Methods of Alternative Dispute Resolution System the techniques or modes of ADR, though widely accepted all over the world, may vary from region to region. This fluctuation depends on the legal framework of a country. The following are the methods of settlement that are widely accepted:

  • Arbitration
  • Mediation
  • Conciliation
  • Negotiation

Arbitration is a mode of ADR wherein the dispute between the parties goes through a process to achieve an amicable resolution by an impartial third party known as an 'arbitrator,' without recourse to litigation. In the case of arbitration, the arbitrator, after reviewing the dispute between the parties comes to a settlement. Such a decision taken by an arbitrator shall be binding on both parties. Unlike other methods of dispute resolution, once the parties have submitted a matter to arbitration, neither can withdraw from the procedure.

Arbitration can either be voluntary or mandatory. In the case of compulsory arbitration, the parties to the dispute enter into Arbitration either under a statute, an order of the court, or through a specific clause included in the contractual agreement between the parties. Whereas on the other hand, in the case of voluntary arbitration, it is up to the discretion of parties to enter into arbitration. The decision that results from the proceeding is known as an 'arbitral award.'

Advantages of arbitration:
  • Flexibility: Arbitration proceedings are flexible and more economically feasible compared to litigation
  • Time-Consuming: Arbitration proceedings occur at an expeditious rate as compared to Litigation; therefore, it saves time for both parties.
  • Confidentiality: The disputes which are subject to arbitration are treated with privacy, and are not released to the public.
  • Arbitrator: The parties have the liberty to choose an arbitrator to handle their dispute.
  • Enforceability: Arbitration awards are generally easier to enforce as compared to court verdicts.
Disadvantages of arbitration:
  • ➜ If arbitration is mandatory as per the contract between the parties, then their right to approach the court is waived.
  • ➜ There is a very limited avenue for appeals.
  • ➜ Arbitration does not provide for the grant of interlocutory applications.
  • ➜ Arbitration awards are not directly enforceable; they are executable subject to judicial sanction.

Mediation is a mode of dispute resolution, where an amicable decision arises with the help of a third party known as a 'mediator,' without recourse to the court of law. It is a voluntary process, and unlike arbitration, it is more flexible; therefore, the parties to the dispute are under no obligation to agree to the settlement. Thus, an agreement taken via mediation shall be binding upon the parties, only as long as they agree to it. There may be instances where parties are advised to adhere to Mediation, however, under such circumstances, the result is up to the parties. Therefore, Mediation is a process where the parties are in total control over their final settlement. Here, the mediator only acts as a facilitator and does not interfere in the decision of the dispute. Therefore, it is a win-win pact.

Advantages of mediation:
  • ➜ Parties have complete control over the settlement.
  • ➜ Less stress as compared to litigation and arbitration.
  • ➜ The relationship between the parties isn't overly damaged.
  • ➜ Mediation proceedings are confidential.
  • ➜ The process resolves the dispute quickly.
Disadvantages of mediation:
  • ➜ Since the decision is at the discretion of the parties, there is the possibility that a settlement between the parties may not arise.
  • ➜ It lacks the support of any judicial authority in its conduct.
  • ➜ The absence of formality- Mediation proceedings are lacking in any procedural formality since they are not based on any legal principle.
  • ➜ The truth of an issue may not be revealed.

Conciliation is a method of dispute resolution wherein the parties to a dispute come to a settlement with the help of a conciliator. The conciliator meets with the parties both together and separately to enter into an amicable agreement. Here, the final decision may be taken by reducing tensions, improving communications, and adopting other methods. It is a flexible process, therefore allowing the parties to define the content and purpose of the proceeding. It is risk-free and is not binding upon the parties unless they sign it.

Advantages of conciliation:
  • ➜ Flexibility: Since the conciliation process is informal, it is flexible.
  • ➜ The conciliator is often an expert in the disputed field.
  • ➜ Conciliation proceedings, like any other form of ADR, are economical as compared to litigation.
  • ➜ The parties to the dispute have the liberty to approach the court of law, if unsatisfied with the proceeding.
Disadvantages of conciliation:
  • ➜ The process is not binding upon the parties to the dispute.
  • ➜ There is no avenue for appeal.
  • ➜ The parties may not achieve a settlement to their conflict.

Negotiation is a method of dispute resolution whereby a dispute between two individuals or groups is settled amicably by an impartial third person called as a negotiator, using different techniques. The negotiator, in this form of resolution, uses various communication methods to bring the parties of the dispute to a settlement. The primary aim of this type of dispute resolution is to reach an agreement that is fair and acceptable by the parties. The parties engage in the dispute with each other until they reach a desirable outcome for all involved.