Alternative Dispute Resolution System

Module 3: Conciliation

Conciliation is a significant aspect of Alternative Dispute Resolution (ADR), offering parties in

conflict an opportunity to resolve their disputes outside the traditional courtroom setting. In
simple terms, conciliation is a process where a neutral third party, known as a conciliator, assists
disputing parties in reaching a mutually agreeable solution to their disagreement. The primary
objective of conciliation is to facilitate communication, understanding, and ultimately, agreement
between the conflicting parties.
In a conciliation process, the conciliator plays a pivotal role in guiding the discussions, fostering
dialogue, and helping parties explore potential solutions to their conflict. Unlike mediation,
where the mediator facilitates communication but doesn't propose solutions, a conciliator may
actively suggest resolution ideas, although they don't have the authority to impose a decision on
the parties. The conciliator remains impartial throughout the process, ensuring fairness and
neutrality.
The process of conciliation typically begins with an opening session where the conciliator
outlines the ground rules and explains the process to the parties. Each party then has the
opportunity to express their perspective on the issue at hand. The conciliator may ask questions
to clarify points and encourage understanding between the parties.
Following the opening session, the conciliator may conduct private sessions with each party
separately to delve deeper into their concerns, interests, and potential solutions. These private
sessions provide a safe space for parties to express their views openly and confidentially.
Once the conciliator has gathered sufficient information and identified common ground between
the parties, they facilitate joint sessions where the parties come together to explore possible
solutions collaboratively. During these joint sessions, the conciliator helps parties generate
options, evaluate proposals, and negotiate terms of settlement.
Throughout the conciliation process, the conciliator remains impartial and ensures that the
discussions remain respectful and focused on finding a resolution. They may employ various
communication techniques, such as active listening, reframing issues, and managing emotions, to
promote constructive dialogue and problem-solving.
The ultimate goal of conciliation is to reach a mutually acceptable agreement that satisfies the
interests and needs of both parties. Once the parties have reached a settlement, the conciliator
assists in documenting the terms of the agreement, which may include outlining commitments,
responsibilities, and timelines.
Conciliation offers several advantages over traditional litigation. Firstly, it is often faster and
more cost-effective than going to court, as it avoids lengthy legal proceedings and associated
expenses. Secondly, conciliation allows parties to maintain greater control over the outcome of
their dispute, as they actively participate in crafting the resolution. Additionally, conciliation can
help preserve ongoing relationships between parties, as it promotes cooperation and
understanding.
However, it's essential to acknowledge that conciliation may not be suitable for all disputes. In
cases where parties are unwilling to engage in good faith negotiations or where power
imbalances exist, alternative approaches to dispute resolution may be more appropriate.
In conclusion, conciliation is a valuable tool for resolving conflicts outside the courtroom,
offering parties a collaborative and constructive way to address their differences. By promoting
communication, understanding, and mutual agreement, conciliation empowers parties to find
sustainable solutions to their disputes while preserving relationships and minimizing costs.

Advantages of Resolution of a Dispute by Conciliation:

1. Cost-Effectiveness: Conciliation is often cheaper than going to court because it doesn't
involve expensive legal fees or lengthy legal procedures.
2. Time-Saving: Conciliation typically takes less time than traditional litigation, allowing parties
to resolve their issues more quickly and get back to their lives sooner.
3. Control Over Outcome: Parties have more control over the outcome of the dispute in
conciliation since they actively participate in crafting the resolution, rather than leaving it up to a
judge.
4. Confidentiality: Conciliation proceedings are private and confidential, so parties can discuss
their issues openly without fear of information being shared publicly.
5. Preservation of Relationships: Conciliation focuses on cooperation and understanding,
which can help maintain relationships between parties, especially important in ongoing business
or personal relationships.
6. Flexibility: Conciliation allows for flexible solutions tailored to the specific needs and
interests of the parties involved, rather than applying rigid legal rules.
7. Less Stressful: Compared to the adversarial nature of litigation, conciliation is generally less
stressful for parties involved since it encourages collaboration and problem-solving rather than
conflict.
8. Impartial Assistance: A conciliator acts as a neutral third party who helps facilitate
communication and understanding between parties, ensuring fairness and balance throughout the
process.
9. Creative Solutions: Parties in conciliation can explore creative solutions that may not be
available in a courtroom setting, leading to more innovative and mutually beneficial outcomes.
10. Enforceability: Agreements reached through conciliation are legally binding and
enforceable, providing parties with the security of knowing that their resolution will be upheld.
Overall, conciliation offers a range of benefits that make it an attractive option for resolving
disputes, promoting efficiency, fairness, and cooperation in finding solutions that work for
everyone involved.

