Alternative Dispute Resolution (ADR) is a legal concept and mechanism that provides methods for resolving disputes outside the conventional court system, primarily to address the problem of millions of pending cases, high litigation costs, and delays in the Indian judiciary. Its modern formalization began with legislative enactments in the late 20th century, though informal dispute resolution has ancient roots in systems like the village Panchayat. ADR is supported by the constitutional goal of equal justice and free legal aid under Article 39-A of the Constitution of India.
The primary legislative framework is the Arbitration and Conciliation Act, 1996, which governs arbitration and conciliation, aligning Indian law with the UNCITRAL Model Law. This Act allows parties to resolve disputes through a private tribunal, with the goal of minimal judicial intervention, and makes the resulting arbitral award enforceable like a judicial decree. The mechanism was strengthened by the Code of Civil Procedure (Amendment) Act, 2002, which inserted Section 89, empowering courts to refer pending cases to ADR methods.
A key related institution is the Lok Adalat (People's Court), a statutory organization established under the Legal Services Authorities Act, 1987, which settles disputes amicably through conciliation, with its award being final and binding.
The ADR landscape has seen significant recent changes: the Arbitration and Conciliation (Amendment) Act, 2015, introduced a time limit under Section 29A, mandating that an arbitral award be made within 12 months of the completion of pleadings. Most recently, the Mediation Act, 2023, formalized mediation, making mediated settlement agreements final and enforceable like a court decree, and promoting mandatory pre-litigation mediation for certain civil and commercial disputes.