Conciliation is limited to encouraging the parties to discuss their differences and to help them their own proposed solution. It’s an amicable way of resolving disputes.
It is voluntary, flexible, confidential, and interest-based process. The parties seek to reach an amicable dispute settlement with the assistance of the conciliator, who acts as a neutral third party. The process is endlessly flexible. It is characterized by the party’s voluntary participation in the process with the intent of finding a beneficial solution for all parties involved. The decision is normally not binding.
Commencement of conciliation proceedings
- 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.
- Conciliation proceedings 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.
- If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in 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.
Number of conciliators
- There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
- Where there is more than one conciliator, they ought, as a general rule, to act jointly.
Appointment of conciliators
- Subject to sub-section (2) [Section are stated from Arbitration and Conciliation Act 1996, 2015] -:
- In conciliation proceedings, with one conciliator, the parties may agree on the name of a sole conciliator;
- In conciliation proceedings with two conciliators, each party may appoint one conciliator;
- 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.
- Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,—
- A party may request such an 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 is made directly by such an institution or person:
Provided that in recommending or appointing individuals to act as a conciliator, the institution or 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.
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.
Conciliator not bound by certain enactments
The conciliator is not bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872)
Role of conciliator
- The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
- The conciliator shall be guided by principles of objectivity, fairness, and justice, giving consideration to, 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.
- The conciliator may conduct the conciliation proceedings in such a manner as he considers 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.
- The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefore.
Communication between conciliator and parties
- 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.
- Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.
Disclosure of information
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 the other 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.
The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavor to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.
Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.
When there is an element of settlement which may be acceptable by the parties, he shall formulate the terms of a possible settlement and provide that to the parties for their observation, after receiving the observation of the parties, the conciliator may reformulate the terms of the possible settlement in the light of such observation. When the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement, If any assistance is required by the parties from the conciliator he shall assist the parties in drawing up, the settlement agreement.
After the signature of the parties, it shall be final and binding on the parties and persons claiming under them respectively. The conciliator will authenticate the agreement and furnish a copy thereof to each of the parties. The Settlement agreement shall have the same status as an arbitral award.
The conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.
Termination of conciliation proceedings
The conciliation proceedings shall be terminated:-
- By the signing of the settlement agreement by the parties, on the date of the agreement; or
- By a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or
- By a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or
- By a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.
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 or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.
- Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.
- For the purpose of sub-section (1), “costs” means reasonable costs relating to:—
- The fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;
- Any expert advice requested by the conciliator with the consent of the parties;
- Any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68.
- Any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.
- The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.
Payment period of Proceeding
For the conciliation proceeding both the parties require to deposit an equal amount as an advance the costs, If the required deposit is not paid in full by both parties within 30 days, the conciliator may suspend the proceeding or may make a written declaration of termination of the proceeding to the parties, to the parties, effective on the date of that declaration.
Role of conciliator in other proceedings
Unless otherwise agreed by the parties,—
- The conciliator shall not act 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;
- The conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.