How ADR can benefit a government system in battling litigation

Updated: May 14, 2020

“It is essential to align a process oriented approach with a result oriented approach in an effort to build core processes into strength and achieve the desired goal of reducing the pendency”.

- Dipak Mishra

According to the data provided by National Judicial Data Grid more than 3.2 crore cases out of which approximately 1 crore are civil cases are pending before the Courts in India, out of which more than 73.1% cases are more than a year old, in which some percentage of cases are more than 30 years of running pendency(1).

High pendency and delays have economic costs due to lost days and state of suspension of business, which resulted in the poor ranking of the country at World Bank’s Ease of Doing Business Index. Higher ranking indicates better regulations for businesses and stronger protection of Property Rights. Low ranking results in less investment from the foreign investor’s backlogging India’s growth in the era of globalisation.

Alternative Dispute Resolution (ADR) is the process of settling a dispute using arbitration, mediation or negotiation. ADR can be used as an alternative for civil cases and can be disposed of more efficiently as cases with low monetary value has resulted in the failure of goal of the parties.

The Code of Civil Procedure, (2) Section 89 itself provides settlement of disputes outside courts. As regards to the promotion of ADR the International Centre for Alternative Dispute Resolution (ICADR) by the Department of Legal Affairs to find an early solution to the dispute.

Commercial Court (Amendment) Act inserts section 12A in the Act it entails where suit doesn’t contemplate urgent interim relief, the Plaintiff has to go pre-institution mediation. The Act introduces establishment of Commercial Appellate Courts in jurisdictions where ordinarily original jurisdiction of the High Court does not exist. It has widened the pecuniary jurisdiction of the Commercial courts, it reduced the limit value from one crore to three lakh only. The Appeal should be disposed within 6 months of filing the appeal. Such amendments resulted in some drastic change in infrastructure and boosted foreign investor’s confidence.

By 2018 India has jumped 23 places in Ease of Doing Business Index and secured 77 position out of 190 countries (3) after the amendments made in the laws of commercial courts

ADR results in a win-win situation of both the parties, unlike the judicial system. ADR is not only a solution for the Judiciary but more beneficial to the government, this will not only reduce the cost of government on judicial bodies but will alternatively help the government to generate more revenues from the society. Establishment of more Courts, increase in the number of Judges or support staff all these processes to reduce the pendency of cases have resulted in huge expenditure by the government, which eventually turns out to be the liability for the government and its economy, ADR is cost-effective and time-efficient it does not involves high rate of investment and results are fasters than the litigation. Decisions of ADR can be set aside (4), in situation when parties are not satisfied with the means of ADR they can approach Courts, thus it will reduce the burden from the Judicial bodies and early solutions to the issues within a relevant period of time.

Poor compatibility to dispose of the cases or resolution of a dispute also affects the business of seas of a country, Maritime laws play an inevitable role in the development of a country. Nation’s backwardness in trade and commerce dispute resolution results in huge loss to the government in businesses.

The Arbitration and Conciliation(Amendment) Act 2019, seeks to establish an independent body called the Arbitration Council of India(ACI) for the promotion of alternative dispute resolution mechanism its major functions include uniform professional standards for all the matters, framing policies for arbitral institution and maintaining a depository arbitral awards (judgment) in India and abroad.

India is a developing nation, with a thick population which includes a large percentage of poor people and low knowledge of Judicial functioning of the State. Corrupt practices adopted by the people involved in the system has resulted in broken hopes of the people who filed cases to avail their rights, which leads to distrust of people on the Judicial System and government. A State with no trust over the Judicial system and government can result in the failure of entire system as people will start finding solutions to the issues all themselves with no respect to the law.

  1. “National Judicial Data Grid (District & Taluka Courts of India),2019”; http://njdg

  2. Section 89(1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observation of the parties, the court may reformulate the terms of a possible settlement and refer the same for-



Judicial settlement including settlement through Lok Adalat; or


3. “A World Bank Group Flagship Report; 16th Edition , 2019”;

4. The Arbitration and Conciliation Act 1996, Section 34

About Author

Parul Dalal

I am a fourth year law student and comprehended the basics of law. I am affiliated to Banasthali Vidyapith, Rajasthan. I am interested in human rights, Arbitration laws and Criminal laws. I put on my opinions to enchance the skills and knowledge. 


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