Alternate Dispute Resolution Navin Merchant

Alternate Dispute Resolution What is Dispute… Dispute occurs when two or more people compete over limited resources and/or perceived or actual incompatible goals How the dispute can be resolved… How the dispute can be resolved… Formal / semiformal / informal ways

Formal / semi- formal ways of resolving disputes. Formal / semi- formal ways of resolving disputes. Litigation Litigation Quasi judicial / Adjudication Quasi judicial / Adjudication Arbitration Arbitration Ombudsman etc. Ombudsman etc.

Litigation; Formal ( sales tax)  Civil ; suits Original stage; District Court / High Court Original stage; District Court / High Court Appellate stages; DC, HC & SC Appellate stages; DC, HC & SC  Criminal; FIR Original stage; Sp Judge Appeals; HC & SC  Constitutional; petition Original stage; HC Original stage; HC Appeals; SC

Semi-formal  Quasi judicial / adjudication SCN, Appeal to collector, Tribunal, SCN, Appeal to collector, Tribunal, Ref to HC, Appeal to SC Ref to HC, Appeal to SC  Arbitration; Arbitration Agreement / court’s reference voluntary, Simpler than litigation, informal, voluntary, Simpler than litigation, informal, binding with narrow scope of appeal binding with narrow scope of appeal  Ombudsman; complaint against mal-administration of revenue division / Tax employees cheap, informal etc cheap, informal etc Appeal to the President of Pakistan Appeal to the President of Pakistan

Informal /alternate ways of dispute resolution Negotiation ( un-assisted) Negotiation ( un-assisted) Mediation Mediation Conciliation Conciliation facilitation etc. facilitation etc.

Why ADR works…..  It is cheap, effective, efficient and simpler  Decisions are not binding  Traditional methods are expensive, time consuming, unpredictable, bound by strict rules and procedures and binding  Assisted ADR techniques work because a third party can help to eliminate or to reduce the effect of some main obstacles to successful negotiation

Why Negotiate Negotiation is the best, cheapest, most economical and most satisfactory way of resolving disputes Negotiation is the best, cheapest, most economical and most satisfactory way of resolving disputes  Negotiation is usually possible where: The parties can identify and agree on what issues are in dispute The parties can identify and agree on what issues are in dispute The interests, goals and needs of the parties are not entirely incompatible The interests, goals and needs of the parties are not entirely incompatible The Parties need to co-operate to meet their goals The Parties need to co-operate to meet their goals

Why Negotiate contd… Reputation, cost, and uncertainty of an imposed decision encourages parties for private settlement Reputation, cost, and uncertainty of an imposed decision encourages parties for private settlement The Parties can influence each other to act in ways that provide mutual benefit or avoidance of harm The Parties can influence each other to act in ways that provide mutual benefit or avoidance of harm The Parties are affected by time constraints The Parties are affected by time constraints The Parties recognize that alternative procedures are not as desirable as negotiation, which allows them to determine the outcome The Parties recognize that alternative procedures are not as desirable as negotiation, which allows them to determine the outcome

Two recognized core strategies for negotiating Positional bargaining Principled negotiation

Positional Bargaining  Each side takes its “best” (i.e. Most extreme) position on what it demands or offers  A period of justification follows, which usually entrenches the first extreme position  Discussions take place where Parties haggle, threaten, bully, cry, or lie in an effort to extract movement or agreement from the other side

Positional Bargaining contd….  Concessions are exchanged  Settlement is usually achieved somewhere in the middle of the bargaining range, depending partly on the balance of power between the Parties.

