Chapter 4: Conciliation

• An ADR mechanism where an independent third party identifies the issues at stake,
developing options, considering alternatives and striving to reach an agreement
• Conciliator does not make a judgement or decision on a dispute. He is not an adjudicator
• Conciliators help parties arrive at a settlement
• Voluntary Conciliation - Where parties jointly decide to refer their dispute to a conciliator
who will then initiate the conciliation process
• Conciliation Ordered by the court – (Look-up)
• When Conciliation is part of a government agency – Parties must first seek an amicable
resolution through conciliation before arbitration, if conciliation fails parties trigger
arbitration or approach the civil court (Frequent in government contracts)

Role of Conciliator:

• Role similar to that of a mediator but may have specialized knowledge or must have an
understanding of the subject matter
• Persuade the parties to reach a common ground, highlighting the drawbacks of pursuing the
matter in Court
• Must remain neutral and will not take sides or declare who is right or who is wrong
• Does not need to engage with evidence but focus on guiding parties towards a resolution
• A conciliator is not an advisor

Process of Conciliation:

• Usually holds separate sessions with each party then a session with all parties encouraging
them to settle their issues

• Conciliation is generally suited for the following types of disputes:

1. Commercial Matters
2. Matrimonial issues
3. Landlord and tenant conflicts
4. Facilitating settlements

• Conciliator can decide on any procedure; there are no standardized procedures

• The decisions made by conciliator are recommendatory
• International conciliation (At least one party should be a foreign party) is limited to disputes
of a commercial nature
 • Sec 61 – Unless the parties have agreed otherwise, the provisions regarding conciliation
apply to disputes arising out of legal relationships whether contractual or not. Non
contractual proceeds include parties mutually deciding on conciliation

• Sec 62 – Party intending to initiate conciliation must send a written invitation to the other
party and must state the subject of dispute briefly. Conciliation proceedings commence
when the other party accepts the invitation to conciliation in writing. If a party intending to
initiate conciliation did not receive a response in 30 days from the date such invitation is sent
it is treated as a rejection of invitation to conciliate

• Sec 63 – There shall be one conciliator unless the parties agree that there will be two or
three conciliators who will act jointly. Number of conciliators can be odd or even

• Sec 64 – One conciliator: party may agree on the name of the sole conciliator
Two conciliator: Each party may appoint one conciliator
Three Conciliator: Parties may agree on the name of the third conciliator who shall act as the
presiding conciliator who must be independent and impartial
Parties must seek the assistance of suitable institutions or person regarding appointment of
conciliators

• Disputes not suitable for conciliation:

1. Disputes in Rem
2. Insolvency proceedings
3. Criminal matters

Initiation of Conciliation Process:

• Proceedings commence when the other party accepts the invitation

• Conciliator is not bound by the rules of procedures or rules of evidence
• If a person is appointed as a conciliator, he is disqualified from being an adjudicator,
arbitrator or judge subsequently in the same matter, because the conciliator has confidential
personal and commercial information about the parties
• Conciliator does not issue an award or order he only facilitates
• Rules of Conciliation of most international institutions states that the parties shall not rely on
or introduce as evidence in arbitration proceedings the views expressed or suggestions made
during the conciliation process. Admissions or any documents made by any party or
proposals made by the conciliator is also not permitted as evidence.
• Conciliators report, if the matter is not settled must merely state that the parties failed to
reach an agreement without expressing any views

Number of Conciliators:

• Sec 63 – There is one conciliator unless parties’ consent to two or three by mutual
agreement
 • Conciliator is someone who helps two opposing sides engaged in discussions, a neutral third
party to facilitate a resolve of dispute between two parties
• Joint conciliators collaborate together
• Although single conciliator is generally preferred to reduce complexibility and timeliness to
quicker resolutions and cost effectiveness
• Single conciliator would also follow uniform approach to resolution; communications
channel is clearer and more direct. Increased confidentiality.
• Conciliator ensures confidentiality of parties
• Parties become more engaged with single conciliator (Single point of coordination)
• Qualifications of a conciliator varies from dispute to dispute
• Sec 63 – If there are more than one conciliator, all conciliators must act jointly in the
conciliation and settlement of disputes
• Sec 64 – In conciliation proceedings by a single conciliator parties may mutually agree on the
name
2 conciliators – Each party may appoint one
3 conciliators - Each party may appoint one and the third conciliator mutually chosen would
be the presiding conciliator (May be from another nationality to ensure more neutrality)
Parties may seek assistance from suitable institutions or individuals for appointment
Conciliator may seek assistance from experts to help the parties reach a settlement

Submission of statement to the conciliator:

• Upon appointment by the parties, each party; a brief written statement mentioning the
nature of dispute and key issues involved will be sent, each party must send a copy of this to
the other party
• A conciliator may request each party a more detailed statement:
1. Outlining their position
2. The facts supporting it
3. Any relevant document or evidence
Copies of the above will be also shared with the other parties
• Request for any other additional information is also permitted
• Sec 66 – Conciliator is not bound by CPC or Indian evidence Act, only principles of natural
justices – both parties to be treated equally and right to be heard
• Sec 67 – Conciliator is responsible to act in an independent and just manner and
Conduct the proceedings in any way suitable
To propose a settlement at any stage of proceedings whether orally or written
• Sec 68 – To facilitate conciliation process, the parties or conciliator, may seek administrative
assistance from a suitable institution or individual (upon consent) for:
1. Providing communication services
2. Interpreting legal provisions
3. Other support services
• Sec 69 – Conciliator may meet the parties individually or together unless there is an
agreement on which agreed upon location
• Sec 70 – When Conciliator receives factual information about the dispute from one party he
must disclose the substance of that information to the other ensuring that both sides have
opportunity unless the matter is of the confidentiality nature in such case he must refrain
from disclosing
Goals of a conciliator:

1. Build a rapport with the parties

2. Earn their trust and confidence
3. Act as a servant-leader in guiding them
4. Play a devil’s advocate in challenging their perspectives
5. Be their friend and confidant
6. Assist them in exploring options for settlement
7. Help them in overcoming obstacles

Skills needed for a conciliator:

1. People Skills – Understanding conflict, communication skills

2. Process Skills – Structuring the process, gathering information, facilitating communication,
developing the agenda
3. Problem Solving Skills – facilitating negotiation, brainstorming options, lateral thinking,
expanding the pie, generating offers, testing offers, exchanging offers

Settlement Agreement:

• If a conciliator perceives there is a possibility of settlement, he will propose a resolution.

After parties’ consideration, the conciliator may revise the terms accordingly
• If the parties reach an agreement, they will draft and sign a settlement agreement
• Upon request the conciliator may assist in drafting the settlement agreement also
• Once signed, settlement agreement is final and binding on parties and any individuals
claiming under them, the conciliator will authenticate the settlement agreement and provide
a copy to each party ensuring it is legally binding and conclusive

Drafting of the settlement terms:

• Most critical aspect

• Terms must be crafted with utmost clarity to avoid ambiguity
• Poorly drafted or unclear settlement agreements can lead to further disputes
• Settlement agreement should be free from any confusing languages
• The conciliator must ensure that once the matter is settled, settlement terms are clearly
explained and drafted where there are no room for disputes in the future
• A signed settlement agreement is binding and final on the parties and any successors or
claimants associated with them
• Conciliators must also ensure the individuals signing the agreement has proper authority

Status and effect of Settlement Agreement:

• It will have the same status as an arbitral award

• Executed as a decree of arbitral award
• In short, only the settlement agreement concluded before the conciliator will have the status
of an arbitral award (Sec 74)
 • Sec 76 – Conciliation proceedings are terminated on the date in which the settlement
agreement is signed by the parties (applicable where matter is amicably resolved and
signed).
Conciliation proceedings are also terminated upon written Declaration from the conciliator
issued after consulting with parties, stating conciliation are no longer justified (applicable
where parties are unable to reach a consensus).
Conciliation proceedings are also terminated upon written Declaration from the parties
addressed to the conciliator stating that the conciliation proceedings are terminated
(Applicable when parties decide conciliation is no longer possible).
Conciliation proceedings are also terminated upon written Declaration from one party to
other and conciliator indicating that the conciliation process is terminated

Conciliation Proceedings:

• In exceptional case where both parties expressly agree that the same conciliator may
continue as an arbitrator the conciliator may assume the role of arbitrator

Reasons for promoting Conciliation in India

• Effective alternate to courts where there is a backlog of cases

Benefits and advantages:

1. Non-binding and confidential

2. Less formal than arbitration or court proceedings
3. Conciliation offers flexibility
4. Cost and time effective
5. At any stage parties can withdraw from the proceedings
6. Preservation of relationship between parties
7. Minimizes the risk of corruption and bias

Challenges of conciliation in India:

1. India doesn’t have a mandatory mediation unlike many parties

2. Conciliation tends to be more common certain matters only (Not as effective where
substantial amount is involved)
3. When Govt is a party to the agreement there arises many hindrances
4. The current framework doesn’t require a pre-conciliation meeting, joint statements or
conferences
5. Some use it as delay tactic when court decision is possibly against them
6. Less adversarial and more cooperative approach