Books references:

Avtar Singh –―Law of Arbitration and Conciliation‖ PP 397-398, 7 Edition,

Eastern book Company, Lucknow.
Dr. Anupam Kurlwal, An Introduction to Alternative Dispute Resolution
System.

Website refrences:
https://indiankanoon.org/
 Introduction
Conciliation means „the settling the disputes without litigations‟. It is a process
in which independent person or persons are appointed by the parties with
mutual consent by agreement to bring about a settlement of their dispute
through consensus or by using of the similar techniques which is persuasive. In
the HALSBURY‟S LAWS OF ENGLAND, the terms „arbitration‟ and
„conciliation‟ have been differentiated as under: “The term „arbitration‟ is used
in several senses. It may refer either to a judicial process or to a no judicial
process is concerned with the ascertainment, declaration and enforcement of
rights and liabilities, as they exist, in accordance with some recognized system
of law. An industrial arbitration may well have for its function to ascertain and
declare, but not to enforce, what in the parties, and such a function is non-
judicial. Conciliation is a process of persuading parties to reach agreement, and
is plainly not arbitration; nor is the chairman of conciliation boards an
arbitrator” Confidence, trust & Faith are the essential ingredients of
conciliation. This effective means of ADR is often used for domestic as well as
international disputes. Some Significant difference is there while using it for
domestic or international disputes.

Conciliation Procedure
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 it has been proved useful that
before referring the dispute to the civil court or industrial court or family court
etc, efforts to concile between the parties should be made. It is similar to the
American concept of court-annexed mediation.

However without structured procedure & statutory sanction, it was not possible
for conciliation to achieve popularity in the countries like USA & also in other
economically advanced countries.

Procedure of Conciliation
4.1 Appointment & qualification of conciliator Conciliator can be appointed
by the parties themselves of their own choice with consensus i.e. both should
agree upon the appointment of the conciliator. The parties follow any of the
following methods.

(a) The parties themselves may name a conciliator or conciliators.

(b) Each party may appoint one conciliator & may mutually agree on the third
conciliator.

(c) The parties may enlist the assistance of a suitable institution a person in
connection with the appointment of conciliators. In the case of family court, or
labour court etc, before referring the matter to the court it is compulsory to
consult with the councilor i.e. conciliator, who are appointed by the government
for making settlement between the parties before the trial & on the report of the
councilor only, matter is put forth for trial.

Here, Conciliator should not be of a specific qualification, but he should also

not be ignorant of the subject matter. He can be a expert person of the subject
matter of dispute for e.g. if there is a dispute regarding construction cost of a
building in that case a person can be a civil engineer, who has the knowledge of
building construction. The important thing, which cannot be ignored, is that
conciliation is not the person who will decide the matter; rather he is a person
who assists the parties to arrive at amicable settlement, where the decision is of
the parties themselves.
Rules and principles of Conciliation
A conciliator is a person who is to assist the parties to settle the disputes
between them amicably. For this purpose, the Conciliator is vested with wide
powers to decide the procedure to be followed by him like the Code of civil
Procedure or the Indian Evidence Act, 1872. When the parties are able to
resolve the dispute between them by mutual agreement and it appears to the
conciliator that there exists an element of settlement which may be acceptable to
the parties, he is to proceed in accordance with the procedure laid down in
section 73, formulate the terms of settlement and make it over to the parties for
their observations; and the ultimate step to be taken by a conciliator is to the
terms formulated by him. The settlement takes shape only when the parties
draw up the settlement agreement or request the conciliator to prepare the same
affix their signatures to it. The settlement agreement signed by the parties is
final and binding on the parties and persons claiming under them. On the basis
of notes by the conciliator during the course of conciliation proceedings held
separately and jointly with each of the parties to the dispute, and also on the
basis of written statements and documentary evidence produced by the parties
in support thereof, the conciliator shall reduce to writing the terms of the
possible settlement, if he finds that there exists the possibility of a settlement
which may be acceptable to both parties. The conciliator shall send the draft
settlement to both the parties. For their consideration and approval. If the parties
make any observation on the draft settlement, the conciliator shall reformulate
the draft settlements incorporating therein the observations made by the parties.
If, after going through the reformulated draft settlement, the parties agree
thereon, they shall convey the same to the conciliator, either orally or in writing,
that they have no objection to the reformulated draft settlement. They will also
make a formal request to the conciliator to either himself draw up the settlement
agreement, or assist the parties in drawing up the same.

