Section 89 of The Code of Civil Procedure, 1908
Settlement of disputes outside the Court.
1[89. Settlement of disputes outisde the Court.--(1) Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for:--
- (a)arbitration;
- (b)conciliation;
- (c)judicial settlement including settlement through Lok Adalat: or
- (d)mediation.
- (2)Were a dispute has been referred--
- (a)for arbitration or conciliation, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of that Act;
- (b)to Lok Adalat, the Court shall refer the same to the Lok Adalat in accordance with the provisions of sub-section (1) of section 20 of the Legal Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act shall .apply in respect of the dispute so referred to the Lok Adalat;
- (c)for judicial settlement, the Court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were referred to a Lok Adalat under the provisions of that Act;
- (d)for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.]
Summary
- The court has the power to suggest ways to settle a dispute outside of a traditional trial.
- If a judge sees elements of a possible settlement, they must formulate the terms and give them to the parties for feedback.
- After receiving observations from the parties, the court can reformulate the terms and refer the case for alternative dispute resolution.
- The four referral options are arbitration, conciliation, judicial settlement including Lok Adalat, or mediation.
- Arbitration and conciliation referrals are governed by the rules of the Arbitration and Conciliation Act, 1996.
- Referrals for mediation follow a prescribed procedure where the court helps the parties reach a compromise.
Practical examples
FAQ
1. What are the referral options for settlement under Section 89 of The Code of Civil Procedure, 1908?
Under Section 89 of The Code of Civil Procedure, 1908, the court can refer a dispute to arbitration, conciliation, judicial settlement including Lok Adalat, or mediation.
2. Does the judge create the settlement terms under Section 89 of The Code of Civil Procedure, 1908?
Yes, under Section 89 of The Code of Civil Procedure, 1908, if settlement elements exist, the court shall formulate the terms and allow the parties to provide their observations.
3. Which law applies to a Lok Adalat referral under Section 89 of The Code of Civil Procedure, 1908?
For a judicial settlement through Lok Adalat, Section 89 of The Code of Civil Procedure, 1908, states that all provisions of the Legal Services Authority Act, 1987, shall apply.
4. What happens if a dispute is referred to arbitration under Section 89 of The Code of Civil Procedure, 1908?
Under Section 89 of The Code of Civil Procedure, 1908, the case is handled according to the provisions of the Arbitration and Conciliation Act, 1996, as if it were originally meant for that process.
Test yourself
1.Under Section 89 of The Code of Civil Procedure, 1908, when can a court formulate terms of a settlement?
2.Which referral option under Section 89 of The Code of Civil Procedure, 1908, specifically mentions the 1996 Arbitration and Conciliation Act?
3.According to Section 89 of The Code of Civil Procedure, 1908, what is the role of the court in mediation?
4.Under Section 89 of The Code of Civil Procedure, 1908, what must the court do after formulating settlement terms?