alternate dispute redressal
B.A.LL.B. (8th semester)
TOPIC – “conciliation: issues related to process
and termination of conciliation proceeding and
how it is better than other modes of alternative
dispute redressal.”
SUBMITTED TO– Mr. abhishek rai
SUBMITTED BY – NAVNEET GUPTA
Enrollment NO.- 374841
ACKNOWLEDGEMENT
I am using this opportunity to express my gratitude to everyone who supported me
throughout the course of this project. I am thankful for their aspiring guidance, invaluably
constructive criticism and friendly advice during the project work. I am sincerely grateful to
them for sharing their truthfulness and illuminating views.
This project would have not been successfully completed without the help of certain people
to whom I would like to express my sincere thanks. I express my warm thanks to Dr.
ABHISHEK RAI for his immense guidance on the project topic. I would also like to thank my
1|Page
external guides and all the people who provided me with the facilities being required for this
project.
Thank you,
Navneet Gupta
INDEX
Pg. No.
1. INTRODUCTION 1
2. HISTORY AND EVOLUTION 3
3. APPLICATION AND SCOPE 3
4. CONCILIATION PROCEDURE 4-6
2|Page
5. TERMINATION OF PROCEEDIG ON SETTLEMENT 7
6. HOW CONCILIATION IS BETTER THAN OTHER ALTERNATIVE MODES OF
DISPUTE RESOLUTION? 8-9
7. CONCLUSION 10
8. BIBLIOGRAPHY 11
INTRODUCTION
Conciliation is one of the non-binding procedures where an impartial third party, known as
the conciliator, assist the parties to a dispute in reaching a mutually agreed settlement of the
dispute. The Halsbury’s Laws of England defines “Conciliation as a process of
persuading the parties to reach an agreement”. Conciliation may comprehensively be
defined as a non-adjudicatory and non-adversarial ADR mechanism involving a settlement
procedure wherein an impartial third party (conciliator) enables and steers the disputant
parties to arrive at a satisfactory and acceptable settlement of a dispute. It is considered as an
effective and meaningful alternative to litigation for resolution of disputes through the
3|Page
guidance and assistance of a neutral and impartial third party. Because of its non-judicial
character, conciliation is considered to be fundamentally different from that of litigation.
Generally Judges and Arbitrators decide the case in the form of a judgment or an award
which is binding on the parties while in the procedure of the conciliation, the conciliator who
is often a government official gives its report in the form of recommendations which is made
public.
Conciliation is a voluntary process and the conciliator has no authority to impose on the
parties a solution to the dispute. Like any other ADR process the sanctity of conciliation is
the mutual determination of the parties to amicably resolve their disputes through an ADR
mechanism. The consensual nature of the dispute resolution process allows parties to join in a
friendly search for an amicable solution, without procedural restraints or protracted battles
over formal technicalities and the parties are encouraged to visualise options which provide
solutions keeping in view their interests and priorities
Generally, all civil disputes are suitable for conciliation and it affords an excellent ADR
mechanism for amicable resolution outside the litigative process.
HISTORY AND EVOLUTION
The history and evolution of ADR is visible from 12th century in China, England and
America. And in the Indian perspective it has been seen that the practice of amicable
resolution of the disputes can be caught from the historic times , when in the villages disputes
were resolved between members of a particular relations or occupations or between members
of the same family was in practice in the ancient times. In the villages still the panchayat
decides approximately all the disputes between the people as in earlier times the disputes
4|Page
were resolved by the elders. The concept of Conciliation was introduced in the statute of
Industrial Disputes Act, 1947. The Conciliation is generally conducted by an officer
appointed by Government under Industrial Disputes Act, 1947. Industrial Disputes Act, 1947
provides provisions for the parties to settle disputes through Negotiation, Mediation and
Conciliation, for example Section 12, Section 18, etc. Alternate Dispute Resolution plays a
major role in the family disputes settlement. Section 5 of the Family Court Act, 1984
provides provisions for the association of social welfare organizations to hold Family Courts
under control of government. Section 6 of the Act provide for appointment of permanent
counsellors to enforce settlement decisions in the family matters. Further Section 9 of the Act
imposes an obligation on the court to make effort for the settlement before taking evidence in
the case. In addition to all provisions referred above, Indian Contract Act, 1872 most
importantly gives a mention about Arbitration Agreement as an exception to Section 28 that
renders an agreement void if it restrains a legal proceeding. ‘Alternate Dispute Resolution
whether sorted for or not can be easily inferred from presence or absence of the ‘Arbitration
clause'.
