‘Conciliation’ is an impartial process whereby the parties to the dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences[2]. Thus the conciliator acts to bring parties to the dispute at amicable settlement among themselves.

It is non-binding process. The conciliator cannot pass award to bind both the parties. Neither it is enforceable in Court.

II. Kinds of Conciliation:-

The Conciliation has following kinds,-

1. Voluntary conciliation:-

In this type of conciliation, parties to the dispute voluntarily participate in the process of conciliation for resolving their dispute.

2. Compulsory conciliation:-

In this type of conciliation parties are compelled to take conciliation to resolve their dispute. It is usually used in labor matters.

III. Advantages and disadvantages of conciliation:-

a). Advantages of conciliation:-

Conciliation has following advantages-

(i). Conciliator is an expert:-

Generally, Conciliator is a legal expert and has experience in dispute resolution. Parties get help of such expert in dispute resolution.

(ii). Private Process:-

The process of dispute resolution through conciliation is private; therefore, there is no chance of causing disrepute to the Court or either parties.

(iii). Right to approach court:-

Right to approach a court is not affected by failure of conciliation process.

(iv). Flexible:-

Since the conciliation is private and informal process it is very flexible and convenient to the parties and even for conciliator.

(v). Suitable process:-

Conciliation is very suitable process in many matters.

(vi). Cheaper:-

Conciliation is cheaper process compare to the court.

b) Disadvantages of conciliation:-

There are following lacunas or disadvantages of conciliation.

(i) No bindingness:-

There is no bendiness in Conciliation, to come at conclusion like award in arbitration.

(ii) No guarantee of success:-

There is no guarantee of success in conciliation. The conciliation may fail. There may not be any conclusion.

(iii) Lack of seriousness:-

Since the process of conciliation is private and informal, parties don’t take it seriously.

(iv) No legal aid:-

Since the conciliation is formal process parties lacks legal assistance.

IV. Conciliator[3]:-

1. Meaning:-

According to Asbury’s Law of England, “Conciliator” is a person persuading parties to reach an agreement.

With respect to the present topic also “Conciliator” means a person who persuades disputing parties to reach at an agreement resolving their dispute.

2. Number of Conciliators (S.63):-

There shall be one conciliator unless the parties agree that there shall be two or three conciliators. However, where there is more than one conciliator, they should as a general rule act jointly.

3. Appointment of Conciliators (S. 64):-

There are following rules as to appointment of Conciliator-

As to sole Conciliator:- In conciliation proceedings with one Conciliator, the parties may agree on the name of a sole conciliator.
As to two Conciliators:- In conciliation proceedings with two Conciliators, each party may appoint one conciliator;
As to three Conciliators:- In conciliation proceedings with three Conciliators, each party may appoint one Conciliator and the parties may agree on the name of the third Conciliator who shall act as the presiding Conciliator.

For appointment of a Conciliator, the parties may have assistance of a suitable institution or person. Either, (i) party may request such institution or person to recommend the names of suitable individuals to act as conciliators, or (ii) the parties may agree that the appointment of one or more conciliators be made directly by such institution or person.

However, in recommending or appointing individuals to act as conciliators, the institution or the person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

4. Role of Conciliator (S. 80):-

Conciliator should maintain his independence and impartiality therefore,-

(i) he 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.

(ii) the Conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

V. Principles of procedure of conciliation[4]:-

Since conciliation is a private and informal proceeding, it is not bound by strict rules of procedure however; the Act lays down some guiding principles of conducting conciliation proceedings which shall be followed by Conciliator.

1. Independence and impartiality (S. 67 (1)):-

The Conciliator should be independent and impartial. He shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

2. Fairness and justice:-

The Conciliator should be guided by principles of objectivity, fairness and justice. He shall among other things, give consideration to, 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. Confidentiality (S. 75)-

The Conciliator and the parties shall keep confidential all the matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for the purposes of implementation and enforcement.

Unless permitted the Conciliator cannot disclose information of one party to another (proviso of S. 70).

4. Disclosure of information (S. 70):-

When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate.

The section is in consonance with the natural law principle, to inform party about content of allegation so to answer it.

5. Cooperation of parties (S. 71):-

The success of conciliation largely depends upon cooperation of parties to the Conciliator. The parties should in good faith cooperate with the conciliator. They should endeavor to comply with requests of Conciliator to submit written materials, provide evidence and attend meetings.

6. Rules of procedure (S. 66)-

The conciliator is neither bound by the rules contained in the Civil Procedure Code nor the rules of Evidence Act. However, it is expected from him to follow principles of natural justice.

