Analysis of the Recent Development of ADR in Different Countries.

A Brief Analysis of the Recent Development of ADR in Different Countries.

Author: Snigdha Shandilya &  Pritish Kumar Pattnaik

Introduction

With the recent development in the legal system, most of the disputes are resolved which is more convenient than any formal trial. Most of the disputes relating to energy, financial services, aviation are settled through the Alternative Dispute Resolution mechanism. There is much special dispute which goes to special forums/tribunals which are more administrative than court. ADR is known for its legal reform movement in the USA for the better administration of justice. With respect to the development made in the ADR through amendments in the Arbitration Act of different countries. ADR is not only a better mechanism for settlement of the dispute, but also it offers better efficiency, flexibility, empowerment of parties, and justice. Today, there are more than 200 countries in the world to have negotiation treaties and prefer the International platform for the resolution of disputes arise at any point in time. Arbitration offers a platform for the resolution of border and boundary and cross border commercial dispute between two countries through negotiation and mediation mechanism. Therefore, most of the legal advisors and intellectuals are involving in ADR, as it is the most integrated form of resolving disputes of the parties. 

INDIA

The Arbitration Law of India underwent three amendments in the years 1940, 1935, which recognized protocol and convention, and in the year 1961, it included foreign award. Recently, the bill has been passed in legislation to amend laws relating to domestic, international, and commercial arbitration. The aim to do so encouraging foreign trade and make New Delhi the headquarters of International Arbitration. To uphold the arbitration procedure and add more strength, there has been a High-level committee set up by the central government which was introduced the Arbitration and Conciliation (Amendment) Bill in the year 2019. The main objective was to deal with the dispute’s speedy resolution with minimum cost expenditure and less of court interference.

The Arbitration in the Conciliation Act was introduced after the amendment in 1996. It stated powers to Supreme Court and High court to designate the Arbitral institution. It also gave powers to CJI of the High Court to appoint the arbitral panel and review the conduct of arbitrators.

The parties got privileges to choose arbitrators through the application to institution directed by the Supreme Court. In the cases of International Commercial Arbitration, the arbitrators’ appointment shall be made on the application. It sets the parties free to decide the procedure of arbitration. In the case of the absence of agreement, both the parties would possess the power to appoint one arbitrator. Then both the arbitrators can nominate the third arbitrator who would be the presiding arbitrator.

Section 17 of the Arbitration and Conciliation Act 2019 states about non-allowance of Interim order after the arbitral award has been passed. The amendment also states about parties to present their statement for claim and defense within six months after the notice is received from arbitrators.

Section 23(4) of the Act states that the dispute relating to international commercial matters must be made within 12 months from the date of completion of the arbitral tribunal. The legislation has also introduced the power of appeal in the new amendment. Moreover, there was the addition of Section 42A and 42B, which deals with the matter concerning the procedure’s confidentiality except for the award. In contrast, Part 1A is included in the Act to establish the Arbitration Council of India. Lastly, section 26 has been repelled under the new amendment.

In BCCI vs. Kochi Cricket (2018) and Hindustan Construction vs. UOI (2019), the Supreme Court Judgement had observed the 2015 amendment and 2019 amendment.

AUSTRALIA

With the recent development in the International Arbitration Act 1974, which has increased the effectiveness in the conduct of the arbitration law in Australia. The change in the Australian Arbitration laws mainly focuses on international trade and commerce. Most of the amendments are inspired by the amendments made in the year 2006 to the UNCITRAL Model. These developments are made to restrict foreign arbitral awards. Arbitral courts of Australia has the power to make interlocutory orders. The threshold test has been removed under the recent changes in the Arbitration Act of Australia. The new enactments also provide optional provisions to the parties to accept or exclude the jurisdiction made by the Federal Court of Australia. Under the UNCITRAL Model Law, the tribunals have the power to make interim orders that may be necessary for the subject matter of the institution. However, Article 17B of the UNCITRAL Model law has not been included in the recent amendments to the Act. The parties to the arbitration can also challenge the identity of the arbitrators on the grounds of biasness to a particular subject matter. The recent amendment also provides a regime of confidentiality which enables the parties to seek the permission with respect to the disclosure of such information. Moreover, with the recent amendment, there has been an increase with the establishment of the arbitration list in the Federal Court of Australia, Supreme Court of Victoria and New South Wales, which facilitates the expertise in the arbitration matters.

