Alternative Dispute Resolution (ADR)

What is ADR?

Alternative Dispute Resolution (ADR) refers to a set of mechanisms that allow parties to resolve disputes outside the formal court system.

• It includes processes such as arbitration, conciliation, mediation, and other mechanisms that are less formal, more flexible, and generally faster than traditional litigation.

• The primary idea is to reduce the burden on courts while ensuring justice and fairness.

Why ADR is Needed

India’s judicial system is currently facing a crisis of pendency and delays. ADR provides a solution for this.

Judicial Pendency

• Over 5 crore cases were pending in Indian courts as of March 2025 . Courts alone cannot handle such a massive load.

• The Supreme Court had 81,734 cases pending as of May 2025, slowing the delivery of constitutional justice.

• High Courts have over 62 lakh pending cases (India Justice Report – 2025), weakening appellate justice.

Judicial Vacancies

• High Courts have 33% vacant judgeships, and District Courts have 21% vacancies, increasing delays in hearings and judgments.

Low Judge-to-Population Ratio

• India has only 15 judges per million people, far below the 50 per million recommended by the Law Commission (1987).

Long-Delayed Cases

• Many cases in different jurisdictions are pending for 5–10 years or more, denying substantive justice.

Other Advantages of ADR

• Faster & Less Costly Resolution: ADR reduces procedural delays and legal costs, helping individuals and businesses avoid prolonged litigation.

• Boost to Economic Competitiveness: Efficient contract enforcement via ADR strengthens investor confidence and supports the Ease of Doing Business.

• Preserves Social Harmony: Mediation and conciliation encourage participatory settlements, helping maintain relationships in family and community disputes.

• Confidentiality & Autonomy: ADR ensures privacy, protecting business reputation and commercial secrets.

• Expert-Driven Justice: Domain experts as arbitrators provide technical, high-quality resolutions, reducing the likelihood of appeals.

• Filters Frivolous Litigation: Mandatory mediation can resolve avoidable disputes before they reach the courts, lowering the backlog.

• Digital Justice Expansion: Online Dispute Resolution (ODR) improves access, particularly for remote areas, and became especially relevant post-COVID-19.

• Culturally Accepted: Traditional dispute-resolution methods like panchayats make ADR familiar and socially trusted in India.

Constitutional and Legal Basis of ADR

Constitutional Basis

• Article 39A: Mandates the State to ensure equal justice and free legal aid, which underpins ADR initiatives like mediation and Lok Adalats.

Legal Framework

1. Arbitration and Conciliation Act, 1996 (Amended 2021)

   • Provides the framework for arbitration and conciliation.

   • Establishes the Indian Arbitration Council to regulate procedures.

   • Fixes a maximum resolution period of 180 days.

   • Parties may exit mediation after two sessions if unsatisfied.

   • Promotes pre-litigation mediation to reduce court backlog.

2. Mediation Act, 2023

   • Mandates pre-litigation mediation for civil and commercial disputes.

3. Lok Adalats

   • Statutory dispute-resolution forums under the Legal Services Authorities Act, 1987.

   • Disputes are settled amicably with no court fees, and awards carry the force of a civil court decree.

4. Gram Nyayalayas (Village Courts)

   • Established under the Gram Nyayalayas Act, 2008 to deliver speedy, affordable justice in rural areas.

   • Primarily handle minor civil and criminal cases at the grassroots level.

Online Dispute Resolution (ODR) Policy – NITI Aayog, 2021

• Phased Implementation: Infrastructure development → mainstream adoption → primary mode of dispute resolution.

• Light-Touch Regulation: Encourages innovation through flexible self-regulation rather than heavy government control.

• Technology Integration: Uses ICT tools for end-to-end digital resolution, improving accessibility and efficiency.

• Legal and Policy Reforms: Supports amendments to existing laws and introduction of mediation/data protection laws.

• Ethical & Design Principles: Ensures transparency, neutrality, accessibility, and data security in ODR platforms.

• Capacity Building & Awareness: Training professionals, developing infrastructure, supporting legal-tech startups, and raising public awareness.

Challenges of ADR in India

1. Low Public Trust & Awareness: Many citizens still view courts as the only legitimate venue for justice.

2. Capacity Constraints: Lack of uniform training standards for mediators and arbitrators affects quality.

3. Expensive Arbitration: High professional fees discourage MSMEs from using arbitration.

4. Weak Institutional Arbitration: India lacks enough world-class institutional arbitration centres compared to Singapore or London.

5. Judicial Interference:

   • Section 34 allows courts to set aside arbitral awards, reducing finality.

   • Section 37 allows appeals against Section 34 orders, further delaying enforcement.

6. Government as Major Litigant: Public sector entities often challenge awards, weakening ADR efficiency.

7. Digital & Cyber Barriers: ODR faces challenges like digital divide, weak rural infrastructure, and data privacy issues.

Way Forward

• Institutionalizing Mediation & Arbitration: Expand court-annexed mediation centres and global-standard arbitration hubs.

• Capacity Building & Accreditation: Create national certification and continuous training for ADR professionals.

• Limiting Judicial Interference: Restrict Section 34 and 37 interventions to uphold finality of awards.

• Mainstreaming ODR: Invest in digital infrastructure, cybersecurity, and multilingual platforms for nationwide access.

• Government as Model Litigant: Ministries and PSUs should comply promptly with ADR outcomes.

• Strengthening Grassroots Justice: Empower Lok Adalats and Gram Nyayalayas with better staffing, funds, and awareness.

Global ADR Case Studies

In summary, ADR in India is a response to judicial delays, vacancies, and high case backlogs. Its success depends on institutionalization, capacity building, technological integration, and public trust. ODR, Lok Adalats, and Gram Nyayalayas complement traditional courts by making justice faster, cheaper, and socially accessible.