Jatin Singh
NALSAR University of Law, Hyderabad
Vedashree Adsule
NALSAR University of Law, Hyderabad
Jatin Singh
NALSAR University of Law, Hyderabad
Vedashree Adsule
NALSAR University of Law, Hyderabad
Courts and ADR Mechanisms in India: Institutional Harmony or Jurisdictional Overlap.
I. Introduction
The Indian justice system stands at a difficult moment. Courts remain the primary guarantors of rights, yet rising pendency threatens their ability to deliver timely justice. Side by side, India has developed one of the world’s most elaborate alternative dispute resolution (ADR) frameworks, including arbitration, mediation, conciliation, Lok Adalats, and sector-specific forums. What was once a set of peripheral mechanisms has now grown into an institutional network engaging millions of disputes every year.
The challenge is no longer whether courts and ADR can coexist, but whether they can do so coherently. Do these institutions complement one another, or do they compete for jurisdiction?
II. Constitutional and Legislative Architecture for ADR
ADR in India is not only a creation of statutes; it is grounded in constitutional values. Article 39A places a positive obligation on the State to ensure equal access to justice, a mandate the Supreme Court has interpreted broadly to include non-adversarial and efficient dispute- resolution processes. In Hussainara Khatoon (I) v. State of Bihar, the Court held that delay itself can violate Article 211 (“No person shall be deprived of his life or personal liberty except according to procedure established by law”), affirming that a speedy trial is integral to fair procedure.2 This constitutional commitment provides a strong foundation for the growth of ADR, which serves as a means to prevent injustice arising from prolonged litigation and judicial backlog.
B. Statutory Foundations
Arbitration and Conciliation Act, 1996
Drawing from the UNCITRAL Model Law, the Act seeks to promote party autonomy and limit judicial interference through provisions such as Section 5.3 The 2015 and 2019 amendments strengthened this framework by imposing stricter timelines, promoting institutional arbitration, and refining the contours of the public-policy standard.4 These reforms reflect a conscious shift toward making arbitration a reliable and efficient alternative to courtroom litigation.
Legal Services Authorities Act, 1987
This Act institutionalised Lok Adalats and Permanent Lok Adalats (PLAs), giving them statutory legitimacy. Awards passed by Lok Adalats carry the status of civil court decrees under
Section 21,5 which has enabled the swift settlement of a very large volume of cases and substantially reduced the burden on the judiciary.
Mediation Act, 2023
The 2023 legislation marks a significant step in formalising mediation in India. It sets out a comprehensive framework for pre-litigation mediation, court-referred mediation, online mediation, and the enforcement of mediated settlement agreements, while also establishing national and state mediation councils.6 This creates a much-needed statutory backbone for mediation practice across the country.
Sector-Specific Statutes
Several modern laws including the Consumer Protection Act, 2019, RERA, the MSME Act, and the Companies Act have integrated ADR components into their regulatory structures. While this has widened the scope of ADR, it has also produced a patchwork of mechanisms that sometimes overlap and vary in procedural standards.
Taken together, these statutes demonstrate that ADR is firmly embedded within India’s justice system. However, legislative design by itself does not eliminate the jurisdictional complexities that arise when multiple forums operate simultaneously.
IV. Mediation and Conciliation: Cooperation by Design
A. Mediation Act, 2023
The new Mediation Act signals a major shift toward structured institutional mediation. It mandates pre-litigation mediation for certain disputes and allows the creation of community mediation systems. Courts now have clear statutory backing to encourage settlement, building on earlier precedents like Afcons Infrastructure v. Cherian Varkey Construction, which laid guidelines for court-referred mediation.7
B. Court-Annexed Mediation Centres
Every High Court now runs mediation centres staffed by trained mediators. Data from these centres show high settlement ratios in matrimonial, commercial, and neighbourhood disputes. This is perhaps the strongest example of institutional harmony: courts redirect cases to mediation, and mediation reduces the burden on courts.