The tactics adopted to improve the results of positional bargaining  Extending the bargaining range at one end  Mis-representing positions or interests by posturing  Withholding sensitive information such as any weakness in the case  Making threats or engaging in bluff  Digging in or walking out…..and waiting for movement from the other party  Never giving without getting  Conceding small and slow

Principled Negotiation  Negotiating on the basis of principles, not positions  Encouraging problem-solving  Using objective standards to support decision making  Aiming for a wise outcome reached efficiently

Why negotiations fail  Poor negotiating skills of one or both Parties or their advisers  Unrealistic expectations  Unrealistic assessment of interests, or alternatives, or of what the other side can do  Emotional antagonism to the other Party, or personality clash  Desire for revenge

Why negotiations fail contd….  Distrust of other Party or their adviser  Failure to communicate interests or offers  Inability of the Parties to identify or solve a real problem  Wrong advisers  Failure to focus on the negotiations;  Genuine disagreement in good faith about facts, principles or rights

ADR Concept of Mediation

What is Mediation Mediation is a voluntary, voluntary, non-binding, non-binding, private dispute resolution resolution process in which a neutral person helps the parties try to reach a negotiated settlement. Amongst ADR techniques, mediation has proved to be the most flexible, powerful and user friendly approach. Today ADR and Mediation are used interchangeably

Why mediation works Mediation uses the best negotiation techniques to facilitate communication and achieve settlement Mediation assists negotiation, changing its structure and dynamic to increase dialogue Mediation changes the focus of the parties away from the events of the past and towards the needs of the future

Why mediation works Facilitates communication and separates the people from the problem Helps overcome deadlock and emotional blockages Restores the negotiation process Identifies and focuses on the real issues and needs of the Parties

Why mediation works contd…. Gets the right people and the right information to the table Helps parties to reassess their case Increases the options for resolution Keeps ownership of the problem and the settlement with the Parties Restores and safeguards relations.

Comparisons NegotiationMediationLitigation VoluntaryVoluntaryInvoluntary If agreement, enforceable as contract Binding, subject to appeal No third-party facilitator Facilitator selected by parties, may have subject expertise, may be facilitative, evaluative or a blend Imposed, decision-maker have subject expertise InformalInformal Formal, rigid rules Unbounded presentation of evidence, arguments and interests, often focused on the past Unbounded presentation of evidence, arguments and interests, focused on the future Opportunity for each party to present proofs and arguments, Focused on past events Outcome: mutually acceptable agreement sought Outcome: imposed decision, supported by reasoned opinion PrivatePrivatePublic

The Mediator’s role The Mediator is a neutral third party who: Manages the process Manages the process Builds trust and confidence Builds trust and confidence Facilitates communication Facilitates communication Explores option for settlement Explores option for settlement

The Mediator’s role contd….  Focuses on interest not rights, needs not wants  Focuses on the future  Is an explorer not a transmitter  Is a neutral diplomat  Keeps on going until the deal is sealed

An Overview of mediation:  A voluntary private process  Assisted negotiation  Flexible framework of joint and private (caucus) meetings

Sales Tax S. 47-A…ADR (salient features)  On application by an aggrieved person CBR may constitute a committee comprising of ST officer, chartered or cost accountants, advocates, representatives of trade bodies etc.   The Committee shall examine the issue, conduct inquiry, seek expert opinion etc and make recommendations to CBR in respect of the resolution   The Board may, on the recommendation of the committee, pass such order, as it may deem appropriate

Sales Tax S. 47-A…ADR (salient features)  The liability of tax against the registered person, or admissibility of refunds, as the case may be;  The extent of waiver of additional tax and penalty;  The quantum of input tax admissible in terms of sub- section (3) of Section 7;

Sales Tax S. 47-A…ADR  Relaxation of any procedural or technical irregularities and condonation of any prescribed time limitation; and  any other specific relief required to resolve the dispute

Sales Tax S. 47-A…ADR All the decisions, orders and judgments shall be modified to the extent of the board’s orders All the decisions, orders and judgments shall be modified to the extent of the board’s orders If the matter is subjudice, the agreement of resolution to be placed before the forum for consideration and orders If the matter is subjudice, the agreement of resolution to be placed before the forum for consideration and orders No appeals…. No appeals….

ADR GOD BLESS US ALL