ADR, Settlement, And Corporate Governance Disputes: The Untapped Potential Of Mediation And Arbitration In Shareholder Conflicts
- IJLLR Journal
- May 26
- 1 min read
Sriram S, LL.M., Alliance University
ABSTRACT
This research paper examines the applications of the alternative dispute resolution (ADR) models, which deals with mediation, arbitration and settlement models in any shareholder dispute which is brought about by a corporate governance issue. The shareholder conflicts are often complex, as well as the matters of power imbalance, the allegation of oppression and mismanagement and the dispute about control and the strategy, which impact the corporate functioning and the long-term survival. Previously, these disputes have been decided by applying the statutory redress to the Companies Act, 2013, particularly in the National Company Law Tribunal (NCLT). However, these procedures are time consuming and adversarial and it is the aspect which is questionable in relation to its efficiency. The paper discusses the issue of whether arbitration sufficient on matters relating to solving disputes or whether mediation and settlement based mechanisms can be more efficient and relationship-focused solutions. Despite the fact that arbitration is much preferred due to its effectiveness, confidentiality and freedom of the parties, it has significant drawbacks which are that it cannot be effectively used to address the problems associated with governance and statutory issues. Whereas mediation is more flexible and non-adversarial and ensures the continued working relationship between businesses, but is not final without settlement. The paper concludes that the potential of mediation and hybrid ADR models is still underused in the context of recent legislative changes including the Mediation Act, 2023. It states that a more balanced and effective method to solve the shareholder dispute would be an integrated ADR model that uses arbitration, mediation, and settlement options.
Keywords: Shareholder Disputes, Corporate Governance, Arbitration, Mediation, Hybrid ADR.
