Amity Law School, Noida: Conciliation and Mediation
Amity Law School, Noida: Conciliation and Mediation
Amity Law School, Noida: Conciliation and Mediation
SUBMITTED TO : ` SUBMITTED BY :
Dr. Aqueeda Khan Aakarsh Chauhan
A032170123003
LLB (Hons.)
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ABSTRACT
In the last two or three decades, Alternative Dispute Resolving System i.e. ADR
initiatives have mushroomed in developing and developed countries alike. But despite
their popularity, many questions remain unanswered regarding their actual success in
increasing efficiency and in broader access to justice.
Recent research on ADR in the United States and also our own observations in some
ADR methods as adopted in India suggests that participants are generally pleased with
the conciliatory, comprehensible, and flexible procedures of ADR. Arbitration as one of
the modes of ADR was considered to be a cheap and efficacious remedy.
Now the situation is completely reversed. Arbitration proceedings have become too
technical and expensive. It is not only the fees of lawyers but also of the arbitrators,
which have started pinching the parties. Through this paper I am emphasizing that,
resort to conciliation, directly or through a trusted common person/ institution, is the
only remedy to achieve early success.
The basic aim is there should be settlement between the parties & no party should feel
as aggrieved instead of lost & win situation, there should be won - won situation for
both Parties.
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INTRODUCTION
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How conciliation is better than other alternative modes of dispute
resolution?
Gone are the days when arbitration was considered to be a cheap and efficacious
remedy. Now the situation is completely reversed. Arbitration proceedings have become
too technical and expensive. In this context, reference may be made to judgment of the
Supreme Court of India.
In Guru Nanak Foundation V. Rattan Singh & Sons, it was observed: “Interminable,
time consuming, complex and expensive court procedures impelled jurists to search for
an alternative forum, less formal more effective and speedy for resolution of disputes
avoiding procedural claptrap and this led to Arbitration Act, 1940.
However, the way in which the proceedings under the Act are conducted and without
an exception challenged in the courts has made lawyers laugh and legal philosophers
weep. Experience shows and law reports bear ample testimony that the proceedings
under the Act have become highly technical accompanied by unending prolixity at every
stage providing a legal trap to the unwary.
Informal forum chosen by the parties for expeditious disposal of their disputes has by
the decisions of the court been clothed with” legalese‟ of unforeseeable complexity.”
Broadly speaking, there are at least three advantages if the parties are able to reasonable
settlement of their disputes through conciliation, viz.
1) Quickness. The parties can devote their time and energy for better and useful work.
2) Economic. Instead of spending hard earned money on litigation, one can invest it for
better dividends.
3) Social. The parties go happily to their respective places and stand relieved from
bickering, enmity, which in certain cases might have lingered on for generations.
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There is a growing feeling amongst the litigants that they would have been better off if
there had been no arbitration clause so that they could file civil suit, which entails
only three steps, viz.
(i) Filing of the pleadings;
(2) Conduct of the proceedings; and,
(3) Judgment.
As against three stages involved in a civil suit, there are as many as six in an
arbitration matter, viz.
(1) appointment of the arbitrator either by the parties or by the court;
(2) pleadings before the arbitrator;
(3) proceedings before the arbitrator;
(4) award;
(5) filing of the award in the court; and,
(6) recourse to a court against arbitral award.
To overcome the ordeals involved, the best course available to the parties is to look to
reasons, appreciate the viewpoint of the opposite party, not to stand on false prestige
and resolve the controversy in an amicable manner. It does not help either party to
pursue litigation – Whether in courts or before an arbitral tribunal. Both parties are
losers, at least in terms of time, at the time of final outcome of litigation. It is at this
stage the parties appreciate that they would have been better off had they taken the
path of conciliation.
It is not only the fees of lawyers but also of the arbitrators, which have started
pinching the parties. Though presently the number is small but nevertheless a serious
beginning has been made in some cases to settle the matter outside arbitration to avoid
unnecessary expense. The resort to conciliation, directly or through a trusted common
person/ institution, is the only remedy to achieve early success.
