Compare and contrast Negotiation, Conciliation, and Arbitration as forms of Alternate Dispute Resolution (ADR)

1. Negotiation as a form of Alternative Dispute Resolution

Alternate Dispute Resolution (ADR), mainly denotes a wide range of dispute resolution processes that act as a means of disagreeing parties to come to an agreement without using the means of litigation. It is a collective term which refers to the ways in which the parties can settle disputes, with the help of a third party. It is also known as external dispute resolution (EDR). ADR has gained widespread acceptance among both the general public and the legal profession in the recent years and is also being adopted as the means to help settle disputes alongside court system itself. Apart from arbitration and mediation, the other form of ADR that has been on a rise is Negotiation.

Negotiation may be defined as any form of direct or indirect communication through which parties who have conflicting interests discuss the form of any action which they might take together to manage and ultimately resolve the dispute between them. Negotiations may be used to resolve an existing problem or to lay the groundwork for a future relationship between two or more parties. It must be noted that there is no compulsion for either of the parties to participate in the process of negotiation. The parties have the free will to either accept or reject the decisions that come out of the process of negotiation. There is no restriction in the number of parties that can participate in the process of negotiation. They can vary from two individuals to the process involving dozens of parties. Unlike arbitration and mediation, the outcome of a negotiation is reached by parties together without resorting to a neutral third party. The process is flexible and informal also ensures confidentiality at the choice of the parties.

In terms of procedure, negotiations is probably the most flexible form of dispute resolution process because it involves only those individuals or parties who are interested in the matter. They shape the process of negotiation as per their own needs and at their own convenience. The chances of reaching a mutually acceptable agreement is high in this process since the acceptance by all the parties is ensured. Since the process of negation uses the interests-based approach instead of the generally used positional-based approach, it provides a greater possibility of a successful outcome. As mentioned above, there is no compulsion for either of the parties to participate in the process which makes negotiation a voluntary process. Once an agreement is reached between the parties, negotiation may also enhance the relations between them. Apart from all of this, opting for negotiation over litigation may also reduce the number of delays and turn out to be less expensive as well.

However, negotiation has some disadvantages as well. Though negotiation provides a greater possibility of a successful outcome, if the parties are unequal the those in a weaker position may be placed at a disadvantageous position. The parties may terminate the process whenever they wish to during the proceedings, this may cause a huge loss of time and money invested in the process. Negotiation does not ensure the good faith and trustworthiness of either of the parties. It must also be mentioned that some issues may not be amenable to negotiation.

Despite all its disadvantages, negotiation is still on a rise as a medium for resolving disputes. It is definitely a much more time and money saving process the litigation. It is high time that the process of negotiation be used globally as a means for resolving disputes after working on its disadvantages.

2. Conciliation as a form of Alternative Dispute Resolution

CONCILIATION: Conciliation is an Alternative Dispute Redrassal (ADR) mechanism where a neutral adjudicator is appointed with the consent of the parties and helping them to reach a mutually agreeable settlement. Conciliation is a persuasive process, where the parties themselves arrive at an amicable settlement. It is a process of settling disputes outside the courts in a way that no party feels aggrieved with the final decision rendered. The settlement is reached on the basis of formal negotiations based on an objective assessment of the positions of the parties. According to section 61 of the Arbitration and Conciliation Act, 1996, which deals with the application and scope of conciliation, conciliation shall extend to all contractual and non-contractual proceedings that are incidentally related to such proceedings. The nature of the disputes shall be such that they have arisen out of legal relationship between the parties, which means a dispute where one party can sue the other party for breach of obligations imposed on the party or for not abiding by the legal framework and the other party can be sued. However, the second part also states that the section does not apply to such a dispute that cannot be submitted to conciliation by virtue of any law for the time being in force.

Ø PRINCIPLE CHARACTERISTICS OF CONCILIATION:

1. Under section 67 (1) of the Act,

• Independence of the proceedings are ensured and the process is kept free from the interference of the courts.

• The conciliator shall be impartial and free from biases and prejudices for or against any party.

2. Under section 67 (2) of the Act,

• Objectivity, fairness and justice - these principles are to be upheld during the proceedings of the case as well as while striving to reach a settlement between the parties.

• While trying to reach a settlement the rights and duties of the parties are to be kept in mind and all the nitty-gritties of the case are to be considered including the surrounding circumstances and the previous conduct of the parties.

