Conciliation: A form of Alternate Dispute Resolution Project Submitted to: Mr. Manoj Kumar (Faculty of Alternate Dispute Resolution)
Project Submitted by: Roit Don!re Semester "#$ Section % Roll no. &'
Submitted on: &.*.*&+
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,idayatulla -ational a/ 0ni1ersity$ -aya Raipur$ 2attis!ar
Declaration
# ereby declare tat te project /or3 entitled 42onciliation: A form of Alternate Dispute Resolution5 submitted to ,idayatulla -ational a/ 0ni1ersity$ Raipur$ is record of an ori!inal /or3 done by me under te able !uidance of Mr. Manoj Kumar $ Faculty of Alternate Dispute Resolution$ ,-0$ Raipur.
Roit Don!re
Semester6 "#
Section %
Roll no6&'
Acknowledgements # feel i!ly elated to /or3 on te topic 42onciliation: A form of Alternate Dispute Resolution5 7e practical reali8ation of tis project as obli!ated te assistance of many persons. # e9press my deepest re!ard and !ratitude for Mr. Manoj Kumar$ Faculty of Alternate Dispute Resolution. ,is consistent super1ision$ constant inspiration and in1aluable !uidance as been of immense elp in understandin! and carryin! out te nuances of te project report. # /ould li3e to tan3 my family and friends /itout /ose support and encoura!ement$ tis project /ould not a1e been a reality.
# ta3e tis opportunity to also tan3 te 0ni1ersity and te "ice 2ancellor for pro1idin! e9tensi1e database resources in te ibrary and trou! #nternet. Some printin! errors mi!t a1e crept in$ /ic are deeply re!retted. # /ould be !rateful to recei1e comments and su!!estions to furter impro1e tis project report.
Roit Don!re
Semester6 "#
Section %
Roll no6&'
Contents Declaration....................................................................................................................................................... Ac3no/led!ements..........................................................................................................................................' 2ontents............................................................................................................................................................ #ntroduction...................................................................................................................................................... ;bjecti1es.........................................................................................................................................................+ Researc Metodlo!y.......................................................................................................................................+ 7e 2oncept of 2onciliation............................................................................................................................< ,istory of 2onciliation in #ndia........................................................................................................................= Process of 2onciliation...................................................................................................................................&* .&2ommencement of conciliation and appointment of conciliator..........................................................&* . Procedure in conciliation and role of conciliator..................................................................................&& .' 7e settlement a!reement.....................................................................................................................&' . 7ermination of 2onciliation proceedin!s.............................................................................................& Ad1anta!es of 2onciliation............................................................................................................................&< '.& 2ost effecti1e and e9peditious process.................................................................................................&< '. Autonomy and con1enience of parties.................................................................................................&< '. Party satisfaction and armony............................................................................................................&= '.
2onfidentiality......................................................................................................................................&>
'.+?nforceability of conciliation settlement a!reement.............................................................................* Disad1anta!es of 2onciliation........................................................................................................................* -o %indin! Decision:.................................................................................................................................* 2onciliator
#n1ol1ement:............................................................................................................................*
2onclusion......................................................................................................................................................& %iblio!rapy................................................................................................................................................... @eblio!rapy..................................................................................................................................................
Introduction 2onciliation is a confidential$ 1oluntary and pri1ate dispute resolution process in /ic a neutral person elps te parties to reac a ne!otiated settlement. 7is metod pro1ides te parties /it an opportunity to ne!otiate$ con1erse and e9plore options aided by a neutral tird party$ te conciliator$ to e9austi1ely determine if a settlement is possible. ,is function is to try to brea3 any deadloc3 and encoura!e te parties to reac an amicable settlement by actin! as a conduit for communication$ filterin! out te disturbin! elements and allo/in! te parties to focus on te underlyin! core objecti1es #t is te fastest emer!in! alternate dispute resolution (ADR) mecanism in te present day /orld and is e9tensi1ely used in te 0.S.$ 0.K. and ?urope as an effecti1e /ay of settlin! disputes$ be it commercial$ contractual or personal. #t is a means by /ic te parties re6learn te basis of communication /it /ic tey can ten resol1e future disputes. #t is slo/ly !ainin! !round and a/areness of its merits is de1elopin! in #ndia$ a country /ic is already familiar /it te concept of pancayats. ,o/e1er$ ADR is still in te e9perimental sta!es in #ndia.& Promul!ated initially as an ;rdinance$ tis Act (te &>>+ Act) consolidates and streamlines te la/ relatin! to Arbitration in #ndia by brin!in! under one statute te 1arious pro1isions relatin! to arbitration /ic /ere earlier spread o1er tree separate Acts. #t is drafted on te lines of te 0-2#7RA Model Arbitration a/ and te 0-2#7RA 2onciliation Rules and for te first time statutorily reco!ni8es conciliation by pro1idin! elaborate rules of en!a!ement.
