Alternative Dispute Resolution: Mediation vs. Conciliation in India

The article is written by Tarini Aleti of Pendekanti Law College pursuing 3rd Year BA. LL.B, during her internship at Ledroit India.

Abstract:

In an era where the Indian judiciary continues to face persistent piling of pending cases, the public confidence in the justice system has gradually diminished. This situation has created a grave need for an accessible and time-bound justice mechanism. Accordingly, the Constitution of India, under Article 39A, recognizes the principle of free legal aid and the right to timely justice, which forms the constitutional foundation for the development of Alternative Dispute Resolution (ADR) in India.

 Among various ADR methods, mediation and conciliation have gained particular importance. This paper focuses on the concept and evolution of the ADR mechanism in India, emphasizing how it developed as an alternative to adversarial litigation. Further, it examines the advantages of ADR. The paper culminates in a comparative analysis between mediation and conciliation, discussing their distinct procedures, roles of third parties, confidentiality obligations, and the enforceability of settlements under their respective statutory frameworks.

Introduction: 

Although India has often adhered to the concept that justice delayed is justice denied. This will be a never-ending principle for India. Despite numerous judicial reforms, such as we have enactment of the Limitation Act, the fast-track court, and various procedural amendments. Recently, Hon’ble President Draupadi Murmu has given the phrase as black court syndrome. As people who come to seek justice are left without actually seeking the justice due to the pendency of the courts, culture of adjournments, procedural rigidity, etc., people are losing trust in the court.

It is in this backdrop that the concept of Alternative Dispute Resolution (ADR) has gained significance. every time you don’t need the court to rely upon for getting justice, you can seek justice even through restorative justice, also known as consensual justice or adjudicatory justice.

To understand this, let us understand the concept of Alternative Dispute Resolution. The term itself says that it is an alternative form for solving the dispute rather than the regular court proceedings. It is a mechanism for resolving disputes outside the court through cooperative negotiation rather than judicial proceedings. In ADR, disputes are amicably resolved by negotiating, and parties reach a mutually acceptable solution, with the help of a neutral third party, avoiding tedious legal proceedings in court. 

Illustration: A and B are co-partners for a piece of an ancestral property. They wanted to divide the property. A wants the 70% while B also wants the same. At this point, instead of seeking prolonged legislation, both parties can opt for mediation. With the help of the mediator, they discuss their financial needs, positions and come up with a solution. Eventually, A and B divide the property equally.

Key words: Adversarial system, mediation, conciliation, restorative justice, participatory adjudication.

Collaborative vs. Adversarial Justice

One of the most significant advantages of ADR is that it seeks to balance the interests of both parties, unlike the adversarial court system, where one party succeeds at the expense of the other. Recently, we witnessed scenarios where judges are under threat because of the judgments they deliver. ADR mechanisms, however, eliminate such consequences because they rely on voluntary participation, mutual discussion, and negotiated settlement. The mediator facilitates communication to ensure that both parties’ needs and interests are heard, understood, and balanced, which is called collaborative justice, unlike Adversarial Justice or sometimes Rights-Based Justice. 

Scope and Applicability:

ADR primarily handles civil and commercial disputes and family disputes where the matter is of a private nature and can be settled by mutual consent. While in criminal cases, someone who commits a serious crime, such as murder or rape, people can’t seek resolution through courts for money or settle it amicably, since these are grave offenses against the public interest. Therefore, for criminal disputes, the concept of ADR is not widely used and doesn’t apply to non-compoundable offenses, as these involve state prosecution rather than private disputes.

Most importantly, ADR is a mechanism that is neutral to both parties, and in non-compoundable offences the neutralisation is not possible. However, ADR can be used for compoundable or quasi-criminal cases like cheque bounce cases or motor accident compensation. So, in civil matters such as property disputes and family issues, we often avoid courtroom battles. Instead, we can use ADR, which provides restorative justice.

Hence, ADR is recognized by Section 89 of the Code of Civil Procedure, 1908, where courts give power to parties to refer to ADR methods.

Types of Justice in the Legal System

The concept of justice can be classified into four major types:

1. Distributive Justice 
2. Procedural Justice 
3. Retributive Justice 
4. Restorative Justice.

ADR mechanisms, particularly mediation and conciliation, operate under restorative justice, ensuring that justice is achieved through communication and mutual agreement.

