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DiscussionPaper
Alternate Dispute
Resolution
WWW.PILDAT.ORG
DiscussionPaper
Alternate Dispute
Resolution
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Published: July 2016
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
CONTENTS
Preface
About the Author
Introduction
Proposed changes in existing ADR Legislation
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i. Updating legislation to restricting grounds for appeal
ii. Coordination with Provincial Governments for implementation of ADR
iii. Creation of ADR Centres
iv. Subjects Admissible under ADR
v. Powers of Mediators
vi. Extension of ADR to Compoundable Offences
vii. Panchayats: A parallel system to ADR
viii. Expenses to be borne by concerned parties
ix. No grounds for appeal
x. Protection of evidence and mediators
xi. Amending lists of subjects within the ambit of ADR
xii. Processes of mediation available Local Government Acts
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
Preface
Preface
W
ith more than two million cases pending in the lower and superior courts in Pakistan, the overburdening of justice
system has been cited as a barrier to access to justice. Legislation that calls for the institution of systems for
Alternate Dispute Resolution (ADR) may be employed to ameliorate the burden on the courts by providing a second
channel for the dispensation of justice.
This Discussion Paper on 'Alternate Dispute Resolution' has been authored by Mr. Shahid Hamid, Senior Advocate,
Supreme Court of Pakistan to inform the activities of the Parliamentary Caucus on Rule of Law. It attempts to give an
introduction the subject of ADR along with giving recommendations for its institution in the context of the 18th
amendment, the powers of mediators and existing legislation related to ADR.
Disclaimer
The views expressed in this paper belong to the author and do not necessarily represent the views of Pakistan Institute of
Legislative Development and Transparency (PILDAT).
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
ABOUTTHE
THE
AUTHOR
ABOUT
AUTHOR
M
r. Shahid Hamid was the Governor of the Punjab Province from March 1997 to August 1999. Previously he was
the Federal Minister of Defence, Establishment and Law in the Caretaker Government of President Farooq
Leghari and Prime Minister Meraj Khalid. Mr. Shahid Hamid is presently practicing law as the senior partner of Hamid
Law Associates. He is one of 300 Senior Advocates of the Supreme Court of Pakistan.
Mr. Shahid Hamid holds a M. A. Economics degree from Cambridge University and is a Barrister-at-Law of the
Honourable Society of the Inner Temple London. He joined the Civil Service of Pakistan in 1964 and served in East
Pakistan also from 1967 to 1969. He was Acting Finance Secretary Punjab and Secretary to Chief Minister Punjab. He
was Director-General Lahore Development Authority from 1976 to 1978.
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
Introduction
Introduction
A
lternate Dispute Resolution (ADR) means the resolving of disputes by parties through methods other than
adjudication by Courts. ADR includes arbitration, mediation, conciliation and referral to Panchayats.
Resolution of disputes through arbitration has been part of our statute law since before partition. The current law on the
subject is the Arbitration Act 1940. In addition, there is a specific law for arbitral resolution of international investment
disputes in the form of the Arbitration (International Investment Disputes) Act 2011 which was passed to give effect to
Pakistan's ratification of the International Convention on the Settlement of Investment Disputes between States and
Nationals of other States. Pakistan has also, belatedly, given effect to the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards 1958 through enactment of the Recognition and Enforcement (Arbitration
Agreements and Foreign Arbitral Awards) Act 2011.
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
Proposed changes in existing ADR
Legislation
Updating legislation to restricting grounds
for appeal
The Arbitration Act 1940 needs to be amended
extensively or, better still, substituted by a revised and
updated Act. Under the present law even awards made
by retired Judges of the Superior Courts can be
objected to, and stayed, on the basis of objections filed
before a Civil Judge. Decisions on such objections
often take years because of the huge pendency of civil
court cases especially in Punjab and Sindh as also in the
Islamabad Capital Territory.
The Civil Court judgments are then subject to appeals
to the District Courts and/or the High Courts depending
on the valuation of the suits as per awards. Inevitably
there is further challenge through petitions/appeals to
the Supreme Court. The minimum required change is
that awards made by the Judges of the Superior Courts
should not be challengeable except before the High
Courts and that also on very limited grounds viz lack of
jurisdiction and errors floating on the face of the
awards. The decision of High Court should be final
subject to the constitutional right of appeal to the
Supreme Court. Yet another desirable change is that
awards made by arbitrators other than retired Judges of
the Superior Courts should be challengeable only in the
District Courts, and not the Civil Courts, and that also
on the limited grounds referred to above. Further, the
procedures followed in international arbitration could
with advantage be incorporated into the revised and/or
updated Pakistan Arbitration Law.