CONCILIATION UNDER THE ARBITRATION AND CONCILIATION ACT, 1996

CONCILIATION IN GENERAL AND ITS OBJECT

Conciliation In General
Conciliation is like having a referee to help two people or groups who are arguing to find a
solution that works for both of them. It's a way to resolve conflicts peacefully without going to
court.
1. Neutral Third Party: In conciliation, there's someone called a conciliator who acts as a
neutral third party. They're not on anyone's side but are there to help both sides talk things out
and come to an agreement.
2. Listening and Understanding: The conciliator starts by listening to both sides. Each party
gets a chance to explain their side of the story and why they're upset or disagreeing with the
other party. This helps the conciliator understand what's going on from both perspectives.
3. Private Meetings: Sometimes, the conciliator might talk to each side separately. These private
meetings are a chance for each party to share more details or feelings they might not want to say
in front of the other party. It helps to get everything out in the open.
4. Finding Common Ground: Once the conciliator understands each side's concerns, they help
both parties find common ground or things they agree on. This can be a starting point for finding
a solution that works for everyone.
5. Brainstorming Solutions: Together, the parties and the conciliator brainstorm ideas for
solving the problem. It's like coming up with different ways to fix things or make things right.
6. Negotiation and Agreement: The parties then negotiate, which means they talk back and
forth about the different ideas until they agree on one that works for both sides. The conciliator
helps keep the conversation going smoothly and makes sure everyone gets a fair chance to speak.
7. Formal Agreement: Once the parties reach an agreement, it's put into writing in a formal
document. This document outlines what each party has agreed to do or not do to resolve the
conflict. It's like a contract that both parties sign to show they agree to follow the terms.
8. Respecting Privacy: One important thing about conciliation is that it's private. What's
discussed during conciliation stays between the parties involved and the conciliator. It's
confidential, which means it won't be shared with anyone else.

Object of Conciliation
The object of conciliation is like the goal or purpose behind why people use this method to solve
conflicts. It's what everyone involved wants to achieve by going through the conciliation process.
Here are some key points about the object of conciliation:
1. Finding a Solution Together: The main goal of conciliation is to help people who are in a
disagreement find a solution that works for everyone. Instead of fighting or going to court,
conciliation aims to bring people together to talk things out and reach a peaceful agreement.
2. Resolving Conflicts Peacefully: Conciliation is all about resolving conflicts in a peaceful
way. It's like trying to find a win-win situation where both sides feel satisfied with the outcome.
The focus is on understanding each other's perspectives and finding common ground.
3. Maintaining Relationships: Another important object of conciliation is to help maintain
relationships between the parties involved. Whether it's between family members, neighbors, or
business partners, conciliation aims to preserve the relationship while still addressing the issues
causing the conflict.
4. Promoting Communication and Understanding: Conciliation encourages open
communication and understanding between the parties. It's about listening to each other's
concerns, feelings, and needs in order to find a solution that respects everyone's interests.
5. Achieving Fairness and Balance: Conciliation seeks to achieve fairness and balance in the
resolution of disputes. The process ensures that both parties have an equal opportunity to express
themselves and participate in finding a solution. The conciliator helps maintain this balance by
being neutral and impartial.
6. Saving Time and Money: Another object of conciliation is to save time and money compared
to going to court. By resolving conflicts outside of the legal system, parties can avoid lengthy
legal procedures and expensive legal fees.
7. Creating Legal Certainty: When parties reach an agreement through conciliation, it's
documented in a formal agreement. This provides legal certainty and clarity about the terms of
the resolution, giving both parties confidence that the agreement will be upheld.
8. Empowering Parties: Conciliation empowers parties to take control of the resolution process.
Instead of relying on a judge or jury to make decisions for them, parties actively participate in
finding a solution that meets their needs and interests.