History of ADR: 

The idea of resolving disputes amicably is not new to India. It has existed since the times of the traditional system; one of the best examples is the Panchayat system and village councils, to which there used to be an informal head named as Sarpanch or Gram Pradhan, who acts as a mediator and resolves the disputes based on the local customs. The decisions held by the Sarpanch were widely accepted by the people in the village. This concept is still prevailing in India. Even the Indian constitution recognised the concept of gram Sabha under the 73^rd Constitutional Amendment Act, 1992. 

Ancient Indian Perspective:

The Idea of conciliation is not entirely new to Indian thought. In Kautilya’s Arthashastra, it referred to a concept of Sama within his theory, the Kautalya Mandala Theory, in which he outlined four methods or upayas used by the king in his foreign relations during times of peace. Though that form of conciliation was political and strategic in nature, it reflects resolving conflicts through mutual talk rather than punishment 

These upayas which are existed since the period of epics and Dharmashastra and are 4 types: 

• Sama (conciliation or negotiation)
• Dana (winning over by gifts or concessions)
• Bheda (creating divisions or using diplomacy)
• Danda (punishment or war, as a last resort)

Kautilya described 5 forms of Sama i.e., praising the opponent, common ties, convincing the opponent, highlighting the advantages, offering concessions or honours etc.

Hindu law has historically recognized four main tribunals for dispute resolution:

• Kula (Family Assemblies): Settled family and kinship disputes.
• Shreni (Guilds): Handled commercial and trade-related conflicts.
• Puga (Community Associations): Resolved village and social disputes.
• Adhikrita (Royal Courts): Addressed major legal conflicts. These traditional forums share similarities with modern ADR and ODR systems.

Colonial and Modern Evolution:

The concept of ADR has become popular during the British rule. The Britishers have brought the adversarial system to India. In 1899, the Indian Arbitration Act was passed, based on the English Arbitration Act of 1889, which was merely applicable to presidency towns, i.e., Calcutta, Bombay, and Madras.

In the period of 1982, the concept of Lok Adalats (people’s courts) was introduced in the state of Gujarat to promote out-of-court settlements. Later, Lok Adalats were established in every state through the Legal Services Authorities Act, 1987.

In 1996, a significant year for the landmark development of the Arbitration and Conciliation Act, 1996, which replaced the Arbitration Act of 1940. This act is still followed in India.

Advantages of Alternative Dispute Resolution: 

The emergence of ADR has been a shift from the adversarial system to the collaborative model of justice. It has removed the tedious process of legal proceedings by promoting speedy, accessible, and cost-effective justice. 

The ADR mechanisms include: Arbitration, mediation, conciliation, negotiation and Lok Adalats.

1. One of the foremost advantages of ADR is the ability to resolve disputes much faster than traditional court proceedings. the Mediation Act, 2023 prescribes that mediation should generally be completed within 180 days, which can be extended by another 60 days. This aligns with the constitutional goal of ensuring speedy justice under Article 21.
2. ADR mechanism reduces litigation costs as it avoids lengthy procedural formalities, lawyers’ fees, and court expenses.
3. The ADR proceedings are flexible and informal compared to the procedural frameworks of the court. Parties have the freedom to use their own language, time, and place of the proceedings. 
4. Unlike the court trials, which are public in nature. The ADR proceedings are strictly confidential. Both the Mediation Act, 2023 (Section 22) and the Arbitration and Conciliation Act, 1996 (Section 75) safeguard confidentiality, ensuring that information disclosed during the process cannot be used in later litigation. This fosters trust between the parties.
5. ADR, particularly mediation and conciliation, emphasizes restoring harmony rather than escalating conflict. The process encourages empathy, communication, and compromise, allowing parties to maintain long-term relationships.
6. The ADR mechanism emphasises collaborative justice over rights-based justice. The parties choose their mediator, identify their mutual interests, and come to a negotiation that benefits both parties rather than one of the parties gaining the benefit.
7. The ADR mechanism reduces the burden of the caseload of courts. This not only reduces the judiciary’s workload but also enhances overall judicial efficiency, allowing courts to focus on cases involving serious legal questions or public interest.
8. Another major advantage is that settlement agreements reached through ADR are legally binding and enforceable. Under Section 74 of the Arbitration and Conciliation Act, 1996, a conciliation settlement has the same status as an arbitral award. Similarly, under Section 31 of the Mediation Act, 2023, mediated settlements are treated as decrees of a court, ensuring enforceability and finality.