Conciliation is a better alternative to the formal justice system. For selecting the mode
of the conciliation, it is not necessary to enter into a formal agreement. Because where
arbitration clause is included in the agreement it is implied that the matter would be
refereed for conciliation first & if amicable settlement fails then only, it is referred to
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the arbitration. The other advantage of choosing conciliation is that though the
amicable settlement in conciliation could not be reached then the evidence leaded, the
proposal made during the conciliation proceedings cannot be disclosed in any other
proceedings (in arbitration also) This protection has been provided by the Arbitration
& Conciliation Act itself. Therefore, parties can attempt Conciliation without any risk.
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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.
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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.
(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.
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One of the questions constantly asked by many is as to what is meant by
conciliation and mediation, whether they are the same and, if not, whether
there are any differences?
(a) In the year 1996, the Arbitration and Conciliation Act, 1996 was passed and sec. 30
of that Act, which is in Part I, provides that an arbitral tribunal may try to have the
dispute settled by use of ‘mediation’ or ‘conciliation’. Sub-section (1) of sec. 30 permits
the arbitral tribunal to “use mediation, conciliation or other procedures”, for the purpose
of reaching settlement.
(b) The Civil Procedure Code (Amendment) Act, 1999 which introduced sec. 89, too
speaks of ‘conciliation’ and ‘mediation’ as different concepts. Order 10 Rules 1A, 1B,
1C of the Code also go along with sec. 89.
Thus our Parliament has made a clear distinction between conciliation and mediation.
In Part III of the 1996 Act (sections 61 to 81) which deals Archived with ‘Conciliation’
there is no definition of ‘conciliation’. Nor is there any definition of ‘conciliation’ or
‘mediation’ in sec. 89 of the Code of Civil Procedure, 1908 (as amended in 1999).
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Conciliation –
Thus the meaning of ‘conciliation’ as can be gathered from the 1996 Act has to be read
into sec. 89 of the Code of Civil Procedure. The 1996 Act is, it may be noted, based on
the UNCITRAL Rules for conciliation.
Now under section 65 of the 1996 Act, the ‘conciliator’ may request each party to submit
to him a brief written statement describing the “general nature of the dispute and the
points at issue”. He can ask for supplementary statements and documents. Section 67
describes the role of a conciliator.
Subsection (1) states that he shall assist parties in an independent and impartial manner.
Subsection (2) states that he shall be guided by principles of objectivity, fairness and
justice, giving consideration, among other things, to the rights and obligations of the
parties, the usages of the trade concerned Archived and the circumstances surrounding
the dispute, including any previous business practices between the parties.
Subsection (3) states that he shall take into account “the circumstances of the case, the
wishes the parties may express, including a request for oral statements”.
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Subsection (4) is important and permits the ‘conciliator’ to make proposals for a
settlement. It states as follows:
“Section 67(4). The conciliator may, at any stage of the conciliation proceeding, 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.”
I shall briefly refer to the other provisions before I come to sec. 73. Section 69 states
that the conciliator may invite parties to meet him. Sec. 70 deals with disclosure by the
conciliator of information given to him by one party, to the other party. Sec. 71 deals
with cooperation of parties with the conciliator, sec. 72 deals with suggestions being
submitted to the conciliator by each party for the purpose of settlement. Finally, Sec.
73, which is important, states that the conciliator can formulate terms of a possible
settlement if he feels there exist elements of a settlement. He is also entitled to
‘reformulate the terms’ after receiving the observations of the parties. Subsection (1) of
sec. 73 reads thus:
“Sec. 73(1) settlement agreement. (1) When it appears to the Conciliator that there exist
elements of a settlement which may be acceptable to the parties, he shall formulate the
terms of a possible settlement and submit them to the parties for their observations.
After Archived receiving the observations of the parties, the Conciliator may
reformulate the terms of a possible settlement in the light of such observations.”
The above provisions in the 1996 Act, make it clear that the ‘Conciliator’ under the said
Act, apart from assisting the parties to reach a settlement, is also permitted to make
“proposals for a settlement” and “formulate the terms of a possible settlement” or
“reformulate the terms”. This is indeed the UNCITRAL concept.
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Mediation –
If the role of the ‘conciliator’ in India is pro-active and interventionist as stated above,
the role of the ‘mediator’ must necessarily be restricted to that of a ‘facilitator’.
In their celebrated book ‘ADR Principles and Practice’ by Henry J. Brown and Arthur
L. Mariot (1997, 2nd Ed. Sweet & Maxwell, Lord on Chapter 7, p 127), the authors say
that ‘mediation’ is a facilitative process in which “disputing parties engage the
assistance of an impartial third party, the mediator, who helps them to try to arrive at an
agreed resolution of their dispute.
