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Published : September 22, 2016 | Author : meghas
Category : Intellectual Property | Total Views : 6553 | Rating :

LL.M, GNLU, Gandhinagar BBA-LL.B (Hons.), ICFAI University, Dehradun

International Commercial Arbitration

‘Arbitration’ as a mechanism of justice is as old as civilization. Arbitration literally means a mechanism in law which encourages parties to settle their differences privately either by mutual consensus or by mediation of a third person. It was prevalent under the Roman law and the Greek civilization in the sixth century. Earlier in England, the attitude towards arbitration was generally hostile but business exigencies changed the scene, in course of time as a yielding place for commercial arbitration. Ancient India had many traditions of arbitration/ mediation up to the medieval period.

The questions like what is the purpose of arbitration?, what are prevalent treaties and conventions regarding arbitration?, what are the laws present in India dealing with arbitration? are dealt in detail in the paper, as human conflicts are inevitable so are the disputes. It is difficult to imagine a human society without conflict of interest. Disputes must be resolved at the minimum possible cost both in terms of money and time.

Courts have become overcrowded with litigants. According to an official report of the year 2014, there is a pendency of over ninety-two crore cases in our high courts across the nation. Naturally litigants have to face so much loss of time and money that at long last when a relief is obtained, it may not be worth the costs. Thus this paper will also be an attempt to devise a machinery which should be capable of providing an alternative to the conventional methods of resolving disputes. All that can be said is that “ADR is rapidly developing its own national institutions, experience, and theoretical and practical development, and at the same time offering a simpler cross-border dispute resolution approach.”

For resolution of disputes, there is a legal system in every human society. Every injured person is supposed to go to the courts for his redressal. All the legal systems are trying to attain the legal ideal that wherever there is a wrong there must be a remedy so that nobody shall take law into his own hands. Courts have become overcrowded with litigants. According to an official report of the year 2014, there is a pendency of over ninety-two crore cases in our nation-wise high courts. Naturally, litigants have to face so much loss of time and money that at long last when a relief is obtained, it may not be worth the cost.

Hence, began the search for alternatives to the conventional court system. A large number of quasi-judicial and administrative tribunals have been created for quicker reliefs. All these tribunals and forums are in a way an alternative method of dispute redressal. But even such tribunals and forums have become overcrowded with the result that they are not able to provide relief within good time. Many tribunals in service matters have been able to provide relief only when the aggrieved employee has already retired from his position. Relief in terms of money which he may ultimately get may not be worth the service period lost. Consumer forums came into being to provide quick, effective and costless relief to buyers of goods and hirers of services. In a large number of cases, delayed consumer remedies have also lost their swiftness. Furthermore, they are not able to provide any remedy for non-consumer matters.

Thus, there remains the need of an alternative remedy which will not be bogged down by costs and delays. As and when such a method of dispute resolution is discovered or devised, or if it has already been discovered or devised, it will be entitled to be given the name of ADR, Alternative Dispute Resolution.

Arbitration is a method of settlement of disputes as an alternative to the normal judicial method. It is one of the methods of alternative dispute resolution (ADR). Among all the forms of ADR like conciliation, mediation, negotiations, etc., arbitration has become the dominant form. It is more firmly established in its utility. The reason for this phenomenal popularity and value is that it is the only real alternative to judicial adjudication. The role and interference of courts in the process of arbitration has been minimized.

Origin Of ADR

ADR is today being increasingly acknowledged in the field of law as well as in the commercial sector. The very reasons for origin of ADR are the tiresome process of litigation, costs and inadequacy of the court system. It broke through the resistance of the vested interests because of its ability to provide cheap and quick relief. In the last quarter of the previous century, there was the phenomenal growth in science and technology. It made a great impact on commercial life by increasing competition throughout the world. It also made a great impact on commercial life by increasing competition throughout the world. It also generated a concern for consumers for protection of their rights. The legal system did not give any response to the new atmosphere and problems of the commercial world. Thus, ADR emerged as a powerful weapon for resolution of disputes at domestic as well as international level. It is developing as a separate and independent branch of legal discipline.

