“Alternative Dispute Resolution (ADR) has got wide acceptance to resolve dispute due to its wide perceived advantages.”

1. Introduction:

Alternative dispute resolution (ADR) is a term that refers to several different (but philosophically linked) methods of resolving business-related disputes outside traditional legal and administrative forums. These methodologies, which include various types of arbitration and mediation, have surged in popularity in recent years because companies and courts became extremely frustrated over the expense, time, and emotional toll involved in resolving disputes through the usual avenues of litigation. Today, legal and corporate acceptance of alternative dispute resolution as a legitimate remedy for addressing business disagreements is reflected in the language of business contracts. ADR contingencies have become a standard element in many contracts between companies and their employees, partners, customers, and suppliers.[1] ADR is generally classified into at least four types: negotiation, mediation, collaborative law, and arbitration.

2. Alternative Dispute Resolution in Bangladesh:

Bangladesh has recently enacted the Arbitration Act 2001 (the Act). It came into force on 10 April 2001, repealing the Arbitration (Protocol and Convention) Act 1937 and the Arbitration Act 1940, legacies of the British Raj in India. The new Act was again amended in 2004 in certain respects. Such legislative steps were urgent in the face of increasing foreign investment in Bangladesh in various sectors, especially in natural gas and power, and the ever-growing export trade with the rest of the world. The Act, consolidates the law relating to both domestic and international commercial arbitration. It thus creates a single and unified legal regime for arbitration in Bangladesh. This modernization gives Bangladesh a facelift as an attractive place for dispute resolution in the field of international trade, commerce and investment. Although the new Act is principally based on the UNCITRAL Model Law, it is a patchwork quilt as some unique provisions are derived from the Indian Arbitration and Conciliation Act 1996 and some from the English Arbitration Act 1996.[2] In June 2000, formalized ADR was introduced in Bangladesh by means of court annexed judicial settlement pilot projects, in an effort to decrease delays, expenses, and the frustrations of litigants laboring through the traditional trial process. The pilot program began in a collaborative effort with ISDLS in a series of Bangladeshi legal studies of Californian ADR systems.[3]

Three Pilot Family Courts were established in the Dhaka Judgeship, which exclusively used judicial settlement to resolve family cases including: divorce, restitution of conjugal rights, dower, maintenance and custody of children. An amendment to the Code of Civil Procedure was not necessary due to an existing 1985 Family Courts Ordinance, which authorized the trial judge to attempt reconciliation between parties prior to and during trial. The pilot courts were staffed by 30 Assistant Judges selected from all over Bangladesh, lawyers and non-lawyers, who were given training by a United

States mediation expert (organized by ISDLS). During this assignment, the Assistant Judges were relieved of all other formal trial duties. All three pilot programs were fully functioning by January 2001. Once judges had begun successfully settling cases, the program was expanded slowly to additional courts throughout the country. By the end of the first year of the program, the judicial settlement procedure in family disputes had effectively been introduced in 16 pilot family courts in 14 districts of Bangladesh.

In 2003, the Civil Code of Procedure was amended to introduce mediation and arbitration as a viable means of dispute resolution in non-family disputes. In addition to this amendment, the Money Loan Recovery Act stipulated the use of Judicial Settlement Conferences for money loan recovery cases. A training program led by former Chief Justice Mustafa Kamal took place at the Judicial Administration Training Institute (JATI) in Dhaka for the forty judges that have exclusive jurisdiction over money loan recovery cases. Mediations began in non-family disputes in July 2003.

3. Worldwide Mechanisms of ADR:

3.1 Modern era

Traditional people’s mediation has always involved the parties remaining in contact for most or all of the mediation session. The innovation of separating the parties after (or sometimes before) a joint session and conducting the rest of the process without the parties in the same area was a major innovation and one that dramatically improved mediation’s success rate.

Traditional arbitration involved heads of trade guilds or other dominant authorities settling disputes. The modern innovation was to have commercial vendors of arbitrators, often ones with little or no social or political dominance over the parties. The advantage was that such persons are much more readily available.[4] The disadvantage is that it does not involve the community of the parties. When wool contract arbitration was conducted by senior guild officials, the arbitrator combined a seasoned expert on the subject matter with a socially dominant individual whose patronage, good will and opinion were important.

