Alternative Dispute Resolution across the Fields of Law: A Consolidated View

The same four processes, namely negotiation, mediation, arbitration and the Lok Adalat, operate in every field of Indian law, but each field attaches them to its own statute and its own forum. This topic brings the six principal fields together: civil and commercial suits, family and matrimonial causes, consumer claims, labour and industrial disputes, commercial and corporate matters, and government contracts. Read together they show a common design. The attempt at settlement is sometimes compulsory, the settlement itself never is; the outcome is made enforceable as a decree; and what cannot be compromised, namely status, rights in rem and serious criminality, stays with the courts in every field alike.

1. The Common Framework

Four instruments run across all six fields and should be kept in view before the field-specific provisions are taken up. Section 89 of the Code of Civil Procedure, 1908, with Order X Rules 1A to 1C, allows a court to refer a pending case to arbitration, conciliation, judicial settlement including a Lok Adalat, or mediation. The Arbitration and Conciliation Act, 1996 governs arbitration wherever the parties have contracted for it. The Mediation Act, 2023 supplies the general law of mediation, absorbs conciliation into it by Section 3(h), and has overriding effect under Section 55 for the conduct of a mediation. The Legal Services Authorities Act, 1987 supplies the Lok Adalat, the Permanent Lok Adalat and the legal services machinery that administers pre-institution mediation in commercial suits.

The six fields, their principal machinery, and the features common to all of them

2. The Fields at a Glance

3. Civil and Commercial Suits

The civil suit is the model from which the rest are built. A compromise may be recorded under Order XXIII Rule 3 and a decree passed in its terms; a pending suit may be referred under Section 89 to any of the four modes; and where an arbitration agreement covers the subject matter, Section 8 of the Arbitration and Conciliation Act, 1996 requires the court to send the parties to arbitration. Settlement in a Lok Adalat carries a refund of the court fee under Section 21 of the Legal Services Authorities Act, 1987 and under Section 16 of the Court Fees Act, 1870. Leave of the court is required for a compromise on behalf of a minor under Order XXXII Rule 7, and notice is required in a representative suit under Order I Rule 8.

4. Family and Matrimonial Causes

Here settlement is not merely permitted but required to be attempted. Section 9 of the Family Courts Act, 1984 obliges the court to endeavour to persuade the parties to settle, and Section 23(2) of the Hindu Marriage Act, 1955 requires an attempt at reconciliation before relief is granted, subject to the excepted grounds. Counsellors are attached to the Family Court under Section 6. The characteristic outcome is a package settling divorce by mutual consent under Section 13B, maintenance, custody, return of articles and the connected criminal complaint together, which no single court could grant. The limits are equally characteristic: a marriage is dissolved only by decree, matrimonial disputes are not arbitrable, a custody arrangement must satisfy the welfare of the child, and allegations of continuing violence make mediation unsuitable because the process assumes parties able to negotiate freely.

5. Consumer Claims

The Consumer Protection Act, 2019 was the first Indian consumer statute to build in a settlement channel. Section 37 permits the commission, at the first hearing after admission or later, to direct the parties to give written consent to mediation. Chapter V, Sections 74 to 81, establishes a consumer mediation cell attached to each commission, provides for the empanelment of mediators and for disclosure of circumstances affecting independence, and requires the commission to pass an order recording the settlement. Section 81 provides that no appeal lies against such an order. The reference requires consent, unlike a reference under Section 89, and the commission retains control of the complaint throughout. Alongside the commissions, the ombudsman schemes in banking, insurance and electricity dispose of large numbers of small claims free of cost to the complainant.

6. Labour and Industrial Disputes

This field has used conciliation longest and uses it differently. The Industrial Relations Code, 2020 replaced the Industrial Disputes Act, 1947 with effect from 21 November 2025. Section 43 provides for conciliation officers appointed by the appropriate Government, Section 53 for conciliation and the report that follows it, and Section 42 for voluntary reference to arbitration before the dispute goes to a Tribunal, with Section 42(8) excluding the Arbitration and Conciliation Act, 1996 from such arbitrations. Sections 3 and 4 provide for the Works Committee and the Grievance Redressal Committee at the bipartite stage, and Sections 44 to 47 for the Industrial Tribunal that adjudicates on the failure of conciliation.

7. Commercial and Corporate Matters

Arbitration is the default here, supported by the Commercial Courts Act, 2015, which concentrates commercial suits and arbitration applications of the specified value in designated courts. Section 12A of that Act requires a plaintiff who does not contemplate urgent interim relief to exhaust pre-institution mediation, and a settlement so reached has the status of an arbitral award on agreed terms under Section 30(4) of the Arbitration and Conciliation Act, 1996. Section 442 of the Companies Act, 2013 provides a Mediation and Conciliation Panel for references by the Tribunal and the Appellate Tribunal, and Section 18 of the MSMED Act, 2006 routes payment disputes of micro and small enterprises to the Facilitation Council, which mediates and then arbitrates, with a pre-deposit of seventy-five per cent required under Section 19 before an award is challenged.

8. Government Contracts

Disputes with the Government and its undertakings behave differently because the contract is standard form, the officer deciding whether to settle is exposed to audit and vigilance scrutiny, and the sums are large. Two corrections have been made. The courts have struck down clauses giving one party control over the appointment of the tribunal, in Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760 and in the Constitution Bench decision in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), (2025) 4 SCC 641. And the Guidelines for Arbitration and Mediation in Contracts of Domestic Public Procurement issued by the Department of Expenditure in June 2024 discourage routine recourse to arbitration in high value procurement, prefer institutional arbitration where it is adopted, and press for mediation under the Mediation Act, 2023. Disputes between public undertakings and Government departments go first to the committee mechanism established for that purpose.

9. What Cannot Be Settled, Field by Field

10. Four Propositions Common to Every Field

1. The attempt may be compelled; the settlement cannot. Section 12A of the Commercial Courts Act, 2015 compels an attempt, Section 89 of the Code permits a reference without consent, and Section 9 of the Family Courts Act, 1984 imposes a duty on the court. In every case the party remains free to refuse the terms and to have the dispute adjudicated.
2. The outcome is made enforceable without a fresh suit. A compromise becomes a decree under Order XXIII Rule 3; a Lok Adalat award is deemed a decree under Section 21 of the Legal Services Authorities Act, 1987; a mediated settlement is enforceable under Section 27 of the Mediation Act, 2023; an arbitral award is enforceable under Section 36 of the Arbitration and Conciliation Act, 1996.
3. The boundary is drawn by the nature of the right, not by the statute. Rights in personam may be compromised; rights in rem, questions of status, matters affecting third parties and prosecutions for serious offences may not, in whichever field they arise.
4. Failure costs the litigant nothing. A failed reference returns the case to the court, the mediator reports only that the attempt was unsuccessful, and Section 24 of the Mediation Act, 2023 excludes the period spent in computing limitation.

11. Related Topics and Provisions