Arbitration and Conciliation Act- Conciliation (Section 60-81)

Conciliation

Introduction

 

Conciliation is another method of alternative dispute resolution.

Section 61- Application and scope

 

Section 61 states that whenever there is dispute arising out of legal relationship, then parties may follow the provision of Part III of this act. If parties agreed that they do not want to follow this part, act says that’s fine too!

This section also makes it clear that the disputes which are mandatory needed to go to court are not covered under this part. (Like Criminal matters!)

 

Section 62- Commencement of conciliation proceedings

 

Section 62 provides details when conciliation is started.

To initiate the conciliation, party who wish to being conciliation proceedings must need to send written invitation. “I invite to glorious and expeditious conciliation proceeding, kindly accept and come”!

This invitation must include subject of the dispute.

As soon as other party accepts this invitation in writing, the conciliation proceedings begins.

Other party might reject the request of the conciliation, in which case there won’t be any conciliation.

If notice is sent and in 30 days other party don’t reply then it would be deemed to be rejection by the other parties. This 30 day period is not fixed, and you can ask other party to reply within 43 days or whatever number of days you like. If in that period, you don’t get a reply, it would be termed as rejection. However this rejection again has to be informed to other party.

Section 63- Number of conciliators

 

Before going into number of conciliators, let’s understand who conciliator is.

According to Halsbury Law of England, “Conciliator” is described as a person persuading parties to reach an agreement.

Conciliator is a person who tells party “guys, calm down, settle your differences or else you will have to pay lawyers fees”!

The process of conciliation is defined as “settlement of a dispute in an agreeable manner, a process in which a neutral person meets with parties to a dispute and explores how the dispute might be resolved”

Now back to section 63, which states the number of conciliators should be one. However parties can have more than one conciliator if they wishes to.

It also states that when number of conciliators is more that one they will have to act jointly.

Wonder why act recommend one conciliator. One conciliator will have reasonable faith of both the parties. There will be less conflicts of opinion and it will help expeditious settlement. Sole conciliator will also bring down expenditure as well.

Section 64- Appointment of conciliators

 

The procedure of appointment of conciliator is easy and less conflict ridden.

When number of conciliator is one, then parties may agree on the name of sole conciliator.

When number of conciliator is two, then each party may appoint one conciliator each.

When number of conciliator is three, then each party will appoint one conciliator and each appointed conciliator will appoint the third one.

Remember there is no provision to go to court for appointment of conciliator. Think why?

Apart from above methods, parties can take help of any institution like chamber of commerce, or they can to any person and ask him to recommend the conciliator.

Section however advises that conciliator should be such a person that is impartial.

In case there are parties from different nation and there are 3 or 1 conciliator, this section advises that the third or sole conciliator should be from different nationality that that of parties.

Note one difference with number of arbitrator. Arbitrator number should be odd, whereas that is not the case in number of conciliators. Think why?

Section 65- Submission of statements to conciliator

 

What will be next course of action after appointment of conciliators? Of course conduct of proceeding.

This section states how it should be carried out.

It states that conciliator should ask each party to submit a written statements, describe the issues of the party and any other additional information needed.

Conciliator can also call upon any party to clarify the statements given in written. He may also call upon any additional document or information from any party.

Section 66- Conciliator not bound by certain enactment

 

Procedures are guided by CPC and evidences are guided by Evidence Act. Conciliator is not bound by these laws.

Section 67- Role of conciliator.

 

What is the role conciliator has to play? We all know but still act provides certain specific role of conciliator.

Conciliator has to use his skills in and independent and impartial manner in attempt of parties to reach settlement.

Clause 2 is extremely important. It states conciliator shall be guided by principles of objectivity, fairness and justice.  Conciliator also has to look over other things usage of trades, their earlier business transaction and rights/obligation of the parties.

Clause 3 gives power to conciliator to carry out the proceedings as he think would be appropriate. If any party wish for oral hearing, then conciliator should carry out that too.

Clause 4 states that conciliator may propose solution, compromise etc. Such proposals or compromises need not with reasons.

Role can be summarize in following way

1)    Carry out proceeding with impartiality

2)    Pay heed to principle of natural justice

3)    Do whatever needed to carry out proceeding.

4)    Propose a solution

 

Section 68- Administrative assistance

 

For smooth conduct of proceedings, conciliator along with consent of parties may arrange an institution or person to help in administration of proceedings.

 

 

Section 69- Communication between conciliator and parties

 

Conciliator may call parties directly for any enquires or he can do written communication with the parties.

Also place of conciliation may be decided by parties. If parties don’t come to any conclusion as to place, then conciliator will decide the place.

 

Section 70- Disclosure of information

 

Both parties submit information and facts to conciliators. Conciliator can share factual information related to dispute to other party as it will help other party to explain their stand in better way.

As far as confidentiality is concerned, if some party don’t want to share information with other party, then such information should not be shared by conciliator.

Section 71- Cooperation of parties with conciliator

 

This section cast a duty upon parties for co-operation. It states that parties should listen to request by Conciliator and respond him.

Also it states that parties should submit written materials, provide evidence and attend meetings.

Section 72- Suggestions by parties for settlement of dispute

 

Each party at their own initiative can suggest for any settlement to conciliator.

Section 73- Settlement agreement

 

If conciliator feels that there is an element of settlement he may formulate the terms of settlement and submit that to parties.

If parties agree to terms of settlement then  all fine, else if some party want some modification they can submit their modification to conciliators. This back and forth procedure can be continued till settlement is reached.

Finally if parties arrived at settlement they may sign settlement agreement. Conciliator can help draw up settlement agreement.

After signing the settlement agreement would be final and binding on parties.

Section 74- Status and effect of settlement agreement

 

Once the agreement is reached, it will be binding on both the parties. This section states that settlement agreement would have same status and effect as if it is arbitral award under section 30.

Section 75- Confidentiality

 

This section states that all information shared during proceeding, or even the proceeding including settlement award should be kept confidential.

It states that information should be revealed when it is necessary for implementation or enforcement of settlement.

Section 76- Termination of conciliation proceedings

 

Conciliation proceedings can be terminated in below way

1)    After signing of settlement agreement

2)    If conciliator gives written declaration that further conciliation proceedings are not justified

3)    If parties decide they can write to conciliators regarding termination.

4)    If One party decides then they can write to conciliator and other party.

 

Section 77-Resort to arbitral or judicial proceeding

 

This section prohibits the arbitral or judicial proceedings when dispute is under conciliation proceedings.

Section 78- Costs

 

Conciliator can fix the cost and give notice to both parties about the cost.

This cost include

1)    And fee and expense of conciliator

2)    Expert advice rendered during proceedings

3)    Any administrative expenses

4)    Any other reasonable expenses.

Section 79- Deposits

 

Conciliator can direct the parties to deposit any amount related to cost.

Section 80- Role of conciliator in other proceedings

 

This section restricts role of conciliator in some proceedings.

First, it states that conciliator cannot act as an arbitrator or consul  in any arbitral or judicial proceedings in respect of a dispute that is subject of conciliation proceedings

Second, the parties cannot present conciliator as witness in ay arbitral or judicial proceedings.

Section 81- Admissibility of evidence in other proceedings

 

This section prohibits the information revealed during conciliation proceedings to be admissible in other arbitral or judicial proceedings.

If specifically prohibits below information

1)    Views or settlement opinion by other parties

2)    Admissions made by other parties during course of settlement proceedings

3)    Proposal made by the conciliator

4)    Willingness of any party to accept any settlement.