C. Conciliation
Though less popular, conciliation under Part III of the Arbitration Act remains a flexible tool. The Supreme Court has endorsed conciliation settlements as having the same status as arbitral awards on agreed terms.
V. Lok Adalats and Permanent Lok Adalats: Overlap and Friction
A. Traditional Lok Adalats
Lok Adalats dispose of lakhs of cases each year, providing quick settlement through compromise. Their awards are deemed decrees of civil courts. This creates harmony, as courts often transfer compoundable or minor cases to Lok Adalats.
B. Permanent Lok Adalats (PLAs)
Issues arise with PLAs exercising pre-adjudicatory jurisdiction in public utility service disputes. In InterGlobe Aviation Ltd. v. N. Satchidanand, the Supreme Court held that PLAs can decide cases on merits if parties do not reach a settlement.8
Critics argue this resembles judicial power without the procedural safeguards of courts. Some High Courts have questioned the constitutional validity of such adjudicatory powers. Here, jurisdictional overlap becomes genuine conflict, not cooperation.
VI. Commercial Courts and Institutional Arbitration: A Mixed Picture
India’s push toward commercial efficiency led to the Commercial Courts Act, 2015. These courts handle disputes involving arbitration applications and enforcement.
A. Positive Implications
Commercial Courts have improved timelines for Section 34 proceedings and enforcement petitions. The Delhi High Court’s Arbitration Cell, for example, tracks deadlines and monitors pendency.
B. Persisting Challenges
Yet the overlap remains problematic:
- Some Commercial Courts treat arbitration matters like ordinary civil
- Appeals under Section 37 still create
- Conflicting interpretations between High Courts often require Supreme Court
Thus, institutional harmony exists in theory but is inconsistently implemented in practice.
VII. Sector-Specific ADR: Fragmentation and Redundancy
Many modern statutes require ADR before litigation:
- Consumer Protection Act, 2019 mandates mediation
- RERA encourages conciliation
- MSME Samadhan uses mandatory conciliation before
- Companies Act, 2013 enables mediation
The result is fragmentation. Different regulators run disparate ADR systems without integration. This sometimes leads to jurisdictional confusion, especially regarding:
- enforceability of settlements,
- overlap with arbitration clauses, and
- whether sectoral ADR bars civil
For instance, whether MSME conciliation prevents arbitrators from taking jurisdiction has produced mixed judicial outcomes.
VIII. Judicial Review of ADR Outcomes
Courts routinely review decisions from ADR bodies.
A. Review of Arbitral Awards
Courts can set aside awards for limited reasons such as patent illegality or conflict with public policy. Despite, Section 34 petitions continue to occupy significant judicial time because parties treat it as a second round of dispute resolution.
B. Review of Lok Adalat Awards
Although not appealable, Lok Adalat awards can be challenged under Article 226 if obtained through fraud or coercion.9
C. Review of PLA Orders
PLA orders are appealable before High Courts, but courts have issued conflicting views on procedure and scope. This layer of judicial review is essential but increases the risk of overlap.
IX. Current Affairs and Emerging Developments
A. Rise of Institutional Arbitration in India
The India International Arbitration Centre (IIAC) and the Mumbai Centre for International Arbitration (MCIA) have strengthened India’s position as a regional arbitration hub. Government circulars now direct public sector undertakings to prefer institutional arbitration.
B. Digital Transformation
The Supreme Court’s e-Committee and NITI Aayog’s Online Dispute Resolution (ODR) Policy encourage technology-enabled mediation and arbitration.10 Courts increasingly accept ODR settlements, but the legal framework remains incomplete.
C. Mediation Bill as Catalyst
The mediation legislation is likely to bring the largest structural shift since the Arbitration Act. Mandatory pre-litigation mediation in commercial matters should reduce filings, but it may also raise questions about enforceability and confidentiality.
X. Institutional Harmony vs. Jurisdictional Overlap: Where Do We Stand?
A fair assessment suggests both coexist.