Private Judges and summary jury trials are cost and time savings processes that have had limited penetration due to the alternatives becoming more robust and accepted.[5]

3.2 Iceland

The Saga of Burnt Njal is the story of a mediator who was so successful that he eventually threatened the local power structure. It ends in tragedy with the unlawful burning of Njal alive in his home, the escape of a friend of the family, a mini-war and the eventual ending of the dispute by the intermarriage of the two strongest survivors. It illustrates that mediation was a powerful process in Iceland before the era of kings.

3.3 Roman Empire:

Latin has a number of terms for mediator that predates the Roman Empire. Any time there are formal adjudicative processes it appears that there are informal ones as well. It is probably fruitless to attempt to determine which group had mediation first.[6]

3.4 Sub-Saharan Africa:

Before modern state law was introduced under colonialism, African customary legal systems mainly relied on mediation and conciliation. In many countries, these traditional mechanisms have been integrated into the official legal system. In Benin, specialized tribunaux de conciliation hears cases on a broad range of civil law matters. Results are then transmitted to the court of first instance where either a successful conciliation is confirmed or jurisdiction is assumed by the higher court. Similar tribunals also operate, in varying modes, in other francophone African countries.[7]

3,5 India:

Alternative dispute resolution in India is not new and it was in existence even under the previous Arbitration Act, 1940. The Arbitration and Conciliation Act, 1996 has been enacted to accommodate the harmonization mandates of UNCITRAL Model. To streamline the Indian legal system the traditional civil law known as Code of Civil Procedure (CPC),1908 has also been amended and section 89 has been introduced. Section 89 (1) of CPC provides an option for the settlement of disputes outside the court. It provides that where it appears to the court that there exist elements, which may be acceptable to the parties, the court may formulate the terms of a possible settlement and refer the same for arbitration, conciliation, mediation or judicial settlement.[8]

4. Classification of ADR:

Dispute resolution processes can be arranged along a spectrum which correlates with increasing third party involvement, decreasing control of the parties over the process and outcome, and, usually, increasing likelihood of having the relationship between the disputants deteriorate during and after resolution of the dispute.

This spectrum can also be grouped into five distinct categories.[9]

5. Some features of ADR:

(a) The preamble specifically mentions that it is “An Act to enact the law relating to international commercial arbitration, recognition and enforcement of foreign arbitral award and other arbitrations.” However, the Act is also applicable to domestic arbitration. [10]

(b) In an international commercial dispute one of the parties to the dispute must be either a firm registered abroad or a foreign national.

(c) The dispute in question must arise out of a legal relationship, whether contractual or not, but considered as a commercial dispute under the law in force in Bangladesh.

(d) The parties are free to determine the number of arbitrators. If the parties fail to fix the number of arbitrators, the tribunal is to consist of three arbitrators.

(e) The parties may choose an arbitrator or arbitrators of any nationality and the chairman of the tribunal may be of any nationality if that is accepted by the parties.[11]

(f) The courts (i.e. the District Judge’s Court in respect of domestic commercial arbitration and the High Court Division of the Supreme Court of Bangladesh in respect of international commercial arbitration) can intervene in regard to appointments of the arbitrators on behalf of the parties as well as of the chairman of the arbitral tribunal within sixty days from the receipt of a party’s application, to facilitate the arbitral process.[12]

(g) The court shall respect the parties’ agreement to arbitrate and refer any party to such agreement to arbitration and stay any legal proceedings that may have been commenced against the other party.

(h) The parties are free to agree on the venue, failing which the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties, shall determine it.

(i) In the absence of the parties’ agreement as to the language of the proceedings, the tribunal can use any language it deems appropriate.

(j) The Act preserves the doctrines of severability of the arbitration agreement and kompetenz-kompetenz, so that the tribunal can rule on its own jurisdiction.

(k) The tribunal is not bound to follow the Code of Civil Procedure 1908 or the Evidence Act 1872. Subject to the parties’ agreement, it may adopt any procedure for conducting the arbitral proceedings.

