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ADR and Arbitration MCQs for Judiciary, Page 2

Judiciary ADR and Arbitration questions 28-55 of 55, with answer keys and explanations covering arbitration agreements, tribunals, awards, court intervention, mediation, conciliation, and enforcement.

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Practice judiciary exam MCQs with answers and explanations across substantive law, procedure, evidence, constitutional law, and state judicial service subjects.

  • Arbitral Tribunal5
  • Arbitration Act Fundamentals4
  • Arbitration and Evidence1
  • Award and Challenge6
  • Commercial Courts and ADR2
  • Conciliation under Arbitration Act2
  • Court Intervention in Arbitration5
  • CPC Section 892
  • Drafting and Practice4
  • Foreign Awards2
  • Gram Nyayalayas Act4
  • Legal Services Authorities Act4
  • Mediation Act, 20239
  • Sectoral ADR5
Question 28EasyMediation Act, 2023

A mediator secretly advises one party how to defeat the other party in litigation. Which value is breached most directly?

  1. A

    The doctrine of res judicata.

  2. B

    The rule against hearsay.

  3. C

    The rule of adverse possession.

  4. D

    Neutrality and impartiality of the mediator.

View answer and explanation

Correct answer: D. Neutrality and impartiality of the mediator.

Mediation depends on trust, neutrality, confidentiality, and informed party participation. A mediator who secretly assists one side undermines the integrity of the process and the validity of any resulting settlement.

Source note: Mediation Act, 2023

Question 29MediumMediation Act, 2023

A party wants to use concessions made during mediation as admissions in later litigation. What is the usual mediation-law answer?

  1. A

    Every mediation statement is automatically public evidence.

  2. B

    Mediation communications are generally protected by confidentiality, subject to statutory exceptions.

  3. C

    Confidentiality applies only to arbitrators, never mediators.

  4. D

    Confidentiality disappears whenever settlement fails.

View answer and explanation

Correct answer: B. Mediation communications are generally protected by confidentiality, subject to statutory exceptions.

Confidentiality allows parties to negotiate candidly. Mediation statutes and rules generally protect mediation communications, while allowing limited exceptions such as threats, fraud, or other legally recognised reasons.

Source note: Mediation Act, 2023

Question 30MediumMediation Act, 2023

What makes a mediated settlement agreement legally significant?

  1. A

    It records a consensual resolution and can be enforced in the manner provided by mediation law.

  2. B

    It is binding even if one party never consented to it.

  3. C

    It is valid only if the mediator writes the judgment personally.

  4. D

    It always requires approval from the Supreme Court.

View answer and explanation

Correct answer: A. It records a consensual resolution and can be enforced in the manner provided by mediation law.

The legal endpoint of mediation is not the mediator opinion but the parties mediated settlement agreement. Once validly made, it gains statutory enforceability subject to limited challenge grounds.

Source note: Mediation Act, 2023

Question 31HardMediation Act, 2023

Which ground is most likely to justify a statutory challenge to a mediated settlement agreement?

  1. A

    A party later regrets settling despite free consent.

  2. B

    The settlement avoided a long trial.

  3. C

    The mediator encouraged both parties to consider compromise.

  4. D

    The settlement was procured by fraud, corruption, impersonation, or concerns a dispute not fit for mediation.

View answer and explanation

Correct answer: D. The settlement was procured by fraud, corruption, impersonation, or concerns a dispute not fit for mediation.

Challenge grounds are deliberately narrow. The law protects finality of settlement while preserving control for serious defects such as fraud, corruption, impersonation, or settlement of non-mediable subject matter.

Source note: Mediation Act, 2023

Question 32MediumMediation Act, 2023

Why do mediation statutes prescribe timelines for completion of mediation?

  1. A

    To ensure mediation becomes a substitute for trial lasting indefinitely.

  2. B

    To prohibit parties from settling early.

  3. C

    To keep mediation efficient and prevent settlement attempts from becoming a delaying tactic.

  4. D

    To make every mediation session public.

View answer and explanation

Correct answer: C. To keep mediation efficient and prevent settlement attempts from becoming a delaying tactic.

Time limits preserve the efficiency promise of ADR. Mediation should give parties a structured settlement window, not an endless pause on adjudication.

