CONCILIATION

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

                        Part III of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) deals with conciliation.   The term ‘conciliation’ used interchangeably with mediation, is a procedure in which a neutral individual, the conciliator or mediator, is appointed in order to assist the parties in reaching a mutually satisfactory resolution of disputes.   Conciliation or mediation is usually a voluntary process that results in signed agreement which defines the future behavior of the parties.   The conciliator uses a variety of skills and techniques to help the parties to reach a settlement but he is not empowered to render a decision.

                        Conciliation is optional as per the provisions of the Act.  In case the parties to the dispute agree to resolve the disputes through conciliation, they have to follow the mandatory provisions contained in Sections 61 to 81 of the Act.   These sections provide application and scope, commencement of conciliation procedures, number of conciliators and their appointment, procedure for conducting the conciliation proceedings, role of conciliator etc.,

APPLICATION AND SCOPE:

                        The dispute should arise within the legal relationship whether contractual or not and to all proceedings relating thereto, e.g., issues arising under contracts, commercial or corporate disputes, torts and breach of duty including negligence, consumer disputes, disagreement in partnership etc., but excludes all those disputes which are not required to be submitted to conciliation by virtue of any other law for the time being in force.   Industrial disputes, family disputes including issues arising on separation and divorce, social conflict etc., may also be taken for conciliation.

COMMENCEMENT OF CONCILIATION PROCEEDINGS:

                        It is a procedure mutually agreed to by the parties to the dispute.   The agreement can be entered into either before a dispute has arisen or after the actual dispute arises.   This can be an independent agreement or in the form of a clause in the main contract.

                                    Even whether there is no agreement between the parties to seek settlement to dispute by conciliation, it can be done.   The procedure is as follows:

• The party desiring conciliation shall send to the other party a written invitation to conciliate, briefly identifying the subject of the dispute;
• Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate;
• If the other party rejects the invitation there will be no conciliation proceedings;
• If the party inviting conciliation does not receive a reply within 30 days from the date on which he sends the invitation, or within such other period of time as specified in the invitation he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing to other party accordingly.

APPOINTMENT OF CONCILIATORS:

                        According to Sec. 63 there shall be only one conciliator unless the parties agree that there shall be two or three conciliators.   Conciliators cannot be more than three in numbers.

                        In case of one conciliator the parties to the dispute may agree on the name of a sole conciliator.

                        In case of two conciliators each party may appoint one conciliator.

                        In case of three conciliators each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall not as the Presiding Conciliator.

                        Where there is more than one conciliator they ought to act jointly.

                        When the parties to the dispute are unable to appoint conciliators on their own they may seek the assistance of a suitable institution or person in connection with the appointment of conciliators.

                        Since the conciliator acts as catalyst for problem solving he is expected to have the fundamental abilities.   The most important ability required for a conciliator is to earn the trust of the parties.   The openness and honesty which require trust which depends upon the conciliator’s ability, competence, consistency, integrity and neutrality at every stage of conciliation process.   Impartiality and neutrality denote that the conciliator is able to separate his personal views about the dispute and its outcome from the view points of each party and is able to concentrate exclusively upon assisting the parties towards settlement without overtly favoring one party over the other party.

 

CONCILIATION PROCEDURES:

 

