Building an institutional framework for alternative dispute resolution in India: challenges and recommendations

Abstract

Alternative Dispute Resolution methods like Arbitration has gained popularity in developed countries in last few decades as an efficient method of solving disputes especially in corporate cases. But, even after being exposed to this more than five decades ago, arbitration or ADR has very little success in India. In this paper, we tried to understand the obstacles in the path of success of ADR in India , the feasibility of ADR methods keeping in mind the Indian context and tried to suggest possible ways to make ADR initiatives sustainable in the long run. At first we tried to analyse the ADR procedures, operational advantages compared to judicial procedures, necessary backgrounds and limitations. Next we did literature review of ADR mechanisms and discussed how it has evolved through years. Then we took some cases where Indian companies/organizations has resolved disputes through arbitration and analysed them. Through this exercise we tried to show how the mind set of Indian courts has changed over the years towards arbitration. We also analysed the conditions where the courts favoured arbitration awards and where it has overruled. We saw that Indian courts have been progressively encouraging arbitrations. There have been positive changes in the results of arbitration award cases challenged in courts over the years. Lastly, we have tried to suggest a sustainable economic model and the methods to carry out the much necessary trust building exercise. The possibility of ADR success in family businesses has also been discussed. We summed up the paper with concluding remarks