Committee suggests enhancing India International Arbitration Centre (IIAC) utilization and limiting judicial intervention in arbitration.
Recommendations include adopting Online Dispute Resolution (ODR), developing ADR professionals, and addressing NALSA's funding and manpower gaps.
In Summary
The Department-related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justicepresented its report on the Alternative Dispute Resolution (ADR) ecosystem in India.
ADR is a set of mechanisms such as arbitration, mediation, conciliation, negotiation and Lok Adalats that resolve disputes outside courts in a faster, cost-effective and less adversarial manner.
Key Issues and Recommendations of the Committee
Key Issues
Committee Recommendation
Judicial backlog & growing burden on courts: Currently exceeds 6 crore cases.
Integrate ADR more effectively by strengthening institutional capacity, sector-specific frameworks, performance standards and accountability mechanisms.
Low utilization of Pre-Institution Mediation and Settlement (PIMS): Only approximately 4,000 settlements over a five-year period.
Make PIMSmandatory and impose cost penalties for unreasonable refusal or bad-faith participation.
Underutilisation of the India International Arbitration Centre (IIAC): Only17 cases handled since establishment.
Undertake targeted outreach, stakeholder engagement and institutional reforms to enhance caseload and global competitiveness.
Excessive judicial intervention in arbitration: Delays arbitral outcomes and dilutes the independence of the process.
Define clear limits on judicial intervention and strengthen institutional rules and procedures.
Limited adoption of Online Dispute Resolution (ODR)
Adopt minimum digital standards, strengthen digital infrastructure and promote user-friendly ODR platforms.
Weak Alternative Dispute Resolution (ADR) professional ecosystem
Develop ADR through accreditation, standardised training, recognised qualifications and integration into legal education.
Funding and manpower gaps in the National Legal Services Authority (NALSA): High staffing vacancies (16/45 vacant) and severe funding gap (allocated ₹550 cr against ₹1,058.87 cr required).
Augment manpower, fill vacancies and provide adequate budgetary support to strengthen legal aid and access to justice.
Lok Adalat Settlement Quality: Mass-scale disposals raise concerns that raw case volume is prioritized over fairness and quality.
Develop clear, simplified guidelines for case selection and settlement conduct along with robust, long-term tracking of settlement data to analyze outcomes over time.
Mediation Act Rolldown Delays: Phased rollout has stalled key provisions (like Section 63) because the Mediation Council of India (MCI) is not yet fully functional.
Fast-track the full establishment of the MCI and finalize its regulatory frameworks.
A proposed regulatory body intended to govern mediation practices in India under the Mediation Act. Delays in its full establishment have stalled key provisions of the Act.
Lok Adalat
A forum for resolving disputes through conciliation and compromise, acting as a voluntary and informal judicial body at various levels.
National Legal Services Authority (NALSA)
An organization responsible for providing legal aid and ensuring access to justice for weaker sections of society. The report points out significant funding and manpower gaps within NALSA.
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