Disha Jain
ICFAI University, Dehradun
Alternative Dispute Resolution (ADR) is a procedural method by which parties would like to resolve their disputes outside the court.The great hopes for success of ADR faded quickly as ADR are facing huge issues and challenges, and are also not an effective means to define, refine, establish and promote a legal framework. They are not able to redress pervasive injustice, discrimination, or human rights problems. The difference between success and failure lies mainly in the level of commitment. Companies that give ADR top priority realizing immense savings of time, money, and relationships. In contrast, companies that let old litigious habits worm their way into the process might as well go back to court. This is the biggest challenge facing in implementation of the ADR. This depressing account graphically illustrates how an alternative method of dispute resolution can go wrong when the parties lack the commitment to make it work
Now, as currently the practice of ADR prevailing too often into private judicial proceedings that looks and costs like the litigation which is supposed to be prevent. Ingrained attitudes and belligerent corporate cultures worked against an equitable, agreeable outcome. It is important to consider these advantages and disadvantages before agreeing to arbitration, or any other kind of alternative dispute resolution. Chances are, you have already agreed to arbitration in many situations, without even knowing it. Many lease agreements and employment contracts have mandatory arbitration provisions, and they will usually be enforced, as long as certain standards are met (generally, they must not deprive a person of a constitutional right, and they should be reciprocal)
SOME SYSTEMIC PROBLEMS OF DISPUTE RESOLUTION IN ASIA
· Failure of a New York Convention-signatory state to ratify the convention
· Absence of mechanism or guidance for courts for the enforcement of foreign arbitral award enforcement of foreign arbitral award
· Adverse judicial attitude to enforcement process
· Judicial interference with arbitration on public policy grounds
· A court’s misinterpretation of the New York convention
· Lack of sufficient arbitration or ADR expertise in the Bar or the Bench in many Asian countries
CHALLENGES WHILE IMPLEMENTING ADR & SETTLEMENT PROCEDURE
1. Arbitrators were frequently and strongly attacked as partial and immature in resolving the disputes. At most parts it has proved out to be a mirror of the court litigation as many persons involved in the legal world are blissfully ignorant of the Alternative methodology in dispensing the even justice process through Arbitral process. So the arbitral justice system has co-extensively remained with the legal system but without much expected success which defeats the whole purpose of the Arbitration and Conciliation Act, 1996.
2. ADR isn’t really all that different from litigation. It may not protect parties’ legal rights. The rights of the parties may not be protected by alternative dispute resolution. Parties are not compelled to continue negotiations or mediation.
3. ADR generally resolve only issues of money or civil disputes.In this the proceedings will not result in injunctive orders i.e. they cannot issue orders requiring one party to do something, or refrain from doing something. They cannot result in an order requiring one of the parties to do or cease doing a particular affirmative act. They cannot change title to property, either. Also, some of the safeguards designed to protect parties in court may not be present in ADR.
4. Parties cannot be compelled to go in for ADR unless they sign an agreement or mutually agree to resolve their disputes by ADR even the unrepresented and/or uninformed parties are at disadvantage of succeeding in an ADR. Participation could be perceived as weakness. While the option of making the proceeding confidential addresses some of this concern, some parties still want to go to court “just on principle.”
5. Another biggest problems is with its application that the wide variety of ADR processes that have diverse rules and dynamics that can accomplish a range of goals which creates lot of confusion about various ADR methods while ADR systems were designed only to meet a wide variety of different goals, but somehow it lacked efficiency in meeting those goals.
6. Parties in conflict often misunderstand each other’s intentions and make negative assumptions about each other. Consequently a statement that might have seemed innocuous when two parties were friends might seem hostile or threatening when the same parties are in conflict.
7. The protection is all what a people want in form of remedy but under this settlement system one should must be aware that he is generally proceeding without the protections offered parties in litigation, such as those rules governing discovery. Courts generally allow a great deal of latitude in the discovery process, which you will not have in an alternative dispute resolution.
8. Also, there is very limited opportunity for judicial review of an arbitrator's decision. While a large arbitration service could, if it so chose, have some kind of process for internal appeals, the decision is usually final and binding, and can only be reviewed by a court in limited cases. The fact that the arbitrator made a decision that the court would not have made is not, by itself, a basis to overturn the decision.
9. Indian courts frequently failed to enforce arbitral awards, reconsidered arbitral decisions on the merits, and denied enforcement of awards as contrary to public policy which creates lack of success with ADR at so many companies that prompted us to take a closer look at how managers were implementing the ADR process. Thus, Damage awards, legal billings, and the number of lawsuits continued to raise that had embraced ADR. At many companies, ADR procedures now typically include a lot of excess baggage in the form of motions, briefs, discovery, depositions, judges, lawyers, court reporters, expert witnesses, publicity, and damage awards beyond reason (and beyond contractual limits).
10. ADR does not produce any legal precedent value.Usually in ADR proceedings, precedents are not given much importance. The outcomes of ADR can vary, depending on arbitrator / mediator and other factors. Poor mediator / arbitrator (qualifications, style and attitude) can result in unsuccessful resolution, and can defeat the purpose of ADR.
11. Lastly, the delay of the cases caused obstacle to the other development objectives, such as economic restructuring, or the management of tensions and conflicts in communities inhibit foreign investment., although ADR has been in use for many years with a growing use of International Commercial Arbitration, it holds a good scope in resolving commercial disputes involving higher stakes.
All the above mentioned reasons creates a great hurdle in making the ADR and out of court settlement successful and also a great challenge in dealing with it.
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countries
ome systemic problems of dispute resolution in Asia
Failure of a New York Convention-signatory state to
ratify the convention
Failure of a state party to ratify BIT that refers to ICSID
arbitration
Absence of mechanism or guidance for courts for the
enforcement of foreign arbitral award
15
enforcement of foreign arbitral award
Adverse judicial attitude to enforcement process
Judicial interference with arbitration on public policy
grounds
A court’s misinterpretation of the New York convention
Lack of sufficient arbitration or ADR expertise in the Bar
or the Bench in many Asian countrie
THE OTHER FACTORS WHICH AFFECTS SETTLEMENT OUT OF COURTS:-
· It can be used as a stalling tactic.
· The negative Attitudes towards the nature of ADR process and its success,
· The obstruction in the settlement,
· Ignorance and corruption involved in the proceeding,
· There is no guaranteed resolution. With the exception of arbitration, alternative dispute resolution processes do not always lead to a resolution.
· Arbitration decisions are final. With few exceptions, the decision of a neutral arbitrator cannot be appealed.
· Decisions of a court, on the other hand, usually can be appealed to a higher court.
· Dissatisfaction Problems in implementation
· Parties may have limited bargaining power that means they do not have much of a say.
· Little or no check on power imbalances between parties.
· Exclusion of pertinent parties weakens final agreement.
However, looking at the advantages as against the disadvantages of ADR, the balance lies in favour of advantages.More over the unethical lawyers who are diluting the whole arbitration system should be debarred from becoming a part of the Alternative Dispute System and must be heavily penalized.It’s important to bring about a change or it will always remain on its probation forever as it is not proving very good in improving the administration of justice and the settlement of particular disputes.