& ttp:///.ficci6arbitration.comtm/atisconcialation.tm
Objectives
To know the histor of Conciliation in India To understand the !rocess of Conciliation in India To understand the Advantages and Disadvantages of Conciliation
Research "ethodlog 7is Researc Project is Descripti1e in nature as it uses descripti1e lan!ua!e for te e9planation of 1arious topics and subjects discussed in tis project.
The Concept of Conciliation 7e ,alsburyBs a/s of ?n!land defines 2onciliation as a process of persuadin! te parties to reac an a!reement$ and is plainly not an arbitration$ nor is te cairman of a 2onciliation %oard an Arbitrator. Arbitration is less formal tan liti!ation$ and 2onciliation is e1en less formal tan Arbitration. 7e terms conciliation and mediation are intercan!eable in te #ndian conte9t. 2onciliation is a 1oluntary process /ereby te conciliator$ a trained and Cualified neutral$ facilitates ne!otiations bet/een disputin! parties and assists tem in understandin! teir conflicts at issue and teir interests in order to arri1e at a mutually acceptable a!reement. 2onciliation in1ol1es discussions amon! te parties and te conciliator /it an aim to e9plore sustainable and eCuitable resolutions by tar!etin! te e9istent issues in1ol1ed in te dispute and creatin! options for a settlement tat are acceptable to all parties. 7e conciliator does not decide for te parties$ but stri1es to support tem in !eneratin! options in order to find a solution tat is compatible to bot parties. 7e process is ris3 free and not bindin! on te parties till tey arri1e at and si!n te a!reement. ;nce a solution is reaced bet/een te disputin! parties before a conciliator$ te a!reement ad te effect of an arbitration a/ard and is le!ally tenable in any court in te country. Most commercial disputes$ in /ic it is not essential tat tere sould be a bindin! and enforceable decision$ are amenable to conciliation. 2onciliation may be particularly suitable /ere te parties in dispute /is to safe!uard and maintain teir commercial relationsips. 7e follo/in! types of disputes are usually conduci1e for mediation: commercial$ financial$ family$ real estate$ employment$ intellectual property$ insol1ency$ insurance$ ser1ice$ partnersips$ en1ironmental and product liability. Apart from commercial transactions$ te mecanism of 2onciliation is also adopted for settlin! 1arious types of ,alsburyBs a/s of ?n!land () * (%utter/orts$ ondon$ t ?dn.$ &>>&).
disputes suc as labour disputes$ ser1ice matters$ antitrust matters$ consumer protection$ ta9ation$ e9cise etc
#istor of Conciliation in India 2onciliation is not a ne/ concept as far as #ndia is concerned. KautilyaBs Artasastra also refers to te process of conciliation.' "arious le!islations in #ndia a1e also reco!ni8ed conciliation as a statutorily acceptable mode of dispute resolution and conciliation /as in fact bein! freCuently resorted to as a mode of dispute resolution under tese specific le!islations. ,o/e1er$ apart from tese statutory pro1isions dealin! /it specified cate!ories of cases$ conciliation in !eneral as a mode of ADR lac3ed proper le!islati1e frame/or3 and statutory bac3in!.
