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ADR stands for Alternate Dispute Resolution and represents any method by which parties to a Civil dispute often arising in a business contract, agree to resolve their disputes outside the Courts. It is an alternative to "Litigation" where the Courts of a given jurisdiction are called upon to adjudicate the dispute and provide a "Judgment". The "Judgment" of a Court has the power of enforcement.
ADR is always suggested by a Civil Court when a dispute is first brought to them as per the provision of Section 89 of Civil Procedure Code. It is expected to speed up the resolution and also use procedures which are simple and follow the principle of natural justice.
ADR principally includes
a) Negotiation
b) Conciliation
c) Mediation and
d) Arbitration
Negotiation is a process by which the disputing parties try to discuss and resolve their disputes, some times with the assistance of other persons who can provide clarity to the dispute. Negotiation works when the parties to the dispute are communicative and the differences arise as to matters where either party is unable to accept the interpretation of the other. The assistance is normally sought to provide a neutral third party opinion particularly if such a party is an expert in the domain of dispute. The agreement reached may be documented so that it becomes an addendum to the basic contract.
Conciliation and Mediation are forms of ADR in which the third party does more than merely "Assisting" the disputing parties to arrive at a settlement. In "Mediation", he uses his counseling skills to make each of the parties agree to a "Give and Take" approach to find a solution. In "Conciliation", the mediator is a little more persuasive and often suggests a solution himself. He is often an "Expert" in the domain of the dispute and is respected by the disputing parties for his expertise and agree to be persuaded. But Mediation or Conciliation is still a process which has to be ratified by the parties in a supplementary agreement as in the case of a Negotiation and is not otherwise binding.
Arbitration on the other hand is a process where the third party called the "Arbitrator" is appointed by the disputing parties and they agree to bind themselves to the decision of the Arbitrator. It is normally a part of the original contract which includes an "Arbitration Clause" or is a supplementary agreement before the Arbitrators are agreed upon. While agreeing to subject themselves to Arbitration, parties also agree on the number of "Arbitrators" in the panel if there should be more than one, the type of expertise that they look for in the Arbitrator and also the Place where the Arbitration has to be held. Often they agree to go a permanent Arbitral house and subject to the conditions of the Arbitral house in terms of the place of arbitration and detailed rules of arbitration.
Arbitration award is often considered binding but is also challenged on the grounds that the process used was not in accordance with the agreement or principles of natural justice was not followed etc.
India has adopted Indian Arbitration and Conciliation Act 1996 amended from time to time with the latest Ordinance of 2015. (The amendment Bill to replace the ordinance is pending passage in the Parliament) which is the reference point for all Arbitrations. Other countries may have their own versions of Arbitration Act which determine the recommended process and the conditions under which the awards can be reviewed by the Judiciary as well as how the Awards are enforced.
Since all forms of ADR require meeting of parties to the dispute including the experts involved, Counsels of the disputing parties, witnesses etc, "Meeting" is the essence of ADR.
The services of ODR Global is meant to facilitate meeting in a virtual place so that the parties can simply attend the meeting without moving out of their office or residence or even while they are in travel. Hence this service can be used for all forms of ADR.
By additional measures such as Recording of the entire proceedings, presence of a representative of ODR Global as a Registrar and Certification of the proceedings by CEAC under Section 65B of Indian Evidence Act, the Virtual Meeting under ODR Global is rendered valuable perhaps as much as if not more than the physical meeting.
When Can you use Arbitration or Mediation? Who will Appoint an Arbitrator? Arbitration or Mediation is an Alternate Dispute Resolution (ADR) Mechanism to settle any disputes between two parties without resorting to the Courts and is normally part of the business contract. In India the contracts also specify that detailed process of Arbitration is guided by the Arbitration and Conciliation Act 1996. It is common to mention the "Place of Business" and whether the Arbitration would be conducted by a "Single Arbitrator" or "A Bench of Multiple Arbitrators" or by a "Specified Arbitration Council" as part of the Business Contract.
Where the business contract has omitted to provide for an ADR mechanism to be used, it is still open to the parties to a dispute to voluntarily agree to go for Arbitration or Mediation involving the services of an Arbitrator/Mediator to help them resolve their disputes arising out of the contract. In such cases, the agreement to use ADR is a supplementary agreement that appends to the original contractual agreement. The dispute will be settled based on the original contract and the supplementary agreement only adds ADR as a means of dispute resolution.
Normally, Arbitration award is binding on the parties though under certain circumstances the Award itself can be challenged in a Court.
Mediation is a facilitation process where the Mediator will assist the disputing parties to come to a settlement. Arbitration is a process where the Arbitrator will evaluate the claims of the disputing parties according to normal principles of justice and give an "Award" on the dispute to which the disputing parties voluntarily agree to abide.
Normally the Contract will specify how the Arbitrator would be appointed.
Some times the parties agree to use a specific Arbitration Council and the Council designates an Arbitrator.
In all other cases, the Arbitrator is chosen by the consent of both the parties with one of them suggesting a few names out of which the other accepts one.
Where there are three arbitrators, it is usually the practice that each one of the disputing parties will appoint one Arbitrator of his choice and they two together appoint the third.
The qualifications of the Arbitrators can be defined by the parties in the Contract.
In some contracts it may be considered essential that the Arbitrator possesses certain technical or domain knowledge. ODR Global may develop a "Panel of Experts" from whom the Arbitrators can chose such experts.
This is only an additional service that ODR Global may provide on request and is not binding on the users of the ODR Global service.
Arbitration Clause
For better clarity, next time you enter into any contract, suggest inclusion of an arbitration clause as follows:
"Any or All of the disputes arising out of or in connection with this contract shall be resolved by arbitration using the services of online arbitration services provided under www.odrglobal.in .The arbitration shall be subject to the provisions of the Indian Arbitration and Conciliation Act 1996 and consist of one/three* arbitrators.." (* use as appropriate). The seat of arbitration is deemed to be India* (*use as appropriate).
P.S: In order to use ODR services, it will be necessary for the parties to mention the e-mail addresses of the parties in the contact/notice clause in the contract.
For Further Reference:
