ALTERNATIVE DISPUTE RESOLUTION METHODS
by Vinod K. Agarwal*
(Article Reference: Document No.14, Chapter 1, March 2001)

Chapter Summary:

• Introduction
• Arbitration
• Fast Track Arbitration
• Conciliation
• Mini-Trial
• Expert Assessment (Engineers)
• Disputed Review Board

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INTRODUCTION - There are several methods available for resolving disputes between two parties. The first and most important method is through the courts. When a dispute arises between two parties belonging to the same country, there is an established forum available for the resolution of the same. The parties can get the said dispute resolved through the courts established by law in that country. Generally, this has been the most common method employed by the citizens of a country for the resolution of their disputes with the fellow citizens.

When a dispute arises between two persons belonging to two different countries, the difficulty arises. One option available to the parties is to go to the domestic courts of either country for the resolution of that dispute. However, this approach may have its own problems. The first is the jurisdiction of the courts. The laws relating to jurisdiction of courts in a country are not made keeping in view the transnational disputes. Normally, they are designed to resolve domestic disputes, that is, disputes arising between two citizens of the same country. The other is dissimilarity in the legal system of two countries. The problem acquires serious dimensions if the county of one party follows common law system and the country of the other party follows civil law system. In spite of tremendous work done by many international organisations and institutions, unification or uniformity of different legal systems is still a distant dream. The next is the choice of law applicable to the agreement and the consequential dispute between the parties. Availability of assets of the defendant in that jurisdiction is also a consideration for the purpose. The reason being that the enforcement of the judgement in any other jurisdiction may be a prolonged and cumbersome process. The absence of a treaty for the enforcement of foreign judgements between the two countries may render the judgement a worthless paper. If the judgement debtor happens to be a sovereign of that other country, the execution may involve claim for sovereign immunity. In some countries, sovereign assets enjoy sovereign immunity. The establishment of the fact in the court of that very country that the sovereign has waived the immunity itself will be a Herculean task. Apart from these difficulties, conventional difficulties, like undue delay in the dispensation of justice, complicated procedural formalities, transportation of entire evidence and witnesses from one country to the other country, high cost of litigation, judicial imperfection, etc., cannot be ignored. In view of these and other difficulties, either party avoids going to the courts in the country of the other party.

It is for these reasons that the alternative dispute resolution methods are becoming more popular for resolution of disputes between parties belonging to two different countries. So much so that some persons have started calling them "appropriate" dispute resolution methods rather than "alternative" dispute resolution methods. The alternative dispute resolution methods offer distinct advantages over litigation. Litigation is a process which takes place in the court rooms. These court rooms are open to public. Any member of the public can enter a court room and can watch, so long as he wishes, the court proceedings of any case. Alternative dispute resolution proceedings take place in private. They are not public proceedings. Thus, they ensure confidentiality. Further, for initiation of alternative dispute resolution methods, an agreement between the parties is an essential requirement. While litigation is an adversorial, formal and inflexible process, alternative dispute resolution methods may be less adversorial, less formal and more flexible process. In litigation, rules of evidence and procedure have to be strictly followed. In alternative dispute resolution methods, simple procedure is followed and the formal rules of evidence and procedure do not apply. Similarly, in litigation, the parties have no voice in the process of selection of judges. They are appointed and paid by the State. Such judges are not specialists in any particular branch of law or subject. They are generalists and deal with all kinds of cases. Generally, the arbitrators and other persons helping in the resolution of disputes through alternative means are selected and paid by the parties. The parties have a choice to prescribe their technical and other qualifications and experience or they can insist that the person having expertise in any particular discipline may alone be appointed. Except in rare or specified circumstances, the settlements arrived at through alternative dispute resolution methods are not subject to challenge in court of law. In addition, the alternative dispute resolution methods offer the conventional advantages like less expensive and dispensation of quick justice, including choice of venue for the resolution of disputes.

The alternative dispute resolution methods have been found satisfactory and are popular not only in the settlement of disputes between two parties belonging to two different countries but they are equally popular and common in the resolution of disputes between two parties belonging to the same country.

Alternative dispute resolution encompasses a variety of methods for the resolution of disputes between the parties. The availability or deployment of any particular method of alternative dispute resolution in any specific case depends on a number of factors. The clause relating to alternative dispute resolution in the agreement between the parties, the availability of persons well versed in the process of alternative dispute resolution, the support provided by the legal system of a country to the alternative dispute resolution methods, the national or international institutional framework for alternative dispute resolution, the availability of necessary infrastructure facilities, etc., play a significant role in the selection of any particular method of the resolution of dispute. The most important, popular and common alternative method of dispute resolution is arbitration.

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* This script was prepared for presentation to the participants in the Workshop on
"Arbitration and Dispute Resolution" organized by the UNITAR at Harare,
Zimbabwe from 11th to 15th September, 2001. This is not an exhaustive description of
the "Alternative Dispute Resolution Methods" but only an illustrative discussion.

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