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Introduction

  • Conciliation serves as a non-adjudicatory form of alternative dispute resolution (ADR) designed to resolve conflicts between parties. This voluntary and confidential method aims to foster communication, understanding, and agreement among the involved parties.
  • In the conciliation process, a neutral third party, known as the conciliator, plays a crucial role in assisting the parties in reaching a mutually agreeable resolution. Functioning as a facilitator, the conciliator helps identify and explore the issues in dispute, encourages an understanding of each other's perspectives, and facilitates the discovery of common ground for agreement.
  • Specific procedures and guidelines govern the conciliation process, which may vary based on jurisdiction or applicable laws. In India, legislation such as the Arbitration and Conciliation Act regulates the conciliation process, providing a framework for its implementation and practice.

Principles of Conciliation Process

Independence and Impartiality

  • Conciliator remains neutral and unbiased throughout the process.
  • Goal: Facilitate fair and amicable settlement between parties.

Fairness and Justice

  • Objective: Ensure objectivity, fairness, and justice in the process.
  • Consider rights, obligations, and prior dealings between parties.

Confidentiality

  • All information disclosed during conciliation is treated as confidential.
  • Conciliator must not disclose confidential information without consent.

Disclosure of Information

  • Conciliator discloses relevant information to both parties to ensure transparency.
  • Allows parties to provide explanations and clarifications.

Cooperation of Parties

  • Parties expected to cooperate in good faith with the conciliator.
  • Includes providing evidence, attending meetings, and submitting materials.

Rules of Procedure

  • Conciliator not bound by strict procedural rules but must uphold natural justice principles.
  • Flexibility in process while ensuring fair treatment of parties.

Place of Meeting

  • Parties can agree on meeting location; if not, conciliator decides based on circumstances.
  • Location chosen to facilitate effective communication and resolution.

Communication between Conciliator and Parties

  • Conciliator may invite parties, communicate orally or in writing, and engage collectively or separately.
  • Ensures clear communication channels for effective resolution.

Understanding the Conciliation Process under the Arbitration and Conciliation Act 1996

Commencement of Conciliation Proceedings

  • According to Section 62 of the Arbitration and Conciliation Act 1996, conciliation proceedings begin with one party sending a written invitation to the other.
  • If the other party accepts the invitation, the process moves forward. Non-acceptance is assumed if there is no response within 30 days.

Appointment of Conciliators

  • After agreeing to conciliation, the next step is appointing conciliators per Section 64.
  • Parties can choose a single conciliator, two conciliators with each party appointing one, or three conciliators with each party appointing one and jointly deciding on a presiding conciliator.

Submission of Written Statements to the Conciliator

  • Conciliators may request factual written statements from both parties, which must be submitted and exchanged between the parties.

Conduct of the Conciliation Proceedings

  • Sections 67(3) and 69(1) govern the conduct, allowing the conciliator to communicate via written or oral means and meet parties collectively or separately as needed.
  • The proceedings are customized to suit the specific case's circumstances.

Administrative Assistance

  • Section 68 provides for seeking administrative aid if required, with the consent of the parties necessary for engaging in such assistance.

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Termination of Conciliation Proceedings – Section 76

  • Termination by Signing of Settlement Agreement (Section 76(a)): Conciliation proceedings come to a close when the involved parties mutually sign a settlement agreement. The official termination date is the day on which the agreement is signed.
  • Termination by Conciliator’s Declaration (Section 76(b)): The conciliation process can be halted if the conciliator formally states in writing that further attempts at conciliation are unwarranted. The termination date is marked as the day of the conciliator's declaration.
  • Termination by Written Declaration of Parties (Section 76(c)): The parties hold the power to end the conciliation proceedings by submitting a written declaration to the conciliator, expressing their desire to conclude the process. The termination date is recorded as the day of the declaration.
  • Termination by Party’s Written Declaration to Other Party and Conciliator (Section 76(d)): A party retains the right to unilaterally terminate the conciliation proceedings by sending a written declaration to both the other party and the conciliator, articulating their decision to terminate the proceedings. The termination date is noted as the day of the declaration.

Case Laws Relating to Conciliation Process

Haresh Dayaram Thakur v. State of Maharashtra and Ors.

