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Fundamentals of Business Laws and Business Communication · Legal Methods and Court System in India

Tribunals and Alternative Dispute Resolution in India

Updated 10 October 2026 · Fact-checked

A tribunal is a quasi-judicial body set up by statute to decide disputes in a specialised area, such as NCLT for company matters. Alternative Dispute Resolution (ADR) settles disputes outside regular courts through arbitration, conciliation, mediation or Lok Adalat. In MCQs, match each body or method to its feature.

Understand Tribunals and Alternative Dispute Resolution

Courts are the regular judicial bodies of the State. They hear all kinds of civil and criminal cases. But courts are crowded and cases take years. So the law creates other forums to decide disputes faster and with expert knowledge.

A tribunal is a body created by a statute to decide disputes in a specific field, such as company law, taxation or service matters. It is called quasi-judicial because it acts like a court (hears parties, follows natural justice, gives binding decisions) but is not a regular court. Its members may include technical experts, not only judges. Tribunals are not bound by every strict rule of procedure that a civil court follows.

Two tribunals you must know are the NCLT (National Company Law Tribunal) and the NCLAT (National Company Law Appellate Tribunal). Both are constituted under the Companies Act, 2013. NCLT hears company matters such as mergers and oppression and mismanagement cases. NCLAT hears appeals against NCLT orders. A further appeal from NCLAT lies to the Supreme Court.

These tribunals also have a role under the Insolvency and Bankruptcy Code, 2016. For corporate insolvency, NCLT acts as the Adjudicating Authority and NCLAT as the Appellate Authority under that Code.

ADR means resolving a dispute without a full court trial. The main methods are: arbitration, where a neutral arbitrator hears both sides and gives a binding decision called an award; conciliation, where a conciliator actively suggests settlement terms; and mediation, where a mediator helps the parties reach their own settlement and does not decide for them. The governing law for arbitration and conciliation is the Arbitration and Conciliation Act, 1996.

Lok Adalat means 'people's court'. It is a forum under the Legal Services Authorities Act, 1987 where disputes are settled by compromise. The award is treated as a decree of a civil court. No appeal lies against the award (s.21 of the Act). Where a matter pending in court is settled, the court fee paid is refunded.

Key formulas to remember

Tribunal definition
Tribunal = body created by statute + quasi-judicial powers + specialised subject
Not a regular court, but its decisions bind the parties.
NCLT and NCLAT
NCLT (first forum for company matters) → appeal to NCLAT → appeal to Supreme Court
Both are constituted under the Companies Act, 2013. They also act as Adjudicating Authority and Appellate Authority for corporate insolvency under the Insolvency and Bankruptcy Code, 2016.
Arbitration
Arbitrator decides; the award is binding
Governed by the Arbitration and Conciliation Act, 1996. Based on an agreement between the parties.
Conciliation
Conciliator proposes settlement terms; parties may accept or reject
Settlement becomes binding only when parties agree and sign it.
Mediation
Mediator facilitates; parties decide the outcome
The mediator does not give a decision.
Lok Adalat
Settlement by compromise; award = civil court decree; no appeal (s.21)
Legal Services Authorities Act, 1987. For a matter pending in court that is settled, the court fee paid is refunded.

How to solve Tribunals and Alternative Dispute Resolution questions

Most questions ask you to identify a body, a method or its key feature. Use this approach.

  1. 1Read the question and mark the key word: 'appeal', 'binding', 'suggests terms', 'compromise', 'company matter'.
  2. 2Decide if the question is about a forum (court, tribunal, Lok Adalat) or a method (arbitration, conciliation, mediation).
  3. 3For a forum, ask: who set it up and for what subject? Statute plus specialised subject points to a tribunal.
  4. 4For a method, ask: who decides? Arbitrator decides; conciliator suggests; mediator only facilitates.
  5. 5For appeals, follow the chain: NCLT, then NCLAT, then Supreme Court.
  6. 6Eliminate options that attach wrong features, such as 'appeal lies against Lok Adalat award'.
  7. 7Pick the option that matches the exact feature asked.

Quickest way: Who decides? Who suggests? Who helps?

When to use it: Use for any MCQ that compares arbitration, conciliation and mediation or asks about their features.

