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Conciliation: Application & its Scope

Project submitted to:


Mr Parvesh Rajput
(Faculty of Law)

Project submitted by:


Ishu Deshmukh
Semester VI, Roll No. 81
15.02.2018

HIDAYATULLAH NATIONAL LAW UNIVERSITY


RAIPUR, C.G.
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TABLE OF CONTENTS

 Declaration....................................................................................................................2
 Acknowledgement........................................................................................................3
 Introduction..................................................................................................................4
 Objectives.....................................................................................................................5
 Research Methodology.................................................................................................5
 Meaning of Conciliation...............................................................................................7
 Application and Scope of Conciliation........................................................................8
 Commencement and Procedure of Proceedings..........................................................11
 Nature and Elements of Conciliation...........................................................................14
 Advantages of Conciliation.........................................................................................18
 Disadvantages of Conciliation.....................................................................................18
 Conclusion & Suggestions...........................................................................................19
 References....................................................................................................................20
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DECLARATION

I, Ishu Deshmukh, hereby declare that the project work entitled “Conciliation:
Application and its Scope” submitted to the HNLU Raipur, is a record of an original work
done by me under the guidance of Mr.Parvesh Rajput, Faculty of Law, a n d t h i s
project has been submitted for the partial fulfilment of the
requirements for the award of the degree of BA-LLB. The results embodied in this thesis
have not been submitted to any other University or Institute for the award of any degree or
diploma.
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ACKNOWLEDGEMENT

I feel highly elated to work on the topic “Conciliation: Application and its Scope”.

No creation in this world is a sole effort, nor is this work of mine. The practical realization of
this project has obligated the assistance of many persons. First of all I would like to thank my
faculty Mr Parvesh Rajput for her invaluable suggestions and guidance. It would not have
been possible for me to frame this project of mine without her support.

I would like to thank my family and friends without whose support and encouragement, this
project would not have been a reality.

I take this opportunity to also thank the University and the Vice Chancellor for providing
extensive database resources in the Library and through Internet. Some typing errors might
have crept in, which are deeply regretted. I would be grateful to receive comments and
suggestions to further improve this project report.

Ishu Deshmukh

Semester VI
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INTRODUCTION
Modern ADR is a voluntary system, according to which parties enter a structured negotiation
or refer their disputes to a third party for evaluation and/or facilitation of resolution.
Especially in the light of the facts that the justice system is flooded by disputes of variable
importance and complexity, and that the parties are almost invariably intimidated by the
atmosphere in the courtroom and the litigation process itself. ADR has now become
acceptable and often preferred alternative to judicial settlement and an effective tool for
reduction of arrears of cases. The alternative modes of disputes resolution include-
Arbitration, Negotiation, Mediation, Conciliation, Lok Adalat, National and State Legal
Authority.

ADR strategies which facilitate the development of consensual solution by the disputing
parties are therefore considered a viable alternative. ADR methods such as mediation,
negotiation and arbitration along with many sub-strategies are increasingly being employed
world over in a wide range of conflict situations, ranging from family and marital disputes,
business and commercial conflicts, personal injury suits, employment matters, medical care
disputes, construction disputes to more complex disputes of a public dimension such as
environmental disputes, criminal prosecutions, professional disciplinary proceedings, inter-
state or international boundary and water disputes.

Conciliation is an alternative dispute resolution (ADR) process whereby the parties to a


dispute use a conciliator, who meets with the parties both separately and together in an
attempt to resolve their differences. They do this by lowering tensions, improving
communications, interpreting issues, encouraging parties to explore potential solutions and
assisting parties in finding a mutually acceptable outcome.

This project wok aims to focus upon what Conciliation is and its process and application and
scope.
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OBJECTIVES

The main objective of this project work was to analyse the concept of Conciliation as a
medium for alternate dispute resolution.

The other secondary objectives are-

1. To understand the concept of Conciliation.


2. To know Conciliation and its application and scope.
3. To understand the method and process for conciliation under Indian Arbitration and
Conciliation Act.

RESEARCH METHODOLOGY

This Research Project is descriptive in nature. Accumulation of the information on the topic
include wide use of secondary sources like books, e-articles etc. The matter from these
sources have been compiled and analysed to understand the concept from the grass root level.

Websites, dictionaries and articles have also been referred.