(l) In respect to the substance of a dispute, the parties are free to choose the rules of law or legal system of any country. In the context of the substantive law chosen by the parties, the Act expressly discards renvoi, unless the parties agree to the contrary.[13]

(m) If the parties do not choose the applicable substantive law, the Act authorizes the tribunal to apply the rules of law anything short of a legal system such as transnational commercial rules or the rules of lex mercatoria – which the tribunal deems most appropriate in the circumstances.[14]

(n) If all the parties agree, the tribunal may use mediation, conciliation or any other procedure at any time during the arbitral proceedings to encourage settlement. This is in keeping with the Asian tradition of settling disputes in a consensual process rather than western confrontational method.[15]

(o) The Act makes provision for the arbitral tribunal, and for the Court (by way of a latter amendment, i.e. Act II of 2004) to make interim orders in respect of the subject-matter of the dispute.

(p) No appeal lies against the tribunal’s order of interim measure of protection.

(q) The tribunal can summon any persons to appear before it, albeit through the competent court, to give evidence or to submit materials if they do not do so of their own accord.[16]

(r) The tribunal has no power to act in respect of consolidation of arbitral proceedings and concurrent hearings, unless it is given by the parties on agreed terms. The parties are free to agree on these matters.

(s) The tribunal must deal with any dispute submitted to it as quickly as possible and act fairly and impartially by giving each party ‘reasonable opportunity’ to participate in the proceedings, and in its deciding procedure and evidence and in exercising other powers conferred on it.[17]

(t) Subject to the parties’ agreement, the tribunal may appoint experts, legal advisers or assessors to assist it on specific issues.

(u) The tribunal may continue the proceedings in the absence of a party and make an award on the basis of the evidence before it.

(v) The tribunal must give its award without undue delay and the award will have the same force of law as if it were a decree of a court.[18]

(w) An award shall be made by the majority of the arbitrators and shall be in writing and signed at least by the majority where the tribunal consists of more than one arbitrator.

(x) An award can be challenged in the court only on specified grounds.[19]

(y) The Act makes provision for appeal against an order of the court setting aside or refusing to set aside an award, or refusing to recognize or enforce any foreign arbitral award. All these appeals go to the Appellate Division of the Supreme Court of Bangladesh.

6. Reasons behind ADR’s wide acceptance:

  • Cost:
    One of the largest reasons parties choose to resolve their disputes outside of the courts is cost. Alternative dispute resolution usually costs much less than litigation, allowing smaller financial disputes a financially viable way to be settled.
  • Speed:
    ADR can be scheduled by the parties and the panelist as soon as they are able to meet. Compared to the court process, where waits of 2-3 years are normal, dispute resolution is as fast as the parties want it to be.
  • Control:
    The parties control some of the process; selecting what method of ADR they want to follow, selecting the panelist for their dispute resolution; the length of the process; and, in a mediations case, even the outcome. Opposed to the court system, where the legal system and the judge control every aspect, ADR is much more flexible.
  • Confidentiality:
    Disputes resolved in court are public and any judgments awarded are also public. Mediation, arbitration, and mini trials are all conducted in private and in strict confidentiality.
  • Experienced Neutral Panelists:
    Our panelists are professional mediators and arbitrators with training and expertise in dispute resolution and insurance. Disputing parties are able to select their panelist from a list of qualified individuals who are specialized in specific aspects of insurance. In the court system, binding decisions are made by judges who may lack expertise in insurance practices.[20]
  • Cooperative Approach:
    All ADR services take place in a more informal, less confrontational atmosphere. This is more conducive to maintaining a positive business relationship between the two parties. With mediation, specifically, the result is collaboration between the two parties.[21]

Alternative dispute resolution (ADR) procedures also offer several advantages:

  • A single procedure. Through ADR, the parties can agree to resolve in a single procedure a dispute involving intellectual property that is protected in a number of different countries, thereby avoiding the expense and complexity of multi-jurisdictional litigation, and the risk of inconsistent results.[22]
  • Party autonomy. Because of its private nature, ADR affords parties the opportunity to exercise greater control over the way their dispute is resolved than would be the case in court litigation. In contrast to court litigation, the parties themselves may select the most appropriate decision-makers for their dispute. In addition, they may choose the applicable law, place and language of the proceedings. Increased party autonomy can also result in a faster process, as parties are free to devise the most efficient procedures for their dispute. This can result in material cost savings.
  • Neutrality. ADR can be neutral to the law, language and institutional culture of the parties, thereby avoiding any home court advantage that one of the parties may enjoy in court-based litigation, where familiarity with the applicable law and local processes can offer significant strategic advantages.[23]
  • Finality of Awards. Unlike court decisions, which can generally be contested through one or more rounds of litigation, arbitral awards are not normally subject to appeal.
  • Enforceability of Awards. The United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards of 1958, known as the New York Convention, generally provides for the recognition of arbitral awards on par with domestic court judgments without review on the merits. This greatly facilitates the enforcement of awards across borders.[24]