#n &>= faced /it te problem of surmountin! arrears te ,imacal Prades ,i! 2ourt e1ol1ed a uniCue project for disposal of cases pendin! in courts by conciliation. 7is /as also been recommended by te a/ 2ommission of #ndia in its <>'. +7e Malimat 2ommittee ad also inter alia recommended te establisment of conciliation courts in #ndia.< ' ".A. Mota and Anoop ". Mota$ Arbitration$ 2onciliation and Mediation ' (Manupatra$ -oida$ nd ?dn.$ **=). Section & of te #ndustrial Disputes Act$ &>< contemplates settlement of disputes trou! conciliation effected trou! conciliation officers appointed under te ActE Section ' of te ,indu Marria!e Act$ &> and ;rder ## A$ 2ode of 2i1il Procedure$ &>*= enable te jud!e to effect settlement bet/een te parties by recourse to conciliation. See Anirud @ad/a and Anirud Krisnan (?ds.)$ R.S. %aca/atBs a/ of Arbitration and 2onciliation (e9is -e9is %utter/orts @ad/a$ -a!pur$ t ?dn.$ *&*). + Sar1es 2andra$ 4ADR: #s 2onciliation te %est 2oice5 in P.2. Rao and @illiam Seffield (?ds.)$ Alternati1e Dispute Resolution = (0ni1ersal a/ Publisin! 2ompany P1t. td.$ Deli$ &>><)E See also ;.P. Moti/al$ 4De1elopment of a/ of 2onciliation in #ndia5$ # #2A Arbitration Guarterly (anuary 6 Marc *&&). < ,.R. %ard/aj$ 4e!al and udicial Reforms in #ndia5$ a1ailable at: ttp: icadr.ap.nic.inarticlesarticles.tml
For te last se1eral decades$ #ndiaHs court system as suffered from an o1er/elmin! bac3lo! of cases. An a1era!e ci1il case ta3es almost a decade to be adjudicated. #n &>>+$ te #ndian e!islature reco!ni8ed tat$ in order to lessen te burden on te courts by introducin! a more efficient case mana!ement system$ conciliation /ould a1e to be inte!rated as a dispute resolution option in appropriate ci1il and commercial matters. So as a conseCuence$ in **$ te 2P2 /as amended to ma3e ADR an inte!ral part of te judicial process. #n terms of te ne/ly inserted Section => of 2P2$ if it appears to te court tat tere e9ist elements$ /ic may be acceptable to te parties$ te court may formulate te terms of a possible settlement and refer te same for arbitration$ conciliation$ mediation or judicial settlement.
#n te mean time te 0-2#7RA ad adopted te 0-2#7RA 2onciliation Rules$ &>=* and te Ieneral Assembly of te 0nited -ations ad recommended te use of tese rules$ terefore$ te Parliament of #ndia found it e9pedient to ma3e a la/ respectin! conciliation$ and te Arbitration and 2onciliation Act$ &>>+ /as enacted.= 2onciliation /as afforded an elaborate codified statutory reco!nition in #ndia /it te enactment of te Arbitration and 2onciliation Act$ &>>+ and Part ### of te Act compreensi1ely deals /it conciliation process in !eneral. 7e capter on conciliation under te Arbitration and 2onciliation Act$ &>>+ is$ o/e1er$ essentially based on te 0-2#7RA 2onciliation Rules$ &>=*.>
= See Preamble to te Arbitration and 2onciliation Act$ &>>+. > P.2. Rao$ 4Arbitration and 2onciliation Act$ &>>+: 7e 2onte9t5 in P.2. Rao and @illiam Seffield (?ds.)$ Alternati1e Dispute Resolution = (0ni1ersal a/ Publisin! 2ompany P1t. td.$ Deli$ &>><).
!rocess of Conciliation $%&Commencement of conciliation and appointment of conciliator
7e conciliation process commences /en te disputin! parties a!ree to conciliate and a neutral conciliator is appointed. 7e party initiatin! conciliation sends a /ritten in1itation to conciliate to te oter party briefly identifyin! te subject matter of te dispute. 2onciliation proceedin!s commence /en te oter party accepts in /ritin! te in1itation to conciliate.&* #f te oter party rejects te in1itation$ tere /ill be no conciliation proceedin!s also if te party initiatin! conciliation does not recei1e reply /itin tirty days from te date on /ic e sends in1itation$ or /itin suc oter period of time as specified in te in1itation$ e may elect to treat tis as C rejection of te in1itation to conciliate and if e so elects$ e sall inform in /ritin! te party accordin!ly.&& 7us conciliation a!reement sould be an ad oc a!reement entered by te parties after te dispute as actually arisen and not before.& ?1en if te parties incorporate conciliation clauses in teir a!reements$ still conciliation /ould commence only if te oter party accepts te in1itation of one party to conciliate in case of a de facto dispute. 7us unli3e in te case of an arbitration a!reement$ Part ###
&* S. +$ Arbitration and 2onciliation Act$ &>>+. && 2lause ' and of S.+ Arbitration and 2onciliation Act$ &>>+. & ". -a!es/ara Rao$ 42onciliation Proceedin!s under te #ndian Arbitration 2onciliation Act of &>>+ and 2P2 J An ;1er1ie/5$