Applicability
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

Termination of proceedings on settlement

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 & 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.
Advantages of resolution of a dispute by conciliation
In contrast to arbitration, conciliation is nonbonding and confidential. If
successful, conciliation results in a settlement of the dispute. Like arbitration,
conciliators are selected by and serve at the expense of the parties. Conciliation
is less formal than arbitration, but is more evaluative than the facilitative
process of most forms of mediation. Conciliators may be retired judges, senior
advocates, or non-lawyers with expertise in the subject matter. The court plays
no formal role in sponsoring conciliation. Conciliation is becoming increasingly
popular, as an alternative to other formal and informal modes of dispute
resolution due to its obvious advantages:

a) It offers a more flexible alternative, for a wide variety of disputes, small as

well as large;

b) It obviates the parties from seeking recourse to the court system;

c) It reserves the freedom of the parties to withdraw from conciliation without

prejudice to their legal position inter se at any stage of the proceedings;

d) It is committed to maintenance of confidentiality throughout the proceedings

and thereafter, of the dispute, the information exchanged, the offers and counter
offers of solutions made and the settlement arrived at.

e) It is cost-effective and produces quicker resolution of dispute.

f) It facilitates the maintenance of continued relationship between the parties

even after the settlement or at least during the period of settlement is attempted
at. This feature is of particular significance to the parties who are required to
continue their relationship despite the dispute, as in the case of disputes arising
out of construction contracts, family relationships, family properties or disputes
between members of any business or other organizations;

g) There is no scope for corruption or bias.

Problems faced by conciliation in India

Although conciliation services are available to civil litigants through the
innovation of Lok Adalats (panels of conciliators) and Conciliation Committees,
several problems remain unsolved. First, India generally lacks obligatory
mediation such as early neutral evaluation utilized in the United States which is
especially useful when imposed shortly after litigation is filed. Conciliation
processes in India require the consent of both parties, or the request of one party
and the decision by the court that the matter is suitable for conciliation. Second,
the subject matter of disputes that may be sent to Lok Adalats is limited to auto
accidents and family matters. Third, the conciliation process normally involves
the lawyers, not the disputing parties themselves. This problem is particularly
acute in writ proceedings in which the government is the responding party,
since counsel frequently claims to lack authority to make decisions about terms
of settlement.Fourth, current conciliation processes do not require the parties to
meet and confer prior to entering either traditional litigation venues or their
alternatives. No joint statement of the specific points of disagreement is
required. The absence of meeting, conference and/or joint statements
requirement is required. The absence of meeting, conference or joint statement
requirements allows competing sides to remain insulated from one another.
Fifth, the Lok Adalats themselves have experienced backlog, and some
defendants agree to conciliation as a way of further delaying the litigation
process. Finally, there is no set time or point within the litigation process at
which a decision is made, by the courts, the parties or otherwise regarding
referral of the case to some form of alternative dispute resolution.
 Conclusion
However, the success of conciliation depends on the mental attitude of
the parties, the skill of the conciliator and the proper environment, backed by
infrastructure facilities for servicing the conciliation procedure.The mental
attitude required for conciliation ranges, on the one end from the inclination of
all the parties to arrive at a mutually agreed settlement, though there may be
mental reservation in making the first move, to the absence of any objection to
such settlement, so that the conciliator may have scope to induce the parties to
attempt conciliation. On ultimate analytical observation, reciprocity is the
hallmark of conciliation process. For healthy business relationship mutual
understanding & to solve the dispute through settlement are the eventual
qualities or eventual base. When party is having healthy business relationship,
he is bound to succeed in conciliation. The need is therefore to develop a will to
accommodate other party‟s genuine interest, a faith in the other‟s objects &
capacity to reason to evolve cultivates the wish to sit together & reciprocate &
to solve out the difference amicably. Therefore it is always preferable to resolve
the dispute by conciliation.