APPLICATION AND SCOPE
Section 61 of the Arbitration and Conciliation Act of 1996 provides for the Application and
Scope of Conciliation1. 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 the legal
relationship. It means that the dispute must be such as to give one party the right to sue and to
the 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 the virtue of any law for the time being in force.
Number and qualification of conciliators2-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 conciliator is more than one, they should as general rule
act jointly.
CONCILIATION PROCEDURE
Commencement of the conciliation proceedings
The conciliation proceeding are initiated by one party sending a written invitation to the other
party to conciliate. The invitation should identify the subject of the dispute. Conciliation
proceedings are commenced when the other party accepts the invitation to conciliate in
writing. If the other party rejects the invitation, there will be no conciliation proceedings. If
the party inviting conciliation does not receive a reply within thirty days of the date he sends
the invitation or within such period of time as is specified in the invitation, he may elect to
1
Section 61 of the Arbitration and Conciliation Act, 1996.
2
Section 63 of the Arbitration and Conciliation Act, 1996.
5|Page
treat this as rejection of the invitation to conciliate. If he so elects he should inform the other
party in writing accordingly.3
Appointment of conciliators
Section 64 deals with the appointment of the conciliators. When the invitation to the
conciliation is accepted by the other party, the parties have to agree on the composition of the
conciliation tribunal. In the absence of any agreement to the contrary , there shall be only one
conciliator. The conciliation proceeding may be conducted by a sole conciliator to be
appointed with the consent of both the parties, failing to which the same may be conducted
by two conciliators (maximum limit is three), then each party appoints own conciliator ,and
the third conciliator is appointed unanimously by both the parties. The third conciliator so
appointed shall be the presiding conciliator. The parties to the agreement instead of
appointing the conciliator themselves may enlist the assistance of an institution or person of
their choice for appointment of conciliators. But the institution or the person should keep in
view during appointment that, the conciliator is independent and impartial.4
Submission of Statement to Conciliator
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 the 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.5
Conduct of Conciliation Proceedings
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 the conciliation proceedings, the conciliator has some freedom. He may
conduct them in such manner as he may consider appropriate. But he should take in 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.6
Administrative assistance
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.7
3
Section 62 of the Arbitration and Conciliation Act, 1996.
4
Section 64 of the Arbitration and Conciliation Act, 1996.
5
Section 65 of the Arbitration and Conciliation Act, 1996.
6
Section 69(1), 67(3) of the Arbitration and Conciliation Act, 1996.
7
Section 68 of the Arbitration and Conciliation Act, 1996.
6|Page
In case of Haresh Dayaram Thakur v. State of Maharashtra and Ors.8 while dealing with
the provisions of Sections 73 and 74 of the Arbitration and Conciliation Act of 1996 in
paragraph 19 of the judgment as expressed thus the court held that-
“From the statutory provisions noted above the position is manifest that a conciliator is a
person who is to assist the parties to settle the disputes between them amicably. For this
purpose the conciliator is vested with wide powers to decide the procedure to be followed by
him untrammelled by the procedural law like the Code of Civil Procedure or the Indian
Evidence Act, 1872. When the parties are able to resolve the dispute between them by mutual
agreement and it appears to the conciliator that their exists an element of settlement which
may be acceptable to the parties he is to proceed in accordance with the procedure laid down
in Section 73, formulate the terms of a settlement and make it over to the parties for their
observations; and the ultimate step to be taken by a conciliator is to draw up a settlement in
the light of the observations made by the parties to the terms formulated by him. The
settlement takes shape only when the parties draw up the settlement agreement or request the
conciliator to prepare the same and affix their signatures to it. Under Sub-section (3) of
Section 73 the settlement agreement signed by the parties is final and binding on the parties
and persons claiming under them. It follows therefore that a successful conciliation
proceedings comes to end only when the settlement agreement signed by the parties comes
into existence. It is such an agreement which has the status and effect of legal sanctity of an
arbitral award under Section 74”.