  1. Arbitrator = decides, award binding.
  2. Conciliator = suggests terms, more active.
  3. Mediator = helps talk, parties decide.
  4. Lok Adalat = compromise, decree, no appeal.
  5. NCLT = first company forum; NCLAT = appeal.

Common mistakes in Tribunals and Alternative Dispute Resolution

  • Saying a mediator gives a binding decision.

    Students mix mediation with arbitration because both avoid court.

    Fix: Only the arbitrator decides. A mediator helps parties reach their own agreement.

  • Thinking a tribunal is the same as a court.

    Both hear disputes and pass orders.

    Fix: Remember a tribunal is created by statute for a specific subject and is quasi-judicial, not a regular court.

  • Believing an appeal lies against a Lok Adalat award.

    Students assume every decision can be appealed.

    Fix: No appeal lies against a Lok Adalat award (s.21). Dissatisfied parties can pursue the regular court case instead of appealing.

  • Reversing the roles of NCLT and NCLAT.

    The names look similar.

    Fix: The extra 'A' stands for Appellate. NCLAT hears appeals from NCLT.

  • Treating conciliation as a decision-making process.

    The conciliator proposes terms, so it feels like a ruling.

    Fix: The conciliator only suggests. The settlement binds only if the parties agree to it.

Worked examples

Example 1

An aggrieved shareholder files an oppression and mismanagement petition against a company. Dissatisfied with the order, the shareholder wishes to appeal. Which is the correct sequence of forums? (A) NCLAT, then NCLT (B) NCLT, then NCLAT (C) High Court, then NCLT (D) Lok Adalat, then NCLAT

Show the solution
  1. Identify the subject: oppression and mismanagement is a company matter.
  2. The first forum for company matters is the NCLT.
  3. An appeal against an NCLT order goes to the NCLAT.
  4. Option A reverses the order. Option C and D name forums not in this chain.

Answer: (B) NCLT, then NCLAT

Example 2

In which of the following methods of ADR does a neutral person only help the parties communicate and reach their own settlement, without giving a decision or suggesting formal terms? (A) Arbitration (B) Mediation (C) Lok Adalat (D) Adjudication by a civil court

Show the solution
  1. The key phrase is 'only helps' and 'their own settlement'.
  2. Arbitration involves a decision called an award, so A is out.
  3. A civil court adjudicates and decides, so D is out.
  4. Lok Adalat is a forum that produces an award with decree status, not the neutral facilitation method asked, so C is out.
  5. Mediation fits: the mediator facilitates and the parties decide.

Answer: (B) Mediation

Exam tips

  • Learn the three-way contrast: arbitrator decides, conciliator suggests, mediator facilitates. Most ADR MCQs test this.
  • Remember the appeal chain NCLT, NCLAT, Supreme Court. Questions often ask who hears the appeal.
  • Lok Adalat questions usually test these points: award equals civil court decree, no appeal, and refund of court fee paid in a settled court case.
  • Watch for words like 'binding', 'quasi-judicial' and 'statute'. They quickly point you to the correct option.

Practice questions from Legal Methods and Court System in India

Tribunals and Alternative Dispute Resolution in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Tribunals and Alternative Dispute Resolution: frequently asked questions

What is the difference between a court and a tribunal?

A court is a regular judicial body that hears all types of cases. A tribunal is created by a statute for a specific subject and is quasi-judicial. Tribunals can include technical experts and are not bound by all strict court procedures.

What is the difference between arbitration, conciliation and mediation?

In arbitration, the arbitrator decides and the award is binding. In conciliation, the conciliator suggests settlement terms. In mediation, the mediator helps the parties settle on their own and does not decide.

What is a Lok Adalat and what are its powers?

A Lok Adalat is a forum under the Legal Services Authorities Act, 1987 that settles disputes by compromise. Its award is treated as a civil court decree, and no appeal lies against it (s.21). If a matter pending in court is settled there, the court fee paid is refunded.

What do NCLT and NCLAT do?

NCLT and NCLAT are constituted under the Companies Act, 2013. NCLT hears company law matters such as mergers and oppression and mismanagement, and NCLAT hears appeals against its orders. Under the Insolvency and Bankruptcy Code, 2016, they also act as Adjudicating Authority and Appellate Authority for corporate insolvency.