Arbitration as a mechanism of justice is as old as civilization. Forms differed-as they must-from time to time and place to place. It was prevalent under the Roman law and in the Greek civilization since the sixth century BC. However, in England in the early period, the attitude towards arbitration is generally hostile. There was a policy against agreements ousting the jurisdiction of courts. Such agreements were considered as void against public policy. Business exigencies changed the scene in course of time, yielding place for commercial arbitration.

In the USA, the story about arbitration significantly begins in 1987 when the Chambers of Commerce New York State established the first privately administered tribunal of businessmen. New York adopted the first modern arbitration law in 1920 which was followed by the federal government in 1925 and subsequently by more than a dozen states. The areas covered were, however, different. A uniform arbitration law was adopted by the National Conference of the Commissioners on Uniform State Laws in 1955 and it was amended thereafter.

Ancient India has many traditions of arbitration/conciliation up to medieval period. The affairs of the community were generally managed, in cases of disputes between members, by a single headman whose office was either hereditary or elective. In some parts, this authority vested not in a council, it had a name, panchayat, with the standard constitution of five persons. Traces of this institution can be found in India even today, though in the primitive communities.

An assembly for administration of justice was of various types and composition. It was either stationary, being held in the village under a tree, or movable, being held in fields. It was constituted at the initiation of the parties who solicited the cognizance and determination of their problems, and was established by the voluntary consent and not by operation of law. To adjudicate or determine the dispute between the contending parties, the heads of the family or the chief of the community, or the inhabitants of the town or village selected a referee approved by both the parties. Amongst the persons living a nomadic life, an assembly was held in the wilderness; amongst those who belonged to the army, in the camp; and amongst merchants and artisans, in the caravan. Brihaspati, Gautam and others make copious reference to these features. Yajnavalkya and Narad have referred to various grades of arbitrators in ancient India, such as (i) the Puga or boards of person belonging to different sects and tribes, but residents of the same locality; (ii) the Sreni, belonging to different sects and tribes or assemblies and meeting of tradesman and artisans belonging to different tribes, but having some kind of connection with one another through the profession practiced by them; and (iii) the Kula or meetings of kinsmen or assemblages of relations. There was hierarchy in appeals also. From the decision rendered by Kulla appealed laid to Sreni and from the decision rendered by Sreni to Puga and from the decision of Puga to the King’s judge and also to the king himself.

This scene changed with the arrival of East India Company in Bengal and Benares. As the Company established its roots in the soil of India, these institutions started vanishing and their place was taken by the foreign modes of dealings with such matters. The Bengal Regulations of 1772 provided that the parties to the dispute relating to accounts shall submit the dispute to arbitration.

Scope And Development Of ADR

Alternative Dispute Resolution is an alternative to the traditional process of dispute resolution through courts. It refers to set of practices and techniques to resolve disputes outside the courts. It is mostly a non-judicial means or procedures for the settlement of disputes. ADR has been a spoke in the wheel of the larger formal legal system in India since time immemorial. The search for a simple, quick, flexible and accessible dispute resolution system has resulted in the adoption of Alternative Dispute Resolution’ mechanisms. The primary object of ADR system is avoidance of vexation, expense, and delay and the promotion of the ideal of ―access to justice.

The ADR techniques mainly consist of negotiation, conciliation, mediation, arbitration and a series of hybrid procedures. Arbitration is adjudicatory and the result is binding, whereas conciliation is consensual and very helpful in making the parties in setting their disputes mutually with the help of a neutral third person. The success of conciliation depends on the mental attitude of the parties, the skill of the conciliator and creation of proper environment which is most essential in matrimonial disputes. Negotiation is a non-binding procedure resorted to buy the parties for arriving at a negotiated settlement. Willingness to resolve the dispute and objectivity necessarily becomes essential to arrive at a negotiated settlement. Mediation is a decision-making process in which the parties are assisted by a third party, the mediator. The mediator attempts to improve the process of decision making and to assist the parties’ reach an outcome to which each of them can consent.

