The significant increase in the role of international trade in the economic development of nations over the last few decades has been accompanied by a considerable increase in the number of commercial disputes as well. In India too, rapid globalization of the economy and the resulting increase in competition has led to an increase in commercial disputes. At the same time, however, the rate of industrial growth, modernization, and improvement of socio-economic circumstances has, in many instances, outpaced the rate of growth of dispute resolution mechanisms.
In many parts of India, rapid development has meant increased caseloads for already overburdened courts, further leading to notoriously slow adjudication of commercial disputes. As a result, Alternative Dispute Resolution mechanisms, including arbitration, have become more crucial for businesses operating in India and those doing businesses with Indian firms.
Types of ADR (Alternative Dispute Resolution)
- Mediation:-Mediation is one of the most popular ADR methods and involves an impartial third party, or mediator, to assist in getting two conflicting parties to open dialogue and the parties find a mutually agreeable solution to their conflict. Mediation is ideal for parties that have a relationship that they wish to maintain and restore but is not considered an ideal ADR for parties if one of the parties has the advantage of power over the other.
- Arbitration:-Arbitration takes place in the presence of an arbitrator who hears both sides of the case and decides what the best possible outcome for the parties involved will be. Binding arbitration means that the parties waive their rights to a trail and will accept any resolution that the arbitrator puts forward. Nonbinding arbitration means that should both parties disagree with the decision of the arbitrator, they can request that the matter go to trial. This system is ideal for those who cannot negotiate, but are looking for a speedy resolution to their conflict.
The Advantages of using ADR
- Saving Time and Money:- Court cases can take months to be heard whilst getting involved in ADR means that the timeframe is under the control of both parties and can be resolved much quicker. In addition to saving time, you can also save a substantial amount of money as there is no need to pay attorney fees, court costs and fees that may result from bringing in experts.
- More Personal Control:- In ADR, both parties will have control over the outcome and will be able to offer solutions that would not be available if the case were brought before a judge. Creative solutions can result in each party being able to adjust their expectations to a common ground or can have an expert offer advice and guidance as in arbitration.
- Restoring Cooperation:- Due to the nature of ADR, the informal environment enables people to resolve disputes outside of a hostile courtroom where the tone is almost always adversarial.
- Win-Win Outcome:- The outcome of ADR is a mutually beneficial conflict resolution where both parties feel comfortable with their own level of compromise. This is very seldom achieved in a court of law where there essentially has to be a winner and a loser.
SBTLS advises clients operating under virtually any legal system, both common and civil law, on every step of the dispute resolution process—from the drafting of dispute resolution clauses to the conduct of proceedings, through to the enforcement of arbitral awards. Based upon our direct experience, we can recommend suitably qualified arbitrators and expert witnesses. We also advise on alternative dispute resolution methods such as mediation, and can provide guidance on the best dispute resolution options in any given situation.