Module 3 – Conciliation

What is conciliation ?
 The procedure for undertaking conciliation between the parties has been provided
under Chapter III ( Section 61- 81) of the Arbitration and Conciliation Act 1996
 It is the process in which a third party helps the parties in dispute to resolve its
way by agreement.
 The person authorised to do is called a conciliator.
 He may do it by giving his opinion regarding the dispute the parties to reach
settlement.
 Part 3 of the Act deals with conciliation.
Main difference between arbitration and conciliation
 In arbitration proceedings, the award is the decision of a singe arbitrator or
arbitration tribunal.
Features of Conciliation
 The process of conciliation is voluntary process
 It is a non – binding process
 The conciliator can become an arbitrator on the wish of the parties if no
agreement could be reached. (Hybrid conciliation)
 The settlement agreement will have the same importance and status as the
arbitration award.
Scope of conciliation
The process of conciliation extends to :
 Disputes whether contractual or not, but may arise out of legal relationship.
Appointment of conciliator (Section 64)
1. By party:
 One conciliator – both the parties may appoint him collectively
 Two conciliator- each party may appoint one conciliator
 Three conciliator – each party may appoint one conciliator each and agree to the
name of third conciliator as the presiding conciliator)
2. By institution (Sec 64(2))
 Parties may request for recommendation of conciliator
 Or parties may agree to appointment made by institutions
Quality of a conciliator
 Acting as a Guide
The foremost essential quality for conciliators is guiding the conciliation process in a
manner that helps parties evolve their ideas about potential resolutions and
settlements.
 Independence and impartiality (Sec 67(1))
Conciliators must remain neutral and impartial throughout the conciliation
proceedings. They should not favor any party and should be unbiased in their
approach while guiding the proceedings.
 Facilitation of Communication
Conciliators must facilitate communication between the parties and assist in
identifying issues, clarifying interests, and encouraging open dialogue
 Confidentiality
 Conciliators must maintain the confidentiality of information shared during the
proceedings.
 Section 75 of the Act requires the conciliator and the parties to keep confidential
all matters relating to the conciliation proceedings.
 Confidentiality extends further to the settlement agreement, except where its
disclosure is necessary for purposes of implementation and enforcement.
Section 67- Role of conciliator
(1) The conciliator shall assist the parties in an independent and impartial manner in
their attempt to reach an amicable settlement of their dispute.
(2) The conciliator shall be guided by principles of objectivity, fairness and justice,
giving consideration to, among other things, the rights and obligations of the parties,
the usages of the trade concerned and the circumstances surrounding the dispute,
including any previous business practices between the parties.
(3) The conciliator may conduct the conciliation proceedings in such a manner as he
considers appropriate, taking into account the circumstances of the case, the wishes
the parties may express, including any request by a party that the conciliator hear oral
statements, and the need for a speedy settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals
for a settlement of the dispute. Such proposals need not be in writing and need not
be accompanied by a statement of the reasons therefor.
Procedure of conciliation
 Commencement of conciliation proceedings – Section 62
 In order for the conciliation proceedings either one of the parties should send a
written invitation to the other party.
 Only if the other party accepts the invitation, they shall go ahead with the
conciliation proceedings.
 If the party does not get a reply even after 30 days of sending the invitation, it
shall be considered that the invitation is not accepted.
 Appointment of conciliator - Section 64
 If the parties agree they can appoint a sole conciliator.
 If the parties agree upon appointing two conciliators, each party shall appoint one
conciliator each.
 In case the parties agree upon three conciliator, each party shall appoint one
conciliator each and the parties together may agree upon a third conciliator, who
shall be the presiding conciliator.
 Submission of written statement to the conciliator – Section 65

 The conciliator may request each of the parties to provide with a written
statement about the facts relating to the case in hand.
 It is necessary for both the parties to submit a written statement to the conciliator.
Along with the conciliator, the parties are also requested to send the written
statement to each other.
 Conduct of the conciliation proceedings - Sections 67(3) and 69(1)

 The conciliator may decide to talk to the parties through written or oral
communication.
 He may also decide to meet the parties together or separately. He may conduct the
proceedings which seem to be suitable to the case in hand.
 Administration assistance - Section 68

 The parties or the conciliator may seek administrative assistance from an

institution or a person if required.
 In order for seeking for administrative assistance, the consent of the parties are
required.
Steps in conciliation
1. Meeting – between the parties.
• Conciliator will explain how the process will run, the role of the conciliator and
expectation of the parties.
• The conciliator will also establish any necessary grounds and ensure that the parties
ready to move forward.
2. Statement
• Parties share their views of the facts and the case.
• The parties will take turns explaining how they see the fact, issues and the possible
options for a settlement.
3. Suggestion
 Conciliator takes what they have heard from the parties and suggest a possible
settlement tat the parties can agree with.
 If the parties like the suggestion, the conciliation will move on.
 If the parties need to change things, the conciliator will ask for clarifying
information and find new suggestion to bring
4. Agreement
 Agreement happens when the parties like one of the options proposed the
conciliator and agree to use that settlement option as the way forward.
Conciliation under Industrial Disputes Act, 1947
 Industrial dispute - Industrial Disputes Act, 1947 provides the provision both for
conciliation for the purpose of settlement of disputes.
 Industrial disputes are created because of differences that arise between the
employers and the employees or between the employer and the workmen or among
the workmen.
 Section 4 provides for Conciliation officers.-
The appropriate Government has to appoint such number of persons as conciliation
officers.
 They will be charged with the duty of mediating in and promoting the settlement of
industrial disputes.
 A conciliation officer may be appointed for a specified area or for specified
industries in a specified area or for one or more specified industries and either
permanently or for a limited period.
 Section 12 - Duties of conciliation officers.
According to this section,
 The conciliation officer investigate the dispute and matters affecting the
settlement of such disputes.
 It also grants authority to the conciliation officer, to do all necessary things that
are necessary for the amicable settlement of the dispute.
 The section further lays down the procedure in case of settlement as well as non-
settlement of the disputes.
 The award arrived at in the course of conciliation proceedings under this Act, is a
binding instrument and has same value as the decree of court, by virtue of Section
18 of the Act.
Conciliation under Family Courts Act, 1984
 Section 5 of Family Courts Act, 1984
The state govt after consulting the high court provides for the association of social;
welfare organization to hold the family court proceeding to arrive at a settlement.
 Section 6 -Counsellors, officers and other employees of Family Courts
The State Government shall, in consultation with the High Court, determine the
number and categories of counsellors, officers and other employees required to assist
a Family Court in the discharge of its functions and provide the Family Court with
such counsellors, officers and other employees as it may think fit.
 Section 9 of Family Courts Act, 1984
Duty of Family Court to make efforts for settlement.
In every suit or proceeding, endeavor shall be made by the Family Court in the first
instance, where it is possible to do so consistent with the nature and circumstances of
the case, to assist and persuade the parties in arriving at a settlement
Conciliation under Hindu Marriage Act 1955
 Section 23(2) of Hindu Marriage Act 1955
Before proceeding to grant any relief under this Act, it is the duty of the court to
make every endeavour to bring about reconciliation, in every case where it is
possible to do so "consistently with the nature and circumstances of the case.