Alternative Dispute Resolution | Study Material

ORDER 10 RULE 1 (A) TO 1 (C)[Alternative Dispute Resolution]

Here We will discuses “Alternative Dispute Resolution” in detail order 10 rule 1(a) to 1(c).

  1. Role of Arbitration.
  2. Is it mandatory to formulate the terms of settlement?
  3. Purpose of arbitration.

After admission and denial if the court finds that there is possibilities of settlement b/w the parties, then it shall formulate the terms of settlement and refer the same to the parties for their observation. Upon such observation if the court finds that there is possibilities of settlement, it may reformulate the term of settlement and if the parties agreed then court should refer matter for ADR in manner provided u/s 89.

However, if after admission and denial the court is of opinion that there is no possibility of settlement it shall record the reason for same and proceed with the suit. Here, a question may arise whether court has discretion to refer the matter for arbitration or whether it is mandatory for the court to refer the matter to arbitration.

It has been held in Salem Advocate case that sec 89 and O10 R1 (A), the word used is ‘shall’ which implies that if the court is satisfied about the possibility of settlement then it is bound to formulate the terms and refer the same for the observation of the parties. If upon such observation the court finds that party may agree upon reformulation then it may reformulate the terms and refer it to parties.

Here, the word ‘may’ is not used for original formulation rather for reformulation otherwise the proceeding for ADR is mandatory.

It was also observed by the court that an attempt to make parties to agree for ADR has to be real and effective and not only mechanically. Even though the stage of ADR comes only after admission and denial but before settlement of issue. However, in case of dispute relating to family the court should be prompt enough to refer the matter for ADR even at the stage of issue of process or notice to the parties for their appearance.

The duty of the court is not dependent upon the application of the parties rather as held in

Afcon Infrastructure Ltd. v/s Cherain Varkey Construction Co. Pvt. Ltd., 2010 SC [Alternative Dispute Resolution]

Has to be fulfilled by the court suo-motto. The purpose of the ADR is to reduce the litigation burden of the court and to prevent unnecessary delay in the judicial proceeding and also to provide speedy justices in favour of the parties.

Role of Arbitration: –

W.r.t the role of judges in lok adalat, it was held by SC in St. Of Punjab v/s Jailor Singh, 2008, K.G Balakrishnan, C.J, that judges at lok adalat are not executing their judicial function rather their duty is to bring about reconciliation.

They must not follow the judicial proceeding and shall not exercise their wisdom upon the parties. And if the settlement failed, then at the time of returning the matter to the court they shall refrain themselves for making any remark about conduct/ demeanours of the party in the failure report, as that may result into biasness against party in the mind of court.

The award passed by the lok adalat is totally based upon the compromise of the parties and the lok adalat have no adjudicatory or judicial function to play. The court from which matter is send for ADR has no control over the matter until the matter is referred back to such court under O10 R1 (C). If the matter is pending at later stage of trial then the court should refrain itself from referring the matter to ADR.

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