In case of Mysore Cements Ltd. v. Svedala Barmac Ltd9 it was said that Section 73 of the
Act speaks of Settlement Agreement. Sub-section (1) says that when it appears to the
Conciliator that there exist elements of 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
observation. After receiving the observations of the parties, the Conciliator may reformulate
the terms of a possible settlement in the light of such observations. In the present case, we do
not find there any such formulation and reformulation by the Conciliator, under Sub- section
(2) if the parties reach a settlement agreement of the dispute on the possible terms of
settlement formulated, they may draw up and sign a written settlement agreement. As per
Sub-section(3) when the parties sign the Settlement Agreement, it shall be final and binding
on the parties and persons claiming under them respectively. Under Sub-section (4), the
Conciliator shall authenticate the Settlement Agreement and furnish a copy thereof to each of
the parties. From the undisputed facts and looking to the records, it is clear that all the
requirements of Section 73 are not complied with.
In short the whole procedure of conciliation can be summarised as follows:-
Either party to the dispute can commence the conciliation process. When one party invites the
other party for resolution of their dispute through conciliation, the conciliation proceedings
are said to have been initiated. When the other party accepts the invitation, the conciliation
proceedings commence. If the other party rejects the invitation, there are no conciliation
proceedings for the resolution of that dispute. Generally, only one conciliator is appointed to
8
AIR 2000 SC 2281
9
AIR 1972 Mysore 149
7|Page
resolve the dispute between the parties. The parties can appoint the sole conciliator by mutual
consent. If the parties fail to arrive at a mutual agreement, they can enlist the support of any
international or national institution for the appointment of a conciliator. There is no bar to the
appointment of two or more conciliators. In conciliation proceedings with three conciliators,
each party appoints one conciliator. The third conciliator is appointed by the parties by
mutual consent. Unlike arbitration where the third arbitrator is called the Presiding Arbitrator,
the third conciliator is not termed as Presiding conciliator. He is just the third conciliator. The
conciliator is supposed to be impartial and conduct the conciliation proceedings in an
impartial manner. He is guided by the principles of objectivity, fairness and justice, and by
the usage of the trade concerned and the circumstances surrounding the dispute, including
any previous business practices between the parties. The conciliator is not bound by the rules
of procedure and evidence. The conciliator does not give any award or order. He tries to bring
an acceptable agreement as to the dispute between the parties by mutual consent. The
agreement so arrived at is signed by the parties and authenticated by the conciliator. In some
legal systems, the agreement so arrived at between the parties resolving their dispute has been
given the status of an arbitral award. If no consensus could be arrived at between the parties
and the conciliation proceedings fail, the parties can resort to arbitration.
A conciliator is not expected to act, after the conciliation proceedings are over, as an
arbitrator unless the parties expressly agree that the conciliator can act as arbitrator.
Similarly, the conciliation proceedings are confidential in nature. Rules of Conciliation of
most of the international institutions provide that the parties shall not rely on or introduce as
evidence in arbitral or judicial proceedings, (a) the views expressed or suggestions made for a
possible settlement during the conciliation proceedings; (b) admissions made by any party
during the course of the conciliation proceedings; (c) proposals made by the conciliator for
the consideration of the parties; (d) the fact that any party had indicated its willingness to
accept a proposal for settlement made by the conciliator; and that the conciliator shall not be
produced or presented as a witness in any such arbitral or judicial proceedings.
Conciliation has received statutory recognition as it has been proved useful that before
referring the dispute to the civil court or industrial court or family court etc., efforts to concile
between the parties should be made. It is similar to the American concept of court-annexed
mediation. However without structured procedure & statutory sanction, it was not possible
for conciliation to achieve popularity in the countries like USA & also in other economically
advanced countries.
