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What do you_mean_conciliation

The document discusses the concept of conciliation as a method of alternate dispute resolution (ADR) and distinguishes it from arbitration, highlighting key differences in procedures and roles. Conciliation involves a neutral conciliator facilitating discussions between parties to reach a mutually agreeable settlement without the authority to enforce an award, while arbitration requires a prior agreement and results in a binding decision by an arbitrator. The Arbitration and Conciliation Act of 1996 outlines specific procedures for conciliation, emphasizing its benefits of efficiency and confidentiality in resolving commercial disputes.

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What do you mean by conciliation? Also discuss distinction between conciliation and arbitration. Discuss the law relating to procedure for conciliation. By Sumeet Pal Singh Brar Visiting Assistant Prof. – Punjabi University, Patiala, Department of Law UGC – NET, B.A.LL.B, LLM
Introduction Purpose of Arbitration Act is to provide quick redressal to commercial dispute by private Arbitration. Quick decision of any commercial dispute is necessary for smooth functioning of business and industry. Internationally, it is accepted that normally commercial disputes should be solved through arbitration and not through normal judicial system. Hence, the need of Alternate Dispute Resolution. (ADR). There are four methods of ADR - negotiation, mediation, conciliation and arbitration. 'Negotiation' is cheapest and simplest method. If it does not work, mediation through a mediator can be tried. If it does not work, conciliation and arbitration will be useful. Arbitration Act makes provision for conciliation and arbitration as ADR mechanisms .
Meaning and Definition of Conciliation Part 3rd of the act deals with conciliation. Conciliation means “the setting of disputes without litigation” Conciliation is a process by which discussion between parties is kept going through the participation of conciliator. The conciliator only brings parties together and tries to solve the dispute using his good offices. The conciliator has no authority to give any award. He only helps parties in arriving at a mutually accepted settlement. After such agreement they may draw and sign a written settlement agreement. It will be signed by the conciliator. However after the settlement agreement is signed by both the parties and the conciliator, it has the same status and effect as if it is an arbitral award. The basis of conciliation is mutual compromise and agreement and reciprocal understanding to decide and arrive on an acceptable solution through mediation and persuasion. In court ,the decision is thrust upon the parties ,in conciliation it comes in b/w parties through amicable negotiation initiated by a conciliator
Acc. To Black law dictionary , conciliation as a settlement of dispute in an agreeable manner in which a neutral person meets with the parties to a dispute and explore how the dispute might be resolve. Acc. to Halsbury law of England “Conciliator is described as a person persuading party to reach in agreement . Some jurists take the term to mean a form of shuttle mediation, as this extract from Commercial Dispute Resolution: "Conciliation: the neutral ... conciliator performs shuttle diplomacy, talking to each party separately, discussing animosities and identifying common ground." Acc. To law dictionary, A form of alternate dispute resolution (ADR) in which a neutral third-party hears both sides and then issues a non-binding suggested resolution
Distinction between Conciliation and Arbitration  1. In case of arbitration, a prior agreement in writing to submit to arbitration disputes which have arisen or which may arise in future, is necessary. But conciliation may be resorted to without the existence of such prior agreement and it generally relates to disputes which have already arisen.  2. for adopting the method of conciliation, there is no need for a prior agreement for resorting to this method, but in arbitration, a prior agreement for arbitration between the parties is required  3. The conciliation proceedings start by sending a written invitation and a written acceptance thereof in between the parties. The invitation may be accepted or rejected by the other party as it has no binding effect, being an invitation only. The prior written agreement in arbitration commands a binding effect upon the parties and its breach by resorting to court, compels court to refer the matter to the arbitration and parties are bound by the arbitral agreement.  4. While the role of conciliator is to help and assist the parties to reach an amicable settlement of their disputes, the arbitrator does not merely assist the parties but he also actively arbitrates and resolves the dispute by
5.In case of conciliation a party may require the conciliator to keep the factual information confidential and not disclose it to the other party. But it is not so in arbitration as an information given by a party is subjected to scrutiny by the other party. Thus there is no question of confidentiality in case of arbitration awards. . 6.In conciliation, the settlement agreement may be formulated by the parties themselves or the conciliator may assist in its formulated or himself may draw it up. The authentication by the conciliator on settlement agreement is also necessary. An arbitration award on the other hand is not merely a settlement agreement but it is a judgment duly signed by the arbitrator 7.The conciliation proceedings may be unilaterally terminated by a written declaration by a party to the other party and the conciliator, but arbitration proceedings cannot be so terminated 8.Conciliator is subjected to certain disabilities under Section 80 of the Act and he cannot act as arbitrator or as a council or a witness in any arbitral or judicial proceedings but there are no such disabilities imposed on an arbitrator or parties to arbitral proceedings. .
