Government Strengthens Alternative Dispute Resolution Framework with Key Reforms in Arbitration and Mediation

(By Syed Ali Taher Abedi)

In a significant push to enhance the effectiveness and efficiency of dispute resolution in India, the government has been actively promoting Alternative Dispute Resolution (ADR) mechanisms such as arbitration and mediation. These methods, which are less adversarial and provide faster solutions, are being positioned as better alternatives to conventional litigation. The government’s ongoing policy and legislative interventions aim to streamline these processes, making them more expedient and accessible for parties involved in disputes.

Key Legislative and Policy Interventions:

1. Arbitration and Conciliation Act, 1996 Amendments
   The Arbitration and Conciliation Act, 1996 has undergone progressive amendments in 2015, 2019, and 2020. These revisions are designed to keep pace with the evolving global arbitration landscape. The amendments focus on ensuring timely resolution of arbitration proceedings, upholding the neutrality of arbitrators, reducing judicial interference, and ensuring the effective enforcement of arbitral awards. They also emphasize promoting institutional arbitration, with the intention of establishing a robust arbitration ecosystem in India, and aligning Indian practices with global standards.
2. Commercial Courts Act, 2015 – Pre-Institution Mediation and Settlement (PIMS)
   The Commercial Courts Act was amended in 2018 to introduce the Pre-Institution Mediation and Settlement (PIMS) mechanism. Under this provision, commercial disputes of a specified value must first undergo mediation before the parties approach the court. This initiative encourages mediation as a first step, allowing parties to settle disputes amicably without resorting to litigation, provided no urgent relief is required.
3. India International Arbitration Centre Act, 2019
   The India International Arbitration Centre Act, 2019, was enacted to establish the India International Arbitration Centre (IIAC), a world-class independent body for institutional arbitration. The IIAC aims to foster both domestic and international confidence by providing a neutral platform for resolving commercial disputes. The IIAC also introduced the India International Arbitration Centre (Conduct of Arbitration) Regulations, 2023, focusing on an efficient, time-bound arbitration process. Additionally, the Centre continues to empanel reputed arbitrators, further enhancing the quality of arbitration services. With its focus on institutional arbitration, the IIAC aspires to become a model arbitration institution in India.
4. Mediation Act, 2023
   The Mediation Act, 2023 provides a comprehensive legislative framework for mediation in India. It aims to streamline and promote mediation, particularly institutional mediation, and will play a crucial role in fostering a culture of amicable out-of-court dispute resolution. The Act is expected to provide a standalone legal framework for mediation, enhancing its growth and popularity.
5. Training and Capacity Building for ADR Professionals
   Under Section 15 of the India International Arbitration Centre Act, 2019, the IIAC is mandated to impart training in ADR mechanisms, including arbitration, conciliation, and mediation. The Centre regularly organizes conferences, seminars, and training sessions for professionals, as well as public and private sector stakeholders, to build capacity and strengthen the ADR framework.

These reforms and initiatives reflect the government’s commitment to improving the dispute resolution landscape in India. By enhancing the arbitration and mediation framework, the government seeks to ensure faster, cost-effective, and less adversarial solutions to disputes, contributing to the overall ease of doing business and improving legal and judicial efficiency.

This information was provided by Shri Arjun Ram Meghwal, the Minister of State (Independent Charge) of the Ministry of Law and Justice and Ministry of Parliamentary Affairs, in a written response to a question in Rajya Sabha.