Alternate Dispute Alternate Dispute ResolutionResolution

Navin MerchantNavin Merchant

Alternate Dispute ResolutionAlternate Dispute Resolution

What is Dispute…What is Dispute…

Dispute occurs when two or more people Dispute occurs when two or more people competecompete over over limitedlimited resources and/or resources and/or perceived perceived or actualor actual incompatible goals incompatible goals

How the dispute can be resolved…How the dispute can be resolved…

Formal / semiformal / informal waysFormal / semiformal / informal ways

Formal / semi- formal ways of resolving Formal / semi- formal ways of resolving disputes.disputes.

  

LitigationLitigation

Quasi judicial / AdjudicationQuasi judicial / Adjudication

ArbitrationArbitration

Ombudsman etc.Ombudsman etc.

Litigation; Formal ( sales tax)Litigation; Formal ( sales tax)

Civil ; suitsCivil ; suits Original stage; District Court / High CourtOriginal stage; District Court / High Court Appellate stages; DC, HC & SCAppellate stages; DC, HC & SC

Criminal; FIR Criminal; FIR Original stage; Sp Judge Original stage; Sp Judge Appeals; HC & SCAppeals; HC & SC

Constitutional; petitionConstitutional; petition Original stage; HC Original stage; HC

Appeals; SCAppeals; SC

Semi-formalSemi-formal

Quasi judicial / adjudicationQuasi judicial / adjudication SCN, Appeal to collector, Tribunal, SCN, Appeal to collector, Tribunal,

Ref to HC, Appeal to SCRef to HC, Appeal to SC

Arbitration; Arbitration Agreement / court’s Arbitration; Arbitration Agreement / court’s referencereference

voluntary, Simpler than litigation, informal, voluntary, Simpler than litigation, informal, binding with narrow scope of appealbinding with narrow scope of appeal

Ombudsman; complaint against mal-administration Ombudsman; complaint against mal-administration of revenue division / Tax employeesof revenue division / Tax employees

cheap, informal etccheap, informal etc Appeal to the President of PakistanAppeal to the President of Pakistan

Informal /alternate ways of dispute Informal /alternate ways of dispute resolutionresolution

Negotiation ( un-assisted)Negotiation ( un-assisted)

Mediation Mediation

ConciliationConciliation

facilitation etcfacilitation etc..

Why ADR works…..Why ADR works…..

It is cheap, effective, efficient and simpler It is cheap, effective, efficient and simpler

Decisions are not bindingDecisions are not binding

Traditional methods are expensive, time Traditional methods are expensive, time consuming, unpredictable, bound by strict rules consuming, unpredictable, bound by strict rules and procedures and bindingand procedures and binding

Assisted ADR techniques work because a third Assisted ADR techniques work because a third party can help to eliminate or to reduce the effect party can help to eliminate or to reduce the effect of some main obstacles to successful negotiationof some main obstacles to successful negotiation

Why Why NegotiateNegotiate

Negotiation is the best, cheapest, most economical Negotiation is the best, cheapest, most economical and most satisfactory way of resolving disputesand most satisfactory way of resolving disputes

Negotiation is usually possible whereNegotiation is usually possible where::

• The parties can identify and agree on what issues The parties can identify and agree on what issues are in disputeare in dispute

• The interests, goals and needs of the parties are The interests, goals and needs of the parties are not entirely incompatiblenot entirely incompatible

• The Parties need to co-operate to meet their goalsThe Parties need to co-operate to meet their goals

Why Negotiate contd…Why Negotiate contd…

• Reputation, cost, and uncertainty of an imposed Reputation, cost, and uncertainty of an imposed decision encourages parties for private decision encourages parties for private settlement settlement

• The Parties can influence each other to act in The Parties can influence each other to act in ways that provide mutual benefit or avoidance ways that provide mutual benefit or avoidance of harmof harm

• The Parties are affected by time constraintsThe Parties are affected by time constraints

• The Parties recognize that alternative The Parties recognize that alternative procedures are not as desirable as negotiation, procedures are not as desirable as negotiation, which allows them to determine the outcomewhich allows them to determine the outcome

Two recognized core strategies for Two recognized core strategies for negotiatingnegotiating

Positional bargainingPositional bargaining

Principled negotiationPrincipled negotiation

Positional BargainingPositional Bargaining

Each side takes its “best” (i.e. Most Each side takes its “best” (i.e. Most extreme) position on what it demands or extreme) position on what it demands or offersoffers

A period of justification follows, which A period of justification follows, which usually entrenches the first extreme usually entrenches the first extreme positionposition

Discussions take place where Parties Discussions take place where Parties haggle, threaten, bully, cry, or lie in an haggle, threaten, bully, cry, or lie in an effort to extract movement or effort to extract movement or agreement from the other sideagreement from the other side

Positional Bargaining contd….Positional Bargaining contd….