ADR is based on more direct participation by the disputants rather than being run by lawyers and judges. This type of involvement is believed to increase people’s satisfaction with the outcome as well as their compliance with the settlement reached. Most ADR processes are based on an integrative approach. They are more cooperative and less competitive than adversarial court based methods like litigation. For this reason, ADR tends to generate less escalation and ill-will between parties. This is a key advantage in situation where the parties most continue to interact after settlement is reached, such as in matrimonial cases of labor-management cases.

Legislative Recognition Of ADR

Alternative Dispute Redressal or Alternative Dispute Resolution has been an integral part of our historical past. Like the zero, the concept of ‘Lok Adalat’ is an innovative Indian contribution to the world of Jurisprudence. The institution of Lok Adalat in India, as the very name suggests means, Peoples’ Court. ‘Lok’ stands for ‘people’ and the vernacular meaning of the term ‘Adalat’ is the Court. India has a long tradition and history of such methods being practiced in the society at grass root level. These are called panchayat, and in legal terminology these are called arbitration. These are widely used in India for resolution of disputes both commercially and non-commercially.

The concept of Lok Adalat was pushed back into oblivion in last few centuries before independence and particularly during the British regime. Now this concept has once again been rejuvenated. It has once again become familiar and popular amongst litigants.

The movement towards Alternative Dispute Redressal (ADR) has received Parliamentary recognition and support. The advent of Legal Services Authorities Act, 1987 gave a statutory status to Lok Adalats, pursuant to the constitutional mandate in Article- 39A of the Constitution of India, which contains various provisions for settlement of disputes through Lok Adalat. It is an Act to constitute legal service authorities to provide free and competent legal services to the weaker sections of the society to ensure that opportunities for securing justice are not denied to any citizen by reason of economic and other disabilities, and to organise Lok Adalats to secure that the operation of the legal system promotes justice on a basis of equal opportunity. Before the enforcement of the Act, the settlements of disputes were in the hands of the Panchayat head or the tribal head. But when statutory recognition had been given to Lok Adalat, it was specifically provided that the award passed by the Lok Adalat formulating the terms of compromise will have the force of decree of a court which can be executed as a civil court decree.

In India, laws relating to resolution of disputes have been amended from time to time to facilitate speedy dispute resolution. The Judiciary has also encouraged out of court settlements to alleviate the increasing backlog of cases pending in the courts. To effectively implement the ADR mechanism, organizations like ICA, ICADR were established, Consumer Redressal forums and Lok Adalats revived. The Arbitration Act, 1940 was repealed and a new and effective arbitration system was introduced by the enactment of the Arbitration and Conciliation Act, 1996. This law is based on the United Nations Commission on International Trade Law (UNCITRAL) model law on International Commercial Arbitration.

In Sitanna v. Viranna , the Privy Council affirmed the decision of the Panchayat and Sir John Wallis observed that the reference to a village panchayat is the time-honoured method of deciding disputes. It avoids protracted litigation and is based on the ground realities verified in person by the adjudicators and the award is fair and honest settlement of doubtful claims based on legal and moral grounds.

The legislative sensitivity towards providing a speedy and efficacious justice in India is mainly reflected in two enactments. The first one is the Arbitration and Conciliation Act, 1996 and the second one is the incorporation of section 89 in the traditional Civil Procedure Code (CPC).

The adoption of the liberalized economic policy by India in 1991 has paved way for integration of Indian economy with global economy. This resulted in the enactment of the Arbitration and Conciliation Act, 1996 (hereinafter referred as ‘new Act’) by the legislature as India had to comply with well-accepted International norms. It superseded the obsolete and cumbersome Arbitration Act, 1940. The new Act has made radical and uplifting changes in the law of arbitration and has introduced new concepts like conciliation to curb delays and bring about speedier settlement of commercial disputes. The new Act has been codified on the lines of the Model Law on International Commercial Arbitration as adopted by the United Nations Commission on International Trade Law (UNCITRAL). One of the most commendable objects of the new Act is to minimize the role of the courts in the arbitration process. The Arbitration and Conciliation Act, 1996 laid down the minimum standards, which are required for an effective Alternative Dispute Resolution Mechanism.