Source note: Mediation Act, 2023

Question 33EasyMediation Act, 2023

Online mediation is legally important because it:

  1. A

    Allows mediation to be conducted using electronic communication where the legal requirements of fairness, consent, and confidentiality are respected.

  2. B

    Treats digital participation as incompatible with settlement.

  3. C

    Makes all settlements non-binding.

  4. D

    Applies only to foreign states.

View answer and explanation

Correct answer: A. Allows mediation to be conducted using electronic communication where the legal requirements of fairness, consent, and confidentiality are respected.

Modern mediation law recognises online mediation to improve access and reduce cost. The format does not remove core requirements such as party consent, mediator neutrality, confidentiality, and proper recording of settlement.

Source note: Mediation Act, 2023

Question 34HardCommercial Courts and ADR

Section 12A of the Commercial Courts Act, 2015 generally requires pre-institution mediation before a commercial suit when:

  1. A

    The suit seeks only criminal punishment.

  2. B

    The plaintiff is a government department.

  3. C

    The suit does not contemplate urgent interim relief.

  4. D

    The defendant refuses to sign an arbitration agreement.

View answer and explanation

Correct answer: C. The suit does not contemplate urgent interim relief.

Section 12A channels commercial disputes into pre-institution mediation where urgent interim relief is not sought. The Supreme Court has treated this requirement as mandatory in the relevant category of suits.

Source note: Commercial Courts Act, 2015, Section 12A / Patil Automation principle

Question 35MediumCommercial Courts and ADR

A plaintiff files a commercial suit seeking immediate injunction to stop dissipation of assets. How does this affect Section 12A pre-institution mediation?

  1. A

    Urgency is irrelevant; every commercial suit must wait for full mediation.

  2. B

    Urgent interim relief is relevant because Section 12A is framed around suits that do not contemplate such relief.

  3. C

    Urgency converts the suit into a criminal trial.

  4. D

    Urgency automatically creates an arbitral award.

View answer and explanation

Correct answer: B. Urgent interim relief is relevant because Section 12A is framed around suits that do not contemplate such relief.

Section 12A is not meant to defeat urgent protective relief. If the suit genuinely contemplates urgent interim relief, the pre-institution mediation filter operates differently.

Source note: Commercial Courts Act, 2015, Section 12A

Question 36EasyCPC Section 89

Section 89 CPC primarily empowers the court to:

  1. A

    Frame a criminal charge after mediation fails.

  2. B

    Set aside all arbitral awards without grounds.

  3. C

    Compel compromise in every civil suit.

  4. D

    Refer appropriate civil disputes to ADR processes such as arbitration, conciliation, judicial settlement, Lok Adalat, or mediation.

View answer and explanation

Correct answer: D. Refer appropriate civil disputes to ADR processes such as arbitration, conciliation, judicial settlement, Lok Adalat, or mediation.

Section 89 is the civil procedure gateway for court-annexed ADR. It does not force settlement; it helps courts identify cases where alternative processes may be appropriate.

Source note: Code of Civil Procedure, 1908, Section 89

Question 37HardCPC Section 89

The Afcons approach to Section 89 is significant because it:

  1. A

    Requires every civil case to be decided by private arbitrators.

  2. B

    Recognises that some disputes are better suited to ADR while others, such as representative suits or serious fraud cases, may require adjudication.

  3. C

    Abolishes mediation in court-referred disputes.

  4. D

    Makes Lok Adalat awards appealable as ordinary decrees.

View answer and explanation

Correct answer: B. Recognises that some disputes are better suited to ADR while others, such as representative suits or serious fraud cases, may require adjudication.

Afcons helped clarify practical categories for ADR referral. Settlement-friendly disputes such as commercial, family, partnership, neighbour, and money claims may fit ADR; matters involving public rights, serious fraud, prosecution, or status may not.

Source note: CPC Section 89 / Afcons Infrastructure v. Cherian Varkey principle

Question 38EasyLegal Services Authorities Act

A Lok Adalat records a compromise and passes an award. What is the legal effect?

  1. A

    The award is deemed to be a decree of a civil court, is final and binding, and no appeal lies from it.

  2. B

    The award is merely recommendatory.

  3. C

    The award is valid only after a second trial.

  4. D

    The award is treated as an FIR.