of te Arbitration and 2onciliation Act$ &>>+ does not en1isa!e any a!reement for conciliation of future disputes. #t only pro1ides for an a!reement to refer te disputes to conciliation after te disputes a1e arise&' #n conciliation proceedin!s ordinarily tere is one conciliator unless te parties a!ree tat tere sall be t/o or tree conciliators. ?1en in case of plurality of conciliators tey are supposed to act jointly. An une1en number of conciliators is not necessary in conciliation since te tas3 of te conciliators is to ma3e recommendations for a settlement and not to render bindin! decisions.& #n conciliation proceedin!s /it one conciliator$ te parties may a!ree on te name of a sole conciliator and in conciliation proceedin!s /it t/o conciliators$ eac party may appoint one conciliator. 7e parties may also reCuest any institution or person to recommend suitable names of conciliators or directly appoint tem and suc person or institution /ile discar!in! tis responsibility sould a1e re!ard to aspects as a re li3ely to secure te appointment of an independent and impartial conciliator.&
$%$ !rocedure in conciliation and role of conciliator
7e conciliator may reCuest eac of te parties to submit a brief /ritten statement describin! te !eneral nature of te dispute and te points at issue$ /it a copy to te opposite party.&+ At any sta!e of te conciliation proceedin!s te conciliator may reCuest a party to submit to im suc additional information as e deems appropriate.&< 7e conciliator is supposed to assist te parties in an independent and impartial manner in teir attempt to reac an amicable settlement of te ir dispute.&= A conciliator assists parties by elpin! tem to initiate and de1elop positi1e dialo!ue$ clarify misunderstandin!s$ create fait upon one anoter and !enerate a con!enial &' "isa #nternational td. 1. 2ontinental Resources (0SA) td.$ A#R **> S2 &'++. & See 2ommentary on Draft 0-2#7RA 2onciliation Rules. & S. +$ Arbitration and 2onciliation Act$ &>>+. &+ S. +$ Arbitration and 2onciliation Act$ &>>+. &< S. +$ Arbitration and 2onciliation Act$ &>>+. &= S. +<$ Arbitration and 2onciliation Act$ &>>+.
atmospere reCuired for armonious and cooperati1e problem6sol1in!. #n order to justify is position te conciliator must be an impartial person. 7e parties sould be able to repose trust and confidence in im so as to enable tem to sare teir secrets and teir tin3in! process /it te conciliator /it te belief tat te same /ill not be di1ul!ed to oter party /itout specific instructions in tat re!ard.&> 7e conciliator may conduct conciliation proceedin!s in suc a manner as e considers appropriate$ ta3in! into account te circumstances of te case and te /ises of te parties. 7e conciliator as /ide procedural discretion in sapin! te dynamic process to/ards a settlement. 7e process of conciliation$ inter alia$ in1ol1es creatin! a constructi1e bondin! bet/een te parties to a dispute to steer tem to/ards resolution.* 7e conciliator is not bound by te 2ode of 2i1il Procedure$ &>*= or te #ndian ?1idence Act$ &=<.&,e is to be !uided by principles of objecti1ity$ fairness and justice !i1in! due consideration to te ri!ts and obli!ations of te parties$ te usa!es of te trade concerned and te circumstances surroundin! te dispute$ includin! any pre1ious business practices bet/een te parties.7e conciliator may in1ite te parties to meet im or may communicate /it tem orally or in /ritin!. ,e may meet or communicate /it te parties to!eter or /it eac of tem separately.' 7e conciliator may old se1eral joint or pri1ate meetin!s /it te parties so as to enable te parties to clarify teir cases and so as to persuade te parties to arri1e at a mutually acceptable solution. 0nless te parties a1e a!reed upon te 1enue of conciliation proceedin!s te conciliator is supposed to decide te 1enue of conciliation proceedin!s in consultation /it te parties. 7us te conciliator is 1ested /it e9tensi1e po/er to coose and mould te procedure to be follo/ed by im untrammeled by te procedural la/s$ albeit in consultation /it te parties. #n order to facilitate te conduct of te conciliation &> M. K. Sarma$ 42onciliation and Mediation5 * P.M. %a3si$ 42onciliation for Resol1in! 2ommercial Disputes5$ & S. ++$ Arbitration and 2onciliation Act$ &>>+. S. +<$ Arbitration and 2onciliation Act$ &>>+. ' S. +>$ Arbitration and 2onciliation Act$ &>>+. Sar1es 2andra$ 4ADR: #s 2onciliation te %est 2oice5 in P.2. Rao and @illiam Seffield (?ds.)$ Alternati1e Dispute Resolution = (0ni1ersal a/ Publisin! 2ompany P1t. td.$ Deli$ &>><).
