Conciliation in India

Conciliation is better than other alternative modes of dispute resolution 

Gone are the days when arbitration was considered to be a cheap and efficacious remedy. Now the situation is completely reversed. Arbitration proceedings have become too technical and expensive. In this context, reference may be made to judgment of the Supreme Court of India. In Guru Nanak Foundation V. Rattan Singh & Sons, 1981 Latest Caselaw 174 SC it was observed:

“Interminable, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal more effective and speedy for resolution of disputes avoiding procedural claptrap and this led to Arbitration Act, 1940. However, the way in which the proceedings under the Act are conducted and without an exception challenged in the courts has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the court been clothed with” legalese‟ of unforeseeable complexity.”

Broadly speaking, there are at least Three advantages if the parties are able to reasonable settlement of their disputes through conciliation, viz.

1) Quickness. The parties can devote their time and energy for better and useful work.
2) Economic. Instead of spending hard earned money on litigation, one can invest it for better dividends.
3) Social. The parties go happily to their respective places and stand relieved from bickering, enmity, which in certain cases might have lingered on for generations. There is a growing feeling amongst the litigants that they would have been better off if there had been no arbitration clause so that they could file civil suit, which entails only three steps, viz.

(a) Filing of the pleadings;
(b) Conduct of the proceedings; and,
(c) Judgment. As against three stages involved in a civil suit, there are as many as six in an arbitration matter, viz.

The Concilitation proceedings in India envisages following stages during the process-

(1) appointment of the arbitrator either by the parties or by the court;
(2) pleadings before the arbitrator;
(3) proceedings before the arbitrator;
(4) award;
(5) filing of the award in the court; and,
(6) recourse to a court against arbitral award.

To overcome the ordeals involved, the best course available to the parties is to look to reasons, appreciate the viewpoint of the opposite party, not to stand on false prestige and resolve the controversy in an amicable manner. It does not help either party to pursue litigation – Whether in courts or before an arbitral tribunal.

Both parties are losers, at least in terms of time, at the time of final outcome of litigation. It is at this stage the parties appreciate that they would have been better off had they taken the path of conciliation. It is not only the fees of lawyers but also of the arbitrators, which have started pinching the parties. Though presently the number is small but nevertheless a serious beginning has been made in some cases to settle the matter outside arbitration to avoid unnecessary expense.

The resort to conciliation, directly or through a trusted common person/ institution, is the only remedy to achieve early success. Conciliation is a better alternative to the formal justice system. For selecting the mode of the conciliation it is not necessary to enter into a formal agreement. Because where arbitration clause is included in the agreement it is implied that the matter would be refereed for conciliation first & if amicable settlement fails then only, it is referred to the arbitration.

The other advantage of choosing conciliation is that though the amicable settlement in conciliation could not be reached then the evidence leaded, the proposal made during the conciliation proceedings cannot be disclosed in any other proceedings (in arbitration also) This protection has been provided by the Arbitration & Conciliation Act, 1996 itself. Therefore parties can attempt Conciliation without any risk.

It is a non-binding procedure in which an impartial third party assists the parties to a dispute in reaching a mutually agreed settlement of the dispute. For effective conciliation, it is necessary that the parties to dispute should be brought together face to face at a common place where they can interact with each other & with the conciliator to arrive at a settlement of the dispute.

The importance of conciliation is that in other proceeding decision is given by the presiding authority & it is binding accordingly. But in conciliation there is amicable settlement where parties themselves have reached to the decision i.e. settlement & which is binding as per their decision. Third party i.e. conciliator is just helping to arrive at settlement & not dictating the term or decision.