What is Conciliation

Dispute Resolution by Conciliation

Conciliation is an option out-of-court dispute resolution instrument whereby the parties to a dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences.

Just like another ADR method Mediation, Conciliation is also a deliberate, confidential and consent based procedure. The parties deliberate and strive to arrive at a mutually acceptable, amicable dispute settlement agreement with the help of the neutral Conciliator.

Sole distinction between Conciliation and Mediation ADR methods is that during the Conciliation, the neutral Conciliator can offer to the Parties to dispute a non-binding settlement proposal. Whereas the Mediator as a procedural Rule always refrain from making such a settlement proposal.

Conciliation a willful process

Conciliation is a willful proceedings, where the parties involved are allowed to agree and endeavor to resolve their dispute by way of Conciliation. As a form of Conciliation is more akin to Negotiation. A neutral Conciliator assists each of the parties to independently develop a list of all of their objectives and reach a settlement, the terms of which are mutually acceptable.

The law which governs Conciliation in India is Arbitration and Conciliation Act, 1996.

Appointment of conciliators 

(1) In conciliation proceedings with one Conciliator, the parties may agree on the name of a sole conciliator in conciliation proceedings with two conciliators, each party may appoint one conciliator in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of Conciliators, and in particular, a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator, the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person.

Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Conciliation Process - 

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

Number of conciliators - 

(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.

(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Submission of statements to Conciliator -

(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.

(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.

(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate. 

Settlement agreement in Conciliation

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Status and effect of settlement agreement in Conciliation

The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under Section 30 of Arbitration and Conciliation Act, 1996..

Confidentiality in Conciliation

The Conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

Broadly speaking the salient benefits of Conciliation includes - 

1. Ensures party autonomy.
   Conciliating parties can choose the timing, language, place, structure and content of the conciliation proceedings.
2. Ensures the expertise of the decision maker.
   Conciliating parties are free to select their conciliator. A conciliator does not have to have a specific professional background. The Conciliating parties may base their selection on criteria such as; experience, professional and / or personal expertise, availability, language and cultural skills. A conciliator should be impartial and independent.
3. It is time and cost efficient.
   Due to the informal and flexible nature of conciliation proceedings, the Conciliating parties can be conducted in a time and cost-efficient manner.
4. Ensures confidentiality.
   The Conciliating parties usually agree on confidentiality. Thus, disputes can be settled discretely and business secrets will remain confidential.