7. Conclusion and Suggestions:

ADR has been proved a cheapest and simple means to resolve disputes amicably. It is a unique and significant process by which very easily solution can be obtained. From the above study it is quite evident that we have ADR from the very beginning and it is not newly developed or evolved. It has ancient backing. It was prevalent in the ancient society and people used to get resolved their disputes through ADR process not by approaching courts. The result was that they used to get readily and speedily disputes resolved.[25]

Now in this modern world, where traditional courts have dominated whole dispute and conflicts resolution system and people prefer to go to these courts, despite the fact it takes so much time and money. People forgot to adopt another alternative and for the redressal of their disputes and grievances, even for petty matters they are approaching to the courts, that resulting in collapse of traditional courts to the large extent, in the sense delay in justice dispensation and increasing costs of litigation. The government is required to bring necessary alterations and changes in the existing laws of the land and also adopts alternatives various methods for resolving disputes and conflicts of family matters, traders and commercial associations, labor and industrial disputes and compensation matters. A unique institution at village and city level should be opened, where the petty matters can be brought & resolved, and which is free from any formal procedure. There should be no need of representation though lawyers. The decision rendered by these institutions must be binding and no scope of further appeal should be made. It should charge a very nominal or minimal fee that is must to run the institution and it should not charge even this nominal fee from the poor who are openly incapable to give it.

 8. References:

  1. Albin, C. (2001). Justice and fairness in international negotiation. Cambridge [England]; New York, Cambridge University Press.
  2. Ancona, D. G., Raymond A. Friedman and Deborah M. Kolb (1991). “The Group and What Happens on the Way to “Yes”.” Negotiation Journal 7.
  3. Boettger, D. I. U. (2004). “Efficiency Versus Party Empowerment – Against a Good-Faith Requirement in Mandatory Mediation.” Review of Litigation 23(1).
  4. Cohen, J. (1999). “Advising clients to apologize.” Southern California Law Review (72).
  5. CPR (2001). ADR Suitability Guide (Featuring Mediation Analysis Guide). New York, CPR Institute for Dispute Resolution.
  6. Erbe, N. D. (2006). “Appreciating Mediation’s Global Role in Promoting Good Governance. . .” Harvard Negotiation Law Review 11(spring).
  7. Fisher R., W. U. a. B. P. (1991). Getting to Yes: Negotiating Agreement Without Giving In. New York, N.Y., Penguin Books.
  8. Grillo, T. (1991). “The Mediation Alternative: Process Dangers for Women.” Yale L.J. 100.
  9. Hughes, P. (2001). “Mandatory Mediation: Opportunity Or Subversion?” Windsor Y.B. Access to    Just. 19(161).
  10. Menkel-Meadow, C. (1985). “For and Against Settlement: Uses and Abuses of the Mandatory Settlement Conference.” UCLA L. Rev. 33.
  11. Sander, F. E. A. (1976). “Varieties of Dispute Processing.” F.D.R. 70(111).
  12. Sander, F. E. A. and L. Rozdeiczer (2006). “Matching Cases and Dispute
  13. Resolution Procedures: Detailed Analysis Leading to a Mediation-Centered Approach.” Harvard Negotiation Law Review 11.
  14. USAID (1998). Alternative Dispute Resolution Practitioners Guide. Washington, DC, USAID.
  15. Watkins, M. and S. Rosegrant (2001). Breakthrough international negotiation: how great negotiators transformed the world’s toughest post-Cold War conflicts. San Francisco, CA, Jossey-Bass.

[1] See, Alternative dispute Resolution – A Discussion Paper (Lord Chancellor‘s Department, November 1999), p-35.

