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Module 3
An Introduction to Conciliation
1. INTRODUCTION:
Conciliation is an instrument of Alternative Dispute Resolution, although the former is drafted
statute unlike the latter. Part III of Arbitration and Conciliation Act 1996, deals with
conciliation which means settling of disputes without litigation as is done in other forms of
ADR. In this form of ADR, a conciliator is appointed who helps in solving disputes of parties
in an amicable manner.
The Preamble of the Arbitration and Conciliation Act, 1996 deals with the objective of the act
as it states “an act to consolidate and amend the law relating to domestic arbitration,
international commercial arbitration and enforcement of foreign arbitral awards as also to
define the law relating to conciliation and for matters connected therewith or incidental
thereto.”1
1.2 HISTORY OF CONCILIATION:
Conciliation is not a new concept as far as India is concerned. Kautilya’s Arthashastra also
refers to the process of conciliation.2 Various legislations 3 in India have also recognized
conciliation as a statutorily acceptable mode of dispute resolution and conciliation was in fact
being frequently resorted to as a mode of dispute resolution under these specific legislations.
However, apart from these statutory provisions dealing with specified categories of cases,
conciliation in general as a mode of ADR lacked proper legislative framework and statutory
1Preamble, Arbitration and Conciliation Act, 1996; available at: https://www.arbitrationindia.com/pdf/acact.pdf
2 V.A. Mohta and Anoop V. Mohta, Arbitration, Conciliation and Mediation 535 (Manupatra, Noida, 2nd Edn.,
2008).
3 Section 12 of the Industrial Disputes Act, 1947 contemplates settlement of disputes through conciliation effected
through conciliation officers appointed under the Act; Section 23 of the Hindu Marriage Act, 1955 and Order
XXXII A, Code of Civil Procedure, 1908 enable the judge to effect settlement between the parties by recourse to
conciliation.
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backing.4 In 1984 faced with the problem of surmounting arrears the Himachal Pradesh High
Court evolved a unique project for disposal of cases pending in courts by conciliation.5
Conciliation was afforded an elaborate codified statutory recognition in India with the
enactment of the Arbitration and Conciliation Act, 1996 and Part III of the Act
comprehensively deals with conciliation process in general. The chapter on conciliation under
the Arbitration and Conciliation Act, 1996 is, however, essentially based on the UNCITRAL
Conciliation Rules, 1980.6
2. CONCILIATION UNDER THE ARBITRATION AND CONCILIATION ACT,
1996:
Alternative Dispute Resolution as per the words mean is an alternative to any court trials and
proceedings wherein the focus is on to resolving the dispute and harmonising the groups with
reasonable expenses for clients unlike courts where the proceedings wherein the there is no
limitation as to the expenses for settling a case. This burdens the court as well as the parties
with delayed justice and sometimes denied due to the burgeoning of pendency of cases.
Wherefore, ADR with its several instrumentalities provide a cordial solution to both the
problems.
As per section 61 of Arbitration and Conciliation Act 1996, which deals with the
commencement of conciliation proceedings require a written invitation by a party to other for
adopting this means for resolution. Thereby, as per section 62, a positive response from the
other party brings the start of a conciliation procedure. Acceptance, if not given within first 30
days of receiving the invitation then the party can treat it as a rejection.
Now the question is on the appointment of Conciliators which is dealt under Section 63 and 64
of the Act which deal with the numbers of conciliators and choosing conciliator is subject to
the discretion of party respectively. Since it is subject to the discretion of party, as there can be
more than one conciliators in a conciliation depending upon the discretion of the parties
entailed in it. Parties, similar to the mediation, can choose their conciliator, in case of two
conciliators, then both the parties choose one and in case of three conciliators both the parties
4 See Anirudh Wadhwa and Anirudh Krishnan (Eds.), R.S. Bachawat’s Law of Arbitration and Conciliation
(Lexis Nexis Butterworths Wadhwa, Nagpur, 5th Edn., 2010).
5 Shodhganga; “Conciliation-Chater 5”; available at:
https://shodhganga.inflibnet.ac.in/bitstream/10603/26666/11/11_chapter%205.pdf
6 P.C. Rao, “Arbitration and Conciliation Act, 1996: The Context” in P.C. Rao and William Sheffield (Eds.),
Alternative Dispute Resolution 82 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997).