9.While conciliation proceedings are in progress, there is a bar on parties from initiating arbitral or judicial proceedings as per Section 77 of the new Act 1996.In arbitration, the arbitral agreement itself suggests for redressal of disputes through arbitration and if any party approaches Court the other party may request the court to refer the matter to arbitration and Court is bound to refer such matter to arbitral Tribunal Likewise pendency of arbitration proceedings is not bar for initiating conciliation proceedings which can be initiated at any stage of arbitral proceedings. 10. In case of arbitrators, there is no bar on their maximum numbers but the total should not be an even number. But in case of conciliation maximum number of conciliator cannot exceed three, parties may agree for two or three conciliator. 11. In arbitration, the proceedings are conducted according to law, but in conciliation the matter may be settled without strict following of the law
Procedure for conciliation proceeding Sec 62-Commencement of conciliation proceedings:- S.62(1)The party initiating conciliation shall send to the other party a written invitation to conciliate under this part, briefly identifying the subject of the dispute. Sub Sec(2) Conciliation proceeding shall commence when other party accepts in writing the invitation to conciliate Sub Sec.(3) If the other party reject the invitation, there will be no conciliation proceedings Sub Sec(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, he may elect, to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly
Sec 65-Submisssion of statements to conciliate- Sub Sec(1) The conciliator upon his appointment, may request each party to submit to him a brief written describing the general nature of the dispute and the points at issue .Each party shall send a copy of such settlement to the other party. Sub Sec(2) 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 evidences to the other party. Sub Sec(3) At any stage of conciliation proceedings the conciliator may request the party to submit to him suc additional information as he deems appropriate . Sec 66-Conciliator not bound by certain enactment :- the conciliator is not bound by the code of civil procedure, 1908 or the Indian Evidence Act,1872
Sec 67-Role of conciliator (1)The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute (2)The conciliator shall be guided by principle of objectivity , fairness and justice, giving consideration to, among other things, the rights and obligation of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business between the parties. (3)The conciliator may conduct the conciliation proceedings in such a manner as he consider appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hears oral statements, and the need for a speedy settlement of the dispute (4)The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of dispute,. Such proposals need not be in writing and need not be accompanied by a settlement of the reasons therefore.