REVIEW OF LITERATURE

 Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems);
Eastern Book Company, Lucknow; 7th Edition(2006) – The book helps me in finding
out the concept of Conciliation and also the scope and application of Conciliation.
 Salama, Ahmed Abdel Karim, National and International Arbitration Law, Comparative
Theorization and Application, (no publisher, 2003), This article help me in finding the nature
and elements of Conciliation.

 Arbitration and Conciliation act 1996, Avtar Singh helps me in knowing the Procedure of
proceedings in Conciliation.
6

MEANING OF CONCILIATION

Conciliation is a private, informal process in which a neutral third person helps disputing
parties to reach an agreement. This is a process by which resolution of disputes is achieved
by compromise or voluntary agreement. Here the parties, together with the assistance of the
neutral third person or persons, systematically isolate the issues involved in the dispute,
develop options, consider alternatives and reach a consensual settlement that will
accommodate their needs.1 In contrast to arbitration, the conciliator does not render a binding
award. The parties are free to accept or reject the recommendations of the conciliator. The
conciliator is, in the Indian context, often a Government official whose report contains
recommendations. The conciliation process is sometimes considered synonymous to
mediation. Where a third party is informally involved without a provision under any law,
which is mediation. In other words a non-statutory conciliation is what mediation is.
Essentially however in effect and structure, conciliation and mediation are substantially
identical strategies where assistance is provided to parties to a dispute by a stranger to the
dispute. Both the conciliator and mediator are required to bring to the process of dispute
resolution fairness, objectivity, neutrality, independence and considerable expertise, to
facilitate a resolution of the conflict.2

Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation
means “the settling of disputes without litigation.” The main difference between arbitration
and conciliation is that in arbitration proceedings the awards is the decision of the Arbitral
Tribunal while in the case of conciliation the decision is that of the parties arrived at with the
assistance of the conciliation.3

Section-63 fixes the number of conciliators. There shall be one conciliator. But the parties
may by their agreement provide for two or three conciliators. Where the number of
conciliators is more than one, they should as a general rule act jointly. In a conciliating
proceeding if there is one conciliator, then the parties agree on the name sole conciliator. And
if there are two conciliators then each party may appoint one conciliator, whereas if there are

1
Prof. Agarwal, Nomita “Alternative Dispute Resolution : Concept & Concerns”, NYAYA DEEP, Vol. VII,
Issue: 01, Jan. 2006, p. 73
2
Raghuram, Goda, J.; “Alternative Dispute Resolution”, NYAYA DEEP, Vol. VIII, Issue: 02, April-2007, pp.
21-22
3
Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems), Eastern Book Company,
Lucknow, 7th Edition(2006), p. 471
7

three conciliators then each party may appoint one conciliator and the parties may appoint the
third one who shall act as the presiding conciliator.4

It is the conciliator who fixes the costs of the conciliation proceedings upon their termination
and gives written notice of it to the parties. The costs are borne by the parties in equal shares.5

‘Conciliation’ is term used interchangeably with mediation and sometimes used to distinguish
between one of these processes (often mediation) involving a more pro-active mediator role,
and the other (conciliation) involving a more facilitative mediator role; but there is no
consistency in such usage.6

4
Ibid, p. 472
5
Ibid, p. 479
6
Sathe, S.P; “Judicial Activism in India- Transgressing Borders and Enforcing Limits”, Oxford India
Paperbacks, 4th Edition- Reprint 2007, O.P Tewari “Alternative Dispute Resolution”, p. 236
8

APPLICATION AND SCOPE OF CONCILIATION

Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. Conciliation
means “the settling of disputes without litigation.” Conciliation is a process by which
discussion between parties is kept going through the participation of a conciliator. The main
difference between arbitration and conciliation is that in arbitration proceedings the award is
the decision of the Arbitral Tribunal while in the case of conciliation the decision is that of
the parties arrived at with the assistance of the conciliator.7

Section 61 of Arbitration and Conciliation Act, 1996 deals with Application and scope.

(1) Save as otherwise provided by any law for the time being in force and unless the parties
have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal
relationship, whether contractual or not and to all proceedings relating thereto.

(2) This Part shall not apply where by virtue of any law for the time being in force certain
disputes may not be submitted to conciliation.

