Académique Documents
Professionnel Documents
Culture Documents
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
2
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.
3
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
4
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.
This project wok aims to focus upon what Conciliation is and its process and application and
scope.
5
OBJECTIVES
The main objective of this project work was to analyse the concept of Conciliation as a
medium for alternate dispute resolution.
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.
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
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
9
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.
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.
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.
Procedure of Conciliation
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.
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
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
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
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
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
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
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