(This article is written by Astitva Kumar, a research associate at ICMCR.)

Introduction

Conciliation is a method of resolving conflicts without resorting to litigation. It is an informal procedure in which a conciliator, or a third party, attempts to reach an agreement between the disputants. He resolves contentious matters by decreasing tensions, increasing communication, interpreting concerns, giving technical support, researching viable solutions, and presenting the parties with a negotiated conclusion. Conciliators have their own manner of resolving disputes, and the actions they take are not always rigid and lawful. There is no requirement for a contract such as an arbitration agreement. Both parties must agree to the terms of the settlement. Conciliation is no longer an afterthought or an add-on to the arbitration process; it has become inextricably linked to the mainstream court procedure. For this precise reason, comprehensive codification of all matters concerning conciliation is the need of the hour.

Definition of Conciliation

According to the Oxford Dictionary, conciliation is defined as “the act of preventing someone from becoming upset.” As previously said, it is critical to resolve business disagreements while keeping goodwill among the parties involved. The term ‘concile’ was used to create it. Conciliate and reconcile are both used to bring men’s affections together, but in different situations.

  • Conciliation in Arbitration and Conciliation Act, 1996

Conciliation is covered under Part III of the Arbitration and Conciliation Act of 1996. It is a voluntary process in which disputants agree to settle their differences through conciliation. It is a flexible procedure that allows the parties to choose the date and location of the conciliation, as well as the structure, topic, and conditions of the discussions. Conciliators are trained and certified neutral people who assist disputing parties in understanding the issues in dispute and their interests in reaching mutually acceptable settlements. The conciliation procedure entails a dialogue between the parties, which is conducted with the help of a conciliator.

The appointment of a conciliator is dealt with in Section 64, which stipulates that if there are more than one conciliator, the third conciliator will function as the Presiding Conciliator.[1]

Section 62 discusses how the conciliation process will begin when one party sends the other a written invitation to conciliate the subject. When the other party accepts the offer to conciliate in writing, the procedure will begin. If the other party refuses the invitation or the willing party does not get a response from the other party within thirty days, it will be considered a Rejection of the Invitation.[2]

The submission of both parties’ statements to the conciliators is explained in Section 65. As asked by the conciliator, each party should provide a brief written statement describing the issue. The statement should identify the nature of the disagreement in general as well as the issues of contention. Each side should send the other a copy of their statement. The conciliator can also request written declarations from the parties, including problems, settlement grounds, and so on. Evidence, papers, or visual representation must be used to back up these claims. The other party must get a copy of the same statement. Additional papers might be requested by the Conciliator whenever he needs them.[3]

The conciliator can arrange up meetings for the parties or meet them jointly or individually, according to Sections 67(3) and 69(1). Parties or conciliators might choose the location of the meeting. Orally or in writing, he can communicate with the parties. He must also take into account the expressed wishes of the parties, such as a rapid resolution of the matter, which is dependent on the facts of the case.

Principles of procedure

  1. Independence and impartiality – Sec 67(1)

The conciliator should be fair and independent. While attempting to seek an acceptable settlement of their disagreement, he should provide unbiased and impartial assistance to the parties.

  1. Fairness and justice – Sec 67(2)

The ideals of impartiality, fairness, and justice should lead the conciliator. He should analyse the parties’ rights and responsibilities, the trade’s customs, and the circumstances surrounding the disagreement, including any prior business practises between the parties, among other factors.

  1. Confidentiality – Sec 75, 70, proviso

All matters relevant to the conciliation processes are to be kept secret by the conciliator and the parties. Similarly, if a party offers the conciliator information on the condition that it be kept secret, the conciliator should not share such information with the opposing party. (Sec 70, proviso)

  1. Disclosure of information – Sec 70

When a party provides the conciliator with information on a fact relevant to the dispute, the conciliator must share the substance of that information with the opposing party. The goal of this clause is to provide the opposite party the opportunity to submit an explanation that he deems suitable.

  1. Cooperation of parties with conciliator – Sec 71

The parties should work with the conciliator in good faith. When the conciliator wants them, they should provide written papers, offer proof, and attend meetings.

  1. Rules of procedure – Sec 66

The provisions of the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872, do not apply to the conciliator. Despite the fact that the conciliator is not bound by procedural procedures, he should not disregard natural justice principles.

  1. Place of meeting – Sec 69(2)

The parties have the option of deciding where talks with the conciliator will take place based on their agreement. If no such agreement exists, the conciliator will choose a meeting location after consulting with the parties. The conditions of the conciliation processes will have to be taken into account.

  1. Communication between conciliator and parties – Sec 69(1)

The parties may be invited to meet with the conciliator, or the conciliator may communicate with them orally or in writing. He can do so with all of the parties or with each of them individually.

The fact that conciliation has a conceptual life outside of the 1996 Act deserves further consideration. As a result, it is necessary to investigate the unique legal treatment and institutionalisation of conciliation by isolating it from the 1996 Act’s packaged framework.

Conciliation in Code of Civil Procedure, 1908

For decades, India’s judicial system has been plagued by an immense backlog of cases. The average civil lawsuit takes over a decade to resolve. The Indian Legislature realised in 1996 that, in order to reduce the burden on the courts by implementing a more efficient case management system, mediation/conciliation would need to be included as a conflict resolution alternative in eligible civil and commercial issues. As a result, the CPC was revised in 2002 to include ADR as an important element of the judicial process. According to section 89 of the CPC, if the court believes there are components in a possible settlement that are acceptable to the parties, the court may create the parameters of a possible settlement and send it to arbitration, conciliation, mediation, or judicial settlement.

