Conciliation Procedure

Conciliation Procedure in India

Either party to the dispute can commence the conciliation process. When one party invites the other party for resolution of their dispute through conciliation, the conciliation proceedings are said to have been initiated. When the other party accepts the invitation, the conciliation proceedings commence. If the other party rejects the invitation, there are no conciliation proceedings for the resolution of that dispute.

Generally, only one conciliator is appointed to resolve the dispute between the parties. The parties can appoint the sole conciliator by mutual consent. If the parties fail to arrive at a mutual agreement, they can enlist the support of any international or national institution for the appointment of a conciliator. There is no bar to the appointment of two or more conciliators.

In conciliation proceedings with three conciliators, each party appoints one conciliator. The third conciliator is appointed by the parties by mutual consent. Unlike arbitration where the third arbitrator is called the Presiding Arbitrator, the third conciliator is not termed as Presiding conciliator. He is just the third conciliator.

The conciliator is supposed to be impartial and conduct the conciliation proceedings in an impartial manner. He is guided by the principles of objectivity, fairness and justice, and by the usage of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties. The conciliator is not bound by the rules of procedure and evidence.

The conciliator does not give any award or order. He tries to bring an acceptable agreement as to the dispute between the parties by mutual consent.

The agreement so arrived at is signed by the parties and authenticated by the conciliator. In some legal systems, the agreement so arrived at between the parties resolving their dispute has been given the status of an arbitral award. If no consensus could be arrived at between the parties and the conciliation proceedings fail, the parties can resort to arbitration.

A conciliator is not expected to act, after the conciliation proceedings are over, as an arbitrator unless the parties expressly agree that the conciliator can act as arbitrator. Similarly, the conciliation proceedings are confidential in nature.

Rules of Conciliation of most of the international institutions provide that the parties shall not rely on or introduce as evidence in arbitral or judicial proceedings-
(a) the views expressed or suggestions made for a possible settlement during the conciliation proceedings;
(b) admissions made by any party during the course of the conciliation proceedings;
(c) proposals made by the conciliator for the consideration of the parties;
(d) the fact that any party had indicated its willingness to accept a proposal for settlement made by the conciliator; and that the conciliator shall not be produced or presented as a witness in any such arbitral or judicial proceedings.

Conciliation has received statutory recognition as Section 80 of the Arbitration and Conciliation Act, 1996, the conciliator does not decide for the parties, but strives to support them in generating options in order to find a solution that is compatible for both of them, thereby fulfilling the mandate of Section 67 of the Act under which the main function of the conciliator is to assist the parties to reach an amicable settlement.

For achieving this, a conciliator is obliged to (1) act in an independent and impartial manner, and (2) abide by the principles of objectivity, fairness and justice. Section 67(4) specifically enables the conciliator to “make proposals for settlement of the dispute … at any stage of the conciliation proceedings.”

Procedure for Conciliation proceedings

The parties competent to contract can have the benefit of conciliation. Though the conciliator is appointed by the parties of their own choice he is an independent & impartial person, who assists the parties in independent & impartial manner in their attempt to reach an amicable settlement of their dispute. He is guided by the principles of objectivity, fairness & Justice. He takes into consideration circumstance surrounding the dispute, including any previous business practices between the parties.

The councilor can hold separate meeting with each party to further clarity its case & to discuss the merits of the case, & to give the clear idea to the requirement to substantiate the claims.

The main aim should be to give clear idea of the lacunas in the case to each many on their side. & to encourage them for settlement .All the information received from one party, conciliation discloses that information to the other party so that it may have an opportunity to present its explanation, if any However if the party has given standing instruction not to disclose the specific information to the other party, then in that case conciliator does not disclose the same.

Conciliator can hold required separate meetings as well as required joint meetings, with the consent of both the parties. If the conciliator is of the view that there is no scope for agreement i.e. settlement between the parties or there is unwillingness to pursue conciliation the conciliator terminates the proceedings.

Where there is settlement between the parties, the conciliator holds a final joint sitting for drawing up & signing a settlement agreement by the parties. The parties are bound by the settlement agreement. The dispute is resolved in terms of the agreement.

Where the settlement is reached in pretrial proceedings of the family court or labour court the settlement agreement can be enforced in the same manner as the judgment, decision of the court. In the case of a matter referred for conciliation, during the pendency of the arbitral proceedings & the law so provides the settlement agreement can be enforced in the same manner as an arbitral award on agreed terms.

The settlement agreement, notwithstanding anything contained in any law for the time being in force, shall be treated as a confidential document and all the written statements, documentary and other evidence procedure and relied upon by the parties, minutes of the conciliation meeting etc. shall also have immunity from being produced elsewhere as a piece of evidence. This element of confidentiality shall be equally binding not only on the conciliator but on the parties as well. The only situation where the confidentiality element shall not have any application is when its disclosure is necessary for the purpose of the implementation and enforcement of the settlement agreement.

Thus, no reference can be made to the settlement agreement by the parties in any forum, except when its contents are required to be disclosed, neither the parties nor the conciliator can make public the contents of the settlement agreement or any other matter relating to the conciliation proceedings. In conciliation procedure, parties & conciliator are bound by certain inherent principles & discipline.

Unless all the parties otherwise agree, the conciliator is estopped from acting as an arbitrator or as a representative of a party in any judicial or other proceeding in respect of a dispute which is or has been the subject matter of conciliation proceedings in which he acts a conciliator.

The conciliator can not be presented by a party as a witness in any such proceedings Similarly, parties can not rely on the followings as evidence in arbitrate judicial or other proceedings.

a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute.
b) admissions made by the other party in the course of the conciliation proceedings
c) proposals made by the conciliator.
d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

For this confidentiality & discipline parties may enter into contractual agreement in a case where there is no provision under the Act. Parties are free to withdraw at any stage of conciliation proceedings & conciliator may also terminate the proceedings, if he finds that there is no scope for settlement. But in some cases some points of dispute are resolved, though not the whole dispute. Thus, even where an attempt to conciliate fails it helps in narrowing the issue in dispute.

Termination of Conciliation proceedings upon settlement between the parties

As and when the parties reach an amicable settlement on the disputes which had been referred to the conciliator, and a duly authenticated copy (by the conciliator) of the settlement agreement is handed over to the parties, the conciliation proceedings shall stand terminated on that date. There is no provision in the Act for review of the settlement agreement, nor there do any provision under which any of the parties to the settlement agreement can retrace its steps and wriggle out of the written commitments in the form of a settlement agreement.

A conciliation proceeding comes to an end and stands terminated if any of the following condition is fulfilled-
(i) On signing of the settlement agreement by the parties.
(ii) If no settlement of dispute is arrived at in any of the following manner:

a) By a written declaration of the conciliator that further efforts at conciliation are no more justified.
b) By joint written declaration of the parties that the conciliation proceedings are terminated.
c) By the declaration of either party to other party & conciliator, that conciliation proceeding is terminated. It is open to the parties to terminate conciliation proceedings at any time before settlement.

The conciliation proceedings can also be terminated:

(i) When the conciliator declares, after consultation with the parties, that any further exercise on conciliation shall be an exercise in futility; or
(ii) When the parties jointly request the conciliator; or
(iii) When one party communicates to the other, with a copy to the conciliator, that no more efforts be made in the conciliation matter.

There is no bar on the number of times the efforts for conciliation can be made. Termination of conciliation proceedings can by no means be taken to be the end of the conciliation efforts for all times to come.