The mediator has no authority to make any decisions that are binding on them, but uses
certain procedures, techniques and skills to help them to negotiate an agreed resolution
of their dispute without adjudication.”
In yet another leading book on ‘Dispute Resolution’ (Negotiation, Mediation and other
processes’ by Stephen B. Goldberg, Frank E.A. Sander Archived and Nancy H. Rogers
(1999, 3rd Ed. Aspine Law & Business, Gaithesburg and New York)(Ch. 3, p. 123), it
is stated as follows:
“Mediation is negotiation carried out with the assistance of a third party. The mediator,
in contrast to the arbitrator or judge, has no power to impose an outcome on disputing
parties. Despite the lack of ‘teeth’ in the mediation process, the involvement of a
mediator alters the dynamics of negotiations. Depending on what seems to be impeding
(an) agreement, the mediator may attempt to encourage exchange of information,
provide new information, help the parties to understand each others’ views, let them
know that their concerns are understood; promote a productive level of emotional
expression; deal with differences in perceptions and interest between negotiations and
constituents (including lawyer and client); help negotiators realistically, assess
alternatives to settlement, learn (often in separate sessions with each party) about those
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interest the parties are reluctant to disclose to each other and invent solutions that meet
the fundamental interests of all parties.
Prof. Robert Baruch Bush and Prof. Joseph Folgen (ibid, p 136) say:
The meaning of these words as understood in India appears to be similar to the way they
are understood in UK. In the recent Discussion Paper by the lord Chancellor’s
Department on Alternative Dispute Resolution (http://www.lcd.gov.uk/Consult/cir-
just/adi/annexald/htm) (Annexure A), where while defining ‘Mediation’ and
‘Conciliation’, it is stated that ‘Mediation’ is a way of settling disputes by a third party
who helps both sides to come to an agreement, which each considers acceptable.
Mediation can be ‘evaluative’ or ‘facilitative’. ‘Conciliation’, it is said, is a procedure
like mediation but the third party, the conciliator, takes a more interventionist role in
bringing the two parties together and in suggesting possible solutions to help achieve a
settlement. But it is also stated that the term ‘conciliation’ is gradually falling into disuse
and a process which is pro-active is also being regarded as a form of mediation. (This
has already happened in USA).
The above discussion shows that the ‘mediator’ is a facilitator and does not have a pro-
active role. (But, as shown below, these words are differently understood in US). The
difference between conciliation and mediation:
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Under our law and the UNCITRAL model, the role of the mediator is not pro-active and
is somewhat less than the role of a ‘conciliator’. We have seen that under Part III of the
Arbitration and Conciliation Act, the ’Conciliator’s powers are larger than those of a
‘mediator’ as he can suggest proposals for settlement.
Hence the above meaning of the role of ‘mediator’ Archived in India is quite clear and
can be accepted, in relation to sec. 89 of the Code of Civil Procedure also. The difference
lies in the fact that the ‘conciliator’ can make proposals for settlement, ‘formulate’ or
‘reformulate’ the terms of a possible settlement while a ‘mediator’ would not do so but
would merely facilitate a settlement between the parties.
Brown quotes (at p 127) the 1997 Handbook of the City Disputes Panel, UK which
offers a range of dispute resolution processes, facilitative, evaluative and adjudicative.
It is there stated that conciliation “is a process in which the Conciliator plays a proactive
role to bring about a settlement” and mediator is “a more passive process”.
This is the position in India, UK and under the UNCITRAL model. However, in the
USA, the person having the pro-active role is called a ‘mediator’ rather than a
‘conciliator’. Brown says (p 272) that the term ‘Conciliation’ which was more widely
used in the 1970s has, in the 1970s, in many other fields given way to the term
‘mediation’. These terms are elsewhere often used interchangeably.
Where both terms survived, some organizations use ‘conciliation’ to refer to a more
proactive and evaluative form of process. However, reverse usage is sometimes
employed; and even in UK, ‘Advisory, Conciliation and Arbitration Service’ (ACAS)
(UK) applies a different meaning. In fact, the meanings are reversed.