Coordination with Provincial
Governments for implementation of ADR
Resolution of disputes through mediation and
conciliation became part of statute law through
enactment of Ordinance XXXIV of 2002 inserting
Section 89-A into the Civil Procedure Code. Section
89-A reads as under:“89-A. Alternate dispute resolution. The court may,
where it considers necessary having regard to the facts
and circumstances of the case, with the object of
securing expeditions disposal of a case, in or in relation
to a suit, adopt with the consent of the parties alternate
dispute resolution method, including mediation and
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conciliation”.
Section 89-A CPC was a step in the right direction but
much more requires to be done. After enforcement of
the Eighteenth Amendment arbitration, other than
international arbitration, is now a provincial subject.
Therefore, the Federal Government will need to act in
consultation and coordination with the Provincial
Governments to enact an Alternate Dispute Resolution
Act for the whole of Pakistan. This can be done by
following the procedure prescribed by Article 144 of
the Constitution. It would be advisable to first take the
matter to the Council of Common Interests.
Creation of ADR Centres
The proposed ADR Act should provide for the setting
up of ADR centers all over the country. The Act should
empower the concerned Governments, in consultation
with the respective High Courts, to appoint a panel of
mediators for each ADR center from amongst lawyers,
retired Judges of the Superior Courts and subordinate
judiciary, retired civil servants, social workers, jurists,
technocrats, ulema, experts in various fields and
persons of recognized repute and integrity, having such
qualifications as may be prescribed, to deal with
disputes referred to the ADR centers by the Civil Court
or brought directly to the centers on joint application of
the disputant parties. The Courts should have power to
refer specified civil disputes to the ADR centers where
the parties consent to such referral.
89-A. Alternate dispute resolution
The court may, where it considers
necessary having regard to the
facts and circumstances of the
case, with the object of securing
expeditions disposal of a case, in
or in relation to a suit, adopt with
the consent of the parties alternate
dispute resolution method,
including mediation and
conciliation
P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
Subjects Admissible under ADR
Civil matter disputes that could be referred for ADR
resolution include land and property disputes, small
claims, family law disputes, personal injury cases,
compensation and damages suits, suits for recovery of
immovable property and separate possession of joint
property, rendition of accounts, suits to restrain waste
and remove nuisance, mesne profits of property and
any other matters agreed upon by the disputant parties
for referral to the ADR center. In due course and
depending on the performance of the ADR system, this
list could be expanded to include all commercial and
contractual disputes, company and banking matters,
insurance cases, parents and trademarks, revenue and
canal drainage matters, and negotiable instruments.
The Punjab Local Government
Act 2013 [sections 96 to 99
refer] provides for amicable
settlement of disputes through
Panchayats established by the
Village Councils in the rural
areas and through Musalihat
Anjumans constituted by
Municipal Committees in the
urban areas
Powers of Mediators
The mediators should be required to decide all matters
referred to them within 30 days. They should hear each
matter from day to day and should not be bound to
adhere to the provisions of either the Qanun-eShahadat Order or the Civil Procedure Code. Their
only object should be to achieve an agreed settlement
between the disputing parties.
An agreed settlement should be got signed by the
parties or their duly authorized representatives and
submitted to the referral court for pronouncement of
judgment and decree accordingly. If the mediator is
unable to achieve an agreed settlement he should,
immediately on conclusion of the 30 days period,
transmit the matter back to the referral court for further
proceedings in accordance with law.
Extension of ADR to Compoundable
Offences
The ADR system can also be extended in due course to
cover amicable settlement of compoundable offences
specified in Section 345 of the Criminal Procedure
Code and other laws which allow compounding of
specific offences.
Panchayats: A parallel system to ADR
It would be appropriate for each Province to pass its
own law for establishment of a Panchayat system as
part of its Local Government Act. The matters included
within the remit of Panchayats should be excluded
from the purview of the law establishing the ADR
system.
