BABASAHEB BHIMRAO

AMBEDKAR UNIVERSITY

SESSION= 2019-2020
SEMESTER-VIII
SCHOOL FOR LEGAL STUDIES
DEPARTMENT OF LAW
SUBJECT- ALTERNATIVE DISPUTE
RESOLUTION
TOPIC- CONCILIATION

SUBMITTED TO- Pro. Anis Ahmad

SUMITTED BY- Sakshi Singh
CLASS- BBA.LLB
Date of Submission- 09/04/2020

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 ACKNOWLEDGEMENT

The project on “conciliation” is do hereby submitted to the ‘Law faculty’ of

‘BABASAHEB BHIMRAO AMBEDKAR UNIVERSITY’, LUCKNOW’. It is
purposely consecuate to the respected “Mrs. Gargi Whorra” and honorable dean
“Professor SUDARSHAN VERMA”.

I have tried out best and I am really thankful to them. I would also like to thank
my parents and my friends who helped me a lot and finalizing the project within
the limited time frame.

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 TABLE OF CONTENT

CHAPTER-1

 INTRODUCTION…………………………………………………...7
 DEFINITION AND MEANING OF COCILIATION……………....8
 HISTORY OF CONCILIATION IN INDIA………………………...9

CHAPTER-2

 APPLICATION AND SCOPE OF CONCILIATION AND

APPOITMENT OF CONCILIATOR………………………………11
 PRINCIPLES OF PROCEDURES IN CONCILIATION………….12

CHAPTER-3

 PROCEDURE OF CONCILIATION……………………………13-17
 ADVANTAGE OF CONCILIATION…………………………...17-18

CHAPTER-4

 CONCLUSION…………………………………………………….20
 BIBLIOGRAPHY………………………………………………….21

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 CONCILIATION = CRITICAL ANALYSIS

OBJECTIVE OF ASSIGNMET –
The main objective of the Assignment is-
 Identify the importance of conciliation.
 Specify the difference between the arbitration, mediation and conciliation.
 Discuss the principles regarding conciliation.
 Discuss the procedure regarding conciliation.
 Discuss the Advantage of conciliation.

AIM OF ASSIGNMENT-

The aim of the conciliation is an alternative dispute resolution (ADR) process whereby the
parties to a dispute use a conciliator, who meets with the parties both separately and together
in an attempt to resolve their differences. They do this by lowering tensions, improving
communications, interpreting issues, encouraging parties to explore potential solutions and
assisting parties in finding a mutually acceptable outcome.

The conciliation also aims to ensure the parties right the neutral is usually seen as an authority
figure who is responsible for the figuring out the best solution for the parties. The conciliator,
not the parties, often develops and proposes the terms of settlement. The parties come to the
conciliator seeking guidance and the parties make decisions about proposals made by
conciliators. In this regard, the role of a conciliator is distinct from the role of a mediator.

Further this paper also consider the difference between the mediation, conciliation and
arbitration which those are the type of alternate dispute resolution. The main ADR alternatives
to civil litigations are negotiation, arbitration, conciliation, mediation etc. These methods are
expeditious, private, and generally much less expensive than a trial. ADR also give people a
chance to determine how they can resolve a dispute.

RESEARCH METHODOLOGY-

To complete this research work the research methodology followed in this study is not uni-
dimenional with regard to critical analysis of conciliation the study make use of both
comparative and evaluative method, it traces the Case laws and also critically analysis the
importance and difference between conciliation, mediation and arbitration.
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The present research is based on reports, Journals, Magazines, Legislative and Judicial
interpretation, declarations, conventions, treaties and information available on internet and
with other databases of the organizations and NGOs etc. For this research visited libraries of
various institutions, to consult the journals and books of learned author. To accomplish this
research ventures, the researcher had to utilize the pieces of information from primary and
secondary sources.

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CHAPTER-1

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 INTRODUCTION

The Halsbury’s Laws of England defines Conciliation as a process of persuading the parties
to reach an agreement.1 Conciliation may comprehensively be defined as a non-adjudicatory
and non-adversarial2 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 guidance and assistance of a neutral and
impartial third party.
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 visualize 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 litigates process. 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. As per the Halsbury Laws
of England, conciliation is a process of persuading parties to each an agreement. 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.