3. Under section 67(3) of the Act, the conciliator may conduct the proceedings of the case in a way as he deems appropriate. However, the wishes and the requests of the parties have to be taken into account while deciding on such appropriateness. This section, in a nutshell, talks about the active - participation of the conciliator.

4. Under section 70 of the Act, confidentiality of the proceedings are ensured. The information that has been divulged by the parties on the condition of it being kept private, shall be kept secure by the conciliator in all circumstances and such information shall be kept confidential, under all circumstances and such information shall not be passed on to the other party or any other third party, by the conciliator. However, the conciliator can pass on the factual information concerning the dispute to the other party to allow them the opportunity to express their stand on it or to present a relevant explanation for the same.

5. Under section 70 of the Act, the conciliation proceedings are based on a cooperative approach and not a compulsive approach, like litigation, where laws are strictly adhered to while delivering a judgement. In conciliation, the parties are expected to submit to the requests of the conciliator whether it is while providing written materials or evidences or even while attending meetings.

3. The Reimbursement of Arbitration as a Method of Dispute Resolution

Arbitration is a method whereby parties to a contract present the disputes that occurred between them to an independent third party for resolution. The origin of all arbitration is the agreement of the disputing parties to arbitrate. The contract emerging based on the dispute may consist of an obligatory arbitration clause thoughtful the parties to recommend to arbitration or otherwise, disputing parties may go for by way of Submission Agreement to arbitrate their disputes as they arise.

In the nonexistence of an agreement to adjudicate the evasion method of dispute resolution is litigation. Litigation is often alleged to be a cumbersome, inept, and costly procedure and in sort to evade the same, disputing parties will often go for arbitrating. Additional reimbursement of arbitration is as follows:

• Privacy

As compare with judicial proceedings, arbitration proceedings confidential. This is of fastidious relevance in disputes connecting commercially sensitive matters which the parties would have a preference to bar from the public sphere of influence.

• Professional Arbitrator

The Arbitrator may be preferred on the basis that he or she has particular credentials, technical proficiency, or specialist knowledge pertinent to the subject matter of the dispute. As the Arbitrator is already well versed in the area of arbitration, there is no requisite to expend time and money on notifying him or her. The Arbitrator may be designated by the parties to the dispute themselves. On the other hand, the parties may settle on that a particular organization is charged with appointing an appropriate Arbitrator.

• Party Self-Sufficiency

The parties may maintain a degree of control in excess of the resolution of the dispute. As there is no compulsion to accomplish Arbitration dealings in any exact approach, the parties are enlightened to see eye to eye all procedural and evidential affairs. Arbitration is usually supposed as extra time and cost proficient process of disposing of disputes than litigation and where parties prefer to keenly contribute in the administration of the proceedings.

• Conclusiveness of the Award

Awards made by the Arbitrator are usually unstated to be concluding and obligatory and may only be set aside in a firm inadequate state of affairs. Yet, the need for a genuine right of appeal might be detested with an annoyed party who considers a flawed award has been made.

• Enforceability of Awards

The arbitration may be predominantly interesting in the milieu of international commercial disputes as it is often appreciably easier to implement an Arbitration Award in other jurisdictions than a Court Order.

Arbitration as an alternative method of dispute resolution continues to amplify in predominance and recognition, predominantly in the milieu of international commercial disputes. Still, when pondering the enclosure of an obligatory Arbitration Clause in an Agreement, the parties thereto ought to constantly ask for the opinion of a lawyer as to the form of dispute resolution most suitable to the particular state of affairs.

References:

1. Characteristics of Alternate Dispute Resolution (ADR) and Advantages and Disadvantages of Alternate Dispute Resolution (ADR)

2. Legal Education in India: Challenges, Innovations, and a Vision

3. Sources of Law

4. Salient features of Arbitration and Conciliation Act, 1996.

5. Disscuss the Differences between Arbitration and Conciliation

6. What type of Matter Cannot be subject to ADR (Alternative Dispute Resolution)

7. Discuss the historical background and objectives of the Arbitration and Conciliation Act, 1996

8. What is an Interim Measure by Court Under Section 9 of the Arbitration and Conciliation Act 1996

9. Differences between Arbitration and Mediation

10. Difference between Mediation and Conciliation

11. Difference between Arbitration and Conciliation