Author: Ayasha Rashid Momin

Introduction

When pending case and dispute acutely stuck down in the court and day by day justice delay at the time alternative dispute resolutions comes with fast-track process. It gives choice to improve the legal system and Fastly accept the modern solutions. When the legal court system comes no doubt its huge contribution to right justice, but it is a slightly delayed process hence its work on the big issues and social issues. When disputes are created in company, firm and business ADR is the best weapon in the legal branch. It deals with the matter very immediately and gives effective output to companies and others. We need the court which protects our rights in business, then the ADR is a faster tool to settle the fights between the parties.

History of ADR

The history of ADR in India has large and deep roots like banyan tree. Its ancient carry the ancient times of India in from of panchayat, Lok panchayat and others. In pre-colonial times dispute is resolved by the kula which indicate family councils, Sreni and Puga which are recognized as courts. They have the motive to protect their social life and maintain their balance. In the British era the Bengal resolutions first time introduced the Arbitration act of 1899. But it only applied to the Mumbai, Kolkata and madras which are famous for the presidency towns. In 1996 there are the limited judicial interventions hances when code civil procedure act 1999 introduced section 89 which says the if any civil matter found any settlement chance it refers to the settlement and ADR. Post independence ADR is growing like the building of the system. Arbitration and conciliation act 1996 replace the act 1940 and this replacement comes with the lots of improvements and needs of legal systems. In this act, the first time represents the conciliation process and concepts. In 2015 to 2019 many updates and amendments were made in the act. In 2015 fast track process introduced which is under the 6-month procedures rules. In 2019 Arbitration council of India established for the global Hub for ADR. In 2023, the mediation act 2023 act made for the mediation and pre litigation process. India treats the international commercial arbitrations separate under the HC ensure with the senior judges.

Types of ADR

Arbitration:

It is an effective tool for ADR. Where the parties decide the third person who decides the dispute between both parties. It is mainly used for commercial disputes. Early days it is also using for the civil disputes.

Process of arbitrations

It is done under the Arbitration and conciliation act in 1996.

Notice clause- section 21-

When dispute arises between parties and parties who are aggrieved, going to arbitration against the party who acts against the default wrong and sends the notice to party for the arbitration process.

Appointment of Arbitrator-section-11-

After the notice is received, both parties appoint the arbitrator. party may decide the arbitrator manually and number of arbitrators.

Statement of Claim-section-23-

Party must be present in the supporting documents and statements of facts before the arbitrator. In this also include the counter claim. If any amount already decides by the party against any kind of loss, then that also mentions in the statement of facts.

Hearing of Parties-

Here the acute starts the hearing of the party where both parties’ exchange information, and preliminary hearing starts. In preliminary hearing, the party decided the schedules of the hearing, addressed the issue, and exchanged information.

Award-section 28 and 36-

It is the final decision of an arbitrator which is binding on both parties. The award is a form of relief but in case dispute arises after the award then the appeal before the high court.

Execution of Award-section36-

When award passes by the tribunal, then the party whose favor of award may come and execute the award.

Mediation:

It is a structural process to resolve disputes. Where one or more parties come together and when arise the dispute between them then the party appoints the third person to resolve it. People call the mediator and process called the mediations.

Process of Mediation:

It is done under the mediation act 2023:

Initial of mediation:

Party may decide the dispute at mediation without involving any court process and filling the case in court. Many times, parties include the cause of mediation in their contract. Or any court referral to the matter for the mediations.

Appointment- clause-8-

When any dispute arises between the parties, then the party may appoint the meditator. Usually, the meditator is the third person who doesn’t have any interest or personal profits from disputes and parties. If the party can’t agree with the mediator, they can apply to the MSP within 7 days.

Mediation proceedings-

In normal manner mediations are conducted in the territorial jurisdiction, but any court refers to the dispute then mediation will be able to do out of jurisdiction as well. Or if any party is ready, then it will be conducted in an online manner. This process is informal and not bound with the Code of Civil and BSA. But mediators or parties may make the process of mediation and dispute very confidential. No one can allow us to share information. Both parties may present the supporting statement and evidence or documents.

Time limit-

The process of mediation must be completed between the 120 days of first appearance before the mediators. But if any delay happens then 60 days will be extended.

Conciliation:

It is a friendly process where we settle the legal disputes with the help of trial and hearings. It is the same as mediation, but a thin line difference is there.