proceedin!s$ te parties$ or te conciliator /it te consent of te parties$ may arran!e for administrati1e assistance by a suitable institution or person. 7is so/s tat dependin! upon te reCuirement from case to case basis te conciliator may or may not adopt a structured process in conciliation. 7e role of te conciliator is to assist te parties to arri1e at an amicable settlement. 7e conciliator may$ at any sta!e of te conciliation proceedin!s$ imself ma3e proposals for a settlement of te dispute.+ #n te #ndian conte9t te conciliator terefore plays an e1aluati1e< role /ile mana!in! te process of conciliation as opposed to a mere facilitator. 7e conciliator assesses te respecti1e cases of te parties and apart from actin! as a facilitator su!!ests and ad1ices te parties on 1arious plausible solutions to te parties so as to enable te parties to coose te best possible and apt solution. ,e attempts to !et te parties to accept te merits and demerits of teir cases tereby leadin! tem to a mutually acceptable solution.= 7e conciliator$ in tis manner plays a more proacti1e and inter1entionist role in persuadin! te parties to arri1e at a final settlement. > #n actual practice conciliator needs to be a person /o is not only /ell6informed and diplomatic but can also influence te parties by is persona and persuasi1e s3ills. ,o/e1er$ if te system of conciliation is to succeed as a proficient ADR mecanism professional trainin! of conciliators needs to be a mandatory reCuirement.'*
S. +=$ Arbitration and 2onciliation Act$ &>>+. + S. +<$ Arbitration and 2onciliation Act$ &>>+. < ,o/e1er 2onciliation may be facilitati1e also. See M. K. Sarma$ 42onciliation and Mediation5$ a1ailable at: ///.delimediationcentre.!o1.in (last 1isited on *.*>.*&*). 7e difference lies in te approac adopted by te conciliator and te le1el of inter1ention = See ;.P. Malotra and #ndu Malotra$ 7e a/ and Practice of Arbitration and 2onciliation (e9is-e9is %utter/orts$ Deli$ nd ?dn.$ **+). > Salem Ad1ocate %ar Association 1. 0nion of #ndia$ A#R ** S2 '''E See also Anirud @ad/a and Anirud Krisnan (?ds.)$ R.S. %aca/atBs a/ of Arbitration and 2onciliation (e9is -e9is %utter/orts @ad/a$ -a!pur$ t ?dn.$ *&*. '* A.2.2. 0nni$ 47e -e/ a/ of Arbitration and 2onciliation in #ndia5$ in P.2. Rao and @illiam Seffield (?ds.)$ Alternati1e Dispute Resolution += (0ni1ersal a/ Publisin! 2ompany P1t. td.$ Deli$ &>><).
$%' The settlement agreement
@en it appears to te conciliator tat tere e9ist elements of a settlement$ /ic may be acceptable to te parties$ e is supposed to formulate te terms of a possible settlement and submit tem to te parties for teir obser1ations. After recei1in! te obser1ations of te parties$ te conciliator may reformulate te terms of a possible settlement in te li!t of suc obser1ations.'& 7e statutory pro1isions' enjoin upon te conciliator to dra/ up and autenticate a settlement a!reement. ,e sould ensure tat te parties a1e full understandin! of te settlement terms.'' 7e a!reement must embody te terms and conditions of te settlement /it clarity and precision. #t is open to te parties to settle some of teir disputes by conciliation and lea1 e te unresol1ed disputes bet/een tem for resolution by oter modes of adjudication.' 7e settlement a!reement must also bear te si!natures of te parties. ' ;nce te parties si!n te settlement a!reement$ it sall be final and bindin! on te parties and persons claimin! under tem respecti1ely.'+ 7e settlement a!reement dra/n up in conciliation proceedin!s as te same status and effect as if it is an arbitral a/ard '< on a!reed terms on te substance of te dispute rendered by an arbitral tribunal under section '* of te Arbitration and 2onciliation Act$ &>>+. ,o/e1er it is only tat a!reement /ic as been arri1ed at in conformity /it te manner stipulated and form en1isa!ed and !ot duly autenticated in accordance /it section <' of te Arbitration and 2onciliation Act$ &>>+$ /ic can be assi!ned te status of a true settlement a!reement and can be enforced as an arbitral a/ard.'= 7erefore a
'& S. <'(&)$ Arbitration and 2onciliation Act$ &>>+E ' S. <'()$ Arbitration and 2onciliation Act$ &>>+ '' P.M. %a3si$ 4ADR in te 2onstruction #ndustry5$ in P.2. Rao and @illiam Seffield (?ds.)$ Alternati1e Dispute Resolution '&+ (0ni1ersal a/ Publisin! 2ompany P1t. td.$ Deli$ &>><). ' Mu3ul Mud!al$ 42onciliation: An #ndian Perspecti1e5$ ## () -yaya Kiran (April **'). ' ,ares Dayaram 7a3ur 1. State of Maarastra$ A#R *** S2 =&. '+ S. <'(')$ Arbitration and 2onciliation Act$ &>>+ '< S. <$ Arbitration and 2onciliation Act$ &>>+. '= Mysore 2ements td. 1. S1edala %armac td.$ (**') &* S22 '<.
