer suits for arbitration. The Bengal resolution of 1793 ( Act XVI of 1793) empowered courts to address a matter of arbitration with the consent of the parties involved where, the value of suit did not exceed 200Rs and thus, were primarily matters related to accounts, partnership, debts, non-performance of contractual obligations, etc.

Dispute resolution in British Buildings

Regulation XV of 1795 extended the 1793 resolution to the territory Madras. Similarly, Regulation XXI of 1803 extended XVI to territory ceded by Nawab Wazir. Similarly, the initiative taken at Madras was extended to the Presidency of Bombay in 1827.

The Civil Procedure Code, 1859 added the provisions which empowered the court to refer disputes to arbitration (Chapter VI Section 312-327 but, not applicable to SC and small cause courts). Under British Rule, Indian Arbitration Act, 1899 was introduced as the first Indian legislation regarding ADR and there it was provided- the matters that would be settled by agreement between parties and did not require court supervision, and everything else was left to the purview of Schedule 2 of Code of Civil Procedure, 1908. The next legislation regarding any ADR process would come in the form of the Arbitration Act of 1940 which consolidated and amended the laws of arbitration and got assent on 11th March 1940 from the Governor-General.

Arbitration Act, 1940 would ultimately prove to be technically complicated, time-consuming, and expensive in proceedings. The Act had only concerned itself with domestic arbitration and there was no substantial part on international ADR proceedings of any kind.

Further, there was increasing growth in this sphere in the World through various conventions that were joined by many nations.

The Conventions that shaped Alternative Dispute Resolution in the modern era:

An international convention

1. 1927 Geneva Convention on the Execution of Foreign Arbitral Awards:

Article 2 of this convention provided that, the enforcement of an award could be refused by the contracting parties even if the conditions of the said article were fulfilled.

Some of the grounds based on which an award could be annulled are:

  1. It is annulled in the country in which the award was made.

  2. The party against whom the award is sought was not given ample time or opportunity to present their case or were not properly represented in a legal capacity.

  3. The dispute between the parties decided on, was beyond the scope of what was submitted to arbitration in the agreement.

This article applied to any award which was given after the enforcement of the 1923 Geneva Protocol on Arbitration Clauses.

Read more about the convention, HERE.

2. 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (The New York Convention):

This convention provided for uniform legislative standards for recognition of arbitral awards and agreements or recognition of courts that are treated as ‘foreign’ under legislation due to some “foreign elements” in its proceedings. The main objective behind this convention was to prevent discrimination between domestic and foreign arbitral awards by compelling signatory parties to enforce foreign awards with the same standard as domestic awards.

However, any foreign award may be refused under certain grounds provided by the convention:

  1. Lack of valid arbitration agreement.

  2. Violation of due process.

  3. Excess of the arbitral tribunal’s authority.

  4. Irregularity in the composition of the arbitral tribunal or arbitral procedure. v) The award “has not yet become binding”.

  5. The award has been “set aside”.

  6. The award “has been suspended”.

Read more about the convention, HERE.

3. 1961 European Convention on International Commercial Arbitration (Geneva Convention):

This convention was applicable on agreements to settle disputes arising out of any trade relationship between the two or more physical or legal persons when such agreement is concluded at their habitual place of residence or they are seated in different contracting states. This convention was concerned with making the process of arbitration organized and uniform.

This convention also deals with the jurisdictions of domestic courts of law. While taking the decisions that concern the validity or existence of agreement of arbitration, these domestic courts of respective contracting parties examine the validity based on the contracting capacity of parties, under the laws which apply to them. Certain provisions for refusal or setting aside an arbitral award have also been stated in this convention.

Read more about the convention, HERE.

4. 1965 Convention on the settlement of Investment Disputes between States and Nationals of Other States (Washington or ICSID Convention):

Signed on 18th March 1965, this convention deals with the dispute settlement between states and nationals of other states and led to the establishment of the International Centre for Settlement of International Disputes (ICSID) under the aegis of the World Bank Group. The objective of ICSID was the settlement of disputes arising between foreign investors and contracting parties through arbitration and conciliation.

Read more about the convention, HERE.

Why did India need new Alternative Dispute Resolution Laws?

Judge's Gavel

1. To provide an alternate method to litigation:

This process is an able alternative option to the traditional process in courts. A set of procedures are given so that fair proceedings are ensured.

2. Economic benefit:

ADR provides a forum for a process of easy, less expensive, simple, and result-oriented process for disposing of the cases. Right from filing a suit till the final judgment, the litigants have to bear huge expenses. ADR facilitates bypassing this hurdle as it is less expensive than an ordinary suit.

3. To dispose of cases expeditiously:

More than 25 million backlogs of cases and more than 20-year delays in the decision on disputes in urban areas have proven to be a travesty for the Indian Judicial system. By legally bypassing cases to the ADR mechanism, the pending cases will be disposed of quickly. As far as new cases are concerned when and if they are submitted to ADR, the simple nature of the proceedings shall ensure a speedy resolution of issues between the parties.

4. To prevent the filing of suits for trivial matters:

Litigation of trivial matters is one of the causes for the aforementioned piling up of cases in the country. So ADR mechanisms in a way prevent such trivial cases and provide for resolving whatever dispute there is between two or more parties.

5. To come up with amicable solutions for the disputes:

ADR aims at bringing about cooperation between the parties to settle a dispute. It is also aimed at removing bias amongst the parties to ensure that the proceedings are fair. It is not adversarial and helps better understanding the differences between the parties. In a way, the relationship of the parties is also maintained.


Due to the major developments taking place in the 20th century in the field of ADR, Indian Jurisprudence saw major changes in the 1990s and therefore, felt the need for a brand new code for easing the ever-growing pressure on the Courts in the country's legal system. Hence, the Arbitration and Conciliation Act was introduced in 1996 and Section 89 of the Civil Procedure Code, 1908 was also readily acknowledged by the Courts (provided the parties wanted to go for ADR.

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Simranlaw Chandigarh
Simranlaw Chandigarh
29 de nov. de 2023

Thank you for sharing a valuable thing about the rules and regulations of law.

For more details, you can also visit Best Lawyers in Chandigarh.

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