1
Halsbury’s laws of England 2 502
2
There is neither a claimant/plaintiff nor a respondent/defendant in conciliation and as a result its proceedings
are non-adversarial in nature. See Sudipto Sarkar & V.R. Manohar (Eds.), Sarkar’s Code of Civil Procedure
(Wadhwa and Company, Nagpur, 11th Edn., 2006).

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DEFINITION AND MEANING OF CONCILIATION-

The simplest meaning of conciliation is the settlement of the disputes outside the court. It is a
process by which the discussion between the parties are kept going through the participation
of a conciliator. 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. As per the Halsbury Laws of England, conciliation is a process of
persuading parties to each an agreement. 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. 3

Conciliation is a process of settlement of disputes that have been widely spread throughout the
centuries. In ancient cultures, parties in a dispute would visit the village old men for advice.
They sought ways to resolve their dispute through the advice given by the old experienced men.
Consequently, with the evolution of ADR, conciliation as an informal institutional practice
gained popularity. This was furthered by the introduction of various guidelines framed to
regulate the process of conciliation.4

3
http://www.legalservicesindia.com/article/725/Principles-&-Procedure-of-conciliation-under-Arbitration-&-
Conciliation-Act-1996.html
4
Retrieved from-https://www.legalbites.in/meaning-and-scope-of-conciliation/ April 8,2020 at 3:00pm.
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HISTORY OF CONCILIATION IN INDIA-

Conciliation is not a new concept as far as India is concerned. Kautilya’s Arthashastra also
refers to the process of conciliation. Various legislations 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
backing. 5

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. This was also
been recommended by the Law Commission of India in its 77 th and 131st reports and the
conference of the Chief Justices and Chief Ministers in December 1993.6 The Malimath
Committee had also inter alia recommended the establishment of conciliation courts in India.7

In the meantime, the UNCITRAL had adopted the UNCITRAL Conciliation Rules, 1980 and
the General Assembly of the United Nations had recommended the use of these rules, therefore,
the Parliament of India found it expedient to make a law respecting conciliation, and the
Arbitration and Conciliation Act, 1996 was enacted. 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. Thereafter post litigation
conciliation was recognized as a mode of dispute resolution when section 89 was incorporate
in the Code of Civil Procedure, 1908 which affords an option for reference of sub judice matters
to conciliation with the consent of parties for extra judicial resolution. 8

5
See Anirudh Wadhwa and Anirudh Krishnan (Eds.), R.S. Bachawat’s Law of Arbitration and
Conciliation (Lexis Nexis Butterworths Wadhwa, Nagpur, 5th Edn., 2010).
6
Sarvesh Chandra, “ADR: Is Conciliation the Best Choice” in P.C. Rao and William Sheffield (Eds.),
Alternative Dispute Resolution 82 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997); See also O.P.
Motiwal, “Development of Law of Conciliation in India”, XLIX ICA Arbitration Quarterly 2 (January - March
2011
7
H.R. Bhardwaj, “Legal and Judicial Reforms in India”, available at: http://icadr.ap.nic.in/articles/articles.html
(last visited on April 8,2020 at, 3:00 pm.
8
Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.

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CHAPTER-2

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APPLICATION AND SCOPE OF CONCILIATION AND APPOITMENT
OF CONCILIATOR-

Section 61 of the Arbitration and Conciliation Act of 1996 provides for the Application and
Scope of 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 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 conciliators.

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.

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
arbitration 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.9

9
http://www.legalservicesindia.com/article/725/Principles-&-Procedure-of-conciliation-under-Arbitration-&-
Conciliation-Act-1996.html visited on ( April 8, 2020 at -3.30 pm)

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PRINCIPLES OF PROCEDURES IN CONCILIATION-

1) Independence and impartiality [Section 67(1)]-

The conciliator should be independent and impartial. He should assist the parties in an
independent and impartial manner while he is attempting to reach an amicable settlement of
their dispute.

2) Fairness and justice[Section 67(2)]-

The conciliator should be guided by the principles of 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.

3) Confidentiality [Section 70]-

The conciliator and the parties are duly bound to keep confidential all matters relating to
conciliation proceedings. Similarly when a party gives a information to the conciliator on the
condition that it be kept confidential , the conciliator should not disclose that information to
the other party.

4) Disclosure of the information[Section 70]-

When the conciliator receives a information about any fact relating to the dispute from a
party, he should disclose the substance of that information to the other party. The purpose of
this provision is to enable the other party to present an explanation which he might consider
appropriate.