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In relation to ‘employment’, the term ‘conciliation’ is used to refer to a mediatory
process that is wholly facilitative and nonevaluative. The definition of ‘conciliation’
formulated by the ILO (1983) is as follows: Archived “the practice by which the
services of a neutral third party are used in a dispute as a means of helping the disputing
parties to reduce the extent of their differences and to arrive at an amicable settlement
or agreed solution. It is a process of orderly or rational discussion under the guidance
of the conciliator.”
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For example: “Whereas the terms ‘conciliation’ and ‘conselling’ have long since
disappeared from the literature in reference to dispute resolution Archived services in
the United States and elsewhere, these terms have remained enshrined in Australian
family laws, with ‘mediation’ grafted on as a separate dispute resolution service in
1991.”
Conversely, policy papers in countries such as Japan still use the term ‘conciliation’
rather than ‘mediation’ for this pro-active process (see
www.kantei.go.jp/foreign/judiciary/2001/0612 report of Justice System Reform
Council, 2001, Recommendations for a Justice System to support Japan in the 21st
Century). NADRAC refers, on the other hand, to the view of the OECD Working Party
on Information, Security and Privacy and the Committee on Consumer Policy where
‘conciliation’ is treated as being at the less formal end of the spectrum while ‘mediation’
is at the more formal end. Mediation is described there as more or less active guidance
by the neutrals.
This definition is just contrary to the UNCITRAL Conciliation Rules which in Art 7(4)
states “Art 7(4). The conciliator may, at any stage of the conciliation proceedings, make
proposals for a settlement of the dispute….”
In an article from US entitled “Can you explain the difference between conciliation and
mediation” (http://www.colorodo.edu/conflict/civil-rights/topics/1950.html), a number
of conciliators Mr. Wally Warfield, Mr. Manuel Salivas and others treat ‘conciliation’
as less formal and ‘mediation’ as pro-active where there is an agenda and there are
ground rules. In US from the informal conciliation process, if it fails, the neutral person
moves on to a greater role as a ‘conciliator’.
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The above article shows that in US the word ‘mediator’ Archived reflects a role which
is attributed to a pro-active conciliator in the UNCITRAL Model. In fact, in West
Virginia, ‘Conciliation’ is an early stage of the process where parties are just brought
together and thereafter, if conciliation has not resulted in a solution, the Mediation
programme is applied which permits a more active role (see
http://www.state.wv.us/wvhic/Pre-Determination/20comc.htm) The position in USA, in
terms of definitions, is therefore just the otherway than what it is in the UNCITRAL
Conciliation Rules or our Arbitration and Conciliation Act, 1996 where, the conciliator
has a greater role on the same lines as the ‘mediator’ in US.
I have thus attempted to clear some of the doubts raised as to the meaning of the words
‘conciliation’ and ‘mediation’. Under our law, in the context of sec. 30 and sec. 64(1)
and sec. 73(1) of the 1996 Act, the conciliator has a greater or a pro-active role in
making proposals for a settlement or formulating and reformulating the terms of a
settlement. A mediator is a mere facilitator.
The meaning of these words in India is the same in the UNCITRAL and Conciliation
Rules and in UK and Japan. But, in USA and in regard to certain institutions abroad,
the meaning is just the reverse, a ‘conciliator’ is a mere ‘facilitator’ whereas a ‘mediator’
has a greater pro-active role. While examining the rules made in US in regard to
‘mediation’, if we substitute the word ‘conciliation’ wherever the word ‘mediation’ is
used and use the word ‘conciliator’ wherever the word ‘mediator’ is used, we shall be
understanding the said rules as we understand them in connection with ‘conciliation’ in
India.
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Reasons to uplift Conciliation in India
The importance of conciliation in the present Indian court system is increased as courts
are facing with the problem of mounting arrears of pending cases & there is a serious
need of disposing of them & for that amicable settlement, conciliation is the best
alternative.
The Himachal Pradesh High court under took the project of disposing of the pending
cases by conciliation & insisting on pretrial conciliation in fresh cases. This idea was
based upon the mediation in Canada & Michigan. The said project had great success in
Himachal Pradesh.
The Law commission of India in its various reports (77th & 13th) has appreciated the
project in Himachal Pradesh and recommended the other States to follow same path.
The other important point to uplift the Conciliation is that, it has got statutory
recognition as included in Arbitration & Conciliation act 1996 which is based on
UNCITRAL Model & because of that it has Universal familiarity & can be used for
settlement of domestic disputes as well as international commercial disputes.
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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.
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REFERENCES
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