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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
(..3..)
Conciliation
Question Bank
Q.1. What is Conciliation? Explain the difference between Arbitration and Conciliation.
Q.2. Explain in detail the Conciliation procedure under the Arbitration and Conciliation
Act, 1996.
Short Notes
1. Disclosure of information by the Conciliator.
2. Role of Conciliator.
3. Duties of Conciliator
Table of Contents
I. Introduction:-..................................................................................................................29
II. Kinds of Conciliation:- .................................................................................................29
1. Voluntary conciliation:-.............................................................................................29
2. Compulsory conciliation:- .........................................................................................29
III. Advantages and disadvantages of conciliation:- .........................................................29
a). Advantages of conciliation:-....................................................................................29
(i). Conciliator is an expert:-......................................................................................29
(ii). Private Process:-..................................................................................................29
(iii). Right to approach court:- ...................................................................................29
(iv). Flexible:- ............................................................................................................29
(v). Suitable process:-.................................................................................................29
(vi). Cheaper:- ............................................................................................................29
b) Disadvantages of conciliation:- .................................................................................29
(i) No bindingness:-....................................................................................................30
(ii) No guarantee of success:-.....................................................................................30
(iii) Lack of seriousness:-...........................................................................................30
(iv) No legal aid:-.......................................................................................................30
IV. Conciliator:-.................................................................................................................30
1. Meaning:-...................................................................................................................30
2. Number of Conciliators (S.63):-................................................................................30
3. Appointment of Conciliators (S. 64):-.......................................................................30
4. Role of Conciliator (S. 80):- ......................................................................................31
V. Principles of procedure of conciliation:- ......................................................................31
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
3. Confidentiality (S. 75)-..............................................................................................31
4. Disclosure of information (S. 70):-............................................................................31
5. Cooperation of parties (S. 71):- .................................................................................32
6. Rules of procedure (S. 66)-........................................................................................32
7. Admissibility of evidence in other proceedings (S. 82)-...........................................32
8. Place of meeting (S. 69 (2)):-.....................................................................................32
9. Prohibition on other proceedings (S. 77):- ................................................................32
VI. Procedure of conciliation:-..........................................................................................32
1. Commencement of conciliation proceedings (S. 62):- ..............................................33
2. Submission of statements to conciliator (S. 65)-.......................................................33
4. To Take administrative assistance (S. 68):-...............................................................33
5. Settlement of dispute:-...............................................................................................33
a. Making proposal for settlement (S. 67 (4)):-..........................................................34
b. Suggestions by parties for settlement of dispute (S. 72):- .....................................34
c. Settlement agreement (S. 73)-................................................................................34
d. Status and effect of settlement agreement (S. 74):- ...............................................34
6. Termination of conciliation proceeding (S. 76):- ......................................................34
VII. The difference between Conciliation and Arbitration:-.............................................34
1. As to the nature:-........................................................................................................35
2. As to prior agreement:-..............................................................................................35
3. Types of dispute referred:-.........................................................................................35
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
I. Introduction:-
‘Conciliation’ is an impartial process whereby the parties to the dispute use a
conciliator, who meets with the parties both separately and together in an attempt to
resolve their differences. Thus, the conciliator acts to bring parties to the dispute at
amicable settlement among themselves.
It is non-binding process. The conciliator cannot pass award to bind both the
parties. Neither it is enforceable in Court.
II. Kinds of Conciliation:-
The Conciliation has following kinds,-
1. Voluntary conciliation:-
In this type of conciliation, parties to the dispute voluntarily participate in the process
of conciliation for resolving their dispute.
2. Compulsory conciliation:-
In this type of conciliation parties are compelled to take conciliation to resolve
their dispute. It is usually used in labor matters.
III. Advantages and disadvantages of conciliation:-
a). Advantages of conciliation:-
Conciliation has following advantages-
(i). Conciliator is an expert:-
Generally, Conciliator is a legal expert and has experience in dispute resolution.
Parties get help of such expert in dispute resolution.
(ii). Private Process:-
The process of dispute resolution through conciliation is private; therefore, there is no
chance of causing disrepute to the Court or either parties.
(iii). Right to approach court:-
Right to approach a court is not affected by failure of conciliation process.
(iv). Flexible: -
Since the conciliation is private and informal process it is very flexible and
convenient to the parties and even for conciliator.
(v). Suitable process:-
Conciliation is very suitable process in many matters.
(vi). Cheaper:-
Conciliation is cheaper process compare to the court.
b) Disadvantages of conciliation:-
There are following lacunas or disadvantages of conciliation.
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
(i) No bindingness:-
There is no bendiness in Conciliation, to come at conclusion like award in
arbitration.
(ii) No guarantee of success:-
There is no guarantee of success in conciliation. The conciliation may fail. There
may not be any conclusion.
(iii) Lack of seriousness:-
Since the process of conciliation is private and informal, parties don’t take it
seriously.
(iv) No legal aid:-
Since the conciliation is formal process parties lacks legal assistance.