Further, the recent amendments of the Civil Procedure Code will give a boost to ADR. Section 89 (1) of CPC deals with the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement. While upholding the validity of the CPC amendments in Salem Advocate Bar Association, Tamil Nadu v. U.O.I , the Supreme Court had directed the constitution of an expert committee to formulate the manner in which section 89 and other provisions introduced in CPC have to be brought into operation. The Court also directed to devise a model case management formula as well as rules and regulations, which should be followed while taking recourse to alternative dispute redressal referred to in Section 89 of CPC. All these efforts are aimed at securing the valuable right to speedy trial to the litigants.

ADR was at one point of time considered to be a voluntary act on the apart of the parties which has obtained statutory recognition in terms of Civil Procedure Code (Amendment) Act, 1999; Arbitration and Conciliation Act, 1996; Legal Services Authorities Act, 1997 and Legal Services Authorities (Amendment) Act, 2002. The access to justice is a human right and fair trial is also a human right. In India, it is a Constitutional obligation in terms of Art.14 and 21. Recourse to ADR as a means to have access to justice may, therefore, have to be considered as a human right problem. Considered in that context the judiciary will have an important role to play.

The Supreme Court of India has also suggested making ADR as ‘a part of a package system designed to meet the needs of the consumers of justice’. The pressure on the judiciary due to large number of pending cases has always been a matter of concern as that being an obvious cause of delay. The culture of establishment of special courts and tribunals has been pointed out by the Hon’ble Supreme Court of India in number of cases. The rationale for such an establishment ostensibly was speedy and efficacious disposal of certain types of offences.

Industrial Disputes Act, 1947 provides the provision both for conciliation and arbitration for the purpose of settlement of disputes. In Rajasthan State Road Transport Corporation v. Krishna Kant , the Supreme Court observed: “The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute-resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute.”

Section 23(2) of the Hindu Marriage Act, 1955 mandates the duty on the court that before granting relief under this Act, the Court shall in the first instance; make an endeavour to bring about reconciliation between the parties, where it is possible according to nature and circumstances of the case. For the purpose of reconciliation, the Court may adjourn the proceeding for a reasonable period and refer the matter to person nominated by court or parties with the direction to report to the court as to the result of the reconciliation [Section 23(3) of the Act].

The Family Court Act, 1984 was enacted to provide for the establishment of Family Courts with a view to promote conciliation in, and secure speedy settlement of, disputes relating to marriage and family affairs and for matter connected therewith by adopting an approach radically different from the ordinary civil proceedings. Section 9 of the Family Courts Act, 1984 lays down the duty of the family Court to assist and persuade the parties, at first instance, in arriving at a settlement in respect of subject matter. The Family Court has also been conferred with the power to adjourn the proceedings for any reasonable period to enable attempts to be made to effect settlement if there is a reasonable possibility.

International Initiatives Towards The Development Of Alternative Dispute Resolution

The history of Alternative Dispute Resolution forum at international level can be traced back from the period of Renaissance, when Catholic Popes acted as arbitrators in solving conflicts arising between European countries. International law can be determined through a great variety of procedures of which the main classes are both the national and the international adjudicative bodies. In particular, in the context of international courts and tribunals the character of most interstate adjudication as a kind of arbitration agreed between the states concerned became visible. Traditional interstate adjudication provides the procedural means which the state parties consider appropriate to facilitate their desire to settle the issue in a flexible manner. Although the procedural authority lies generally with the international courts reflecting the national model of a fixed and unalterable lex fori proceduralis it is never authoritatively exercised against the state parties. The basic idea is to facilitate dispute settlement rather than executing and enforcing an overarching international legal order. One major reason for this character of international adjudication is the lack of authority granted to international courts reflected in the most meagre and rare submission of states to jurisdiction according to Article 36(2) of the ICJ Statute. No enforcement of judgments against the will of the judgment debtor may be expected. The other major reason is that international law’s incoherent structure is more apt and ready to settle disputes than to enforce coherent doctrines rarely endorsed by the states as the ultimate standard of their international behaviour.

ADR has given fruitful results not only in international political arena but also in international business world in settling commercial disputes among many co-operative houses for e.g. settling of long standing commercial dispute between General Motors Company and Johnson Matthey Inc. which was pending in U.S District Court since past few years.