Section 61 points out that the process of conciliation extends, in the first place, to disputes,
whether contractual or not. But the disputes must arise out of legal relationship. It means that
the dispute must arise out of legal relationship. It means that the dispute must be such as to
give one party the right to sue and other party the liability to be sued.

The process of conciliation extends, in the second place, to all proceedings relating to it. But
part III of the act does not apply to such disputes as cannot be submitted to conciliation by
virtue of any law for the time being in force.

7
Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems), Eastern Book Company,
Lucknow, 7th Edition(2006), p. 471
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COMMENCEMENT AND PROCEDURE OF PROCEEDINGS

Number and qualifications of conciliators (Section 63): Section 63 fixes the


number of conciliators. There shall be one conciliator. But the parties may by their agreement
provide for two or three conciliators. Where the number of conciliators is more than one, they
should as a general rule act jointly.

Appointment of conciliators (Section 64): Sub‐section (1) of Section 64 provides


three rules for the appointment of conciliators:

1) If there is one conciliator in conciliation proceedings, the parties may agree on the name of
a sole conciliator.

2) If there are two conciliators in conciliation proceedings, each party may appoint one
conciliator.

3) If there are three conciliators in a conciliation proceedings, 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.

Sub‐section (2) of Section 64 provides for the assistance of a suitable institution or person in
the appointment of conciliators.

Either a party may request such institution or person to recommend the names of suitable
individuals to act as conciliator, or the parties may agree that the appointment of one or more
conciliators be made directly by such institution or person.

The proviso to Section 64 requires that in recommending or appointing individuals to act as


conciliators, the institution or person shall have regard to such considerations as are likely to
secure the appointment of an independent and impartial conciliator with respect to a sole or
third conciliator the advisability of appointing a conciliator of a nationality other than the
nationalities of the parties should be taken into account.

Principles of Procedure: Independence and Impartiality [Section 67(1)] : The conciliator


should be independent and impartial. He should assist the parties in an independent and
impartial manner while he is attempting to reach an amicable settlement of their dispute.
10

Fairness and Justice [Section 67(2)]: The conciliator should be guided by principles
of objectivity, fairness and justice. He should take into consideration, among other things,
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.

Confidentiality [Section 75, 70, proviso]: The conciliator and the parties are duly
bound to keep confidential all matters relating to the conciliation proceedings. Similarly,
when a party gives an information to the conciliator on the condition that it be kept
confidential, the conciliator should not disclose that information to the other party.

Disclosure of information [Section 70]: When the conciliator receives an information


about any fact relating to the dispute from a party he should disclose the substance of
that information to the other party. The purpose of this provisio is to enable the other party
to present an explanation which he might consider appropriate.

Cooperation of parties with conciliator [Section 71]: The parties should in good
faith cooperate with the conciliator. They should submit the written materials, provide
evidence and attend meetings when the conciliator requests them for this purpose.

Rules of Procedure (Section 66): The conciliator is not bound by the rules contained in
the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. Though the conciliator
is not bound by the technical rules of procedure, he, it seems, should not ignore the principles
of natural justice. Thread of natural justice should run through the entire conciliation
proceedings. The principles of natural justice require that both parties must be heard each in
the presence of the other.

Communication between Conciliator and Parties [Section 69 (1)]: The


conciliator may invite the parties to meet him or may communicate with them orally or in
writing. He may do so with the parties together or with each of them separately.

Procedure of Conciliation

Commencements of conciliation proceedings [Section 62] :

1) The conciliation proceedings are initiated by one party sending a written invitation to the
other party to conciliate. The invitation should identify the subject of the dispute.
11