  • The Supreme Court, in the case of Haresh Dayaram Thakur v. State of Maharashtra and Ors. (AIR 2000 SC 2281), analyzed Sections 73 and 74 of the Arbitration and Conciliation Act 1996.
  • The court highlighted that a conciliator's main role is to aid parties in resolving disputes amicably, having the authority to establish the procedure without being constrained by procedural laws like the Code of Civil Procedure or the Indian Evidence Act 1872.
  • When parties reach a mutual agreement and the conciliator sees a potential acceptable settlement, they should follow the process outlined in Section 73. This involves drafting settlement terms, presenting them for parties' consideration, and finalizing the settlement based on their feedback.
  • The settlement only becomes legally binding when parties themselves draft the settlement agreement, or request the conciliator to do so, and sign it. Once signed, the settlement agreement is final and binding on the parties and any individuals associated with them, as per Sub-section (3) of Section 73.

Mysore Cements Ltd. v. Svedala Barmac Ltd.

  • In the case of Mysore Cements Ltd. v. Svedala Barmac Ltd. (AIR 2003 SC 3493), the court discussed Section 73 of the Arbitration and Conciliation Act.
  • Section 73(1) emphasizes that if a conciliator identifies potential settlement elements acceptable to parties, they should formulate these terms and present them for parties' review. Subsequent to parties' feedback, the conciliator can adjust the terms accordingly.
  • However, the court noted a lack of formulation and reformulation by the conciliator in this case, as required by Sub-section (1). Sub-sections (2) to (4) outline the process of reaching and finalizing a settlement agreement between the parties.
  • Sub-section (4) mandates the conciliator to authenticate the settlement agreement and provide each party with a copy once it is signed, ensuring the agreement's validity and enforceability.

Conclusion

  • In conclusion, conciliation stands as a valuable alternative dispute resolution process, intricately guided by the provisions of the Arbitration and Conciliation Act. With a neutral conciliator at its core, the process commences with a written invitation, progresses through the appointment of a conciliator, and involves the exchange of written statements. Throughout the proceedings, the conciliator adheres to principles of fairness and justice, maintaining strict confidentiality.
  • The ultimate aim is to achieve a settlement agreement, solidified as final and binding upon the parties' signatures. Conciliation provides a means for parties to amicably resolve disputes, steering clear of litigation and preserving relationships. With its structured yet flexible approach, conciliation empowers parties to actively engage in the process, facilitating the discovery of mutually acceptable resolutions.
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FAQs on Process of Conciliation - Civil Law for Judiciary Exams

1. What is the process of conciliation under the Arbitration and Conciliation Act 1996?
Ans. The process of conciliation under the Arbitration and Conciliation Act 1996 involves a neutral third party, known as a conciliator, assisting the parties in reaching a mutually acceptable agreement to resolve their dispute.
2. What is the significance of Section 76 of the Arbitration and Conciliation Act 1996?
Ans. Section 76 of the Arbitration and Conciliation Act 1996 deals with the termination of conciliation proceedings. It outlines the circumstances under which the conciliation process may be terminated and the consequences of such termination.
3. How does the termination of conciliation proceedings impact the parties involved in the dispute?
Ans. The termination of conciliation proceedings under Section 76 of the Arbitration and Conciliation Act 1996 may lead to the parties being unable to reach a resolution through conciliation. In such cases, they may have to resort to other methods of dispute resolution, such as arbitration or litigation.
4. What are the steps involved in the conciliation process as per the Arbitration and Conciliation Act 1996?
Ans. The steps involved in the conciliation process under the Arbitration and Conciliation Act 1996 include the appointment of a conciliator, submission of statements by the parties, discussions facilitated by the conciliator, and the eventual drafting of a settlement agreement if a resolution is reached.
5. How does conciliation differ from arbitration under the Arbitration and Conciliation Act 1996?
Ans. Conciliation involves a neutral third party assisting the parties in reaching a voluntary agreement, while arbitration involves a neutral third party making a binding decision on the dispute. Both processes are governed by the Arbitration and Conciliation Act 1996, but they differ in their approach to resolving disputes.
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