settlement a!reement arri1ed in pri1ate conciliation proceedin!s can be enforced by e9ecutin! te same in a ci1il court as if it /ere a decree of te court.'>
$%( Termination of Conciliation proceedings A successful conciliation proceedin! concludes /it te dra/in! and si!nin! of a conciliation settlement a!reement. 7e si!nin! of te settlement a!reement by te parties$ on te date of te settlement a!reement terminates conciliation proceedin!s. 7at apart$ any party may terminate conciliation proceedin!s at any time e1en /itout !i1in! any reason since it is purely 1oluntary process. 7e parties can terminate conciliation proceedin!s at any sta!e by a /ritten declaration of eiter party. A /ritten declaration of te conciliator$ after consultation /it te parties$ to te effect tat furter efforts at conciliation are no lon!er justified$ also terminates conciliation proceedin!s on te date of suc declaration.* 7e Supreme 2ourt in Haresh Dayaram Thakur v. State of Maharashtra and others41 refused to accept te settlement a!reement dra/n up by te conciliator as le!ally 1alid on te !round tat te pro1isions of Section <' and conseCuently Section < of te Act ad been blatantly 1iolated. #n tis case$ te conciliator eld some meetin!s /it te parties in /ic tere /as discussion and tereafter dre/ up te so called settlement a!reement by imself in secrecy and send te same to court in a sealed co1er. -aturally$ te so6called settlement a!reement did not bear te si!natures of te parties %ut te ,i! 2ourt in its order ad !i1en te said settlement a status i!er tan an arbitral a/ard inasmuc as te court refused to e1en entertain any objection a!ainst te said settlement a!reement reiteratin! te position tat te settlement arri1ed at by te conciliator /ill be bindin! on te parties. 7e Supreme 2ourt in tis case obser1ed tat te conciliator /o /as a former jud!e of te i! court and te learned jud!e /o passed te impu!ned order failed to ta3e note of te pro1isions of Section <' and < of te Act and te clear distinction bet/een '> As an arbitral a/ard on a!reed terms is also e9ecutable as decree of te court in terms of s. '+$ Arbitration and 2onciliation Act$ &>>+. * S. <+$ Arbitration and 2onciliation Act$ &>>+. & A#R *** S2 =&
arbitration proceedin!s and conciliation proceedin!s. 7e court eld tat te learned jud!e of te i! court in passin! te impu!ned order failed to notice te apparent ille!alities committed by te conciliator in dra/in! up te so6called settlement a!reement 3eepin! it secret from te parties and sendin! it to te courts /itout obtainin! teir si!natures on te same. 7erefore$ tere /as blatant 1iolation of te procedure laid do/n in section <' and < of te act and ence te settlement a!reement dra/n up by te conciliator /as /olly untenable
7e Supreme 2ourt in Mysore Cements Ld. V. Svedala Barmac Ltd.,4 eld tat a settlement a!reement comes into e9istence under Section <' /en it satisfies te reCuirement stated terein and it !ets te status of an Arbitral A/ard under Section '* of te Act. %ut a compromise si!ned by bot te parties to 2onciliation and autenticated by te 2onciliators by itself does not become enforceable unless suc a compromise petition is accepted by te 2ourt and te 2ourt puts it seal of appro1al for dra/in! a decree on te basis of compromise petition. #n tis case$ te 2ourt refused to accept te 2ompromise A!reement as Settlement A!reement /itin te meanin! of Section <' because te procedure and steps contemplated in Section <' /ere not adered to /ile arri1in! at te Memorandum of 2onciliation. #n courtBs 1ie/ it /as merely a letter of comfort /ic /as sou!t to be enforced as settlement a!reement. 7erefore it could not be enforced as an Arbitration A/ard unless Section < read /it Section '* of Arbitration and 2onciliation Act$ &>>+.