Conciliation proceedings are commenced when the other party accepts the invitation to
conciliate in writing. If the other party inviting conciliation does not receive a reply
within thirty days from the date he sends the invitation or within such period of time as is
specified in the invitation, he may elect to treat this as rejection of the invitation to
conciliate. If he so elects he should inform the other party in writing accordingly.
2) Submission of statement to conciliator [Section 65] The conciliator may
request each party to submit to him a brief written statement. The statement should
describe the general nature of the dispute and the points at issue. Each party should send
a copy of such statement to the other party. The conciliator may require each party to
submit to him a further written statement of his position and the facts and grounds in its
support. It may be supplemented by appropriate documents and evidence. The party
should send a copy of such statements, documents and evidence to the other party. At
any stage of the conciliation proceedings, the conciliator may request a party to submit to
him any additional information which he may deem appropriate.
3) Conduct of conciliation proceedings [Section69 (1), 67 (3)] The conciliator
may invite the parties to meet him. He may communicate with the parties orally or in
writing. He may meet or communicate with the parties together or separately. In the
conduct of conciliation proceedings, the conciliator has some freedom. He may conduct
them in such manner as he may consider appropriate. But he should take into account the
circumstances of the case, the express wishes of the parties, a party’s request to be heard
orally and the need of speedy settlement of the dispute.
4) Administrative Assistance [Section 68] Section 68 facilitates administrative
assistance for the conduct of conciliation proceedings. Accordingly, the parties and the
conciliator may seek administrative assistance by a suitable institution or the person with
the consent of the parties.

NATURE AND ELEMENTS OF CONCILIATION


12

Conciliation is a peaceful means to settle disputes arising between parties; it is based on


choosing a conciliator to reach a dispute settlement through approximating different points of
view without extending his role to issuing a binding decision for the disputants. This
definition illustrates the basic elements included in conciliation, represented in:

1. Conciliation is a Peaceful Means to Settle Disputes Conciliation is a peaceful means to


settle disputes arising between the parties, and remove the problems that prevent the
execution and completion of their relationships. Conciliation is not considered a legal or
judicial means adopted to resolve disputes arising between parties; rather it is the most
feasible mechanism by which decision is made through the parties' agreement and consent.
Since conciliation aims, like all peaceful mechanisms, to settle existing disputes, it is also
distinguished by being a primarily peaceful mechanism to resolve them. This feature may
make conciliation not subject to the judiciary control; the conciliator's attempts are not
subject to the judiciary control in general.8

2. Conciliation as an optional means to settle dispute Conciliation basically depends on the


parties' desire, even if this satisfaction in accepting this means or in serious participation
leads to waiving some rights hoping to reach a solution which meets the parties' desires.
When a dispute arises, selecting conciliation springs from the parties' pure desire; hence, it
may not be imposed upon them. Resorting to conciliation largely depends on accepting it and
the parties' tendency to it. It is adopted at the time of choosing it, whether before or after the
dispute arises, or before or after choosing the legal means such as arbitration. The parties'
agreement to resort to the adjudication or arbitration and inclusion of an express condition in
this regard in the contract concluded between them does not prevent adopting this peaceful
means to resolve disputes. Conciliation results from the parties' agreement on a third party’s
intervention to settle the dispute. Although the legislator regulates the rules of the peaceful
settlement, adopting this means depends on the parties' desire at its start. Conciliation starts
with an application by one of the parties notifying the other party to take his opinion whether
to accept this means or not, through the organization or the center to which the settlement
application is submitted. The optional feature is obvious while agreeing on resorting to this
means.9 Agreement on resorting to conciliation may precede submitting the settlement

8
Ibid.pp.26-27 See MOHAMED HUSSAM LOTFY. Legal Protection Execution and Disputes Settlement
according to the Trade Aspects Agreement in Relation to Intellectual Property Rights, (IOIP publications, 1997),
p. 8.
9
Ibid, p. 33. See Salama, Ahmed Abdel Karim, National and International Arbitration Law, Comparative
Theorization and Application, (no publisher, 2003), p. 46.
13

application or be while resolving dispute through the arbitration court; albeit some prefer to
resort to it in the second stage. That is because in the latter, it is easy to reach a satisfactory
solution. Thus, starting conciliation before starting disputation with its costs and difficulty is
necessary, albeit the peaceful settlement process fails, since this agrees with the philosophy
for which this means is legislated, namely the peaceful settlement of the dispute, and its
accordance with the manner in which the process of the settlement between the parties takes
place.