5) Co-operation of the parties with Conciliator [S. 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.10

10
http://www.legalservicesindia.com/article/725/Principles-&-Procedure-of-conciliation-under-Arbitration-&-
Conciliation-Act-1996.html (visited on April 8, 2020 at- 3.45 pm.)
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CHAPTER-3

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PROCEDURE OF CONCILIATION-

1) Commencement of the conciliation proceedings [Section 62]-

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 treat this as rejection of the invitation to conciliate. If he so
elects he should inform the other party in writing accordingly. Thus conciliation
agreement should be an ad hoc agreement entered by the parties after the dispute has
actually arisen and not before.
Even if the parties incorporate conciliation clauses in their agreements, still
conciliation would commence only if the other party accepts the invitation of one party
to conciliate in case of a de facto dispute. Thus unlike in the case of an arbitration
agreement, Part III of the Arbitration and Conciliation Act, 1996 does not envisage any
agreement for conciliation of future disputes. It only provides for an agreement to refer
the disputes to conciliation after the disputes have arisen. 11
In conciliation proceedings with one conciliator, the parties may agree on the name of
a sole conciliator and in conciliation proceedings with two conciliators, each party may
appoint one conciliator. The parties may also request any institution or person to
recommend suitable names of conciliators or directly appoint them and such person or
institution while discharging this responsibility should have regard to aspects as are
likely to secure the appointment of an independent and impartial conciliator. 12

11
Visa International Ltd. v. Continental Resources (USA) Ltd., AIR 2009 SC 1366
12
S. 64, Arbitration and Conciliation Act, 1996
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 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 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.

3) Conduct of Conciliation Proceedings [Section 69(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 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 beheard orally and the need of speedy settlement of the dispute.
The settlement agreement must also bear the signatures of the parties. 13 Once the parties
sign the settlement agreement, it shall be final and binding on the parties and persons
claiming under them respectively.
The settlement agreement drawn up in conciliation proceedings has the same status and
effect as if it is an arbitral award on agreed terms on the substance of the dispute
rendered by an arbitral tribunal under section 30 of the Arbitration and Conciliation
Act, 1996. However it is only that agreement which has been arrived at in conformity
with the manner stipulated and form envisaged and got duly authenticated in
accordance with section 73 of the Arbitration and Conciliation Act, 1996, which can be

13
Haresh Dayaram Thakur v. State of Maharashtra, AIR 2000 SC 2281
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 assigned the status of a true settlement agreement and can be enforced as an arbitral
award.14

4) TERMINATION OF CONCILIATION PROCEEDINGS-

A successful conciliation proceeding concludes with the drawing and signing of a

conciliation settlement agreement. The signing of the settlement agreement by the
parties, on the date of the settlement agreement terminates conciliation proceedings.
That apart, any party may terminate conciliation proceedings at any time even without
giving any reason since it is purely voluntary process. The parties can terminate
conciliation proceedings at any stage by a written declaration of either party. A written
declaration of the conciliator, after consultation with the parties, to the effect that
further efforts at conciliation are no longer justified, also terminates conciliation
proceedings on the date of such declaration.

How arbitration, mediation and conciliation are different from each other?

Mediation and conciliation both are an informal process. Whereas, arbitration is more formal
as compared to them.

In mediation, the mediator generally sets out alternatives for the parties to reach out an
agreement. The main advantage of the mediation is that the settlement is made by the parties
themselves rather than a third party. It is not legally binding on the parties. Arbitration is a
process where the parties submit their case to a neutral third party who on the basis of
discussion determine the dispute and comes to a solution. Dispute resolution through
conciliation involves the assistance of a neutral third party who plays an advisory role in
reaching an agreement. The process adopted by all the three are different but, the main purpose
is to resolve the dispute in a way where the interest of the parties is balanced.