A#R **' S2 '>'
Advantages of Conciliation '%& Cost effective and e)peditious process 2onciliation is an economical and e9peditious mecanism for resolution of disputes in comparison to liti!ation and arbitration$ /ic ma3es it an e9cellent ADR Mecanism. 7e cost mana!ement tools and e9pertise of te conciliator !enerally pre1ent multiplication of actual costs to te parties and see3 to ma3e it cost efficient. ' 7e conciliator follo/s a simplified procedure suited to te aspirations of te parties and 3eepin! in mind te need for speedy settlement of te dispute. Moreo1er te time mana!ement tools applied by te conciliator pre1ent dra!!in! on of conciliation proceedin!s for lon!er periods and ensure its conclusion /itin a reasonable time frame. 7e end result in conciliation is a ne!otiated settlement /ic is treated to be an
' As/anie Kumar %ansal$ Arbitration and ADR + (0ni1ersal a/ Publisin! 2o. P1t. td.$ Deli$ **) S. +<(')$ Arbitration and 2onciliation Act$ &>>+. As/anie Kumar %ansal$ Arbitration and ADR ' (0ni1ersal a/ Publisin! 2o. P1t. td.$ Deli$ **).
arbitral a/ard on a!reed terms$ tereby ob1iatin! te possibility of successi1e appeals and finally resol1in! te dispute in an e9peditious and cost effecti1e manner
'%$ Autonom and convenience of parties 2onciliation is fle9ible and con1enient. 7e parties are free to a!ree on te procedure to be follo/ed by te conciliator$ te time and 1enue of te proceedin!s and tus e1entually control te process. 7e conciliator may conduct te conciliation proceedin!s in suc a manner as e considers appropriate$ ta3in! into account te circumstances of te case$ con1enience of te parties and te /ises te parties may e9press.+ A 1ery commendable feature of conciliation is tat te parties can /itdra/ from conciliation at any sta!e. < 0nless a party consents to te initiation and continuance of conciliation and accepts te resultant settlement a!reement e cannot be said to be bound by te process$ and e may /al3 out from conciliation proceedin!s at any time. 7is is unli3e arbitration and liti!ation /ere decisions can be made e1en if a party /al3s out.= 7e parties terefore not only control te procedure in conciliation proceedin!s but also te final outcome of te proceedin!s. #ndeed party autonomy is a 1ery laudable feature of conciliation.
'%' Creative solutions* remedies #n liti!ation or arbitration /at solution or resolution /ould be contained in te jud!ment or a/ard is not /itin te control or prior 3no/led!e of te parties and moreo1er te ultimate decision is based on a strai!tfor/ard decision on merits 3eepin! in 1ie/ te ri!ts and positions of te parties. #n conciliation o/e1er te parties control te outcome and can incorporate terms and conditions in te settlement a!reement as per mutual a!reement. 7ey can de1ise creati1e solutions for teir disputes at one !o /ic may not a1e been /itin te contemplation of an arbitrator or a jud!e. 7ey can also decide o/ teir ri!ts and liabilities are !oin! to be actually /or3ed out on resolution of te dispute and cal3 out in!enious modalities for complyin! /it te basic terms of settlement. + S. +<(')$ Arbitration and 2onciliation Act$ &>>+. < Mu3ul Mud!al$ 42onciliation: An #ndian Perspecti1e5$ ## () -yaya Kiran (April **'). = As/anie Kumar %ansal$ Arbitration and ADR (0ni1ersal a/ Publisin! 2o. P1t. td.$ Deli$ **).
'%( !art satisfaction and harmon 0nli3e liti!ation and arbitration /ere one party /ins and te oter loses$ in conciliation bot parties are /inners as te decision is acceptable to bot. %ot parties are in fa1our of te decision$ as until bot parties a!ree to a proposal$ te settlement or a!reement does not ta3e place. 7erefore it is a /in6/in situation for bot te parties as bot te parties are satisfied /it te a!reement. Suc /in6/in situation enables tem to retain !ood relationsip for times to come unli3e liti!ation and arbitration /ere te parties on account of te /in6loss eCuation are not able to continue or rebuild teir relationsip. ?1en /ere te conciliation proceedin!s do not fructify into a settlement$ tey pro1e to be useful by enablin! te parties to understand eac oterBs 1ersions$ positions and aspirations in a better perspecti1e.