CHINA

The new developments in ADR from the past few years have bought immense relief to the parties. Earlier they tend to visit court and even after spending considerable time and effort, most of them end up losing because of the time-consuming proceedings. This disadvantage by civil dispute resolution gave rise to other mechanisms. The new developments under the Chinese ADR mechanism aim at self, social and public -relief by improving the quality of mass media and gave the best effects to it. The court is encouraging people for pre-litigation mediation and will consult the same inn lawsuits. The major development can be seen in the era of 2006 during the development of the Shanghai Pudong Area People’s court. Here, it was mandated to consider mediation for the pre-trail stage during the civil and criminal cases. Later on, it was observed that 16% of such cases got solved through it between 2015-18. The next development was regarding mediation which majorly focuses on personal rights. Earlier, the parties had to give up on their own interest and compromise in traditional mediation but now the focus was upon individually focused society. Earlier, the focus was on the betterment of the group and not on the right of the individual which constructed in providing relief. One cause for such was also no professional training of mediators which resulted in poor mediation committees. They were not funded and poorly paid which made this into a part-time job. The change bought more resources to train and educate them. Now, the professional mediation committees have expanded in the many other sectors including insurance, securities and intellectual properties. The third change was collaborating the non -judicial organizations with courts which led the settlement confirmed by the court. The courts have also been seeking for advice for mediation organizations and assistance. Now comes the fourth change which talks about the amendments, enactment and legalization of “People’s Mediation Law.”  The law includes the selection and qualification of mediation and mediators. Whereas the fifth change is about including the usage of modern technology and online dispute resolutions methods which got established in 2007 by the Supreme Court. Surprisingly, over a year more than 12,000 organizations got connected to this platform. Parties can easily apply for mediation and choose their mediator over it through video. The parties need to sign in with their cell phone or computer. There was also an establishment of the first Internet court which specifically deals with online dispute cases.

There was also a new treaty imposed on cross-border mediation which was signed by China. This treaty encourages cross-border mediation.

RUSSIA

The Hong Kong International Arbitration Centre (HKIAC) has been granted a license for being the authorized committee. The laws undergo major amendments on March 29, 2019. These amendments focused majorly on the dispute arising out of the shareholder’s agreement of the contracts by state companies. These began affecting arbitral and ad hoc arbitration. This amendment also provides relaxation for compensation to those who incurred loss by the legal entity or those who had claimed for invalidation from the same. These could only be referred to as the ones licensed by the Russian government. Later, the Russian institution also announced the grant of license to the sports arbitration in April 2019. Though there were some restrictions for licensed permanent arbitral institutions regarding ownership of shares which include disputes concerning incorporation, reorganization, management, liquidation of a legal entity through corporate management bodies, and disputes regarding the issue of securities. Furthermore, these amendments consisted of two requirements I.e.  The party, arbitration should be administered under a permanent institution and should be seated in Russia. The parties were not needed to include the entity itself and the arbitration procedure must be confidential. The amendments also expanded the scope of disputes to be referred to in international arbitration institutions. The ones which were arising out of the procurement of contract concluded by state-owned under Law 223-FZ had gone under the restrictive approach adopted by Russian courts.

Conclusion

In light of the recent development in the Arbitration laws, it has provided a broad framework and platform which will offer a mode of resolution of the dispute through alternative means with the objective of the settlement of dispute of the parties in the most appropriate and effective manner. It has its own implications and outcomes in both national and international character.

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