TERMINATION OF PROCEEDINGS ON SETTLEMENT
As and when the parties reach an amicable settlement on the disputes which had been
referred to the conciliator, and a duly authenticated copy (by the conciliator) of the settlement
agreement is handed over to the parties, the conciliation proceedings shall stand terminated
on that date. There is no provision in the Act for review of the settlement agreement, nor
there do any provision under which any of the parties to the settlement agreement can retrace
its steps and wriggle out of the written commitments in the form of a settlement agreement.
8|Page
A conciliation proceeding comes to an end & stands terminated if any of the following
condition is fulfilled;
(i) On signing of the settlement agreement by the parties.
(ii) If no settlement of dispute is arrived at in any of the following manner-
a) By a written declaration of the conciliator that further efforts at conciliationare no
more justified.
b) By joint written declaration of the parties that the conciliation proceedings are
terminated.
c) By the declaration of either party to other party & conciliator, that conciliation
proceeding is terminated. It is open to the parties to terminate conciliation
proceedings at any time before settlement.
The conciliation proceedings can also be terminated:
(i)When the conciliator declares, after consultation with the parties, that any further exercise
on conciliation shall be an exercise in futility; or
(ii)When the parties jointly request the conciliator; or
(iii)When one party communicates to the other, with a copy to the conciliator, that no more
efforts be made in the conciliation matter.
There is no bar on the number of times the efforts for conciliation can be made. Termination
of conciliation proceedings can by no means be taken to be the end of the conciliation efforts
for all times to come.10
HOW CONCILIATION IS BETTER THAN OTHER ALTERNATIVE MODES OF
DISPUTE RESOLUTION ?
Gone are the days when arbitration was considered to be a cheap and efficacious remedy.
Now the situation is completely reversed. Arbitration proceedings have become too technical
and expensive. In this context, reference may be made to judgment of the Supreme Court of
India. In Guru Nanak Foundation V. Rattan Singh & Sons11, it was observed:
“Interminable, time consuming, complex and expensive court procedures impelled jurists to
search for an alternative forum, less formal more effective and speedy for resolution of
disputes avoiding procedural claptrap and this led to Arbitration Act, 1940. However, the way
10
Section 76 of the Arbitration and Conciliation Act, 1996
11
AIR 1981 SC 2075.
9|Page
in which the proceedings under the Act are conducted and without an exception challenged in
the courts has made lawyers laugh and legal philosophers weep. Experience shows and law
reports bear ample testimony that the proceedings under the Act have become highly
technical accompanied by unending prolixity at every stage providing a legal trap to the
unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has
by the decisions of the court been clothed with legalese of unforeseeable complexity.”
Broadly speaking, there are at least three advantages if the parties are able to reasonable
settlement of their disputes through conciliation, viz.
1) Quickness. The parties can devote their time and energy for better and useful work.
2) Economic. Instead of spending hard earned money on litigation, one can invest it for better
dividends.
3) Social. The parties go happily to their respective places and stand relieved from bickering,
enmity, which in certain cases might have lingered on for generations.
There is a growing feeling amongst the litigants that they would have been better off if there
had been no arbitration clause so that they could file civil suit, which entails only three steps,
viz.
(i) Filing of the pleadings;
(2) Conduct of the proceedings; and,
(3) Judgment.
As against three stages involved in a civil suit, there are as many as six in an arbitration
matter, viz.
(1) appointment of the arbitrator either by the parties or by the court;
(2) pleadings before the arbitrator;
(3) proceedings before the arbitrator;
(4) award;
(5) filing of the award in the court; and,
(6) recourse to a court against arbitral award.
To overcome the ordeals involved, the best course available to the parties is to look to
reasons, appreciate the viewpoint of the opposite party, not to stand on false prestige and
resolve the controversy in an amicable manner. It does not help either party to pursue
litigation –Whether in courts or before an arbitral tribunal. Both parties are losers, at least in
terms of time, at the time of final outcome of litigation. It is at this stage the parties appreciate
that they would have been better off had they taken the path of conciliation.