3. A Means based on a Third Party’s Intervention The definition of conciliation illustrates the
basic element on which conciliation as a peaceful means depends. This element is the
intervention of a third party, either to approximate different points of view, giving help, and
exchanging information and documents to make parties reach a meeting point in which their
different demands are achieved, or to extend its function to be able to provide the parties with
some solutions, some of which may lead to their satisfaction without being able to take a
solution or impose it on them. Since the decisions or recommendations issued by the
conciliator do not represent an arbitral or judicial decision or a binding decision, the
conciliation system cannot make use of the judiciary authority, unlike arbitration which
makes use of the judiciary authority without being an alternative to it. Arbitration always
needs the judiciary intervention to settle everything that enables the arbitrator to achieve his
task, and to guarantee his commitment to his limited powers. In addition, after issuing the
recommendation and approving it by the parties, the conciliator's procedures and
recommendations are not subject to the judiciary evaluation to verify the validity of the
issued recommendation. On the contrary, the award issued by the arbitrator is subject to a
final evaluation to verify its validity when the sentenced party appeals.10

1.4. Conciliation Committees Issue only Unbinding Recommendations for the Disputant
Parties The conciliation committees' role is limited to issuing decisions and recommendations
by which the disputants may abide if they find this settlement a meeting point they agree on.
This is for the purpose of not resorting to the legal means which remove peacefulness from
the settlement way. These parties may not abide by them if they feel that these
recommendations do not achieve the least of their demands or desires. The third party doing
the conciliation is a neutral person whose job is limited to lead the parties to a medial
settlement without extending to issuing a decision or sentence on the parties. Thus, the

10
J. COT, international Conciliation (1972), (trans. Myers). See Dress, (1988). International Commercial
Mediation and Conciliation, 10 LoY. L.A. INT'L & COMP. L.J. pp. 569-574.
14

conciliator does not do a judicial work; so the recommendations or decisions issued by him
do not reach the level of binding rules or decisions. Although conciliation is not very
different from the other peaceful settlement means, like mediation, good offices and fact
finding, yet conciliation differs, for example, from fact finding. According to the rules of the
international law, the fact finding committee works on discovering facts and reasons which
have led to the dispute. Thus, it does not bind the parties to accept the results of the fact
finding. Fact finding committees do not give any suggestions to settle the dispute, but rather
they pave the way for parties to negotiate in order to reach a settlement for the current dispute
between them. Therefore, fact finding committees differ from conciliation committees in that
the latter gives suggestions and recommendations for the disputants, even though the
recommendations of the conciliation committees are not binding for the disputing parties.
Thus, the relationship between conciliation committees and fact finding committees is a
special one; so there is a connection between them. It can be said that conciliation is a
practical development and needed in some disputes in which the mere fact finding is not
enough. On the other hand, fact finding committees are in some cases an image of
conciliation committees. They illustrate and show, through studying facts and reasons which
have led to the dispute, the hidden facts which may help the parties understand the situation,
so that they can reach a medial settlement approved by the parties of that dispute. In addition,
there is a trend which sees that conciliation is a medial way between fact finding and
arbitration.

ADVANTAGES OF CONCILIATION
15

1. Effective and expeditious process

Conciliation is an economical and expeditious mechanism for resolution of disputes in


comparison to litigation and arbitration, which makes it an excellent ADR Mechanism. The
cost management tools and expertise of the conciliator generally prevent multiplication of
actual costs to the parties and seek to make it cost efficient.11 The conciliator follows a
simplified procedure suited to the aspirations of the parties and keeping in mind the need for
speedy settlement of the dispute.12 Moreover the time management tools applied by the
conciliator prevent dragging on of conciliation proceedings for longer periods and ensure its
conclusion within a reasonable time frame.13 The end result in conciliation is a negotiated
settlement which is treated to be an arbitral award on agreed terms, thereby obviating the
possibility of successive appeals and finally resolving the dispute in an expeditious and cost
effective manner

2. Autonomy and convenience of parties

Conciliation is flexible and convenient. The parties are free to agree on the procedure to be
followed by the conciliator, the time and venue of the proceedings and thus eventually
control the process. The conciliator may conduct the conciliation proceedings in such a
manner as he considers appropriate, taking into account the circumstances of the case,
convenience of the parties and the wishes the parties may express. 14 A very commendable
feature of conciliation is that the parties can withdraw from conciliation at any stage. 15 Unless
a party consents to the initiation and continuance of conciliation and accepts the resultant
settlement agreement he cannot be said to be bound by the process, and he may walk out
from conciliation proceedings at any time. This is unlike arbitration and litigation where
decisions can be made even if a party walks out.16 The parties therefore not only control the
procedure in conciliation proceedings but also the final outcome of the proceedings. Indeed
party autonomy is a very laudable feature of conciliation.

