A Submission For The Paper

Professional Ethics
And Professional Accountability

Submitted To - Dr. Neetu Gupta

Submitted By - Kevin Gautam

L.L.B Semester VI
Roll No. - 105/20
Section M

Department Of Laws, Panjab University, Chandigarh

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Introduction

The Arbitration and Conciliation Act, 1996, as the name itself suggests, deals with
two types of proceedings; domestic arbitration and conciliation proceedings. While
provisions relating to domestic arbitration are contained in Part I which includes
Sections 1 to 43, the conciliation proceedings are dealt with in Part III which includes
Sections 61 to 81 (Part II deals with enforcement of foreign awards). On perusal of
the provisions of the Act, it is apparent that there is a clear distinction in the statute
between arbitration proceedings and conciliation proceedings.

'Conciliation', as defined in Halsbury's Laws of England, "is a process of persuading

parties to reach an agreement, and is plainly not arbitration, nor is the chairman of a
Conciliation Board an arbitrator." Conciliation undoubtedly is the most commonly
accepted form of alternative dispute resolution mechanism. It is essentially a
non-judicial power as against arbitration which may be in a judicial or non-judicial
form. Briefly speaking conciliation may be defined as a process of setting of disputes
without recourse to Court of law or litigation.

As a technique of ADR (Alternative Dispute Resolution), conciliation has acquired

statutory recognition in the Arbitration and Conciliation Act, 1996. As against
arbitration, it is neither based nor controlled by the existence of a prior agreement
between the parties. That apart, recourse to conciliation can be had even after
parties have resorted to litigation and the case is pending before a Court.

'Arbitration' is outside the court settlement of a dispute by one or more (odd number)
persons who are appointed as arbitrators by both the parties. According to Section
2(1)(a) of the Arbitration and Conciliation Act, 1996 “Arbitration means any arbitration
whether or not administered by a permanent arbitral institution”. In other words, any
form of arbitration irrespective of its nature has been recognised statutorily in India
by bringing such arbitration under the ambit of the Arbitration and Conciliation Act,
1996. It consists of a simplified trial, with simplified rules of evidence and with no
discovery. Arbitration hearings are usually not a matter of public record. The arbitral
award is binding on the parties just like a court decree or order
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Conciliation -

Meaning

Briefly stated, conciliation means any third party assisted alternate dispute resolution
(ADR) approach. He discusses the details of the dispute with the parties and on the
basis of facts collected, he himself draws up and proposes a solution, which in his
opinion is most fair and reasonable. It differs from mediation, the mediator only
assists the parties to resolve their dispute without, however, himself drawing up a
solution. It is far less informal than the process of conciliation.

Conciliation is generally a voluntary process and discussions made in the process of

conciliation are not binding on the parties unless the parties themselves agree to
treat as binding. It is an ADR process of settling the dispute outside the Court.

Conciliator -

Conciliator is the third party who is involved in settling the dispute of the parties.
Generally, there is one conciliator for the settlement but there can be more than one
conciliator, if the parties have requested for the same. If there is more than one
conciliator then they will act jointly in the matter. Section 64 deals with the
appointment of conciliator which states that if there is more than one conciliator then
the third conciliator will act as the Presiding Conciliator.

Advantages and disadvantages of Conciliation -

Advantages

(1) The conciliation procedure is of private nature. The documents, evidences or

any other information which are used during the process are Confidential.

(2) One of the most important advantages is that they are Informal process and
contain simple procedures which can be easily followed by the general
people.

(3) The process depends upon the circumstances of the case. In these processes
the need of the parties comes first like quick settlement of their cases so there
is no chance for delay.
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(4) The selection of the conciliators depends upon the parties. The parties can
choose a conciliator on the basis of their availability, experience in particular
field, previous track records of the cases, knowledge in subject area.

(5) Conciliation is cheap as compared to litigation. They are cost effective and the
most opted process for resolving disputes. It purely depends upon the nature
of the dispute but is widely acceptable.

Disadvantages

(1) Conciliator is not a legally qualified person for resolving disputes. His decision
is not binding upon the parties.

(2) As the procedure of conciliation is informal and simple there is a high

possibility of delivering injustice.

(3) Miscommunication of information: The role of the conciliator to settle up the

case by giving information of one party to another and vice versa. The
process of sending and receiving information sometimes leads to mixed and
incorrect information. So, by these processes one can easily interpret the
information given.

Arbitration -

Meaning

Arbitration is like a court procedure because the parties submit evidence similar to a
trial where the third party hears the entire situation and give his decision which is
binding upon the parties. In the case of Collins v Collin, the Court held that “An
arbitration is a reference to the decision of one or more persons, either with or
without an umpire, of some matter or matters in difference between the parties.” an
arbitrator listens to the evidence which is brought by both parties and makes a
decision which is generally binding upon both parties. Arbitration means getting an
arbitral award on an ongoing conflict, by the arbitrator. In the process of arbitration,
the cause is heard and determined between the parties in a dispute before the
person selected by the parties or appointed under statutory authority i.e., The
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Arbitration and Conciliation Act, 1996. The objective of Arbitration is to settle the
dispute which arose between the parties by one or more arbitrators appointed by
them by going through the documents and evidence. According to Kurt Brenn “The
objective of arbitration is not compromise but adjudication through which the parties
are at liberty to compromise.” A wise arbitrator would certainly promote such
agreement, but as a rule there is no zest, if there is compromise in arbitral awards.
While taking a decision in an arbitral matter, the arbitrator must consider the fact that
the decision imparted by him must be in the interest of the principle of natural justice.