10 | P a g e
It is not only the fees of lawyers but also of the arbitrators, which have started pinching the
parties. Though presently the number is small but nevertheless a serious beginning has been
made in some cases to settle the matter outside arbitration to avoid unnecessary expense. The
resort to conciliation, directly or through a trusted common person/ institution, is the only
remedy to achieve early success.
Conciliation is a better alternative to the formal justice system. For selecting the mode of the
conciliation it is not necessary to enter into a formal agreement. Because where arbitration
clause is included in the agreement it is implied that the matter would be refereed for
conciliation first & if amicable settlement fails then only, it is referred to the arbitration. The
other advantage of choosing conciliation is that though the amicable settlement in
conciliation could not be reached then the evidence leaded, the proposal made during the
conciliation proceedings cannot be disclosed in any other proceedings (in arbitration also)
This protection has been provided by the Arbitration & Conciliation Act itself. Therefore
parties can attempt Conciliation without any risk.
It is a non-binding procedure in which an impartial third party assists the parties to a dispute
in reaching a mutually agreed settlement of the dispute. For effective conciliation, it is
necessary that the parties to dispute should be brought together face to face at a common
place where they can interact with each other & with the conciliator to arrive at a settlement
of the dispute. The importance of conciliation is that in other proceeding decision is given by
the presiding authority & it is binding accordingly. But in conciliation there is amicable
settlement where parties themselves have reached to the decision i.e. settlement & which is
binding as per their decision. Third party i.e. conciliator is just helping to arrive at settlement
& not dictating the term or decision.
CONCLUSION
The process of conciliation as an alternate dispute redressal mechanism is advantageous to
the parties in the sense that it is cost effective and expeditious, it is simple, fast and
convenient then the lengthy litigation procedure and it eliminates any scope of biasness and
corruption. The parties who wish to settle their disputes they can be provided great intensive
by the process of conciliation. In order to enable the conciliator to play his role effectively
,the parties should be brought together face to face at a common place where they can interact
face to face and with the conciliator, separately or together without any distraction and with
only a single aim to sincerely arrive at the settlement of the dispute. Conciliation is a boon
and it is a better procedure to settle any dispute as in this process it is the parties who by
11 | P a g e
themselves only come to the settlement of the dispute and the role of the conciliator is to
bring parties together and to make a atmosphere where parties can themselves resolve their
disputes. Conciliation tries to individualize the optimal solution and direct parties towards a
satisfactory common agreement. In conciliation, the conciliator plays a relatively direct role
in the actual resolution of a dispute and even advises the parties on certain solutions by
making proposals for settlement. Thus I would like to conclude with a saying: Do conciliate,
therefore, whenever there are differences, and sooner it is done, the better.
BIBLIOGRAPHY
BOOKS:-
1. Singh, A. (2007). Law of ARBITRATION AND CONCILIATION. 8th ed. LUCKNOW: EASTERN BOOK
COMPANY.
ARTICLES:-
1. India, l. (2019). Principles & Procedure of conciliation under Arbitration & Conciliation Act 1996.
[online] Legalservicesindia.com. Available at:
12 | P a g e
http://www.legalservicesindia.com/article/725/Principles-&-Procedure-of-conciliation-under-
Arbitration-&-Conciliation-Act-1996.html [Accessed 29 Apr. 2019].
2. Shinde, D. (2012). Conciliation as an Effective Mode of Alternative Dispute Resolving System.
[ebook] IOSR Journal Of Humanities And Social Science (JHSS). Available at:
http://iosrjournals.org/iosr-jhss/papers/Vol4-issue3/A0430107.pdf [Accessed 27 Apr. 2019].
3. Jhusiwala, R. (2010). Conciliation in India: An Overview. [ebook] PSA legal. Available at:
http://psalegal.com/wp-content/uploads/2017/01/DisputeResolutionBulletin-
IssueVII08092010070309PM.pdf [Accessed 28 Apr. 2019].
WEBSITES:-
1. Legislative.gov.in. (2019). [online] Available at: http://legislative.gov.in/sites/default/files/A1996-
26.pdf [Accessed 29 Apr. 2019].
13 | P a g e