Process of conciliations:

It is done under the Indian Arbitration and Conciliation Act, 1996.

Commencements of proceeding: sections 62:

The process of conciliation starts when any dispute arises between the party, and any aggrieved party writes the invitation of conciliations and sends it to the other party, and that party will accept it and write an acceptation of invitation letter.

Appointment of conciliator: section 64:

The party must agree on the same conciliator party may appoint the one or three conciliators. Each party appoints one and two conciliators. appoint one main conciliator.

Submission of statements: section 65:

After the appointment of conciliator, conciliator may request both parties to represent the statement of fact and dispute of issue. After this proceeding will start.

Conduct the proceeding: section 67&69:

Conciliators may have the freedom to conduct the proceeding in an appropriate manner. In this conciliator, meet the party together or separate.

Role of conciliator: section 67(4):

Here are the conciliators that play the most important role. He listens to the party and if any need, then appoints the expert and gives the expert advice.

The Settlement Agreement: section 73&74:

When all hearings are done then the party agrees on the settlement draft with the settlement agreement. When parties agree and sign the settlement agreement, it becomes final and bound on party.

Negotiation:

Negotiation is the process where the parties interact with each other when dispute arises between them.

Process of negotiations:

Preparation and planning:

When dispute arises between the party and they face a critical phase then they define their aims. Establishing their own BATNA means the best alternative to negotiated agreements. Party may also identify the red flags and walk away points. Understand the needs and potential of the party and their needs.

Exchange the information:

Both parties may exchange information related to the issue. They provide statements of facts and supporting documents. Share their own perspective with their party. Listen to each other and build trust for the resolutions.

Bargaining and problem solving:

It is the main core of the process where the parties give and take the values. It has a simple rule to never give anything without return in something. Keep continuing the discussions.

Closure and Implementation:

When agreements riches the final stage verbally orally recap, the points of agreements put all writing documents or send it with each other.

Evaluation:

Evaluation of all agreements. Analyze the outcomes and review the relationships.

Recent developments:

Restraint on modify the award:

Gayatri Balasamy v. M/s ISG Novasoft Technologies Ltd. (April 2025) in this case SC 5- judge bench decision held that under section 34 court have only a set aside power. Court did not have

Power to change it or modify it whole. They can’t alter it.

Systemic Overhaul:

The T.K. Viswanathan Committee (2024-2025) and the Draft Amendment Bill (2024) have goal to fix the Indian arbitrations delays, high price of the system. And both have aims to make the global hub of arbitrations. Hence, they change some rules and modify the old system to a modern system. Now the institutional organization has the right to select the professional staff, fix the fees, and handle their own admin work. If any emergency order is needed, then go to the emergency arbitrator and within 30 days it should be decided. This committee and bill also promote the digital signatures of audio and video hearing and paperless work.

IBC & Arbitration:

NCLT vs. DRT (Jan 2026) in this case Bombay HC affirmed that if case goes to the national company law tribunal, then stop appointing private arbitrators. IBC is the win before the arbitration act. You can only use private arbitrators when assets that NCLT is supposed to distribute fairly at all.

Avoid the appoint sole arbitrator:

M/S. M.V. Omni Projects (India) Ltd. v. Union of India 2026 justice C. Hari Shankar and Justice Om Prakash Shukla held that party dose not appoint the unilateral arbitrator for themself without known. If he wants to appoint then it is expressed in written and executed by both parties. When any sole unilateral arbitrator is appointed then it comes under the void ab initio.

Ai role in ADR:

In 2025, using AI in ADR increases majorly. It is used for reviewing documents and case management. With the help of AI, the ADR becomes easy or fast in process.

International Arbitration and Commercial ADR (2025-2026): Objective:

1. Maintain the transparency and codify the AI process.
2. Final award or reasoning taken by the human not AI to prevent the challenges under section 34 of the arbitration act.
3. Reducing the time for award with the AAA-ICDR.
4. Disclose the third-party funding.
5. Using the med-arb means before it comes to tribunal mandated to go for mediation.

Summary:

ADR becomes very common in India. ADR helps to reduce the court burden and person burden as well. ADR plays a wider role in the corporate and commercial sections. When case stuck down in court then company name, good will automatically down and it promotes the less business system but with the help of ADR dealing with it is easy and fast. It proved speed, cost effectiveness, reducing the backlogs of courts, and protecting the relationships between both parties.