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What is Conciliation under Alternate Dispute Resolution ?

Updated: Mar 23

Conciliation is a form of Alternate Dispute Resolution, where in two or more parties involved in a dispute resolve it out of court by appointing an conciliator. Unlike, in Arbitration where in a clause for arbitration agreement is mentioned, which binds the parties by default to resolve their cases through an arbitrator and an award is issued by the arbitrator. In conciliation, the aim of the parties is to arrive at consensus which would be favorable to both the parties and the settlement is based on the arguments and suggestions presented by the parties.

Conciliation Procedure - ADR in India

Litigation is a time taking process and the inputs would be by the book of law and procedures prescribed, conciliation as a process allows the parties to submit their suggestions which would be helpful in resolving the dispute and also get inputs from a third individual a conciliator who can propose solutions based on the discussion between the parties, for reaching a mutually considerable agreement which the parties are looking to arrive at.

In terms of Legality for conciliation procedure, The Arbitration and Conciliation Act 1996, Chapter III lays down the scope and procedure for conciliation.

How is Conciliation initiated ?: The Party initiating conciliation shall send a written invitation to other party to conciliate, and the proceedings shall commence, when the other party accepts it in writing, the invitation to conciliate. The other party is at liberty to reject the invitation or If there is no reply within 30 days from the date on which the invitation to conciliation was sent, then it will be considered to be an implied rejection and there shall be no conciliation proceeding.

Appointment of Conciliators: The parties may choose a sole Conciliator, or in case of two Conciliators each party will choose a single Conciliator who ought to act jointly as a general rule. In Conciliation proceedings with three Conciliators, each party may appoint one Conciliator and the two Conciliators will appoint the third Conciliator who shall act as presiding Conciliator.

Conciliation Proceeding: The parties will submit brief written statement describing the nature of the dispute and points at issue and each copy shall also be sent to the other party. In addition to this any additional documents and other evidence will also be supplemented upon the request of the Conciliator. The Conciliator may have private meetings with the party or together with the parties and the Conciliator shall disclose any factual information to the other party in order to give the other party an opportunity to present their explanation. Provided when a party gives an information to the Conciliator subject to confidentiality, the Conciliator cannot disclose such information to the other party. During the process, the parties are required to cooperate with the conciliator and may pass suggestions to the Conciliator for the settlement of the dispute.

Is Conciliation Binding? : When it appears to the Conciliator there exists element of settlement, the Conciliator shall formulate terms of possible settlement and submit it to the parties for observation, which maybe reformulated after considering the observation of the parties in lieu of settlement. When the parties sign the settlement agreement, the settlement shall be final and binding on the parties to conciliation.

Is Conciliation a Confidential Process?: The Conciliator and the parties to Conciliation shall keep all the matters of the proceedings confidential and also the settlement agreement, unless it's disclosure is necessary for the purpose of enforcement and implementation. The parties to Conciliation cannot rely on the evidence in arbitral or judicial proceedings, the views or suggestions made by the other party in respect of possible settlement including any proposals made by the Conciliator or the fact that the other party has indicated heir willingness to accept a proposal for the settlement.

Why should one opt for conciliation: If parties are looking to arrive at a mutual agreement to resolve their dispute instead of getting involved in legal procedure which would be time consuming and monetary expense on the parties, then conciliation is the best way to go for. Also as the judgement of conciliation isn't binding unless the parties have signed an agreement, the parties have an opportunity to work on a mutual agreement to resolve their issue instead of taking it to the courts where the judgement would be mostly ruled in favor of one party and can't be appealed once pronounced by the highest courts.


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