Concessions are exchangedConcessions are exchanged

Settlement is usually achieved Settlement is usually achieved somewhere in the middle of the somewhere in the middle of the bargaining range, depending partly on bargaining range, depending partly on the balance of power between the the balance of power between the Parties.Parties.

The tactics adopted to improve The tactics adopted to improve the results of positional the results of positional

bargainingbargaining Extending the bargaining range at one endExtending the bargaining range at one end

Mis-representing positions or interests by posturingMis-representing positions or interests by posturing

Withholding sensitive information such as any Withholding sensitive information such as any weakness in the caseweakness in the case

Making threats or engaging in bluffMaking threats or engaging in bluff

Digging in or walking out…..and waiting for Digging in or walking out…..and waiting for movement from the other partymovement from the other party

Never giving without gettingNever giving without getting

Conceding small and slowConceding small and slow

Principled NegotiationPrincipled Negotiation

Negotiating on the basis of principles, Negotiating on the basis of principles, not positionsnot positions

Encouraging problem-solvingEncouraging problem-solving

Using objective standards to support Using objective standards to support decision making decision making

Aiming for a wise outcome reached Aiming for a wise outcome reached efficientlyefficiently

Why negotiations failWhy negotiations fail

Poor negotiating skills of one or both Parties Poor negotiating skills of one or both Parties or their advisersor their advisers

Unrealistic expectationsUnrealistic expectations

Unrealistic assessment of interests, or Unrealistic assessment of interests, or alternatives, or of what the other side can do alternatives, or of what the other side can do

Emotional antagonism to the other Party, or Emotional antagonism to the other Party, or personality clashpersonality clash

Desire for revengeDesire for revenge

Why negotiations fail contd….Why negotiations fail contd….

Distrust of other Party or their adviser Distrust of other Party or their adviser

Failure to communicate interests or offersFailure to communicate interests or offers

Inability of the Parties to identify or solve a real Inability of the Parties to identify or solve a real problem problem

Wrong advisersWrong advisers

Failure to focus on the negotiations; Failure to focus on the negotiations;

Genuine disagreement in good faith about Genuine disagreement in good faith about facts, principles or rightsfacts, principles or rights

ADRADR

Concept of MediationConcept of Mediation

What is MediationWhat is Mediation

Mediation is a Mediation is a voluntaryvoluntary, , non-bindingnon-binding, private , private dispute resolutiondispute resolution process in which a process in which a neutral neutral

personperson helps the parties try to reach a helps the parties try to reach a negotiated negotiated

settlementsettlement. .

Amongst ADR techniques, Amongst ADR techniques, mediation has proved mediation has proved to be the most flexible, powerful and user to be the most flexible, powerful and user friendly approach.friendly approach.

Today ADR and Mediation are used interchangeablyToday ADR and Mediation are used interchangeably

Why mediation worksWhy mediation works

Mediation uses the best negotiation Mediation uses the best negotiation techniques to facilitate communication techniques to facilitate communication and achieve settlementand achieve settlement

Mediation assists negotiation, changing Mediation assists negotiation, changing its structure and dynamic to increase its structure and dynamic to increase dialoguedialogue

Mediation changes the focus of the Mediation changes the focus of the parties away from the events of the past parties away from the events of the past and towards the needs of the futureand towards the needs of the future

Why mediation worksWhy mediation works

Facilitates communication and separates Facilitates communication and separates the people from the problemthe people from the problem

Helps overcome deadlock and emotional Helps overcome deadlock and emotional blockagesblockages

Restores the negotiation processRestores the negotiation process

Identifies and focuses on the real issues Identifies and focuses on the real issues and needs of the Partiesand needs of the Parties

Why mediation works contd….Why mediation works contd….