IV. Conciliator:-
1. Meaning:-
According to Asbury’s Law of England, “Conciliator” is a person persuading
parties to reach an agreement.
With respect to the present topic also “Conciliator” means a person who persuades
disputing parties to reach at an agreement resolving their dispute.
2. Number of Conciliators (S.63):-
There shall be one conciliator unless the parties agree that there shall be two or
three conciliators. However, where there is more than one conciliator, they should as a
general rule act jointly.
3. Appointment of Conciliators (S. 64):-
There are the following rules as to the appointment of a Conciliator-
a. As to sole Conciliator:- In conciliation proceedings with one Conciliator,
the parties may agree on the name of a sole conciliator.
b. As to two Conciliators:- In conciliation proceedings with two Conciliators,
each party may appoint one conciliator;
c. As to three Conciliators:- In conciliation proceedings with three
Conciliators, each party may appoint one Conciliator and the parties may
agree on the name of the third Conciliator who shall act as the presiding
Conciliator.
For appointment of a Conciliator, the parties may have assistance of a suitable
institution or person. Either, (i) party may request such institution or person to
recommend the names of suitable individuals to act as conciliators, or (ii) the parties may
agree that the appointment of one or more conciliators be made directly by such
institution or person.
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“Conciliation”
Prof. S.D. Bhosale
However, in recommending or appointing individuals to act as conciliators, the
institution or the person shall have regard to such considerations as are likely to secure
the appointment of an independent and impartial conciliator and with respect to a sole
or third conciliator, shall take into account the advisability of appointing a conciliator of a
nationality other than the nationalities of the parties.
4. Role of Conciliator (S. 80):-
Conciliator should maintain his independence and impartiality therefore,-
(i) he shall not act as an arbitrator or as a representative or counsel of a party in any
arbitral or judicial proceedings in respect of a dispute that is the subject of the
conciliation proceedings.
(ii) the Conciliator shall not be presented by the parties as a witness in any arbitral or
judicial proceedings.
V. Principles of procedure of conciliation:-
Since conciliation is a private and informal proceeding, it is not bound by strict rules
of procedure however; the Act lays down some guiding principles of conducting
conciliation proceedings which shall be followed by Conciliator.
1. Independence and impartiality (S. 67 (1)):-
The Conciliator should be independent and impartial. He shall assist the parties in an
independent and impartial manner in their attempt to reach an amicable settlement of
their dispute.
2. Fairness and justice:-
The Conciliator should be guided by principles of objectivity, fairness and justice. He
shall among other things, give consideration to, the rights and obligations of the parties,
the usages of the trade concerned and the circumstances surrounding the dispute,
including any previous business practices between the parties.
3. Confidentiality (S. 75)-
The Conciliator and the parties shall keep confidential all the matters relating to the
conciliation proceedings. Confidentiality shall extend also to the settlement agreement,
except where its disclosure is necessary for the purposes of implementation and
enforcement.
Unless permitted the Conciliator cannot disclose information of one party to another
(proviso of S. 70).
4. Disclosure of information (S. 70):-
When the conciliator receives factual information concerning the dispute from a
party, he shall disclose the substance of that information to the other party in order that
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“Conciliation”
Prof. S.D. Bhosale
the other party may have the opportunity to present any explanation which he considers
appropriate.
The section is in consonance with the natural law principle, to inform party about
content of allegation so to answer it.
5. Cooperation of parties (S. 71):-
The success of conciliation largely depends upon cooperation of parties to the
Conciliator. The parties should in good faith cooperate with the conciliator. They should
endeavor to comply with requests of Conciliator to submit written materials, provide
evidence and attend meetings.
6. Rules of procedure (S. 66)-
The conciliator is neither bound by the rules contained in the Civil Procedure Code
nor the rules of Evidence Act. However, it is expected from him to follow principles of
natural justice.
7. Admissibility of evidence in other proceedings (S. 82)-
The section mentions four categories of evidences which cannot be relied on or
introduced as an evidence in other arbitral or judicial proceedings when the subject
matter of the dispute is the same. Those subjects are-
(i) Views expressed or suggestions made by the other party in respect of a possible
settlement of the dispute,
(ii) Admissions made by other party in the course, of conciliator proceedings,
(iii) Proposals made by the conciliator,
(iv) The fact that the other party had indicated his willingness to accept a proposal for
settlement made by the conciliator.
8. Place of meeting (S. 69 (2)):-
If not determined by the parties, the conciliator determines the place of conciliation
after consultation with the parties.
9. Prohibition on other proceedings (S. 77):-
The parties shall not initiate, during the conciliation proceedings, any arbitral or
judicial proceedings relating to the same matter except to preserve his rights. Thus, the
section prohibits the parties from initiating any judicial or arbitral proceedings for the
same matter. The provision is made to avoid any complications in the matter under
conciliation. However, the section protect right of party to resort to judicial or arbitral
proceedings if it becomes necessary to preserve his rights.
VI. Procedure of conciliation:-
Following procedure is followed to conduct conciliation proceedings-.