Areas of Harmony | Areas of Overlap |
Court-annexed mediation centres | PLA adjudicatory authority |
Statutory support for arbitration | Appeals from arbitration orders |
Judicial restraint in Section 34 challenges | Sectoral ADR mechanisms functioning in silos |
Widespread use of Lok Adalats | Conflicting interpretations across High Courts |
Establishment of Commercial Courts | Excessive judicial interference in arbitrator appointments |
Thus, India exhibits partial harmony, moderated by pockets of overlap largely caused by procedural inconsistencies and ambiguous statutory drafting.
XI. Recommendations: Building a More Coherent Framework
India needs to move from scattered reforms to a coordinated institutional design where courts and ADR mechanisms function as parts of a single justice system rather than competing jurisdictions. The present framework remains fragmented because arbitration, mediation, conciliation, Lok Adalats, and sector-specific processes each operate under separate statutes. This creates duplication and confusion. A unified ADR policy perhaps through a comprehensive Law Commission exercise can create consistent standards and reduce the unpredictability caused by divergent High Court rulings. The Law Commission’s Report No. 246 had emphasised coherence in arbitration; a broader exercise is now overdue.11
Judicial involvement in arbitration must also be recalibrated. Although BALCO and Vidya Drolia encouraged restraint, courts still dominate key stages, including arbitrator appointments and Section 34 reviews. The 2019 Amendment allowing institutional appointments under Section 11 should be fully operationalised.12 Courts should confine Section 34 review strictly to the grounds recognised in Ssangyong Engineering, where the Supreme Court clarified that
re-appreciation of evidence is impermissible.13 Faster disposal of arbitration-related matters by Commercial Courts will strengthen the credibility of the process.
Mediation must be integrated more systematically. The Mediation Act provides a workable statutory basis, but effective implementation requires consistent training, accreditation of mediators, and clearer referral practices by judges. The guidelines in Afcons Infrastructure remain useful in ensuring that mediation becomes a predictable first step rather than an occasional experiment. With proper support, mediation can significantly reduce pendency and change the culture of dispute resolution.
Sector-specific ADR bodies also need rationalisation. Their current proliferation consumer mediation cells, RERA forums, MSME councils has created overlapping jurisdictions, especially where private arbitration clauses co-exist with statutory conciliation requirements. The Supreme Court’s ruling in Silpi Industries illustrates the confusion.14 A coordinated institutional structure with interoperable procedure and shared standards would prevent duplication and forum shopping.
Permanent Lok Adalats require statutory clarity. Their hybrid adjudicatory role under Section 22C of the Legal Services Authorities Act was upheld in InterGlobe Aviation,15 but questions about procedural safeguards persist. Parliament must decide whether PLAs are conciliatory forums or quasi-judicial tribunals. Without clarification, unpredictability and jurisdictional conflict will continue.
Finally, technology must be integrated into dispute resolution. NITI Aayog’s ODR Handbook and the Supreme Court’s e-Committee have repeatedly stressed the need for digital systems.16 Linking court portals with ODR platforms can make case referrals smoother, reduce physical appearances, and expand access for litigants outside major cities. With legislative support through the Mediation Act, online mediation can become a mainstream pathway rather than a pandemic-era innovation.
Collectively, these reforms can transform the relationship between courts and ADR bodies into one of structured cooperation. The objective is not to diminish the judiciary, but to create a justice system where each mechanism handles the disputes it is best equipped for. Only such clarity can make the promise of accessible and efficient justice a reality.
XII. Conclusion
India’s justice system does not face a choice between courts and ADR. The two institutions are not rivals; they are partners in delivering justice. The Constitution, legislation, and judicial decisions all reflect an intention to build a complementary ecosystem. Yet jurisdictional overlap persists because of inconsistent implementation, fragmented sectoral frameworks, and judicial hesitation to fully let go of control.
The future lies in designing a coordinated system where courts act as facilitators of ADR rather than competitors. With the Mediation Act, institutional arbitration reforms, and ODR initiatives, India is moving closer to that goal. The challenge now is to align statutory intent with consistent administrative and judicial practice. Only then can the promise of accessible, efficient, and harmonious dispute resolution become a lived reality.