S
Sahaj Vidhi
Law optional 2018 paper II

Even though Section 89 of the Code of Civil Procedure, 1908 provides for out of court settlement of civil disputes filed in a civil court, the impact of such settlement through Alternative Dispute Resolution (ADR) appears to be poor. Analyse the reasons for failure to settle the disputes through ADR modes.

Verified Answer
  1. Core Legal Answer & Context: Section 89 of the Code of Civil Procedure, 1908, introduced in 2002, mandates civil courts to refer disputes to Alternative Dispute Resolution (ADR) mechanisms (arbitration, conciliation, judicial settlement, mediation) if there's a possibility of settlement. The primary goals were to alleviate judicial backlog, provide expeditious and cost-effective justice, and foster amicable resolutions. However, the impact has often been suboptimal, with many referred disputes failing to settle due to several systemic and behavioral factors.
  2. Relevant Statutes and Sections:
    • Code of Civil Procedure, 1908: Section 89 (Settlement of disputes outside the Court).
    • Arbitration and Conciliation Act, 1996: Governs arbitration and conciliation processes.
    • Legal Services Authorities Act, 1987: Provides for Lok Adalats (judicial settlement).
  3. Important Landmark Cases:
    • Salem Advocate Bar Association, Tamil Nadu v. Union of India (2005): The Supreme Court clarified the scope and procedure of Section 89 CPC, emphasizing the mandatory nature of referring disputes to ADR and providing detailed guidelines for its implementation, including the need for proper training of mediators.
    • Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. Pvt. Ltd. (2010): This case further interpreted Section 89, categorizing cases suitable for different ADR methods and highlighting the importance of judicial discretion. It also acknowledged practical challenges in effective implementation and the need for a more nuanced approach.
  4. Clear Conclusion: The poor impact of ADR under Section 89 CPC stems from a confluence of factors: inadequate awareness and training among stakeholders, an ingrained adversarial mindset, a shortage of skilled and neutral mediators/conciliators, the perception of ADR as a delay tactic, and parties' reluctance to genuinely compromise. For ADR to realize its full potential, a concerted effort is required to enhance infrastructure, improve professional training, and cultivate a collaborative dispute resolution culture among all participants.