Alternative Dispute Resolution in Pakistan

Alternative Dispute Resolution in Pakistan

The Alternative Dispute Resolution Act, 2017 (ADR Act) in Pakistan is a legal framework that enables dispute resolution outside the traditional courtrooms. It provides a mechanism for ADR to deliver inexpensive and expeditious remedies and resolution through arbitration, mediation, conciliation, and neutral evaluation.

What is Alternative Dispute Resolution (ADR)?

Under the ADR Act 2017, the ADR system is designed to facilitate dispute resolution without resorting to formal litigation. It includes processes like:

  • Arbitration: Where a neutral who is a third party makes a decision binding upon the parties.
  • Mediation: A mediator is the one who helps parties reach a mutually satisfactory settlement.
  • Conciliation: Similar to mediation but more advisory in nature.
  • Neutral Evaluation: An impartial person evaluates the dispute and offers an opinion on its merits.

These methods provide swift resolutions, saving time and resources and maintaining confidentiality between parties.

Key Definitions We Need to Learn Under the ADR Act, 2017

Arbitration: Arbitration is when the parties submit a dispute to a neutral arbitrator or a panel of arbitrators whose decision (award) is binding on the parties.

Mediation: Mediation is a process facilitated by a mediator who encourages communication and negotiation between the parties, helping them reach a voluntary and mutually satisfactory agreement.

Conciliation: A neutral third party helps the disputing parties resolve their conflict by offering potential solutions and advice to settle.

Neutral: Any impartial person, such as an arbitrator, mediator, or conciliator, who facilitates the ADR process.

ADR Centre: The government established An ADR Center to offer structured services for dispute resolution.

Settlement: An agreement between the parties through ADR methods that resolve the dispute without needing a court judgment.

Scope of the ADR Act 2017

The ADR Act 2017, which came into effect on May 30, 2017, extends to the Islamabad Capital Territory. The act applies to civil matters and compoundable offenses, enabling parties to resolve disputes without going through lengthy court procedures. The Act is also tailored for provinces. You can read regarding Alternate Dispute Resolution in Punjab.

Vital Civil Matters Covered by the ADR Act 2017

The act lists specific civil matters that can be referred to ADR:

1. Landlord and tenant disputes.

2. Land and property disputes.

3. Commercial disputes.

4. Contractual disputes.

5. Professional negligence cases.

6. Insurance claims and many more.

By covering a wide range of civil issues, the ADR Act 2017 provides a structured pathway for resolving disputes amicably.

ADR Process in Civil Matters

  1. Referral to ADR: Courts must refer civil matters to ADR unless all parties do not agree or the court deems that ADR is unsuitable due to intricate legal or factual issues. The referral can occur at any stage of the proceedings, with consent from all parties.
  2. Panel of Neutrals: The government establishes a panel of qualified Neutrals consisting of lawyers, retired judges, civil servants, ulema, and other respected individuals. Neutrals can be appointed by the court or agreed upon by the parties involved.
  3. Appointment and Appearance: Once referred to ADR, the parties must appear before the Neutral or ADR Centre as instructed by the court. ADR proceedings must be completed within specified timeframes, usually 30 to 60 days, depending on the method used.
  4. Outcome of ADR: If a settlement is reached, the Neutral records the agreement, and the court passes a decree based on the settlement. If the ADR process fails, the court resumes the legal proceedings.

Other Disputes that can be taken to ADR centers:

GENERALLY, any matter under the law not falling in the Schedule but agreed to by the parties for settlement under this Act can be brought before ADR. This Act has a schedule that lists cases that can be brought before ADR centers. The list is shared below.

  1. A dispute between a landlord and tenant.
  2. Pre-emption cases.
  3. Land and property disputes.
  4. Civil matters under the Small Claims and Minor Offences Courts Ordinance, 2002.
  5. Commercial dispute includes but is not limited to any claim, right, or interest arising from trade and commerce.
  6. Contractual cases.
  7. Disputes relating to professional negligence.
  8. Suits for specific performance.
  9. Companies and banking matters.
  10. Insurance.
  11. Negotiable instruments.
  12. Personal injury.
  13. Compensation and damages suits.
  14. Patent, Trademark, and copyright.
  15. Disputes under the Canal and Drainage Law.
  16. Dispute for recovery of movable property or value thereof.
  17. Dispute for separate possession of joint immovable property through partition or otherwise.
  18. Dispute for redemption of mortgaged property.
  19. Dispute for rendition of accounts of joint property.
  20. Dispute to restrain waste and remove nuisance.
  21. Mesne profits of property.

Compoundable Offenses and ADR

The ADR Act 2017 allows compoundable offenses under the Code of Criminal Procedure, 1898, that can be resolved through ADR. The court can appoint a neutral to facilitate the compounding of the offense. If the parties reach an agreement, the accused can be discharged. This is particularly useful in resolving disputes that arise from minor criminal offenses where the parties are willing to settle.

Criminal Offenses That Can Be Resolved Through ADR:

– Offenses listed under Section 345 of the Code of Criminal Procedure, 1898.

– Other compoundable offenses are specified under various laws.

By addressing criminal matters, the ADR Act widens the scope of dispute resolution, enabling quicker settlements.

