The Evolution of ADR in India

Introduction

The Indian justice system is often criticised for its pendency of cases, with over 4.5 crore cases pending before various courts as of 2023.¹ In such a climate, the significance of Alternative Dispute Resolution (ADR) has become undeniable. ADR mechanisms, including arbitration, mediation, conciliation, and negotiation, are increasingly being recognised as efficient, cost-effective, and relationship-preserving alternatives to traditional litigation. However, ADR is not a foreign import to India; its roots can be traced back to ancient Panchayat systems, evolving into the codified statutes we see today, culminating most recently in the Mediation Act, 2023.

Traditional Roots of ADR in India

Dispute resolution through informal mechanisms has existed in India since antiquity. The Panchayat system, comprising village elders resolving disputes through dialogue, was an early form of mediation and conciliation.² This system emphasised community harmony and restoration of relationships over punitive outcomes, an ethos central to ADR today.

Statutory Recognition of ADR

The Code of Civil Procedure, 1908 (CPC), was one of the first pieces of legislation to recognise out-of-court settlements. Order XXIII, Rule 3 of the CPC allows compromise decrees when parties settle disputes amicably.³

A major development came with the Arbitration Act, 1940, which provided a framework for arbitration in India but was criticised for excessive judicial intervention. This was later replaced by the Arbitration and Conciliation Act, 1996, which was modelled on the UNCITRAL Model Law.⁴ The 1996 Act consolidated arbitration, conciliation, and enforcement of foreign awards, bringing Indian arbitration closer to global standards.

Judicial Endorsement of ADR

The judiciary has played a crucial role in promoting ADR.

• In Salem Advocate Bar Association v. Union of India (2005),⁵ the Supreme Court upheld the constitutional validity of Section 89 CPC, which empowers courts to refer parties to arbitration, mediation, conciliation, or Lok Adalat.

• In Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (2010),⁶ the Court clarified the scope of Section 89 and encouraged wider use of mediation and conciliation.

These decisions underscored that ADR was not merely an alternative but an integral part of the Indian justice system.

The Mediation Act, 2023: A Landmark Reform

The passage of the Mediation Act, 2023 marks a historic milestone. For the first time, India has a standalone statute on mediation, giving it statutory recognition and enforceability. Key features include:

• Mandatory pre-litigation mediation for certain disputes.

• Enforceability of mediated settlement agreements akin to court decrees.

• Institutional mediation framework through the establishment of the Mediation Council of India.

• Provisions for community mediation, preserving India’s traditional dispute resolution ethos.

This Act aligns India with global developments such as the Singapore Convention on Mediation (2019), reflecting India’s commitment to strengthening ADR mechanisms.

Conclusion

From the Panchayat system to the Mediation Act, 2023, ADR in India has come full circle, modernising ancient practices while aligning with international standards. As courts continue to face the challenge of pendency, ADR offers not just an alternative but a parallel path to justice. For law students, practitioners, and policymakers alike, understanding this evolution is crucial to reimagining the future of dispute resolution in India.

References

1. National Judicial Data Grid, Pendency of Cases in India (2023).

2. Baxi, Upendra, The Crisis of the Indian Legal System (1982).

3. Code of Civil Procedure, 1908, Order XXIII, Rule 3.

4. Arbitration and Conciliation Act, 1996; UNCITRAL Model Law on International Commercial Arbitration, 1985.

5. Salem Advocate Bar Assn. v. Union of India, (2005) 6 SCC 344.

6. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24.