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choose a third conciliator who will be presiding in the conciliation proceeding. At the same
time, if the parties do not come to any prudent choice of conciliator then they can request a
suitable institution to provide them a conciliator.
The extent of jurisdiction of conciliator is such that the conciliator is not bound by Code of
Civil Procedure, 1908 or the Indian Evidence Act 1872 (1 of 1872).7 With that the specific role
of the conciliator is such that he has to be fair, just and impartial for a better and conclusive
solution to any issue. The appointed conciliator must as well be amicable with the parties and
provide them with ways in which they can prudently solve their matter without further
engaging in any altercation on legal level. As per section 67(4) “The conciliator-may, at any
stage of the conciliation proceedings, makes proposals for a settlement of the dispute. Such
proposals need not be writing and need not be accompanied by a statement of the reasons
therefore.”8As and when the settlement agreement is prepared in a conciliation, the
responsibility of the conciliator includes confidentiality, meaning thereby, he must keep those
information confidential which the party has asked to keep a secret although the factual
information he/she receives must as well be disclosed to the other party, for the other party to
explain his side and that also leads to a better understanding of both the sides.
3. DIFFERENCE BETWEEN CONCILIATION AND OTHER FORMS OF ADR:
Arbitration v/s Conciliation
Arbitration is the process where a third party adjudges the dispute and creates
an arbitral award that is binding on both parties. Conciliation, on the other hand,
is a non-binding process where the conciliator is an advisor suggesting the
parties of a suitable way to resolve the conflict.9
Mediation v/s Conciliation
Mediation is the process wherein a neutral third party facilitates dialogue
between the parties. The role of the conciliator surpasses that of a mediator. The
7 Bare Act; Section 66 of Arbitration and Conciliation Act, 1996; available at:
https://www.arbitrationindia.com/pdf/acact.pdf
8 Bare Act; Section 67 of Arbitration and Conciliation Act, 1996; available at:
https://www.arbitrationindia.com/pdf/acact.pdf
9 https://www.legalbites.in/meaning-and-scope-of-conciliation/
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conciliator has to suggest an effective way of resolving the dispute to the
parties.10
4. CONCLIATION: A MECHANISM TO RESOLUTION
Disputes are pervasive in nature, therefore, in order to resolve disputes, legal bodies have to
come up with as many resolution processes as possible for better management of judicial
system. Considering conciliation as one such ways of resolving disputes would not be incorrect,
for it specifies its categorically which entails an efficient management of work if a good and
consciously right person is appointed as conciliator, then an effective manner in which the
whole process lay down with each parties and conciliators provided precisely their rights and
duties. The conciliation is a mechanism which has indeed been an instrument in settling down
cases and loosen the burden of the courts by disposing of cases with settlement that can suffice
the parties.
One of the major parts in taking consideration is the factor that it is cost efficient which thereby,
helps poor clients in getting justice without facing any money constraint which they generally
face in court proceedings as some business minded advocates find their ways in stealing them
off by giving them false hopes as well promises.
Alternative Dispute Resolution and it’s forms are chosen only when the parties demand an
amicable solution and reasonable for both of them. That makes the use of ADR proficient to
tackle the matter in friendly and relaxed manner. Therefore, conciliation is a well-organized
mechanism for resolution. In the case of Haresh Dayaram Thakur v. State of Maharashtra and
Ors, AIR 2000 SC 2281, which dealt with the sections 73 and 74 of the Arbitration and
Conciliation Act of 1996 in which the courts 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.11 Therefore, a successful conciliation proceedings comes
to end only when the settlement agreement signed by the parties comes into existence.
Therefore, it is such an agreement which has the status and effect of legal sanctity of an arbitral
award under Section 74.12 Conciliation has still not received the potential use and popularity
10 Ibid.
11 LegalserviceIndia; “Principle and Procedure of Conciliation”; available at:
http://www.legalserviceindia.com/legal/article-1180-principles-and-procedure-of-conciliation.html
12 LegalserviceIndia; “Principle and Procedure of Conciliation”; available at:
http://www.legalserviceindia.com/legal/article-1180-principles-and-procedure-of-conciliation.html
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for its efficiency, thus, it is important to utilise the mechanism more in practical and give it its
due popularity, advocating and propagating for its credibility in settling matters.
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