11
Ashwanie Kumar Bansal, Arbitration and ADR 26 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005)
12
S. 67(3), Arbitration and Conciliation Act, 1996.
13
Ashwanie Kumar Bansal, Arbitration and ADR 23 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005).
14
S. 67(3), Arbitration and Conciliation Act, 1996.
15
Mukul Mudgal, “Conciliation: An Indian Perspective”, II (2) Nyaya Kiran (April 2003).
16
Ashwanie Kumar Bansal, Arbitration and ADR 24 (Universal Law Publishing Co. Pvt. Ltd., Delhi, 2005).
16

3. Creative solutions/ remedies


In litigation or arbitration what solution or resolution would be contained in the judgment or
award is not within the control or prior knowledge of the parties and moreover the ultimate
decision is based on a straightforward decision on merits keeping in view the rights and
positions of the parties. In conciliation however the parties control the outcome and can
incorporate terms and conditions in the settlement agreement as per mutual agreement. They
can devise creative solutions for their disputes at one go which may not have been within the
contemplation of an arbitrator or a judge. They can also decide how their rights and liabilities
are going to be actually worked out on resolution of the dispute and chalk out ingenious
modalities for complying with the basic terms of settlement.

4. Party satisfaction and harmony

Unlike litigation and arbitration where one party wins and the other loses, in conciliation both
parties are winners as the decision is acceptable to both. Both parties are in favour of the
decision, as until both parties agree to a proposal, the settlement or agreement does not take
place. Therefore it is a win-win situation for both the parties as both the parties are satisfied
with the agreement. Such win-win situation enables them to retain good relationship for times
to come unlike litigation and arbitration where the parties on account of the win-loss equation
are not able to continue or rebuild their relationship. Even where the conciliation proceedings
do not fructify into a settlement, they prove to be useful by enabling the parties to understand
each other’s versions, positions and aspirations in a better perspective.

5. Confidentiality

In contradistinction to judicial proceedings conciliation is a private closed door affair and


therefore offers privacy and confidentiality. In fact confidentiality in conciliation proceedings
is a statutory guarantee17

17
S. 75, Arbitration and Conciliation Act, 1996.
17

The conciliator and the parties are supposed to keep confidential, all matters relating to the
conciliation proceedings. The parties are also precluded from relying upon or introducing as
evidence in subsequent arbitral or judicial proceedings views expressed or suggestions made
by the other party in respect of a possible settlement of the dispute, admissions made by the
other party in the course of conciliation proceedings, proposals made by the conciliator and
the fact that the other party had indicated his willingness to accept a proposal for settlement
made by the conciliator. which makes conciliation an excellent dispute resolution
mechanism.18

Even during the course of conciliation proceedings where a party gives any information to the
conciliator subject to a specific condition that it be kept confidential, the conciliator is not
supposed to disclose that information to the other party.19 This ensures that even in the
eventuality of failure of conciliation proceedings neither party is able to derive undue benefit
out of any proposal, view, statement, admission, etc. made by the opposite party during
conciliation proceedings.20 The process of conciliation provides an opportunity for settlement
of disputes without publicity.21 The conciliator is also precluded from acting as an arbitrator
or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of
a dispute that is the subject of the conciliation proceedings nor can he be presented by the
parties as a witness in any arbitral or judicial proceedings.22

6. Enforceability of conciliation settlement agreement

The settlement agreement drawn up in conciliation proceedings has the same status and effect
as if it is an arbitral award23 on agreed terms on the substance of the dispute rendered by an
arbitral tribunal under section 30 of the Arbitration and Conciliation Act, 1996. Thus the
settlement agreement in conciliation is executable as a decree of the civil court.24 It is open to
any party to apply for execution of the settlement agreement by filing an execution petition
before the civil court. The expeditious enforcement of a conciliation settlement agreement in

18
S. 81, Arbitration and Conciliation Act, 1996.
19
S. 70, Arbitration and Conciliation Act, 1996.
20
S. 70, Arbitration and Conciliation Act, 1996.
21
A.K. Bansal, “Conciliation: Quick Settlement of Disputes”, (1) Arb. L.R. (Journal) 22 (1999).
22
S. 80, Arbitration and Conciliation Act, 1996; See also Alcove Industries Ltd. v. Oriental Structural Engineers
Ltd., (2008) Arb.L.R. 393.
23
S. 74, Arbitration and Conciliation Act, 1996.
24
S. 36, of the Arbitration and Conciliation Act, 1996.
18

a summary manner i.e. by way of execution proceedings in a civil court is the principal
advantage attached with conciliation.25

DISADVANTAGES OF CONCILIATION

No Binding Decision:

If no agreement can be made between the parties, each will be left in the same position as
they started. There is no binding decision handed down which can be frustrating to parties
who have invested time, money and effort into the process.