Arbitration can be done by voluntary or compulsory method. In Voluntary arbitration,

if a dispute arose between the two Parties and they are unable to resolve their
differences by themselves, thereby the parties agreeing to present their dispute to
the fair authority and the decision will be binding upon both parties. Whereas
Compulsory arbitration, is the method where the parties are required to accept
arbitration without any willingness on their part. When one party in any industrial
dispute feels aggrieved by the act of the other party, it may approach the appropriate
government to refer the dispute to any organisation of adjudication for the
settlement. The arbitrator or arbitral tribunal consists of a neutral person or persons
responsible for resolving the dispute that the parties have submitted before them.

Difference Between Conciliation and Arbitration

Though like arbitration, conciliation is also another means of settling disputes, the
two differ in many vital aspects. The only similarity that appears between the two is
that a 'third person' is chosen or nominated by the parties to resolve their disputes.

The main points of difference between arbitration and conciliation may be stated as
follows:

(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. As a corollary of this, it
follows that there being a prior arbitration agreement between the parties, both of
them are bound by the agreement. But in case of conciliation, since a written
invitation is made by one party, the other party may or may not accept the same.

(2) While the role of conciliator is to help and assist the parties to reach an amicable
settlement of their dispute, the arbitrator does not merely assist the parties but he
also actively arbitrates and resolves the dispute by making an arbitral award.
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(3) 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 the 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.

(4) A settlement agreement may be made by the parties themselves and the
conciliator shall authenticate the same. An arbitration award on the other hand, is not
merely a settlement agreement but it is a judgement duly signed by the arbitrator.

(5) 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 terminated.

(6) 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.

(7) The arbitration proceedings or awards may be used as evidence in any judicial
proceedings but the conciliation proceedings cannot be used as evidence in any
arbitral or judicial proceedings.

(8) Last but not the least, an arbitrator has to decide according to law, but a
conciliator can conciliate irrespective of law. Russel, in his Book on Arbitration has
brought out the distinction between functioning of an arbitrator and conciliator in the
following words:-

"An arbitrator is not a conciliator. He cannot ignore the law or misapply it in order to
do what he thinks just and reasonable. Unlike conciliator, an arbitrator is a tribunal
constituted by parties to decide disputes in accordance with the law."

The main features of conciliation under the Arbitration and Conciliation Act, 1996 are
as follows:

(1) The process is non-adversary in nature there being no defendant or claimant or

opposite party.

(2) It is voluntary in nature, depending upon parties to agree or not with the solution
drawn up by the conciliator.

(3) The conciliator has discretion to decide the procedure so as to ens speedy and
less expensive disposal of the dispute. Thus the process is fairly flexible.
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In conciliation, the causes of dispute or differences are first identified then resolved
by the conciliator thus protecting the interests of the parties. The process of
conciliation being flexible and more or less informal, the partie readily agree to get
their disputes are resolved through this method. When the parties enter upon
conciliation and reach an agreement on a settlement of dispute, the agreement so
reached has the status and effect as if it was an arbitral award. The Act also
provides confidentiality in respect of all matters in the conciliation proceedings.

Difference between Arbitration and Conciliation

Arbitration Conciliation

Meaning Arbitration is like a court Conciliation is an

procedure because the parties alternative dispute
submit evidence similar to a trial resolution method in
where the third party hear the which an expert is
entire situation and give his appointed to resolve a
decision which is binding upon dispute by convincing the
the parties. parties to agree upon an
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agreement.

Enforceability of That decision made by the However, a conciliator has

decision arbitrator is binding in the same no right to enforce his
way as a court decision. decisions.

Nature of process Arbitration is a formal process It is an informal process

and follows similar procedures and usually involves a
as court proceedings where discussion on the table.
witnesses can be called and
evidence can be presented in
respective cases.

Prior agreement Prior agreement is required. No need of prior

agreement

Availability Available for existing and future Available for only existing
disputes. disputes.

Outcome Arbitral award is final and Conciliation does not

binding upon parties. always ensure that a
mutually agreed result will
arise between the parties.

Conclusion

The procedures and techniques discussed above are the most commonly used
methods of ADR. However, there are countless various ADR methods, many of
which modify or combine the above methods. With each type of ADR, the objective
is to resolve the dispute by method of round table discussion. ADR is the most
effective process which lessens the burden of courts. ADR promotes harmonious
relationships among parties. The settlement of disputes through ADRs is so effective
and globally accepted that courts have recognized some of them as mediation more
often. This avoids the procedure of litigation and the award for fair and impartial
settlement of doubtful issues of an individual on a legal and ethical basis which is
based upon ground reality.

This is what distinguishes ADR methods from general litigation. There can be only
one winning party after a court trial, while all parties can be treated as winner after
conciliation, mediation or negotiation, as there is no conflict between them and they
go through the settlement procedure.
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