Conciliation and Conciliators under Arbitration and Conciliation Act, 1996

Among various methods of dispute settlement, conciliation appears to be the most democratic method.
The conciliator invites both parties to dispute, explores the areas of disagreement, helps them to
examine various alternatives and selects, by mutual agreement, a solution which is most favourable.

Thus, the process of conciliation aims at facilitating the settlement of disputes. The conciliator does not
the power to force any solution and can only make recommendatory interventions. The
recommendatory nature of conciliation is then its biggest strength and weakness. Conciliation is as old as
Indian history.

Legal Provisions Dealing with Conciliation

Section 61 of the Arbitration and Conciliation Act of 1996[2] provides for the Application and Scope of
Conciliation which points out that the process of conciliation extends, in the first place, to disputes,
whether contractual or not and they must arise out of the legal relationship. In a dispute, one party has
the right to sue and to the other party the liability to be sued. But Part III of the Act does not apply to
such disputes.

Section 63 of the act fixes the number of conciliators. Ideally, one conciliator is required but the parties
may by their agreement provide for two or three conciliators.

Appointment of a conciliator under the Arbitration and Conciliation Act, 1996

According to Section 64 of the Arbitration and Conciliation Act, 1996-

(1) Subject to sub-section-

(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole
conciliator;

(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;

(c) 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) a party may request such an institution or person to recommend the names of suitable individuals to
act as conciliator; or

(b) the parties may agree that the appointment of one or more conciliators be made directly by such an
institution or person.

The parties have to agree on the composition of the conciliation tribunal when the invitation to
conciliation is acknowledged. In the absence of any agreement to the contrary, there shall be only one
conciliator. If both parties fail to appoint a conciliator with consent, the same may be conducted by two
conciliators (maximum limit is three), then each party appoints own conciliator, and the third conciliator
is appointed unanimously by both parties.
Commencement of conciliation proceedings under section 62 of the act states that-

(1) The party initiating conciliation shall send to the other party a written (via Register Post, Whatsapp,
Hand delivery of Notice) invitation to conciliate under this Part, briefly identifying the subject of the
dispute.

(2) Conciliation proceedings shall commence when the other party accepts (Our team personally visit the
locatable Customer base to attend the Conciliation camp and take the acknowledge copy of receipt and
confirmation of attendance) 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 (30 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.

The conciliation proceedings shall be terminated as given under section 76-

(a) by the signing of the settlement agreement by the parties on the date of the agreement; or

(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that
further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation
proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect
that the conciliation proceedings are terminated, on the date of the declaration.

Conclusion

The process of conciliation as an alternate dispute redressal mechanism is beneficial to the parties as it is
expeditious and cost-effective which makes it simple compared to lengthy litigation. However, the
success of conciliation depends on the attitude of the parties, the skill of the conciliator and the
appropriate environment, backed by infrastructure facilities for servicing the conciliation procedure. On
ultimate analytical observation, reciprocity is the hallmark of the conciliation process.

Mutual understanding is required for a healthy business and solving the dispute through settlement is
the eventual quality or eventual base as it leads to success in conciliation. In contrast to arbitration,
conciliation is nonbonding and confidential.

It also reserves the freedom of the parties to withdraw from conciliation without prejudice to their legal
position inter se at any stage of the proceedings. Conciliation is a boon and it is a better procedure to
settle any dispute as in this process it is the parties who by themselves only come to the settlement of
the dispute and it tries to individualize the optimal solution and direct parties towards a satisfactory
common agreement.