Lok Sabha Question No. 1564 (UNSTARRED), answered on 2021-07-28
Subject: Alternate Dispute Redressal System
Ministry: LAW AND JUSTICE
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA MINISTRY OF LAW AND JUSTICE DEPARTMENT OF LEGAL AFFAIRS

*****

## LOK SABHA

## UNSTARRED QUESTION NO.1564 TO BE ANSWERED ON WEDNESDAY, THE 28 TH  JULY, 2021

## ALTERNATE DISPUTE REDRESSAL SYSTEM

## 1564. SHRI N.K. PREMACHANDRAN:

Will the Minister of LAW AND JUSTICE be pleased to state :

- (a) Whether the Government proposes to promote Alternate Dispute Redressal System than the traditional court system;
- (b) If so, the details thereof and the reason therefor;
- (c) The  details  of  the  action  taken  by  the  Government  to  promote  the Alternate Dispute Redressal System during the last six years;
- (d) Whether it is very difficult to execute the orders of the Alternate Disputes Redressal System;
- (e) If so, the action taken for the execution of orders passed by the various Alternate Dispute Redressal System;
- (f) Whether  persons  without  legal  knowledge  and  legal  education  are appointed as presiding officer in the Alternate Disputes Redressal System; and
- (g) If  so,  the  action  taken  for  ensuring  appointment  of  persons  with  legal background as presiding officer in Alternate Disputes Redressal System?

## ANSWER

## MINISTER OF LAW AND JUSTICE (SHRI KIREN RIJIJU)

(a): Yes, the Government is promoting the Alternate Dispute Redressal System to supplement the traditional court system.

(b): To promote Alternate Dispute Redressal System in India the Arbitration and Conciliation Act 1996 was enacted to consolidate the law relating to domestic arbitration,  international  commercial  arbitration  and  enforcement  of  foreign arbitral awards as also to define the law relating to conciliation and for matters connected thereto.  The above Act has been amended thrice in 2015, 2019 and 2020 to further improve the arbitration process. The NDIAC Act 2019 has also been enacted for setting up of the New Delhi International Arbitration Centre.

The Government of India is promoting Alternate Dispute Redressal System as it is  time  bound,  simpler,  more  convenient,  and  less  expensive  compared to  the traditional court system.

(c): As  per  amendments  carried  out  in  the  Arbitration  and  Conciliation  Act, 1996, faster timelines have been provided to make the arbitration process more effective, the appeal process has been made time bound, provisions have been made for fast  track  settlement  of  arbitration  disputes  and  it  has  been  ensured that the process doesn't become very expensive.

The Government has also enacted the NDIAC ACT 2019 which provides for setting  up  of  the  New  Delhi  International  Arbitration  Centre,  as  a  Centre  of National Importance, with a view to make it a preferred seat for domestic as well as International Commercial Arbitration.

Commercial Courts Act, 2015 has also been amended in 2018 to provide for the resolution of disputes through pre institution mediation and settlement (PIMS) mechanism. According to section 12A of the Commercial Courts Act, 2015 the settlement agreement reached through the pre institution mediation and settlement  (PIMS)  mechanism  have  the  same  status  and  effect  as  if  it  is  an arbitral  award  on  agreed  terms  under  sub-section  (4)  of  section  30  of  the Arbitration and Conciliation Act, 1996.

(d) to (e): Section 36(1) of the Arbitration and Conciliation Act, 1996 provides for the enforcement of Arbitral Award where the time for making an application to  set  aside  the  arbitral  award  under  section  34  has  expired.  The  award thereafter  shall  be  enforced  in  accordance  with  the  provisions  of  the  Code  of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the  court.  Further,  section  34(6)  of  the  Act  provides  that  the  application  for setting  aside  the  Award  shall  be  disposed  of  expeditiously  and  in  any  event, within  a  period  of  one  year  from  the  date  on  which  the  notice,under  section

34(5), of filing of application for setting aside  of award is issued to the other party.

Further, section 74 of the Arbitration and Conciliation Act, 1996 provides that settlement agreement reached through the process of conciliation shall have the same  status  and  effect  as  if  it  is  an  arbitral  award  on  agreed  terms  on  the substance of the dispute rendered by an arbitral tribunal under section 30.

(f) to  (g): The  alternative  dispute  resolution  (ADR)  mechanisms  do  not prescribe that persons without legal knowledge and legal education cannot be appointed as presiding officer. These are informal process and the appointment of presiding officer is done as per the principle of party autonomy.

*****