Alternative Dispute Resolution (hereinafter referred to as ADR) is an alternate method to resolve the dispute out of the court by way of
arbitration, mediation or conciliation. ADR is becoming a common way to resolve disputes these days as it is less time-consuming and informal in nature which makes it easier for the parties to involve in person in resolving their dispute. It involves the engagement of a third party to reach a solution that is mutually accepted by both parties.
What are the Provisions for Arbitration?
Sec-89 of the Code of Civil Procedure, states that “Where it appears to the Court that there exist elements of a settlement which may be
acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for:–
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat: or
(d) mediation.”
Arbitarility of Arbitration: The Hon’ble court has laid down the test of arbitrarily in the Booz Allens Case by stating that the disputes that
affect the right in personnem Involving IPR, to be referred to Arbitration.
Why to choose ADR over litigation?
There are numerous benefits of choosing ADR over litigation some of them are mentioned below:
Simple and Flexible: The procedure of ADR is easy as compared to the ordinary litigation procedure as it involves the legalities
and proper formatting for filing of cases. Moreover, the procedure in ADR can be adjusted according to the parties’ will.
Cost Effective: The procedure of ADR is less expensive than the litigation procedure as it saves the drafting, filing and other
costs.
Early Justice: The ADR cases are time saving as the matter is concluded at its earliest whereas in the ordinary courts, the matter goes for years as the court is already dealing with thousands of pending cases. In ADR a common third person is appointed for the settlement of disputes amicably. Therefore, the dispute is resolved in an expeditious manner.
Win-Win Condition: When the matter is referred to the regular courts one party will win the case whereas the other will lose whereas in the ADR there is a win-win condition for both parties as they can resolve their disputes by a mutual decision that is beneficial for both the parties. The judiciary has same view point on the said topic as in the Theos Food Pvt. Ltd& Ors.V. Theobroma Foods Pvt. Ltd. The parties deals in the
confectionary and bakery products. There is a dispute in between the parties with regard to the trademark they are using. Both the parties filed different petition for trademark infringement in different high courts. The matter has been resolved amicably between that is favourable for both of them.
“Theos will not do marketing out of Delhi NCR and theobroma can continue to sell their products in the whole country. So, it can be concluded that ADR provides solutions that are beneficial to both parties.
-Surbhi Singla
Associate at Aggarwals & Associates, S.A.S Nagar, Mohali.