Application and Scope: Section 61

1. Application to Disputes:
• The first part states that unless stated otherwise by any current law and unless the parties
involved have agreed differently, the rules outlined in this part of the law will apply to
conciliation.
• This means that the rules and procedures for conciliation, as laid out in this part of the law,
are generally applicable to disputes that arise from legal relationships. These relationships
can be contractual (based on a formal agreement) or non-contractual.
2. Exemptions:
• The second part mentions that there are situations where these rules won't apply.
• Specifically, if there's a law currently in effect that prohibits certain disputes from being
resolved through conciliation, then the rules outlined in this part wouldn't be applicable to
those particular disputes.

Commencement of Conciliation Proceedings. Section 62

1. Invitation to Conciliate:
If one party wants to start conciliation, they need to send a written invitation to the other party.
This invitation should briefly explain what the dispute is about.
2. Agreement to Conciliate:
Conciliation begins when the other party agrees in writing to participate in the process after
receiving the invitation.
3. Rejection of Invitation:
If the other party says no to the invitation, then conciliation won't happen.
4. No Response:
If the party initiating conciliation doesn't get a response within 30 days (or whatever time period
was specified in the invitation), they can consider it a rejection. They must then inform the other
party in writing that they're treating it as a rejection.
Q. What is Conciliation? Explain duties of Conciliators. How does it differ from
Arbitration? Explain the Provision in Arbitration and Conciliation Act, 1996 about
Conciliation.
Dispute which can be settled by Conciliation
Conciliation serves as a means for parties in disputes to find mutual agreement outside
courtrooms. It covers a wide range of conflicts arising from legal relationships.
Contractual disputes often arise from differing interpretations of agreements or breaches of
contracts. Through conciliation, parties engage in constructive dialogue facilitated by a neutral
conciliator to explore underlying concerns and reach agreements.
In business disputes, conciliation offers a way to resolve conflicts over ownership, financial
matters, or strategic direction. By fostering communication and problem-solving, it enables
businesses to address grievances while safeguarding long-term interests.
In employment disputes, conciliation helps resolve conflicts like wrongful termination or
discrimination. It allows for open discussions, mitigating adversarial dynamics and preserving
workplace relationships.
Consumer disputes, such as those over product quality or warranties, find resolution through
conciliation. It empowers consumers and businesses to negotiate solutions that address
grievances while enhancing trust in the marketplace.
Conciliation transcends traditional litigation, offering a flexible mechanism for resolving
conflicts peacefully. By promoting communication and cooperation, it fosters enduring solutions
that uphold the dignity of all involved.

Advantages of Resolution of a Dispute by Conciliation:

Already Explain above.

