What is a quicker method for resolving disagreements between businesses?
Show answer & explanation
Correct answer: D
Explanation
Answer: (D) Alternative Dispute Resolution
Explanation:
Alternative Dispute Resolution (ADR) is the quickest and most effective method for resolving differences or commercial disputes between businesses. Traditional court litigation consumes excessive time and money, whereas through ADR, disputes are resolved outside the court via mutual consent. ADR primarily takes four forms: Arbitration, Conciliation, Mediation, and Negotiation. Within the Indian legal framework, the 'Arbitration and Conciliation Act, 1996' provides the legal structure for the speedy settlement of commercial disputes. This not only reduces the burden on the judiciary but also prevents bitterness from arising in business relationships.
Additional Points:
Arbitration: In this process, a neutral third party renders a decision that is legally binding on both parties.
Mediation: In this process, a mediator facilitates dialogue between the parties to help them reach a mutually acceptable solution.
Significance: To promote 'Ease of Doing Business,' the Government of India enacted the Commercial Courts Act, 2015, to ensure that commercial disputes are resolved in a time-bound manner.
Potential Exam Questions and Answers:
Question: Which is the primary legislation related to Alternative Dispute Resolution (ADR) in India?
Answer: The Arbitration and Conciliation Act, 1996.
Question: Is the Lok Adalat also a form of ADR?
Answer: Yes, Lok Adalats serve as an effective platform for ADR to ensure speedy justice.
Question: What subject does the Singapore Convention relate to?
Answer: It relates to the settlement of international commercial disputes through mediation—an agreement to which India is a signatory.