View answer and explanation

Correct answer: A. The award is deemed to be a decree of a civil court, is final and binding, and no appeal lies from it.

Under the Legal Services Authorities Act, a Lok Adalat award based on compromise has strong finality. The absence of appeal reflects that the award rests on consent, though writ remedies may remain for serious jurisdictional or fraud issues.

Source note: Legal Services Authorities Act, 1987, Section 21

Question 39MediumLegal Services Authorities Act

If parties before a regular Lok Adalat fail to reach compromise, the Lok Adalat generally:

  1. A

    Decides the dispute on merits like a civil court after full trial.

  2. B

    Convicts the party refusing settlement.

  3. C

    Automatically appoints an arbitrator.

  4. D

    Returns or refers the matter back to the appropriate court for disposal according to law.

View answer and explanation

Correct answer: D. Returns or refers the matter back to the appropriate court for disposal according to law.

A regular Lok Adalat is settlement-based. If no compromise is reached, it does not adjudicate the case on merits; the matter goes back for regular adjudication.

Source note: Legal Services Authorities Act, 1987, Section 20

Question 40HardLegal Services Authorities Act

Permanent Lok Adalat for public utility services differs from an ordinary Lok Adalat because:

  1. A

    It can try all serious criminal offences.

  2. B

    It exists only for matrimonial divorce decrees.

  3. C

    It may, after failed conciliation and within statutory limits, decide the dispute on merits in eligible public utility service matters.

  4. D

    It cannot attempt conciliation.

View answer and explanation

Correct answer: C. It may, after failed conciliation and within statutory limits, decide the dispute on merits in eligible public utility service matters.

Permanent Lok Adalat under Chapter VI-A first attempts conciliation in public utility service disputes. If settlement fails, it can decide eligible disputes on merits, subject to statutory exclusions and limits.

Source note: Legal Services Authorities Act, 1987, Sections 22A-22E

Question 41MediumLegal Services Authorities Act

Which matter best fits the public utility service logic of Permanent Lok Adalat?

  1. A

    A dispute involving services such as transport, postal, telegraph, power, water, sanitation, hospital, insurance, or notified public utility services.

  2. B

    A serious murder prosecution.

  3. C

    A constitutional challenge to a statute.

  4. D

    An election petition challenging membership of Parliament.

View answer and explanation

Correct answer: A. A dispute involving services such as transport, postal, telegraph, power, water, sanitation, hospital, insurance, or notified public utility services.

Permanent Lok Adalat is designed for accessible resolution of public utility service disputes. It is not a substitute for criminal prosecution, constitutional adjudication, or special statutory forums for public law status disputes.

Source note: Legal Services Authorities Act, 1987, Section 22A

Question 42EasyGram Nyayalayas Act

The central purpose of the Gram Nyayalayas Act, 2008 is to:

  1. A

    Replace all High Courts with panchayat tribunals.

  2. B

    Create private arbitration centres for multinational companies.

  3. C

    Bring justice closer to rural communities through village-level courts with simplified and accessible procedure.

  4. D

    Abolish legal representation in every civil case.

View answer and explanation

Correct answer: C. Bring justice closer to rural communities through village-level courts with simplified and accessible procedure.

Gram Nyayalayas are conceived as local, accessible courts for specified civil and criminal matters. The design emphasises low-cost, speedy and proximate justice, especially for rural areas.

Source note: Gram Nyayalayas Act, 2008

Question 43MediumGram Nyayalayas Act

In civil disputes before a Gram Nyayalaya, the Nyayadhikari should generally:

  1. A

    Ignore settlement because rural courts cannot conciliate.

  2. B

    Assist, persuade, and endeavour to bring about settlement where appropriate.

  3. C

    Refer every matter only to international arbitration.

  4. D

    Decide all matters without hearing either side.

View answer and explanation

Correct answer: B. Assist, persuade, and endeavour to bring about settlement where appropriate.

The Gram Nyayalayas framework expressly values conciliation in civil disputes. The court is not merely a miniature trial court; it is also expected to encourage settlement in suitable cases.

Source note: Gram Nyayalayas Act, 2008

Question 44MediumGram Nyayalayas Act

Which statement about Gram Nyayalaya jurisdiction is safest?

  1. A

    It covers every matter in India regardless of statute.

  2. B

    It has exclusive jurisdiction over all company mergers.