Main provisions of Conciliation under Arbitration and Conciliation Act, 1996/ Duties and
Powers of Conciliators
Section 65. Submission of statements to conciliator
When a conciliator is appointed, they may ask each party involved in the dispute to provide a
brief written explanation of what the disagreement is about and what specific points they're
arguing over. Each party has to share this statement with the other party.
The conciliator might also ask each party to give more detailed written explanations of their side
of the story, including facts and reasons supporting their position. They can also include any
documents or evidence they think is important. Again, both parties have to share these statements
and evidence with each other.
During the conciliation process, the conciliator may ask for more information from either party if
they think it will help resolve the dispute.
Section 66. Conciliator not bound by certain enactments
This statement means that the conciliator, the person helping to resolve the dispute, doesn't have
to follow the rules laid out in the Code of Civil Procedure, 1908, or the Indian Evidence Act,
1872.
Section 67. Role of conciliator
1. Assistance in an Impartial Manner:
The conciliator must help the parties in an independent and impartial way as they try to find a
friendly agreement to their disagreement.
2. Guidance by Principles:
The conciliator should follow principles of objectivity, fairness, and justice. They consider
factors like the rights and duties of the parties involved, common practices in the relevant
industry, and the circumstances surrounding the dispute, including any past business dealings
between the parties.
3. Conduct of Proceedings:
The conciliator has the flexibility to conduct the conciliation proceedings as they see fit,
considering factors like the specifics of the case, the preferences of the parties, including any
requests for oral statements, and the importance of resolving the dispute quickly.
4. Proposal for Settlement:
At any point during the conciliation process, the conciliator can suggest potential solutions to
settle the dispute. These proposals don't have to be written down or explained in detail but can be
made verbally as the conciliator sees fit.
Section 68. Administrative assistance
To make the conciliation process smoother, the parties involved or the conciliator, with the
agreement of the parties, can arrange for administrative support from a suitable institution or
individual. In simpler terms, if everyone agrees, they can get help with paperwork or other
organizational tasks from an outside source to make things easier during conciliation.
Section 69. Communication between conciliator and parties
1. The conciliator has the authority to invite the parties to meet with him, or he can communicate
with them either verbally or in writing. He can conduct meetings with the parties collectively or
individually, depending on the situation.
2. If the parties haven't decided on a specific location for meetings with the conciliator, the
conciliator will choose a suitable place after consulting with the parties, considering the
circumstances of the conciliation proceedings.
Section 70. Disclosure of information.
When one party provides the conciliator with factual information about the dispute, the
conciliator must share the essence of that information with the other party. This allows the other
party to respond appropriately and provide any explanations they deem necessary. However, if a
party gives information to the conciliator with the condition that it remains confidential, the
conciliator is prohibited from disclosing that information to the other party.
Section 71. Co-operation of parties with conciliator.
The parties involved in the conciliation process are expected to cooperate sincerely with the
conciliator. This includes actively participating and making an effort to fulfill requests made by
the conciliator, such as submitting written materials, providing evidence, and attending meetings.
Section 72. Suggestions by parties for settlement of dispute
Either party has the freedom to propose settlement suggestions independently or when prompted
by the conciliator during the conciliation process.
Section 73. Settlement agreement
1. If the conciliator believes that there are potential settlement terms acceptable to the parties,
they will draft these terms and present them to the parties for their feedback. After receiving
input from the parties, the conciliator may revise the terms accordingly.
2. If the parties agree on a settlement, they can create and sign a written settlement agreement.
Upon request, the conciliator may assist in drafting this agreement.
3. Once the parties sign the settlement agreement, it becomes legally binding for them and
anyone claiming under them.
4. The conciliator will then authenticate the settlement agreement and provide each party with a
copy for their records.
Section 74. Status and effect of settlement agreement
The settlement agreement holds the same legal standing and impact as an arbitral award made by
an arbitral tribunal under Section 30, if both parties have agreed to it.
Section 75. Confidentiality.
Regardless of any other laws currently in place, the conciliator and the parties involved must
maintain confidentiality regarding all aspects of the conciliation process. This confidentiality
extends to the settlement agreement, except in cases where disclosing it is necessary for
implementing or enforcing the agreement.
Section 76. Termination of conciliation proceedings.
(a) If the parties sign the settlement agreement, the proceedings end on that date.
(b) The conciliator can issue a written declaration, after discussing with the parties, stating that
further conciliation efforts aren't warranted. The proceedings end on the date of this declaration.
(c) If both parties jointly declare in writing to the conciliator that they want to terminate the
proceedings, they end on the date of this declaration.
(d) A party can independently declare in writing to the other party and the conciliator (if there is
one) that they wish to terminate the proceedings. They end on the date of this declaration.
Section 77. Resort to arbitral or judicial proceedings
During the conciliation process, the parties involved are not allowed to start any arbitration or
court proceedings regarding the dispute being discussed in the conciliation, unless a party
believes such action is necessary to protect their rights.
Section 78. Costs
Upon concluding the conciliation process, the conciliator will determine the costs involved and
notify the parties in writing. These costs cover various aspects, including:
1. The fees and expenses of the conciliator and any witnesses requested by the conciliator with
the parties' consent.
2. Expenses related to expert advice sought by the conciliator with the parties' consent.
3. Any assistance provided as per section 64, clause (b), and section 68 of the law.
4. Other expenses incurred throughout the conciliation process and the drafting of the settlement
agreement.
Section 79. Deposits
1. The conciliator can ask each party to pay an equal amount in advance to cover expected costs
mentioned in section 78(2).
2. During the conciliation process, the conciliator can request additional equal payments from
both parties if necessary.
3. If both parties don't fully pay the required deposits within thirty days, the conciliator can pause
the proceedings or terminate them in writing.
4. Once the conciliation process ends, the conciliator will provide an account of the deposits
received and return any unused money to the parties.
Section 80. Role of conciliator in other proceedings
(a) The conciliator cannot serve as an arbitrator or represent any party in any arbitration or court
case related to the dispute being conciliated.
(b) The parties cannot call the conciliator as a witness in any arbitration or court proceedings.
Section 81. Admissibility of evidence in other proceedings
The parties are prohibited from using the following in arbitration or court proceedings, regardless
of whether they are related to the dispute being conciliated:
(a) Any views or suggestions made by the other party regarding a potential settlement.
(b) Admissions made by the other party during the conciliation process.
(c) Proposals put forward by the conciliator.
(d) Any indication by the other party of their willingness to accept a settlement proposal made by
the conciliator.