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
1. Commencement of conciliation proceedings (S. 62):-
The party initiating conciliation proceedings shall send to the other party a written
invitation to conciliation, briefly identifying the subject of the dispute. Conciliation
proceeding shall commence when the other party accepts in writing the invitation to
conciliate.
If the other party rejects the invitation, there will be no conciliation proceedings.
Even, if the other party doesn’t reply within 30 days or the time mentioned in the
invitation, it may be treated that the conciliation is rejected by the other party. However,
the party sending invitation should inform in writing to the other party accordingly.
2. Submission of statements to conciliator (S. 65)-
The conciliator, upon his appointment, may request each party to submit to him a
brief written statement describing the general nature of the dispute and the points at issue.
Each party shall send a copy of such statement to the other party.
The conciliator may request each party to submit to him a further written
statement of his position and the facts and grounds in support thereof, supplemented by
any documents and other evidence that such party deems appropriate. The party shall
send a copy of such statement, documents and other evidence to other parity.
At any stage of the conciliation proceedings, the conciliator may request a party to
submit to him such additional information as he deems appropriate.
3. Communication by Conciliator with parties (S. 69 (1) and S. 67 (3)):-
The conciliator may invite the parties to meet him or may communicate with them
orally or in writing. He may meet or communicate with the parties together or with each
of them separately.
The conciliation is not bound by the strict proof of a law, however, he may
conduct the proceeding in such a manner as he considers appropriate, taking into account
the circumstance of the case, the wishes of the parties, oral hearing (if requested by a
party), speedy disposal of the matter etc.
4. To Take administrative assistance (S. 68):-
In order to facilitate the conduct of the conciliation proceeding, the parties, or the
conciliator with the consent of the parties, may arrange for administrative assistance by a
suitable institution or person. Such administrative services may be related with providing
lists of conciliators, arranging meetings for conciliators, and providing two-way
communication services such as translation, interpretation, etc.
5. Settlement of dispute: -
There are the following provisions related to the settlement of disputes.
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
a. Making proposal for settlement (S. 67 (4)):-
The conciliator may, at any stage of the proceedings make proposal for a
settlement of the dispute. Such proposal need not be in writing and need not be
accompanied by a statement of the reasons therefore.
b. Suggestions by parties for settlement of dispute (S. 72):-
Each party may, on his own initiative or at the invitation of the conciliator, submit
to the conciliator the suggestions for the settlement of the dispute.
This section gives freedom to the parties to give their suggestions for settlement of
the dispute.
c. Settlement agreement (S. 73)-
When it appears to the conciliator that there exists an element of a settlement
which may be acceptable to the parties, he shall formulate the terms of a possible
settlement and submit them to the parties for their observations. After receiving the
observations of the parties, the conciliator may reformulate the terms of a possible
settlement in the light of such observations.
If the parties reach agreement on a settlement of the dispute, they may draw up
and sign a written settlement agreement. If requested by the parties, the conciliator may
draw up, or assist the parties in drawing up, the settlement agreement.
When the parties sign the settlement agreement, it shall be final and binding on the
parties and persons claiming under them respectively. Thereafter, the conciliator shall
authenticate the settlement agreement and furnish a copy thereof to each of the parties.
d. Status and effect of settlement agreement (S. 74):-
The settlement agreement shall have the same status and effect as if it is an arbitral
award on agreed terms. (as if arbitral tribunal under S.30).
6. Termination of conciliation proceeding (S. 76):-
The conciliation proceedings terminate-
a. by the signing of the settlement agreement by the parties, on the date of the
agreement; or
b. by a written declaration of the conciliator, after consultation with the parties, to the
effect that further efforts of conciliation are no longer justified.
c. by a written declaration of the parties addressed to the conciliator to the effect that
the conciliation proceedings is terminated.
d. by a written declaration of a party to the other party and the conciliator, of
termination of conciliation proceedings.
VII. The difference between Conciliation and Arbitration: -
The process of conciliation and arbitration are different.
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“Law Master’s” Publication
“Conciliation”
Prof. S.D. Bhosale
1. As to the nature: -
“Arbitration” means the reference of a dispute or difference between not less than two
parties, for determination, after judicially hearing both sides, by a person or persons other
than a court of a competent jurisdiction.
‘Conciliation’ is an impartial process whereby the parties to the dispute use a
conciliator, who meets with the parties both separately and together in an attempt to
resolve their differences.
2. As to prior agreement: -
To refer the matter for arbitration, a prior agreement between the parties is
necessary.
Prior agreement is not necessary to refer a dispute for conciliation.
3. Types of disputes referred: -
Any existing or future dispute may be referred to arbitration, whereas only
existing disputes can be referred to conciliation.
4. Enforceability: -
An arbitrator can enforce his award, whereas a conciliator cannot settlement.
5. Formal / Informal Proceeding: -
An arbitration proceeding is a formal proceeding, evidence is taken before it,
parties are examined on oath, etc. Whereas, Conciliation is an informal process to resolve
disputes.
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