Conciliator Involvement:

Although the conciliator is meant to be an impartial third party, the ability for them to involve
themselves in the proceedings through their ‘active’ involvement can question the unbiased
nature of the conciliator.

25
Ss. 74, 30 and 36, Arbitration and Conciliation Act, 1996; See also Avtar Singh, Law of Arbitration and
Conciliation (Eastern Book Company, Lucknow, 7th Edn, 2005).
19

CONCLUSION & SUGGESTIONS

No doubt that alternative dispute resolution mechanisms(ADRM), especially the diplomatic


ones, play an important role in enhancing and fostering economic and political relationships
between the states involved, the investors’ states, the home states and the states where the
investments are established, the host states. From the various diplomatic mechanisms,
conciliation is considered the most appropriate due the advantages it enjoys. There are a
variety of advantages to the use of conciliation, often in the comparative sense relative to
litigation or arbitration. Conciliation is less costly than the adjudicative methods, as it is a
relatively informal and expeditious process. Also, if a small claim is involved, conciliation
should be preferred since it will be more cost effective than litigation. Similar to arbitration,
party autonomy is emphasized and the disputants usually have considerable freedom to
design the conciliation process, including the choice of location and conciliators with
expertise in the relevant subject-matter (ad hoc conciliation). Although in the institutional
context, the parties don’t enjoy the same scope of freedom as the procedures and list of
conciliators are previously determined by the institution, they have the freedom from the
beginning to go to whatever institution they want to manage the dispute resolution process
using conciliation and other ADRM if available. The informal conciliation environment is
likely to be warmer than that of the adjudicative forum. The compromising, "win-win"
character of the conciliatory process is a major advantage since it facilitates the maintenance
of a harmonious business relationship, whereas the use of an adjudicative form may rupture
this connection. Thus, conciliation should be preferred in situations where the parties wish to
preserve their extant contractual and commercial ties. However, a number of drawbacks to
the use of conciliation can be posed. It has been argued that conciliation, because it results in
non-binding recommendations, is likely to be a waste of time, effort, and money since the
process may collapse entirely or the recommendations may not be accepted by the disputants.
20

REFERENCES

BOOKS

1. Tewari, O.P; The Arbitration & Conciliation Act with Alternative Dispute
Resolution; Allahabad Law Agency, Faridabad; 4th Edition(2005) Reprint 2007
2. Singh, Dr. Avtar; Law of Arbitration and Conciliation (including ADR Systems);
Eastern Book Company, Lucknow; 7th Edition(2006)
3. Chawla S.K.; Law of Arbitration and Conciliation- Practice and Procedure; eastern
Law House Pvt. Ltd,; Reprint 2000

JOURNALS, MAGAZINES & NEWSPAPERS

1. Sh. Venugopal K.K.; “Rendering Arbitration in India Swift Effective”; NYAYA


DEEP; Vol. VI, Issue: 01, Jan. 2006
2. Ganguli A.K.; “The Proposed Amendments To The Arbitration And Conciliation Act,
1996- A Critical Analysis”; Journal of Indian Law Institute (2003)
3. Ramakrishnan K, J; “Scope of Alternative Dispute Resolution in India”; 2005(1) JV
4. Prof. Aggarwal, Nomita; “Alternative Dispute Resolution: Concept and Concerns”;
NYAYA DEEP; Vol. VII, Issue: 01, Jan. 2006

E-materials

1. www.globaljurix.com
2. www.frindia.org
3. www.legalseviceindia.com
4. www.duhaime.org
5. www.frenosuperiorcourt.org
6. www.ebc-india.com
7. www.sethassociates.com
8. www.legalindia.in
9. www.ijtr.nic.in

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