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Alternate Dispute Redressal Mechanism

Alternate Dispute Redressal is a method of out of the court settlements. This is an amicable, speedy method of settling disputes. As all of us know that there have been a large number of cases that have not been decided due to the paucity of time and paucity of judges in the judiciary, it is important to indulge in other settlement mechanisms. Alternate Dispute Redressal Mechanism is working as a helping hand to the judiciary, and also reduce the time taken to resolve issues amicably within a time frame. It also work as a motivation to entrepreneurship as the problems can be resolved in time and the business is moved without hurdles.

There are many ADR mechanisms such as

  1. Arbitration

  2. Negotiation

  3. Mediation

  4. Conciliation

  5. Client counselling.

ADR is the emerging trend of settling dispute mechanisms as it is an alternative for the formal legal system and is less time consuming. Solving any type of conflict through the Alternative Dispute mechanism is completely the choice of the parties. Many times, a dispute settlement clause is already added to the agreement between the parties, in which the method for settling the dispute and the laws guiding the procedure is specified.

Arbitration is a popular ADR mechanism and is an alternative to litigation. In arbitration both the parties consensually submit before an arbitrator or an arbitral tribunal. Formation of the tribunal depends on the subject matter of the dispute, laws guiding the settlement, and the administrating authority. For example, if the subject matter of the dispute is the law of Sea then mostly, it is guided by the United Nations Convention on the Law of Sea (UNCLOS).

There are many types of arbitration such as

  1. commercial arbitration

  2. Contract arbitration

  3. Inter-state Arbitration

  4. Labour Arbitration

  5. Investment Arbitration, etc.

The arbitral tribunal is established by the consent of both parties. This could be a tribunal of three or five members. At the closure of the arbitration the arbitrator or the arbitral tribunal gives an arbitral award which is binding on all the parties to the dispute.

Mediation is another ADR mechanism in which the parties submit to a third neutral party, called the mediator, who assists parties to the dispute to mediate their claims and get to a common decision that is accepted by all the parties. The mediator helps two or more parties to negotiate to an agreement where substantially common interests of all the parties meet. In another word, mediation is a way to get to a mid-way decision which serves the best benefits of both the parties or according to their claims.

Negotiation is that the ADR mechanism in which the parties to dispute decide the course of action and further negotiate through bargaining on an individual or collective compensations. In this method, a skilled negotiator is appointed who acts as the advocate for one party. These negotiators attempt to get to the most favourable outcomes for their parties.

There are many international ADR organization which act as the administrating authority in various types of organizations. The most prominent international organizations for an ADR mechanism are –

  1. Permanent Court of Arbitration (PCA)

  2. World Trade Organisation (WTO)

  3. International Chamber of Commerce (ICC)

  4. Court of Arbitration for Sport (CAS), and

  5. United Nations Commission on International Trade Law (UNCITRAL).

ADR mechanism is intended to instil confidence to the corporate world as the business system is more globalised and liberalised. There are no boundaries and businesses have different cultures and systems. Legal systems also different in different countries as the laws. The ADR system enable corporates who are in to complex business transactions, to avoid time consuming and complex legal hassles and go for out of court amicable solutions.

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