ADR is now a growing and accepted tool of reform in dispute management in American and European commercial communities. ADR can be considered as a co-operative problem-solving system. ADR is an alternative to adjudication, for example, court annexed arbitration or court annexed conciliation, but it may be complimentary to the court procedures. There was a time when civil litigation was considered to be time consuming and costly method of dispensing justice and commercial people preferred to resort to arbitration. Now ADR has become popular and desirable in USA, UK, Canada, Hong Kong and Australia as it is effective, cost efficient and speedy form of dispute resolution. It has been observed that ADR is able to produce better outcomes than the traditional courts because firstly different kinds of disputes may require different kind of approaches which may perhaps be not available in the courts. Second factor for resorting ADR techniques to resolve the disputes is direct involvement and intensive participation by the parties in the negotiation to arrive at a settlement. Third advantage of accepting ADR is the intervention of a skilled neutral Adviser which is always very helpful in arriving at a settlement.

The increasing growth of global trade and the delay in disposal of cases in courts under the normal system in several countries made it imperative to have the perception of an Alternative Dispute Resolution System (ADRS), more particularly, in the matter of commercial disputes. When the entire world was moving in favour of a speedy resolution of commercial disputes, the United Nations Commission on International Trade Law way back in 1985 adopted the UNCITRAL Model Law of International Commercial Arbitration and since then a number of countries has given recognition to that model in their respective Legislative systems. An important feature of the said model is that it has harmonized the concept of arbitration and conciliation in order to designate it for universal application.

Treaties And Conventions

1. 1923 Geneva Protocol on Arbitration Clauses:

In this Geneva Protocol each of the Contracting States recognizes the validity of an agreement whether relating to existing or future differences between parties subject respectively to the jurisdiction of different Contracting States by which the parties to a contract agree to submit to arbitration all or any differences that may arise in connection with such contract relating to commercial matters or to any other matter capable of settlement by arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject.

Thereby in this present Protocol, each Contracting State reserves the right to limit the obligation mentioned above to contracts which are considered as commercial under its national law.

2. 1927 Geneva Convention on the Execution of Foreign Arbitral Awards:

In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement whether relating to existing or future differences (hereinafter called "a submission to arbitration") covered by the Protocol on Arbitration Clauses, opened at Geneva on September 24, 1923 shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties. Besides this some necessary conditions are to be fulfilled to obtain such recognition or enforcement.

The present Convention applies only to arbitral awards made after the coming-into-force of the Protocol on Arbitration Clauses, opened at Geneva on September 24, 1923. It does not apply to the Colonies, Protectorates or territories under suzerainty or mandate of any High Contracting Party unless they are specially mentioned.

3. 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention):

Recognising the growing importance of international arbitration as a means of settling disputes, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards or rather can also be recognised as New York Convention seeks to provide common legislative standards for the recognition of arbitration agreements and court recognition, are treated as “foreign” under its laws because of some foreign element in the proceedings.

The Convention’s principle aim is that foreign and non-domestic arbitral awards will not be discriminated against and it obliges parties to ensure such awards are recognised and generally capable of enforcement in their jurisdiction in the same way as domestic awards. An ancillary aim of the Convention is to require courts of parties to give full effect to arbitration agreements by requiring courts to deny the parties access to court in contravention of their agreement to refer the matter to an arbitral tribunal.

The Convention deals with the field of application, i.e. the recognition and enforcement of foreign arbitral awards (arbitral awards made in the territory of another State).

4. 2006 Recommendation regarding Interpretation of Article II (2) and Article VII (1) of the New York Convention:

The Recommendation was adopted by UNCITRAL on 7th July, 2006. It was drafted in recognition of the widening use of electronic commerce and enactments of domestic legislation as well as case law, which are more favourable than the New York Convention is respect is respect of the form requirement governing arbitration agreements, arbitration proceedings, and the enforcement of arbitral awards.

5.1961 European Convention on International Commercial Arbitration (Geneva Convention):

Arbitration agreements concluded for the purpose of settling disputes arising from international trade between physical or legal persons having, when concluding the agreement, their habitual place of residence or their seat in different Contracting States.