Conciliation in Industrial Disputes Act, 1947

The Conciliation Officers and Board of Conciliation mentioned in this statute have clearly defined functions and responsibilities, with the State playing an active role in the conciliation process from start to finish. Conciliation under the Industrial Disputes Act was not enabled effectively due to the highly heated and politicised character of our trade unions and the bureaucratic and regimental structure of the State machinery.[4]

Conciliation in Family Courts Act, 1984

According to the preamble of the Family Courts Act of 1984, it was created with the goal of fostering conciliation and ensuring the prompt resolution of conflicts connected to marriage and family issues. According to Section 4 of the 1984 Act, “every effort shall be made to ensure that persons committed to the need to protect and preserve the institution of marriage and to promote the welfare of children, and who are qualified by reason of their experience and expertise to promote the settlement of disputes through conciliation and counselling” are selected for appointment as judges.

Cases on Conciliation

  1. Haresh Dayaram Thakur v. State of Maharashtra and Ors. AIR 2000 SC 2281
    In dealing with Sections 73 and 74 of the Arbitration and Conciliation Act of 1996, the court stated in paragraph 19 of the ruling that “From the legislative provisions described above, it is obvious that a conciliator is a person who is to help the parties in resolving their disputes peacefully.” The conciliator is given broad powers to choose the method to be followed, unrestricted by procedural rules such as the Code of Civil Procedure or the Indian Evidence Act, 1872. When the parties are able to resolve their dispute by mutual agreement and it appears to the conciliator that there is an element of settlement that may be acceptable to the parties, he is to proceed in accordance with Section 73, formulate the terms of a settlement, and present it to the parties for their comments; and the final step for a conciliator is to draught a settlement in light of the observations. Only when the parties write out a settlement agreement or request that the conciliator produce one and affix their signatures to it does the settlement take shape. The settlement agreement signed by the parties is final and binding on the parties and anybody claiming under it, according to Section 73, Subsection (3). As a result, a successful conciliation action ends only when the parties’ settlement agreement is signed. It is such an agreement that, under Section 74, has the legal solemnity and effect of an arbitral decision.[5]
  1. Mysore Cements Ltd. V. Svedala Barmac Ltd. AIR 2003 SC 3493
    Section 73 of the Act is believed to refer to a Settlement Agreement. When the Conciliator believes there are components of a solution that may be acceptable to the parties, he shall construct the parameters of a proposed settlement and offer them to the parties for their consideration, according to subsection (1). Following receipt of the parties’ views, the Conciliator may reformulate the terms of a potential settlement in light of the observations. Under Subsection (2), if the parties achieve a settlement agreement of the dispute on the probable parameters of settlement specified, they may write up and sign a formal settlement agreement. Subsection (3) states that once the parties sign the Settlement Agreement, it is final and binding on the parties and anybody claiming under it. The Conciliator must authenticate the Settlement Agreement and provide a copy to each of the parties under Subsection (4). It is obvious from the uncontested facts and the records that all of Section 73’s criteria have not been met.[6]

Difference between Arbitration and Conciliation

The distinction between arbitration and conciliation may be clearly defined on the basis of the following factors:

  1. Arbitration is a way of settling labour disputes in which management and labour submit their respective perspectives to a neutral third party who renders a verdict and enforces it. Conciliation is a form of conflict resolution in which an impartial third party meets with the parties jointly and severally and assists them in reaching a negotiated settlement or resolving their disagreements.
  2. The arbitrator’s ruling is acceptable to the parties involved. The conciliator, on the other hand, does not have the authority to enforce his judgement.
  3. Arbitration necessitates a prior written agreement between the parties known as an arbitration agreement. Conciliation, on the other hand, does not need any prior agreement.
  4. Arbitration can be used for both present and future problems, whereas conciliation can only be used for current issues.
  5. Witnesses, evidence, cross-examination, transcripts, and legal counsel are all employed in arbitration, just as they are in a courtroom. Conciliation, on the other hand, is an informal method of settling problems between management and labor.[7]

Conclusion

The ability to carry out law is more vital than passing a myriad of laws, and this is the major issue with Indian legislation. Even though we have a statute, the Alternative Dispute Resolution Act, it is not widely used in India for business issues, even though it is widely used in industrialized nations such as Japan for nearly all types of civil disputes. Even though ADR is widely used, the strategies used in each method differ. As a result, rather than having a single act for both arbitration and conciliation, a separate act for conciliation is required to instill professionalism and focused attention to this subject. As a result, institutionalizing mediation is critical.

[1] Section 64, Arbitration and Conciliation Act, 1996

[2] Section 62, Arbitration and Conciliation Act, 1996

[3] Section 65, Arbitration and Conciliation Act, 1996

[4] Prabhu, S. A case for institutionalising conciliation. Bar and Bench – Indian Legal news. Retrieved January 30, 2022, from https://www.barandbench.com/columns/a-case-for-institutionalising-conciliation

[5] Haresh Dayaram Thakur v. State of Maharashtra and Ors. AIR 2000 SC 2281

[6] Mysore Cements Ltd. V. Svedala Barmac Ltd. AIR 2003 SC 3493

[7] Elitenicheresearch. Retrieved January 30, 2022, from https://www.elitenicheresearch.com/search/National-Arbitration-and-Mediation