Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) comprises a suite of processes—mediation, arbitration, conciliation and Lok Adalat—that settle conflicts without recourse to formal litigation. By diverting disputes from courts, ADR trims average resolution time from the Indian judiciary’s median of 3.5 years to under six months for most commercial matters. The World Bank’s 2022 “Doing Business” report credits ADR with saving litigants an estimated 40 percent of legal expenses in comparable jurisdictions. Consequently, ADR has become a cornerstone of both domestic policy and trans‑national commerce.

Historical Background

The earliest recorded ADR mechanisms in the subcontinent appear in the Arthashastra (c. 3rd century BCE), where King Kautilya delegated minor civil grievances to village panchayats. Medieval Mughal courts routinely employed “sulh” (reconciliation) panels, a practice documented in the Ain‑i‑Akbari of 1595. In the modern era, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on International Commercial Arbitration in 1985, providing a template that shaped India’s 1996 Arbitration and Conciliation Act.

Mechanism and Types

Mediation, defined by the International Mediation Institute as a voluntary, confidential dialogue facilitated by a neutral third party, achieved a 78 percent settlement rate in 2020 across 12,000 commercial cases worldwide. Arbitration obliges parties to a written agreement—often a clause in a contract—under which an arbitrator renders a binding award; the International Chamber of Commerce