In today’s world, when everything is excessively complicated, litigation is promoted as the primary means of resolving every legal disagreement that develops. Regardless of how well contracts are structured, miscommunications and disagreements will always occur throughout business transactions. Because commercial operations involve huge amounts of cash transactions and nether parties to the contract want to lose time or money when a disagreement arises. Business is increasingly reliant on methods that meet their demands. They favor techniques that are less formal than judicial processes, are less expensive, and provide a quick resolution to their concerns. Alternative dispute resolution comes into the picture to resolve the problem.


Any way of settling conflicts without resorting to litigation is referred to as Alternative Dispute Resolution. ADR encompasses any conflict resolution methods and strategies that occur outside of the purview of any governmental entity. All alternative dispute resolution procedures have similar qualities in that they allow parties to find acceptable remedies to their disputes outside of traditional judicial proceedings, but they are controlled by various standards. The most notable benefit of ADR is that it allows disputing parties to settle their differences in private. ADR, unlike a trial, which is open to the press and public, keeps conflicts out of the spotlight. Choosing ADR over litigation allows a corporation to keep investors, creditors, rivals, and the media out of the conflict, allowing them to observe it, analyze its causes, and assess its impact on business. Alternative dispute resolution (ADR) is a broad term that encompasses a variety of approaches and methods for resolving disagreements between parties. Arbitration, mediation, conciliation, and negotiation are some common forms of alternative dispute resolution.


A commercial dispute generally emerges as a result of a specific result of the interactions among two or more businesses. Most commercial agreements include terms allowing for alternative dispute resolution processes or recourse to the courts for the satisfaction of complaints. Conciliation or arbitration are the most common methods for resolving commercial disputes. Choosing a process to resolve a disagreement is largely determined by the parties’ cultural and legal traditions. Conciliation is generally chosen since it is speedier, less expensive, and less formal. Furthermore, conciliation creates the best scenario for both parties and supports the continuation of a cordial corporate relationship that may have been harmed if complex formal conflict resolution methods had been utilized. Arbitration, mediation, conciliation, negotiation is some of the common forms of alternative dispute resolution used in commercial dispute 


Arbitration is one of the most ancient procedures for resolving disagreements between parties. It has always existed in some form or another in every country. Arbitration is also one of the most well-known and often used methods of alternative dispute resolution. In general, arbitration is defined as “a private mechanism for the resolution of disputes that occur in private under an agreement between two or more parties, under which the parties agree to be bound by the arbitrator’s decision, which will be made according to law after a fair process, and such decision will be enforceable at law”. Arbitration includes disputing parties and also a neutral party who is the arbitrator. He is the person in charge of overseeing the process and making the required choices to resolve the disagreement. Unlike in litigation, when the court appoints a judge to sit on a lawsuit, the arbitrator is usually a private individual chosen by the parties. Such a person is generally an expert in the subject of the conflict.


Mediation is the newest and most promising kind of alternative dispute resolution. Clients who are embroiled in a disagreement have another option, mediation. A neutral third person supports the disputing parties in reaching an agreement during mediation. In contrast to an arbitrator, a mediator does not decide the conclusion but rather assists the parties in reaching an agreement. During this procedure, the parties endeavor to come up with a viable solution on their own. The main object of mediation is to enhance business and trade while reducing reliance on the already overburdened court.


Conciliation is a procedure in which a conciliator is appointed to resolve a dispute resulting from a legal relationship between parties without the involvement of the court. The conciliator plays an important role in this process because he or she tries to find a middle ground by convincing the parties to achieve an agreement, which is generally an acceptable resolution to the parties’ conflict. The conciliator also supports this process by providing solutions to the parties’ conflict.


Alternative dispute resolution methods are widely used in commerce since where there is trade, there is also negotiation. Negotiation is the most basic type of alternative dispute resolution method, in which both parties, with or without the assistance of lawyers, negotiate the terms of any agreement, contract, settlement, or dispute to achieve an advantage for their respective sides. Negotiations are a common practice in the business world, as many transactions or contracts involving large sums of money must be negotiated between two parties.


There are several advantages to using alternative dispute resolution. The main aim of a business organization is to maximize profit. Commercial disputes and legal cases divert the businesses’ main goals. Alternative dispute resolution helps the business by providing a speedy and effective process during a conflict. Hence it is very important to consider alternative dispute resolution like arbitration, mediation, negotiation, conciliation.

Author’s Name: Sujay Sundaram (Narsee Monjee Institute of Management Studies, Hyderabad)

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