Experience of ADRC, Adjudication/Appeals and Mediation Anwar Kashif Mumtaz Partner Saiduddin & Co., Advocates Taxation, Management & Company Law Consultants

The Spectrum of Dispute Resolution Negotiation Mediation Arbitration Litigation

Experience of Adjudication/Appeals Cumbersome Time constraint Costly Lengthy Lawyers Centered

What is ADR ? ADR is a system which operates side by side with the existing judicial system.

Provisions Pertaining to ADR Income Tax Section 134 A of the Income Tax Ordinance, 2001. Sales Tax Section 47A of the Sales Tax Act, 1990. Federal Excise Section 38 of the Federal Excise Act, 2005. Custom Section 195 C of Customs Act, 1969

Reasons to bring ADR in Tax Laws To minimize litigation Cost effective Minimize the work load of appellate forums Early disposal To minimize delay in collection of tax Delivery of justice and redressal of governance

Cases referred for ADR All disputes pending before any Appellate Forums like CIT(A) /Collectorates Appellate Tribunals High Courts Supreme Court of Pakistan. Except criminal cases or question of law having larger revenue impact

Latest progress in ADRCs (Both Direct and Indirect Taxes) As per FBR Website   No. of App. App. rejected or withdrawn committee formed recommendations received Recommendations not accepted Recommendations implemented Direct 263 98 165 108 29 102 Indirect 248 52 176 118 25 61

Reason for Non Effectiveness of ADRC Members are working voluntary without any Remuneration Committee members are not trained for the assignments FBR is a Party and final decision maker at the same time So many adjournment allowed Delay in final response from FBR

A Definition of Mediation Mediation is a Flexible process conducted confidently in which a neutral person actively assist parties in working towards a negotiated agreement of a dispute or difference with the parties in ultimate control of the decision to settle and the terms of resolution

The Spread of Mediation Finland UK USA Australia New Zealand France Germany Ireland South Africa Denmark Sweden Norway Spain Portugal Greece Italy Kenya Uganda Netherlands Singapore

Comparisons Negotiation Mediation Arbitration Litigation Voluntary Usually Voluntary Not Voluntary Enforceable as Contract Binding Binding, subject to Appeal No third-party neutral Neutral appointed by parties to control process not decision Neutral agreed by parties to impose decision Impose decision Informal Informal & flexible model Meant to be less formal but now more rigid Formal No set rules on how to negotiate, may focus on past No set rules on how to negotiate, may focus on future Set rules with parties presenting evidence, focus on past Each party present evident and arguments, focus on past. Mutually acceptable agreement Private Public Parties may or may not be involved in negotiation Parties presents & free to engage fully Parties may attend but participate only as witness

Key benefits of Mediation Cost effective Speedy Wider range of outcomes possible Parties have input into outcome Higher satisfaction with outcome Less likely to require enforcement