Comparative analysis between Mediation and Conciliation In India

The term Alternative Dispute Resolution or External dispute resolution is nowhere defined under this act. ADR is the dispute resolution process and techniques where parties settle their disputes with the help of a 3^rd party who is neutral.  The term “alternative dispute resolution” arose from Frank Sander‘s paper, “Varieties of Dispute Processing.”.

Mediation and conciliation are both types of Alternative Dispute Resolution (ADR) which facilitate peaceful resolution of a conflict without involving a court of law. Although they have a similar goal, which is to solve conflict in a peaceful manner with the help of a neutral third party, they vary in their manner, legal regulations, the degree of involvement of the third party and the binding decision.

CONCILIATION:

Conciliation is one of the mechanisms of ADR. Here the conciliator plays more proactive role compared ot the mediation. The conciliator not only assists in communication between the parties but also suggests, evaluates, and proposes the solutions for the settlement of dispute, considering both the interests of the parties. It is governed by Part III of the Arbitration and Conciliation Act, 1996 which is based on the UNCITRAL Model Law which was recommended by the United Nations General Assembly.

The major features of Conciliation include:

1. Section 61-76 of 1996 Act governs them. Conciliator is a neutral specialist who can offer a resolution.
2. A court of law starts the proceedings having an invitation in writing sent by one party who in turn is accepted by the other (Section 62). 
3. Protecting confidentiality under Section 75 — statements and proposals may not be used during subsequent proceedings. 
4. After the sides come to an agreement, a Settlement Agreement (Section 73) is signed that under Section 74 is effective as an arbitral award, and thus final and binding.

 Advantages of Conciliation: 

• Allows specialized or technical professionals to help in settlement. 
• Very flexible and informal like mediation. 
• The settlement agreement can be enforced like an award. 

Limitations: 

• Will happen as the parties are willing to take up the proposal of the conciliator.
• May turn ineffective in case of a breakdown in trust or collaboration among the sides.

MEDIATION
The idea of mediation is a party-based and voluntary process whereby parties in dispute negotiated under the help of a neutral party called the mediator. The mediator helps parties communicate, establishes interests and persuades them to agree on a mutually acceptable resolution, but does not make or propose terms of settlement. The emphasis is on collective justice, dialogue and maintenance of relationships instead of fighting through the law.

Mediation was awarded first in Code of Civil Procedure, 1908, Section 89 and in Industrial Disputes Act, 1947.  Now a separate act was enacted exclusively for the mediation, i.e., the Mediation Act, 2023.  The President gave assent to the bill on September 15, 2023. The act came into effect on October 9, 2023. 

Definition:

Characteristics are as follows: 

1. Wholly voluntary and on the autonomy of the parties. 
2. Mediator does not act as an advisor or decision-maker but as a facilitator. 
3. Secretive and non-commitment; no other use is possible in the future. 
4. Process time bound – complete 180 days (can be extended to 60 days). 
5. Settlement Agreement (Section 31, Mediation Act, 2023), upon signing and registration, is legally equivalent to a civil court decree.

Advantages of Mediation:

• Maintains relations and promotes collaboration.
• Less formal, flexible and cost-effective.
• Favors restorative justice as opposed to adversarial results. 

Limitations:

• The result will be based on consent.
• Mediator is not able to dictate or propose conditions. 
• Not applicable to situations where there is an imbalanced bargaining power among parties.

Conclusion:

Alternative Dispute Resolution has emerged as an indispensable mechanism in achieving the constitutional vision of speedy and affordable justice. The ADR mechanism is a participatory adjudication where parties voluntarily participate and find a mutually agreeable solution, and resolve the dispute amicably, unlike the judicial adjudication, which is a formal process where the rights and obligations of the parties are involved and deliver a legally binding judgment.