The Indian Parliament recognised in 1996 the need for alternative dispute resolution (ADR) mechanisms in civil and commercial disputes to reduce the workload of the courts. These mechanisms include arbitration, mediation, and conciliation. To facilitate the fast resolution of economic disputes through private Arbitration, Parliament passed the "Arbitration and Conciliation Act, 1996." Rapid problem solving is seen as crucial to the efficient operation of any business or sector. Although "Alternative Dispute Resolution" (ADR) is the name under which it was originally introduced, it has since been rebranded in several sectors as "Appropriate Dispute Resolution" (ADR) in recognition of the process and results it consistently delivers. Judicial dispute resolution (JDR) is another term for litigation. Since alternative dispute resolution (ADR) is not limited by national borders, it is increasingly being viewed as a truly global system.
In India, the courts use the Indian Arbitration and Conciliation Act of 1996 while deciding on alternative dispute resolution. In 1996, India passed the Arbitration and Conciliation Act based on the work of the United Nations Commission on International Trade Law (UNCITRAL), but the concept of alternative dispute resolution has been part of Indian law since at least 1840. It was not until January 25, 1996 that the Arbitration and Conciliation Act, 1996 went into effect. Prior to that date, disputes were resolved under the Civil Procedure Code, the Indian Contract Act, the Specific Relief Act, and the Indian Arbitration Act, 1899, which was subsequently repealed by the Indian Arbitration Act, 1940.