Difference Between Arbitration and Conciliation.

Aspect Arbitration Conciliation

Nature of Process Adjudicative Facilitative
Parties themselves, with the help of a
Decision Maker Arbitrator(s) neutral conciliator
Governed by arbitration laws or Governed by conciliation laws or
Legal Basis agreements agreements
Formality Generally more formal Generally less formal
Role of Third Party Acts as a judge Acts as a facilitator or mediator
Control over
Process Limited control by parties Greater control by parties
Evidence
Presentation Formal rules apply Informal rules apply
Flexibility Limited High
Decision Binding Generally binding Non-binding
May or may not be confidential
Confidentiality depending on the agreement Generally confidential
Timing Generally faster May take longer
Legal
Representation Lawyers may be involved Generally, parties represent themselves
Can be expensive depending on the
Costs complexity Generally lower than arbitration
Appeals Generally limited or not allowed No scope for appeals
Settlement Decided by arbitrator(s) Agreed upon by the parties themselves
 Aspect Arbitration Conciliation
Control over Less control as decision is made by More control as parties decides on the
Outcome arbitrator(s) outcome
Relationship Adversarial Cooperative
Formalized
Procedures More formal procedures usually followed Less formal procedures followed
Finding mutual agreement and resolving
Focus Determining fault and awarding remedies issues
Duration Typically, shorter than litigation May take longer depending on complexity
Law may guide discussions but not
Role of Law Law is applied by arbitrator(s) applied by the conciliator
Presence of
Hearing Formal hearings are common Informal hearings may occur
Settlement
Agreement Not required but can be reached Required for process to be successful
Involvement of Less active involvement of parties in More active involvement of parties in
Parties decision-making decision-making
Finality of Decision Generally final and binding Non-binding unless parties agree

Difference Between Negotiation and Mediation.

Aspect Negotiation Mediation

Communication between parties to Third-party intervention to facilitate
Definition reach a mutual agreement communication and agreement between parties
Third-Party
Involvement Not typically involved Involves a neutral mediator
Parties make decisions with the assistance of
Decision Making Parties make decisions independently the mediator
Outcome Direct agreement between parties Agreement facilitated by the mediator
Parties have more control over the Mediator guides the process and facilitates
Control process and outcome communication
Formality Can be formal or informal Generally less formal than negotiation
Third party facilitates communication and
Role of Third Party No third-party intervention assists in resolution
Focus Asserting individual interests Finding common ground and mutual solutions
Timing Usually quicker than mediation May take longer than negotiation
Confidentiality Not necessarily confidential Generally confidential
Legal Parties may or may not involve legal Parties usually do not involve legal
 Aspect Negotiation Mediation
Representation representatives representatives
Often takes place in a structured setting with
Setting Can occur in various settings the mediator
Settlement
Agreement Not always necessary Typically involves a formal agreement
Parties advocate for their own
Impartiality interests Mediator remains neutral and impartial
Scope of Issues Can involve a wide range of issues Generally, focuses on specific issues