Sec 69 Communication between conciliator and parties  Sub S(1) 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  Sub S(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place the parties, having regard to the circumstances of the conciliation proceedings
Sec 68-Administrative assistance:- In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a amicable institution or persons Sec 70-Disclosure of information- When the conciliator receives factual information concerning the disputes from a party, he shall disclose the substance of that information to the other party in order party may have the opportunity to present any explanation which he considers appropriate. Provided that when a party gives any information to the conciliator, subject to a specific condition that it be kept confidential’ the conciliator shall not disclose that information to the other party
Sec 71 Co-operation of parties with conciliator- The parties shall in good faith co-operate with the conciliator and, in particular, shall Endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings  Sec 72 Suggestion by parties for settlement of dispute- Each party may, on his own initiative of the conciliation, submit to the conciliator suggestions form settlement of the dispute. Sec 73 Settlement agreement- (1) When it appears to the conciliator that there exist 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 observation of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observation. (2)If the parties reach agreement on a settlement of the dispute ,they may draw up and sign a written agreement . If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement. (30When the parties sign the agreement, it shall be final and binding on parties and person claiming under them respectively. (4)The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties
Harish Dayaram Thakur v/s State of Maharashtra In this case Supreme Court refused to accept the settlement agreement drawn up by the conciliator as legally valid on the ground that the provisions of Sec 73 and consequently Sec 74 of the Act had been blatantly violated. In this case, the conciliator held some meetings with the parties in which there was discussion and thereafter drew up the so called settlement agreement by himself in secrecy and sent the same to the court in a sealed cover. Naturally, the settlement agreement did not bear the signature of the parties. But the High Court in its order had given the said settlement a status higher than an arbitral award inasmuch as the Court refused to even entertain any objection against the said settlement agreement reiterating the position that the settlement arrived at by the conciliator will be binding on the parties.
The Supreme court observed in this case that the learned judge of the High Court in passing the impugned order failed to notice the apparent illegalities committed by the conciliator in drawing up the settlement agreement. Keeping it secret from the parties and sending it to the court without obtaining their signature on the same. Therefore, there was blatant violation off procedure laid down in Sec73 and 74 of the Act and hence the settlement agreement drawn up by the conciliator was wholly untenable
Sec 75 Confidentiality:-  This sec imposes a duty upon the conciliator to keep confidential all matters relating to conciliation proceedings including settlement agreement except where disclosure is necessary for the purpose of implementation and enforcement of the settlement agreement . Sec 76 Termination of conciliation proceedings:- The conciliation proceedings shall be terminated; (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 conciliation, after consultation with the parties, to the effect further efforts of conciliation are no longer justified on the date of the declaration; or (c) By a written declaration of the parties addressed to the conciliation to the effect that the conciliation proceedings are terminated, on the date of the declaration; or
Sec 77:- Resort to arbitral or judicial proceedings The parties shall not initiate, during the conciliation proceedings any arbitral or judicial proceedings in respect of a dispute that is the subject matter of the conciliation proceedings except that a party may initiate arbitral judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights (d) By a written declaration of a party to the other party and the conciliation, if appointed to the effect that the conciliation proceedings are terminated on the date of the declaration Sec78 Costs;- When the conciliation proceedings are terminated due to the reason mention in sec 76, the conciliator shall fix the costs of conciliation and the amount of costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment with the consent of the parties
Sec 79 Deposits:- (a)The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub sec (2) of sec 78 which he expects will be incurred. (b)During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party . (c)If the amount is not paid mention above within thirty days, the conciliator may suspend the proceedings (d)Upon termination of the conciliation proceedings t, the conciliator shall render an accounting to the deposits received and shall return any unexpected balance to the parties
Sec 81 Admissibility of evidence in other proceedings:-  This section prohibits admissibility of evidence in respect of conciliation proceedings in any other proceedings, whether judicial or arbitral, relating to the dispute that is the subject matter of conciliation. The object of such prohibition is to ensure confidentiality of the conciliation proceedings which is a vital and most essential for the success of conciliation as a measure of disputes resolution mechanism
Conclusion:-The Arbitration and Conciliation Act 1996 comprehensively covers both domestic and international commercial arbitration and conciliation and makes provision for conciliation procedure which is fair, efficient, and is capable of meeting the needs of different kinds of conciliation. The procedure of conciliation is easier and cheaper. Earlier arbitration was considered to be a cheap and efficacious The Indian Parliament passed the Arbitration and Conciliation Act of 1996 mainly to implement the UNCITRAL Model Law on International Commercial Arbitration of 1985 and UNCITRAL Rules on Conciliation of 1980 and to improve upon the Arbitration Act of 1940 to make the arbitration law more in conformity with the changed global investment and commercial climate.