  3. C

    It can overrule Supreme Court judgments.

  4. D

    It operates over specified civil and criminal matters as provided in the Act and schedules, subject to statutory limits.

View answer and explanation

Correct answer: D. It operates over specified civil and criminal matters as provided in the Act and schedules, subject to statutory limits.

Gram Nyayalayas are statutory courts with defined subject matter. Their jurisdiction depends on the Act, schedules, notifications and statutory limits; they are not courts of unlimited jurisdiction.

Source note: Gram Nyayalayas Act, 2008

Question 45MediumGram Nyayalayas Act

Appeals from Gram Nyayalaya decisions generally reflect which structure?

  1. A

    Civil appeals go to the Supreme Court directly in every matter.

  2. B

    Criminal and civil appeals move to the appropriate higher district-level forum as provided by the Act, rather than creating a wholly private appeal system.

  3. C

    No appeal can ever exist from any Gram Nyayalaya order.

  4. D

    Appeals are heard by the mediator who failed to settle the case.

View answer and explanation

Correct answer: B. Criminal and civil appeals move to the appropriate higher district-level forum as provided by the Act, rather than creating a wholly private appeal system.

The Act connects Gram Nyayalaya decisions to the ordinary judicial hierarchy through specified appellate forums. The aim is local access with legal supervision, not isolation from the court system.

Source note: Gram Nyayalayas Act, 2008

Question 46EasySectoral ADR

Family Courts are associated with ADR because the statute expects the court to:

  1. A

    Make efforts for settlement where possible before moving into adversarial adjudication.

  2. B

    Send every divorce case to private commercial arbitration.

  3. C

    Refuse all counselling and welfare assistance.

  4. D

    Treat matrimonial disputes as ordinary money suits only.

View answer and explanation

Correct answer: A. Make efforts for settlement where possible before moving into adversarial adjudication.

The Family Courts Act gives settlement and welfare a central role. Conciliation, counselling and expert assistance are used where appropriate, though settlement cannot override legality, consent, safety, or child welfare.

Source note: Family Courts Act, 1984

Question 47MediumSectoral ADR

Consumer mediation under the Consumer Protection Act, 2019 is best understood as:

  1. A

    A replacement for all product liability claims regardless of consent.

  2. B

    A process where the mediator imposes punishment on the trader.

  3. C

    A process available only in criminal consumer prosecutions.

  4. D

    A settlement mechanism connected to consumer commissions for suitable consumer disputes.

View answer and explanation

Correct answer: D. A settlement mechanism connected to consumer commissions for suitable consumer disputes.

The 2019 consumer framework institutionalises mediation through consumer commissions and mediation cells. The aim is faster consumer dispute settlement, while unsuitable or unsettled matters proceed according to the Act.

Source note: Consumer Protection Act, 2019

Question 48HardSectoral ADR

Section 18 of the MSMED Act is important in ADR because it:

  1. A

    Transfers all MSME disputes to criminal courts.

  2. B

    Bars conciliation in payment disputes.

  3. C

    Allows reference of supplier-buyer payment disputes to the Micro and Small Enterprises Facilitation Council for conciliation and, if needed, arbitration.

  4. D

    Applies only to international investment treaties.

View answer and explanation

Correct answer: C. Allows reference of supplier-buyer payment disputes to the Micro and Small Enterprises Facilitation Council for conciliation and, if needed, arbitration.

The MSMED Act creates a sector-specific ADR pathway for delayed payment disputes. The Facilitation Council first undertakes conciliation; if conciliation fails, arbitration may follow under the statutory scheme.

Source note: Micro, Small and Medium Enterprises Development Act, 2006, Section 18

Question 49MediumSectoral ADR

In industrial dispute resolution, a conciliation officer primarily:

  1. A

    Facilitates settlement between employer and workmen and reports the result to the appropriate government.

  2. B

    Acts as a private arbitrator in every dismissal dispute.

  3. C

    Issues criminal sentences against trade unions.

  4. D

    Sets aside High Court judgments.

View answer and explanation

Correct answer: A. Facilitates settlement between employer and workmen and reports the result to the appropriate government.

Industrial dispute law uses conciliation as an early settlement mechanism. The conciliation officer promotes compromise and submits reports, while adjudication by Labour Courts/Tribunals is a separate stage where required.