7. Admissibility of evidence in other proceedings (S. 82)-

The section mentions four categories of evidences which cannot be relied on or introduced as an evidence in other arbitral or judicial proceedings when the subject matter of the dispute is the same. Those subjects are-

(i) Views expressed or suggestions made by the other party in respect of a possible settlement of the dispute,

(ii) Admissions made by other party in the course, of conciliator proceedings,

(iii) Proposals made by the conciliator,

(iv) The fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

8. Place of meeting (S. 69 (2)):-

If not determined by the parties, the conciliator determines the place of conciliation after consultation with the parties.

9. Prohibition on other proceedings (S. 77):-

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings relating to the same matter except to preserve his rights. Thus, the section prohibits the parties from initiating any judicial or arbitral proceedings for the same matter. The provision is made to avoid any complications in the matter under conciliation. However, the section protect right of party to resort to judicial or arbitral proceedings if it becomes necessary to preserve his rights.

VI. Procedure of conciliation[5]:-

Following procedure is followed to conduct conciliation proceedings-.

1. Commencement of conciliation proceedings (S. 62):-

The party initiating conciliation proceedings shall send to the other party a written invitation to conciliation, briefly identifying the subject of the dispute. Conciliation proceeding 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. Even, if the other party doesn’t reply within 30 days or the time mentioned in the invitation, it may be treated that the conciliation is rejected by the other party. However, the party sending invitation should inform in writing to the other party accordingly.

2. Submission of statements to conciliator (S. 65)-

The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.

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. The party shall send a copy of such statement, documents and other evidence to other parity.

At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.

3. Communication by Conciliator with parties (S. 69 (1) and S. 67 (3)):-

The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

The conciliation is not bound by the strict proof of a law, however, he may conduct the proceeding in such a manner as he considers appropriate, taking into account the circumstance of the case, the wishes of the parties, oral hearing (if requested by a party), speedy disposal of the matter etc.

4. To Take administrative assistance (S. 68):-

In order to facilitate the conduct of the conciliation proceeding, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person. Such administrative services may be related with providing lists of conciliators, arrangement of meeting for conciliators, to provide two way communication services such as translation, interpretation etc.

5. Settlement of dispute:-

There are following provisions related to the settlement of dispute.

a. Making proposal for settlement (S. 67 (4)):-

The conciliator may, at any stage of the proceedings make proposal for a settlement of the dispute. Such proposal need not be in writing and need not be accompanied by a statement of the reasons therefore.

b. Suggestions by parties for settlement of dispute (S. 72):-

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator the suggestions for the settlement of the dispute.

This section gives freedom to the parties to give their suggestions for settlement of the dispute.

c. Settlement agreement[6] (S. 73)-

When it appears to the conciliator that there exists an element 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 receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively. Thereafter, the conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

d. Status and effect of settlement agreement[7] (S. 74):-

The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms. (as if arbitral tribunal under S.30).

6. Termination of conciliation proceeding[8] (S. 76):-

The conciliation proceedings terminates-

by the signing of the settlement agreement by the parties, on the date of agreement; or
by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts of conciliation are no longer justified.
by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings is terminated.
by a written declaration of a party to the other party and the conciliator, of termination of conciliation proceedings.

VII. The difference between Conciliation and Arbitration:-

The process of conciliation and arbitration are different.

1. As to the nature:-

“Arbitration” means the reference of dispute or difference between not less than two parties, for determination, after hearing both sides in a judicial manner, by a person or persons other than a court of a competent jurisdiction.

‘Conciliation’ is an impartial process whereby the parties to the dispute use a conciliator, who meets with the parties both separately and together in an attempt to resolve their differences.

2. As to prior agreement:-

To refer the matter for arbitration, the prior agreement between the parties is necessary.

Prior agreement is not necessary to refer dispute for conciliation.

3. Types of dispute referred:-

Any existing or future dispute may be referred to arbitration, whereas, only existing dispute can be referred to conciliation.

4. Enforceability:-

Arbitrator can enforce his award, whereas, conciliator cannot settlement.

5. Formal / Informal Proceeding:-

Arbitration proceeding is a formal proceeding, evidence is taken before it, parties are examined on oath etc. Whereas, Conciliation is informal process to resolve dispute.

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[1] सुलाहा / समझौता/ समेट

[2] “सुलाहा” एक निष्पक्ष प्रक्रिया है जिसके तहेत विवाद के पक्षकार एक सुलह्कर्ता का उपयोग करते है| जो अपने मतभेदो को सुलझाने के प्रयास मे पार्टीयोके साथ अलग-अलग और एक साथ मिलते है|

[3] सुलाह्कर्ता

[4] सुलाहा कि प्रक्रिया कि सिद्धान्त

[5] सुलाहा कि प्रक्रिया

[6] समझौता करार

[7] निपटान समझौते कि स्थिति और प्रभाव

[8] सुलह: कार्यवाही कि समाप्ती