Bangalore: When the managing director of Koluthara Exports contested a defective sea food consignment he procured from his supplier, he decided to take the easy way out - he chose the alternative dispute resolution (ADR) route to come to a settlement, thereby avoiding to a long and an expensive legal battle.

"The case, which other wise would have languished in the court for several years was settled very quickly," said Antony Verghese Koluthara. He took the dispute to the Arbitration & Mediation Centre (AMC), an ADR institution, which claims to be the first of its kind in the private sector.

It took two months to resolve the issue. Further, the company saved over Rs 2 lakh, which otherwise would have gone towards legal and court fees, said Mr Koluthara.

With courts in India being inundated with unsolved cases, the emergence of ADR institutions like AMC is a welcome trend say legal experts. ADRs are the preferred route to settle litigations in several countries like the US, UK, and Canada, they add.

In India, though, arbitration bodies like the Indian Council of Arbitration, The Bengal Chamber of Commerce are present, private enterprises for resolving disputes are negligible, say legal professionals.

Ad-hoc arbitration (beyond the institutional framework) is not gaining ground due to the absence of accredited arbitrators, arbitration rules not being followed and fees being charged at will.

According to the former chief justice of India, MN Ventakachalaiah, arbitration institutions are an effective, speedier and cheaper alternative. He pointed out to intra-institutional arbitration mechanisms, which have successfully existed in several sectors. They have brought down the number of litigations.

He gave the instance of the arbitration mechanism present in the broking community. Mr Ventakachalaiah said though the time is correct for AMC to enter the dispute resolution business, their continuity will depend on the quality of service and credibility.

Anil Xavier, an administrator at AMC, said the response so far has been encouraging. Over 30 disputes have been resolved since AMC came into being a year ago, he claimed. AMC has catered to real estate developers, private financiers and marine food exporters.