1. After his appointment as conciliator he may request each party to submit a written statement describing the general nature of dispute and points at issue. (The term ‘conciliator’ hereinafter applies to a sole conciliator, two or three conciliators as the case may be)
2. Each party is to submit written statement as requested by the conciliator within the time stipulated;
3. Each party shall send a copy of each statement to another party;
4. The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate;
5. Each party shall send a copy of such statement, documents and other evidence to the other party;
6. According to Sec. 65 the conciliator, at any stage of conciliation proceedings, may request any party to submit to him such additional information as deems appropriate;
7. The conciliator is not bound by the code of Civil Procedure, 1908 or the Indian Evidence Act, 1872;
8. After going through the cases filed by each party, the conciliator holds a joint meeting with the parties either by oral or written invitation which may be individually or the parties together;
9. The place of conciliation is the place agreed to by the parties.   If there is no agreement the place shall be determined by the Conciliator after consultation with the parties, having regard to the circumstances of the conciliation proceedings;
10. In order to facilitate the conduct of conciliation proceedings, the parties or the conciliator may arrange, with the consent of the parties, for administrative assistance by a suitable institution or person;
11. The parties shall in good faith co-operate with the conciliator.   They shall try to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings;
12. The conciliator may hold private meeting with each party separately to further clarify its case and to discuss the merits of the case, guiding the party in respect of legal position and the requirements to substantiate the claim.   While doing so, he should always try to bring the parties close to an agreement.   In case the parties to the disputes are so inclined he may even suggest a settlement for acceptance by the parties.   This suggestion may either be in writing or oral;
13. If the conciliator receives factual information from the party he should disclose the substance of that information to the other party so that to give him an opportunity of being heard;
14. If the factual information is given to the conciliator by the party subject to the condition that it be kept confidential, the Conciliator shall not disclose that information to the other party;
15. 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;
16. If the conciliator is of the opinion that there is no scope for agreement between the parties or where the parties or any one of them indicate its unwillingness to pursue the conciliation, the conciliator may terminate the proceedings;
17. When it appears to the conciliator that there exist elements of settlement that 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 receiving the observations of the parties, the conciliator may formulate the terms of a possible settlement in the light of such observations;
18. If the parties reach agreement by themselves they may drawn up a settlement agreement.   If requested by the parties the conciliator may draw up, or assist the parties in drawing up the settlement agreement;
19. The settlement agreement shall be in writing and signed by the parties to the dispute;
20. The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties;
21. The Conciliator and the parties keep all the matters relating to the conciliation proceedings confidential.   They may treat the settlement agreement also confidential except where its disclosure is necessary for the purposes of implementation and enforcement;
22. The conciliation proceedings shall be terminated-
• By the signing of the settlement agreement by the parties on the date of the agreement; or
• By a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at a conciliation are no longer justified, on the date of declaration; or
• By a written declaration to the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of declaration; or
• By a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated on the date of declaration.
23. Upon termination of the conciliation proceedings, the conciliator shall fix the costs of conciliation and given written notice thereof to the parties.  The term ‘costs’ mean reasonable costs relating to-

• The fee and expenses of conciliator and witnesses required by the conciliator with the consent of the parties;
• Any expert advice requested by the conciliator with the consent of the parties;
• Any assistance provided by the institution or person;
• Any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.

24. The costs shall be borne equally by the parties unless the settlement agrees provides for a different apportionment;
25. The conciliator may direct such party to deposit an equal amount as an advance for the costs which he expects will be incurred;
26. During the course of conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party;
27. If the deposits are not paid in full by both parties within 30 days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of declaration;
28. The conciliator, after the termination of the proceedings, shall render an accounting to the parties of the dispute, the deposit received and return any unexpended balance to the parties;

STATUS AND EFFECT OF SETTLEMENT AGREEMENT:

                        The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms of the substance of the dispute rendered by an arbitral tribunal under Sec. 30.   It is enforceable like a decree of court.

OTHER CONDITIONS:

1. The parties shall not initiate during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his right.
2. Unless otherwise agreed to by the parties the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceedings in respect of a dispute that is the subject of the conciliation proceedings;
3. Unless otherwise agreed to by the parties the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings;
4. The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject matter of the conciliation proceedings-

-          views expressed or suggestions made by the other party in respect of a possible settlement of dispute;

-          admissions made by the other party in the course of the conciliation proceedings;

-          proposals made by the conciliator;

-          the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

ADVANTAGES OF CONCILATION:

• The agreement reached is that of the disputes involves;
• It obviates the parties from seeking recourse to the court system;
• The dispute is quickly resolved without great stress and expenditure;
• It facilitates the maintenance of continued relationship between the parties even after the settlement;
• It offers a more flexible alternative for a wide variety of disputes, small as well as large;
• It reserves the freedom of the parties to withdraw from the proceedings without prejudice to their legal position inter se at any stage of the proceedings;
• The dispute was kept private by maintaining the confidentiality throughout the proceedings and thereafter;
• The settlement agreement is enforceable as like that of a decree.

DIFFERENCE BETWEEN CONCILIATION AND ARBITRATION:

• In conciliation the attitude is ‘win-win’ as against the attitude in arbitration ‘win-lose’;
• The arbitrator gives the award on the basis of the arguments and evidences brought by the parties.   In conciliation the conciliator tries to bring the parties together so that they can discuss their dispute and resolve the dispute by designing a settlement agreement.   So the role of the conciliator is difficult that that of arbitrators;
• The proceedings of the arbitration are either defensive or offensive but never to co-operative.   But in the conciliation co-operation is the main factor in resolving the dispute.

CONCLUSION:                  

                        In the conciliation proceedings the end product is the agreement of both sides.   The conciliator cannot impose his decisions as settlement on parties.   The settlement agreement is the result of compromise and negotiation.   So each party feels he has reached an acceptable agreement.   Both sides feel they have won.   But the real key is the mediator or conciliator.   Since it takes less time and small expenditure the best way to resolve any dispute is reconciliation.