6.1962 Agreement relating on Application of the European Convention on International Commercial Arbitration (Paris Agreement):

This Agreement shall be open for signature by the member States of the Council of Europe. It shall be ratified or accepted. Instruments of ratification or acceptance shall be deposited with the Secretary-General of the Council of Europe.

7.1965 Convention on the Settlement of Investment Disputes Between States And Nationals of Other States (Washington or ICSID Convention):

The Convention on the Settlement of Investment Disputes between States and Nationals of other States signed in Washington on 18 March 1965, established the International Centre for Settlement of Investment Disputes (ICSID) within the World Bank Group. The purpose of the Centre is to resolve, through conciliation and arbitration, disputes arising between Contracting States and foreign investors.

ICSID arbitration and conciliation allows States and foreign investors to settle their disputes on an equal footing within an international institutional framework.

8. 1966 Convention Providing a Uniform Law on Arbitration (Strasbourg Convention):

Each Contracting Party undertakes to incorporate in its law, within six months of the date of entry into force of this Convention in respect of that Party, the provisions of the uniform law contained in Annex I to this Convention. Each Contracting Party has the right, in its law to supplement the uniform law by provisions designed to regulate questions for which no solutions are provided, on condition that such provisions are not incompatible with the uniform law.

9. 1972 Convention on the Settlement by Arbitration of Civil Law Disputes resulting from Relations of Economic And Scientific Technical Cooperation (Moscow Convention):

In this Moscow Convention all disputes between economic organizations resulting from contractual and other civil law cases arising between them in the course of economic and scientific-technical cooperation of the countries-parties to the present Convention shall be subject to arbitration proceedings with the exclusion of the above disputes from jurisdiction of the courts of law.

10.1975 Inter- American Convention on International Commercial Arbitration (Panama Convention):

The Inter-American Convention on International Commercial Arbitration, signed in Panama on 30 January 1975, is one of the main arbitral conventions for the American continent. As for the others, these are the New York Convention of 12 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards and the Inter-American Convention on Extraterritorial Validity of Foreign Judgements and Arbitral Awards, signed in Montevideo on 8 May 1979.

11. 1976 UNCITRAL Arbitration Rules:

Adopted by UNCITRAL on 28 April 1976, the UNCITRAL Arbitration Rules provide a comprehensive set of procedural rules upon which parties may agree for the conduct of arbitral proceedings arising out of their commercial relationship and are widely used in ad hoc arbitrations as well as administered arbitrations. The Rules cover all aspects of the arbitral process, providing a model arbitration clause, setting out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings and establishing rules in relation to the form, effect and interpretation of the award.

2002 UNCITRAL Model Law on International Commercial Conciliation with Guide to Enactment and Use:

Adopted by UNCITRAL on 24 June 2002, the Model Law provides uniform rules in respect of the conciliation process to encourage the use of conciliation and ensure greater predictability and certainty in its use. To avoid uncertainty resulting from an absence of statutory provisions, the Model Law addresses procedural aspects of conciliation, including appointment of conciliators, commencement and termination of conciliation, conduct of the conciliation, communication between the conciliator and other parties, confidentiality and admissibility of evidence in other proceedings as well as post-conciliation issues, such as the conciliator acting as arbitrator and enforceability of settlement agreements.

Some International ADR Institutions And Organizations:

Arbitration Chambers, Singapore is a commercial company whose main business is to provide an independent source of expertise to parties in dispute. It is a firm of professional arbitrators and mediators who are available to undertake resolution of commercial disputes through arbitration or mediation. There is a large network of office in various cities of Asia and the Pacific.

Singapore International Arbitration Centre, Singapore was established in 1991. SIAC is now one of the premier international arbitration institutions. It provides a neutral, efficient and reliable dispute resolution service in the regional hub that is the Centre of Asia’s legal and business activity.

American Arbitration Association (AAA) was founded in 1926. It is a private enterprise in the business of arbitration, and one of several arbitration organizations that administers arbitration proceedings. The American Arbitration Association also administers mediation and other forms of alternative dispute resolution. It is headquartered in New York City.