The difference between conciliation and mediation has been an important issue in ADR
jurisprudence. One obvious reason is that there are striking similarities between mediation and

14
Mysore Cements Ltd. v. Svedala Barmac Ltd., (2003) 10 SCC 375

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conciliation.15 The source of morality in both mediation and conciliation is the liberty and spirit
of the parties to evaluate their respective cases, understand their interests and arrive at a
negotiated settlement with the assistance of a neutral third party. Albeit, the two terms are used
distinctly yet the fundamental philosophy and the basic process in both mediation and
conciliation are similar. Both, conciliation and mediation can be described as negotiation
facilitated by a third party. They both focus on amicable resolution of disputes and aim at
maintenance of relationships between the parties. In fact, at times the two terms are used
synonymously or interchangeably.16

ADVANTAGE OF CONCILIATION-

 Conciliation offers a more flexible alternative to arbitration as well as litigation, for

resolution of disputes in the widest range of contractual relationships, as it is an entirely
voluntary process.
 In conciliation proceedings, the parties are free to withdraw from conciliation, without
prejudice to their legal position, at any stage of the proceedings.
 The matter is settled at the threshold of the dispute, avoiding protracted litigation efforts
at the courts. As conciliation can be scheduled at an early stage in the dispute, a
settlement can be reached much more quickly than in litigation.
 Parties are directly engaged in negotiating a settlement.
 The conciliator, as a neutral third party, can view the dispute objectively and can assist
the parties in exploring alternatives which they might not have considered on their own.
 Parties save money by cutting back on unproductive costs such as traveling to court,
legal costs of retaining counsels and litigation and staff time.
 The parties may carefully choose conciliators for their knowledge and experience .
 Conciliation enhances the likelihood of the parties continuing their amicable business
relationship during and after the proceedings.

15
Ahmad Momeni Rad, “Good Offices, Conciliation and Mediation in WTO DSS”, (2) Kar.L.J. (Journal) 16 (2005);
Mediation is a variation of conciliation. See G.K. Kwatra, Arbitration & Alternative Dispute Resolution 41
(Universal Law Publishing Co. Pvt. Ltd., Delhi, 2008).

16
Ghanshyam Singh, “Mediation: A Choice of Dispute Settlement in India”, X (1) MDU L. J. 41 (2005); See also
Karl Mackie and Edward Lightburn, “International Mediation – The UK Experience”, in P.C. Rao and William
Sheffield (Eds.), Alternative Dispute Resolution 137 (Universal Law Publishing Company Pvt. Ltd., Delhi, 1997);
Alexander Bevan, Alternative Dispute Resolution 15 (Sweet and Maxwell, London, 1992); See also Henry J.
Brown & ArthurL. Mariot, ADR, Principles and Practice (Sweet & Maxwell, London 2nd Edn., 1997).

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  Creative solutions to special needs of the parties can become a part of the settlement.
 Confidentiality is maintained throughout the proceedings on information exchanged,
the offers and counter offers of solutions made and the settlement arrived at. Also,
information disclosed at a conciliation meeting may not be divulged as evidence in any
arbitral, judicial or another proceeding .17

17
http://www.ficci-arbitration.com/htm/whatisconcialation.htm
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CHAPTER-4

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 CONCLUSION

It is more important to be able to execute a law than to keep on enacting a plethora of

legislations and that is the main problem with Indian Legislations. Though, we have the law
that is, ADR Act but still, is not very popular for commercial disputes in India when developed
countries like Japan can use it for almost all kinds of civil disputes.

We have the law, but machinery is still not effective and perfect that the business community
can trust it. Also, it is not as popular as normal litigation. When we see the backlog of crores
of cases in Indian courts today, it is not just essential for commercial disputes but also for civil
disputes which take 10-20 years to reach their destiny.

This is one kind of urgent judicial reform that is needed today in India. Not only this, but it
will also ease the doing of business in India for it’ll attract investors to invest in our country.
ADR can be the monosyllabic solution for many economic problems for India and at the same
time is necessary to curb the menace of the backlog of cases which the foremost concern and
worry of Indian judiciary today.

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 BIBLIOGRAPHY

1. BARE ACT:

Arbitration and Conciliation Act, 1996

2. BOOKS:
 Basu. N.D
“Law of Arbitration and Conciliation”
9th edn, Universal law Publishing Co. Pvt Ltd., 2000
 O.P Malothra
“The law and Practice of Arbitration and Conciliation”
2nd edn, Lexis Nexis Butterworth’s, New Delhi 2006.

3. WEBSITES:
 http://www.legalservicesindia.com/
 https://blog.ipleaders.in/arbitration-mediation-and-conciliation-different/
 https://www.legalbites.in/meaning-and-scope-of-conciliation
 www.sodhganga.inflibnet.in.ac

 http://lawcommissionofindia.nic.in/adr_conf/concepts%20med%20rao%201
.pdf

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