Key Provisions of the ADR Act 2017

 1. Reference to ADR

Courts can refer civil cases to ADR if the parties agree. They can refer to the dispute at any stage, provided there’s a mutual agreement. Exceptions include cases involving complex legal issues or cases the court deems ADR unsuitable.

 2. Appointment of Neutrals

Like an arbitrator or mediator, a neutral person is selected by mutual agreement or the court. The government notifies a Panel of Neutrals for each district, which includes experienced lawyers, retired judges, civil servants, ulema, and other professionals. The ADR Act encourages gender diversity, with women given due representation in the panel.

 3. ADR Centre

The act establishes ADR Centres that facilitate the process. The court may refer cases to these centers, especially where one or both parties are women, ensuring a fair and inclusive ADR process.

 4. Settlement and Award

Once a settlement is reached, it is documented and signed by the neutral and both parties. The court will pass a decree based on the settlement, making it enforceable. If ADR fails to resolve the dispute, the case will be returned to court for further proceedings.

 5. Costs and Fees

The costs of ADR are shared between the parties based on mutual agreement or as the court decides. This ensures fairness and encourages parties to participate in ADR processes.

 6. Penal Costs

Individuals who deliberately delay ADR proceedings or violate any part of the Act may face penalties of Rs. 100,000. This provision discourages frivolous actions and ensures a smooth ADR process.

Miscellaneous Provisions in ADR Act:

The ADR Act 2017 also outlines several miscellaneous provisions that ensure the effectiveness of the system:

  1. Evaluator Utilization: Courts or ADR centers may utilize expert evaluators to assist in financial or technical matters related to the dispute.
  2. Savings: Proceedings before a neutral are privileged and cannot be used as evidence unless both parties consent.

Appeals or Revision against decree based on ADR settlement:

Appeal and Revision: The Act bars any appeal or revision against the decree passed by the court based on ADR settlements, emphasizing finality and reducing delays.

Benefits of ADR:

The ADR Act 2017 benefits the public by:

Reducing Court Backlogs: Courts are often overburdened with cases. ADR offers a solution that helps alleviate this issue.

Cost Efficiency: By avoiding lengthy litigation, parties save on legal fees and court costs.

Time Efficiency: ADR processes are typically much faster than court cases, leading to quicker resolutions.

Confidentiality: Unlike court proceedings, ADR is a private process that ensures confidentiality for the parties involved.

Amicable Resolutions: ADR encourages collaboration and negotiation, fostering better relationships between disputing parties.

Overriding Effect of the ADR Act

The provisions of the ADR Act take precedence over other laws. This ensures that in matters where ADR is applicable, the procedures of the Act will override conflicting laws, providing a clear and authoritative path for dispute resolution.

Conclusion

The Alternative Dispute Resolution Act of 2017 is a progressive step toward modernizing the legal system in Pakistan. Offering alternative methods for resolving civil and compoundable criminal disputes ensures quicker, more cost-effective justice. This act particularly benefits individuals and businesses seeking to resolve conflicts efficiently while maintaining confidentiality. At LEX (lex.com.pk), we aim to provide expert legal advice on making the most of ADR and help you navigate the legal landscape for a successful outcome.

For further information on the ADR process and how it can be helpful for you, please visit our website at [lex.com.pk].

Frequently Asked Questions (FAQs)

Q1. What is the Alternative Dispute Resolution (ADR) Act of 2017?

The ADR Act 2017 is a legal framework in Pakistan that allows for resolving disputes without going through the traditional court process. It promotes faster, less expensive methods like arbitration, mediation, and conciliation to help parties reach settlements outside court.

Q2. What kind of disputes can be resolved through ADR?

Under the ADR Act, civil matters such as landlord-tenant disputes, property disputes, contractual disagreements, commercial disputes, and professional negligence cases can be resolved through ADR. The complete list of disputes eligible for ADR is outlined in the Act’s Schedule.

Q3. How does the ADR process work?

In eligible cases, courts refer disputes to ADR, where a Neutral (an arbitrator, mediator, or conciliator) facilitates the resolution. Parties may either select their Neutral or have one appointed by the court. The ADR process must be completed within specified timeframes (30 to 60 days). If a settlement is reached, it is submitted to the court for approval. If ADR fails, the dispute goes back to the court.

Q4. What are the advantages of using ADR over traditional litigation?

ADR offers several benefits over court litigation, including:

– Faster resolution of disputes.

– Lower legal costs.

– More flexibility and control over outcomes.

– Confidentiality, as ADR proceedings are not public like court cases.

Q5. What happens if ADR fails to resolve the dispute?

If the ADR process does not result in a settlement or award, the Neutral submits a report to the court. The court then continued the legal proceedings from when the case was referred to ADR.

Q6. Can ADR be used for criminal matters?

Yes, ADR can be applied to certain compoundable offenses, where the law allows the offense to be settled between the parties. The court may appoint a Neutral to facilitate the settlement. If the offense is compounded, the court discharges the accused.

Q7. Who bears the costs of the ADR process?

The parties involved usually bear the costs and fees associated with the ADR process. If no agreement is reached, the court can mutually agree upon or determine these costs. The parties also bear the costs of using an evaluator if needed.

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