International Centre for Dispute Resolution (ICDR), established in 1996 by the American Arbitration Association, administers international arbitration proceedings initiated under the institution's rules. ICDR currently is headquartered in New York City. It also has offices in Ireland, Bahrain, Dublin, and Mexico City, and is scheduled to open an office in Singapore.

International Chamber of Commerce (ICC) is an international business organization with hundreds of thousands of member companies in over 130 countries spanning virtually every sector of private enterprise.

World Intellectual Property Arbitration and Mediation Centre based in Geneva, Switzerland, the WIPO Arbitration and Mediation Centre was established in 1994 to offer Alternative Dispute Resolution (ADR) options for the resolution of international commercial disputes between private parties.

European Court of Arbitration is a legal entity under the Alsace- Moselle law, formed in 1959. It promotes arbitration and mediation. It is a branch of European Centre of Arbitration which promotes arbitration and administers domestic and international arbitration. Its branches are spread over Europe including Eastern Europe, the Mediterranean, the Middle East and the Black Sea countries.

Gulf Cooperation Council Commercial Arbitration Centre (GCCCAC) was established on 19th March 1995 by GCC leaders, one of the main objectives of G.C.C. Commercial Arbitration Centre is fill the vacuum in the region by providing expeditious and effective Arbitration services.

“Discourage litigation persuade your neighbours to compromise whenever you can point out to them how the nominal winner is often a real loser, in fees, expenses, waste of time…”

The importance of ADR mechanism can be aptly put in the above words of Abraham Lincoln. Alternative Dispute Resolution mechanisms are in addition to courts and complement them. The traditional system of dispute resolution is afflicted with inordinate delays. However, the backlog and delay appear to be more accentuated than in modern-day India. ADR mechanisms play an important role in doing away with delays and congestion in courts. The Indian civil justice system serves the interests of a diverse and exploding population, the largest democracy and the seventh largest national market in the world. This formidable responsibility, combined with the recent drive toward greater political accountability in the public administration and post-1991 market reforms, places ever-greater pressure on the civil justice system. An estimated backlog of 25 million cases and reported delays in some urban areas in excess of twenty years, currently undermine the effective enforcement of the substantive civil and commercial rights. Backlog and delay have broad political and economic implications for Indian society. If India fails to face and meet these challenges, it will not be able to realise fully its legal commitment to democratic and liberal economic policies. In cases such as motor accident claims, the victims may require the compensation to be paid without delay in order to meet medical and other expenses. In matters such as these, Alternative Dispute Resolution mechanisms like Lok Adalat can help victims obtain speedy relief.

In the ultimate analysis it may be concluded that the widening gap between the common people and the judiciary is indeed a serious cause of concern for all those who deal with the judiciary is indeed a serious cause of concern for all those who deal with the administration of justice. The effective utilization of ADR systems would go a long way in plugging the loophole which is obstructing the path of justice. The concepts of alternative modes of dispute resolution should be deeply ingrained in the minds of the litigants, lawyers and the judges so as to ensure that ADR methods in dispensation of justice are frequently adopted. Awareness needs to be created amongst the people about the utility of ADR and simultaneous steps need to be taken for developing personnel who would be able to use ADR methods effectively with integrity.

With the advent of the alternate dispute resolution, there is new avenue for the people to settle their disputes. The settlement of disputes in Lok Adalat quickly has acquired good popularity among the public and this has really given rise to a new force to alternate dispute resolution and this will no doubt reduce the pendency in law Courts. The scope of alternate dispute resolution system (ADR) has been highlighted by the Hon’ble Chief Justice of India in his speech in the joint conference of the Chief Ministers of the State and Chief Justice of High Courts, held at Vigyan Bhavan, New Delhi on September 18, 2004 and insisted the Courts to try settlement of cases more effectively by using alternate dispute resolution system so as to bring down the large pendency of cases in law Courts.

Alternate Dispute Resolution is rapidly developing at national and international level, offering simpler methods of resolving disputes. Increasing trend of ADR services can easily be inferred from the growth of “Arbitration clause” in majority of contracts. There has been a significant growth in number of law school courses, diplomas, seminars, etc. focusing on alternate dispute resolution and rationalizing its effectualness in processing wide range of dispute in society.


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