In Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd. [(2010) 8 SCC 24], the Supreme Court laid down a definitive framework for courts to refer civil disputes to alternative dispute resolution methods, including mediation, conciliation, and Lok Adalats.
Case Background: A construction dispute arose between the two companies. The trial court referred the matter to arbitration. This was challenged, and the issue reached the Supreme Court to determine the scope of ADR referral under Section 89 of the Civil Procedure Code (CPC).
Supreme Court’s Guidelines: The Court held that only disputes which can be resolved by mutual consent are suitable for ADR. It also provided a detailed checklist to guide judges in determining when to refer cases to mediation, arbitration, conciliation, or judicial settlement.
Key Contributions:
- Clarified which disputes are suitable for ADR.
- Mandated that courts must apply their mind before referring matters.
- Emphasized mediation and conciliation as preferred ADR modes in civil cases.
Impact: The Afcons judgment elevated the role of mediation and court-annexed ADR in India. It encouraged judicial officers to actively consider ADR at the pre-trial stage to reduce pendency.
Conclusion: Afcons Infrastructure v. Cherian Varkey gave practical teeth to Section 89 CPC. It redefined ADR not just as an option but as an integral part of India’s civil justice system, helping achieve the goals of speed and access to justice.