[2] See, Paper presented on the conference organized by (ISDLS) Institute for the Study and Development of Legal Systems (2005). Report on the Turkish Civil Justice Conference:ADR Learning Program, p-231-234.

 [3] See, Lord Woolf Access to Justice, Interim Report (1995) at Chapter 4.7. 2.

[4] See, Burger ?Isn‘t There a Better Way? (March, 1982) 68 American Bar Association Journal 274 – 277 at 274.

[5] See, Nelson ?Adapting ADR to Different Cultures? (Dec 15, 2001). Online article available at  http://www.gowlings.com/resources/publications.asp?pubid=776.

[6] See Fuller “Mediation – Its Forms and Functions” (1971) 44 S Cal L Rev 305 at 325.

 [7] See, Nelson ?Adapting ADR to Different Cultures? (Dec 15, 2001). Online article available at http://www.gowlings.com/resources/publications.asp?pubid=776.

 [8] See, Barrett A History of Alternative Dispute Resolution (Jossey-Bass San Francisco, 2004) at 7.

 [9] See, Barrett A History of Alternative Dispute Resolution (Jossey-Bass San Francisco, 2004) at 3.

 [10] See, Hensler ?Our Courts, Ourselves: How the Alternative Dispute Resolution Movement us Re-Shaping Our Legal System? (2003-2004) 108 Penn St L Rev at 165.

 [11] See, Benham & Boyd Barton ?Alternative Dispute Resolution: Ancient Models Provide Modern Inspiration? (1995-1996) 12 Ga St U L Rev 623 at 635.

[12] See, A History of Arbitration in Ireland The Dublin International Arbitration Centre, www.dublinarbitration.ie. See also Moran ?A legend to rival the Marie Celeste The Irish Times 11 November 2005, p-45-51.

[13] See, A History of Arbitration in Ireland The Dublin International Arbitration Centre, www.dublinarbitration.ie. See also Moran ?A legend to rival the Marie Celeste The Irish Times 11 November 2005 at 94.

[14] See, Stempel ?Reflections on Judicial ADR and the Multi-Door Courthouse at Twenty; Fait Accompli, Failed Overture, or Fledging Adulthood?? (1996) 11 Ohio St J on Disp Resolution at 297.

[15] See, Subrin ?Teaching Civil Procedure While You Watch It Disintegrate? (1993) 59 Brook L Rev 115 at 1158.

 [16] See, Subrin ?Teaching Civil Procedure While You Watch It Disintegrate? (1993) 59 Brook L Rev 115 at 1158.

 [17] See Shone ?Law Reform and ADR: Pulling Strands in the Civil Justice Web? Paper presented at the Australasian Law Reform Agencies Conference April 2006 Wellington New Zealand at 3. Available at http://www.lawcom.govt.nz/UploadFiles/SpeechPaper/8208298e-fef7-4c6b-a38d- 9e65ed2f99f9//Session%202B%20- 20ADR%20-%20Shone.pdf.

 [18] See, Hensler ?Our Courts, Ourselves: How the Alternative Dispute Resolution Movement us Re-Shaping Our Legal System? (2003-2004) 108 Penn St L Rev at 165.

 [19] See, Sander ?Varieties of Dispute Processing? (1976) 70 Federal Rules Decisions 79 at 112-113.

 [20] See, Sander ?Varieties of Dispute Processing? (1976) 70 Federal Rules Decisions 79 at 120.

 [21] See, Sander ?Varieties of Dispute Processing? (1976) 70 Federal Rules Decisions 79 at 131.

 [22] See, Benham & Boyd Barton ?Alternative Dispute Resolution: Ancient Models Provide

Modern Inspiration? (1995-1996) 12 Ga St U L Rev 623 at 635.

[23] See, Lord Woolf, Access to Justice, Interim Report (1995) and Lord Woolf, Access to Justice Final Report (1996) at 62.

 [24] See, Benham & Boyd Barton ?Alternative Dispute Resolution: Ancient Models Provide Modern Inspiration? (1995-1996) 12 Ga St U L Rev 623 at 635.

 [25] See, Green Paper on alternative dispute resolution in civil and commercial matters COM/2002/0196 Final. Available at http://eurlex.europa.eu/.