Expenses to be borne by concerned parties
The costs and fees under the ADR System should be
borne by the parties concerned as may be mutually
agreed upon by them. In case of failure to reach a
settlement the costs should be determined by the Court
to whom the matter is referred back for adjudication.
No grounds for appeal
As the decisions of the mediators under the ADR
System are to be made on the basis of agreed
settlements it follows that there can be no appeal or
revision from the decrees passed on the basis of such
settlements.
Protection of evidence and mediators
The proceedings before the mediators should not be
admissible in evidence in any court without the
consent of the parties, and the mediators themselves
should not be required to appear as witnesses in any
subsequent proceedings sent back to the referral courts
regardless of whether they have succeeded or failed in
achieving negotiated settlements. The mediators
should be given protection for any act done in good
faith in performance of their functions.
Amending lists of subjects within the ambit
of ADR
Each Government should have power to add to and,
where necessary, delete subjects within the ambit of the
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P I L D AT
Discussion Paper
Alternate Dispute Resolution
July 2016
ADR system, as also to make Rules to give effect to the
provisions of the ADR Act within its jurisdiction.
panels of their members as conciliators. The panels are
to be chaired by the Nazims.
Processes of mediation available Under
Local Government Acts
The Sindh Local Government Act 2013 [section 72
read with Schedule-III] provides, amongst the optional
functions of District Councils, adoption of measures
for the settlement of disputes by conciliation and
arbitration.
The Punjab Local Government Act 2013 [sections 96
to 99 refer] provides for amicable settlement of
disputes through Panchayats established by the
Village Councils in the rural areas and through
Musalihat Anjumans constituted by Municipal
Committees in the urban areas. Both the Panchayats
and Musalihat Anjumans are to consist of 9 members
including at least 2 women. The term of office is 5
years. The assumption of jurisdiction is based on
consent of the parties or reference by the competent
court. Neither the Panchayat nor the Musalihat
Anjuman can assume jurisdiction in disputes relating
to non-compoundable offences. If the dispute is
pending before Court, the settlement effected by the
Panchayat of Musalihat Anjuman is subject to the
approval of such Court. The Panchayat or Musalihat
Anjuman can also assume jurisdiction on a reference
made by the Officer Incharge of a Police Station where
the offence is compoundable.
The Khyber Pakhtunkhwa Local Government Act
2013 [section 29 refers] prescribes that the functions of
Village Councils and the Neighbourhood Councils
shall include provision of effective forums for out of
court amicable settlement of disputes. For this purpose
the respective Councils are required to constitute
The Balochistan Local
Government Act 2010 [sections
81 to 85 refer] provides that
Musalihat Anjumans shall be
constituted in each local
council consisting of 3 of its
members including at least one
women member. The term of
office is to be the same as the
term of office of the concerned
local council
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The Balochistan Local Government Act 2010 [sections
81 to 85 refer] provides that Musalihat Anjumans shall
be constituted in each local council consisting of 3 of its
members including at least one women member. The
term of office is to be the same as the term of office of
the concerned local council. All members of the local
council including the members of the Musalihat
Anjumans are enjoined to use their good offices to
achieve amicable settlement of disputes amongst the
people in their jurisdiction through mediation,
conciliation and arbitration regardless of whether or
not any proceedings have been instituted in a Court of
law in respect of such disputes. Every settlement
brought about by the Musalihat Anjuman in a case
pending before a Court shall be subject to the approval
of the concerned Court. Any Court may refer a dispute
to a Musalihat Anjuman and prescribe the procedure
for the Anjuman and the time period within which the
dispute is required to be settled. The Musalihat
Anjuman may, if the disputant parties so require,
appoint a one-person conciliator to resolve the dispute.
It would be seen that in all the provincial laws there are
varying degrees of ambiguity as to which disputes can
be referred for amicable resolution by the Panchayat/
Musalihat Anjuman/ Village Council/Neighbourhood
Council. Some of the provincial laws need to be given
more 'substance'. The ground position is that, as of date,
none of the provisions in the provincial laws are
operative.
Islamabad Office: P. O. Box 278, F-8, Postal Code: 44220, Islamabad, Pakistan
Lahore Office: P. O. Box 11098, L.C.C.H.S, Postal Code: 54792, Lahore, Pakistan
E-mail: [email protected] | Website: www.pildat.org