Source note: Industrial Disputes Act, 1947

Question 50MediumSectoral ADR

Cheque dishonour cases often settle through mediation or Lok Adalat because:

  1. A

    They are never criminal complaints.

  2. B

    They must always be decided by international commercial arbitration.

  3. C

    They are compoundable in nature and commonly involve payment-focused compromise.

  4. D

    They cannot be settled once summons is issued.

View answer and explanation

Correct answer: C. They are compoundable in nature and commonly involve payment-focused compromise.

Section 138 NI Act prosecutions are criminal complaints, but the offence is compoundable and payment settlement is common. Lok Adalats and mediation can reduce docket pressure while securing compensation-oriented outcomes.

Source note: Negotiable Instruments Act, 1881 / Legal Services Authorities Act, 1987

Question 51MediumArbitration and Evidence

The Bharatiya Sakshya Adhiniyam evidence framework generally does not apply to:

  1. A

    Judicial proceedings before ordinary courts.

  2. B

    Affidavits and arbitration proceedings.

  3. C

    Courts-martial where applicable.

  4. D

    Criminal trials before Sessions Courts.

View answer and explanation

Correct answer: B. Affidavits and arbitration proceedings.

Evidence law is designed for judicial proceedings. Arbitration uses a flexible evidentiary process under the arbitration statute and party/tribunal procedure, though fairness and natural justice remain essential.

Source note: Bharatiya Sakshya Adhiniyam, 2023, Section 1 / Arbitration Act Section 19

Question 52EasyDrafting and Practice

A contract requires negotiation for 30 days, then mediation, then arbitration. Such a clause is usually called:

  1. A

    A criminal charge-sheet.

  2. B

    A limitation waiver in all cases.

  3. C

    A public interest litigation clause.

  4. D

    A multi-tier or escalation dispute resolution clause.

View answer and explanation

Correct answer: D. A multi-tier or escalation dispute resolution clause.

Multi-tier clauses create staged dispute resolution. The key drafting issue is certainty: time periods, triggering notices, forum, mediator/arbitrator appointment, seat, language and consequences of non-compliance should be clear.

Source note: ADR drafting principles

Question 53HardDrafting and Practice

In arbitration drafting, the seat of arbitration is legally important because it usually determines:

  1. A

    The hotel where hearings must physically occur.

  2. B

    The procedural law and supervisory court jurisdiction for the arbitration.

  3. C

    The substantive law of contract in every case without exception.

  4. D

    The identity of the stenographer.

View answer and explanation

Correct answer: B. The procedural law and supervisory court jurisdiction for the arbitration.

Seat is a juridical concept. It usually anchors curial law and supervisory court control. Venue may be only the physical place of hearings unless the clause or circumstances show it is intended as the juridical seat.

Source note: Arbitration drafting and seat doctrine

Question 54HardDrafting and Practice

Emergency arbitration is most useful when:

  1. A

    A party needs urgent interim protection before the regular arbitral tribunal is constituted.

  2. B

    The parties want a final criminal conviction.

  3. C

    The arbitration agreement has no dispute at all.

  4. D

    The only issue is court fee refund in Lok Adalat.

View answer and explanation

Correct answer: A. A party needs urgent interim protection before the regular arbitral tribunal is constituted.

Emergency arbitration gives urgent interim relief within institutional rules before the main tribunal is formed. Indian law has recognised enforceability of emergency relief in India-seated institutional arbitration through the Section 17 framework in appropriate cases.

Source note: Arbitration Act Section 17 / emergency arbitration doctrine

Question 55MediumDrafting and Practice

Confidentiality in arbitration primarily protects:

  1. A

    A party right to suppress evidence of fraud in every forum.

  2. B

    The arbitrator from giving reasons.

  3. C

    The award from ever being enforced.

  4. D

    The privacy of arbitral proceedings and materials, subject to statutory and enforcement-related exceptions.

View answer and explanation

Correct answer: D. The privacy of arbitral proceedings and materials, subject to statutory and enforcement-related exceptions.

Confidentiality supports commercial privacy, but it is not absolute. Disclosure may be necessary for enforcement, challenge, statutory duty, legal rights, or other recognised exceptions.

Source note: Arbitration and Conciliation Act, 1996, Section 42A principles

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