Gets the right people and the right Gets the right people and the right information to the tableinformation to the table

Helps parties to reassess their caseHelps parties to reassess their case

Increases the options for resolutionIncreases the options for resolution

Keeps ownership of the problem and the Keeps ownership of the problem and the settlement with the Partiessettlement with the Parties

Restores and safeguards relationsRestores and safeguards relations..

ComparisonsComparisons

NegotiationNegotiation Mediation Mediation Litigation Litigation

VoluntaryVoluntary VoluntaryVoluntary InvoluntaryInvoluntary

If agreement, enforceable as contractIf agreement, enforceable as contract If agreement, enforceable as contractIf agreement, enforceable as contract Binding, subject to appealBinding, subject to appeal

No third-party facilitatorNo third-party facilitator Facilitator selected by parties, may Facilitator selected by parties, may have subject expertise, may be have subject expertise, may be facilitative, evaluative or a blendfacilitative, evaluative or a blend

Imposed, decision-maker have Imposed, decision-maker have subject expertisesubject expertise

InformalInformal InformalInformal Formal, rigid rulesFormal, rigid rules

Unbounded presentation of evidence, Unbounded presentation of evidence, arguments and interests, often arguments and interests, often focused on the pastfocused on the past

Unbounded presentation of evidence, Unbounded presentation of evidence, arguments and interests, focused on arguments and interests, focused on the future the future

Opportunity for each party to present Opportunity for each party to present proofs and arguments, proofs and arguments, Focused on past eventsFocused on past events

Outcome: mutually acceptable Outcome: mutually acceptable agreement soughtagreement sought

Out come: mutually acceptable Out come: mutually acceptable agreement soughtagreement sought

Outcome: imposed decision, Outcome: imposed decision, supported by reasoned opinion supported by reasoned opinion

PrivatePrivate PrivatePrivate PublicPublic

The Mediator’s roleThe Mediator’s role

The Mediator is a neutral third party who:The Mediator is a neutral third party who:

Manages the processManages the process

Builds trust and confidenceBuilds trust and confidence

Facilitates communicationFacilitates communication

Explores option for settlementExplores option for settlement

The Mediator’s role contd….The Mediator’s role contd….

Focuses on interest not rights, needs not Focuses on interest not rights, needs not wantswants

Focuses on the futureFocuses on the future

Is an explorer not a transmitterIs an explorer not a transmitter

Is a neutral diplomatIs a neutral diplomat

Keeps on going until the deal is sealedKeeps on going until the deal is sealed

An Overview of mediation:An Overview of mediation:

A voluntary private processA voluntary private process

Assisted negotiationAssisted negotiation

Flexible framework of joint and private Flexible framework of joint and private (caucus) meetings(caucus) meetings

Sales Tax S. 47-A…ADRSales Tax S. 47-A…ADR (salient features)(salient features)

On application by an aggrieved person CBR may On application by an aggrieved person CBR may constitute a committee comprising of ST officer, constitute a committee comprising of ST officer, chartered or cost accountants, advocates, chartered or cost accountants, advocates, representatives of trade bodies etc.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…ADRSales Tax S. 47-A…ADR(salient features)(salient features)

The liability of tax against the registered person, The liability of tax against the registered person, or admissibility of refunds, as the case may be;or admissibility of refunds, as the case may be;

   The extent of waiver of additional tax and The extent of waiver of additional tax and

penalty;penalty;

   The quantum of input tax admissible in terms of The quantum of input tax admissible in terms of

sub-section (3) of Section 7;sub-section (3) of Section 7;

Sales Tax S. 47-A…ADRSales Tax S. 47-A…ADR

Relaxation of any procedural or technical Relaxation of any procedural or technical irregularities and condonation of any prescribed irregularities and condonation of any prescribed time limitation; andtime limitation; and

any other specific relief required to resolve the any other specific relief required to resolve the disputedispute

Sales Tax S. 47-A…ADRSales Tax S. 47-A…ADR

All the decisions, orders and judgments shall be All the decisions, orders and judgments shall be modified to the extent of the board’s ordersmodified to the extent of the board’s orders

If the matter is subjudice, the agreement of If the matter is subjudice, the agreement of resolution to be placed before the forum for resolution to be placed before the forum for consideration and ordersconsideration and orders

No appeals….No appeals….

ADRADR

GOD BLESS US ALLGOD BLESS US ALL