'%+ Confidentialit #n contradistinction to judicial proceedin!s conciliation is a pri1ate closed door affair and terefore offers pri1acy and confidentiality. #n fact confidentiality in conciliation proceedin!s is a statutory !uarantee> 7e conciliator and te parties are supposed to 3eep confidential$ all matters relatin! to te conciliation proceedin!s. 7e parties are also precluded from relyin! upon or introducin! as e1idence in subseCuent arbitral or judicial proceedin!s 1ie/s e9pressed or su!!estions made by te oter party in respect of a possible settlement of te dispute$ admissions made by te oter party in te course of conciliation proceedin!s$ proposals made by te conciliator and te fact tat te oter party ad indicated is /illin!ness to accept a proposal for settlement made by te conciliator. /ic ma3es conciliation an e9cellent dispute resolution mecanism.*
> S. <$ Arbitration and 2onciliation Act$ &>>+. * S. =&$ Arbitration and 2onciliation Act$ &>>+.
?1en durin! te course of conciliation proceedin!s /ere a party !i1es any information to te conciliator subject to a specific condition tat it be 3ept confidential$ te conciliator is not supposed to disclose tat information to te oter party.& 7is ensures tat e1en in te e1entuality of failure of conciliation proceedin!s neiter party is able to deri1e undue benefit out of any proposal$ 1ie/$ statement$ admission$ etc. made by te opposite party durin! conciliation proceedin!s. 7e process of conciliation pro1ides an opportunity for settlement of disputes /itout publicity.' 7e conciliator is also precluded from actin! as an arbitrator or as a representati1e or counsel of a party in any arbitral or judicial proceedin! in respect of a dispute tat is te subject of te conciliation proceedin!s nor can e be presented by te parties as a /itness in any arbitral or judicial proceedin!s.
'%,-nforceabilit of conciliation settlement agreement 7e settlement a!reement dra/n up in conciliation proceedin!s as te same status and effect as if it is an arbitral a/ard on a!reed terms on te substance of te dispute rendered by an arbitral tribunal under section '* of te Arbitration and 2onciliation Act$ &>>+. 7us te settlement a!reement in conciliation is e9ecutable as a decree of te ci1il court.+ #t is open to any party to apply for e9ecution of te settlement a!reement by filin! an e9ecution petition before te ci1il court. 7e e9peditious enforcement of a conciliation settlement a!reement in a summary manner i.e. by /ay of e9ecution proceedin!s in a ci1il court is te principal ad1anta!e attaced /it conciliation.<
& S. <*$ Arbitration and 2onciliation Act$ &>>+. S. <*$ Arbitration and 2onciliation Act$ &>>+. ' A.K. %ansal$ 42onciliation: Guic3 Settlement of Disputes5$ (&) Arb. .R. (ournal) (&>>>). S. =*$ Arbitration and 2onciliation Act$ &>>+E See also Alco1e #ndustries td. 1. ;riental Structural ?n!ineers td.$ (**=) Arb..R. '>'. S. <$ Arbitration and 2onciliation Act$ &>>+. + S. '+$ of te Arbitration and 2onciliation Act$ &>>+. < Ss. <$ '* and '+$ Arbitration and 2onciliation Act$ &>>+E See also A1tar Sin!$ a/ of Arbitration and 2onciliation (?astern %oo3 2ompany$ uc3no/$
Disadvantages of Conciliation .o /inding Decision: #f no a!reement can be made bet/een te parties$ eac /ill be left in te same position as tey started. 7ere is no bindin! decision anded do/n /ic can be frustratin! to parties /o a1e in1ested time$ money and effort into te process.
Conciliator Involvement: Altou! te conciliator is meant to be an impartial tird party$ te ability for tem to in1ol1e temsel1es in te proceedin!s trou! teir Lacti1eB in1ol1ement can Cuestion te unbiased nature of te conciliator.
Conclusion Alternati1e Dispute Resolution (ADR) refers to all tose metods of resol1in! a dispute /ic are alternati1es for liti!ation in te courts. #t is a decision ma3in! process to resol1e disputes tat does not in1ol1e liti!ation or 1iolence. 2onciliation is a /ell6accepted metod of Alternati1e Dispute Resolution. #t is a metod by /ic te parties to a dispute use te ser1ices or ta3e te assistance of a neutral and impartial tird person or institution$ called a conciliator as a means of elpin! tem to reduce te e9tent of teir differences and to arri1e at an amicable settlement or a!reed solution accordin! to a compromise rater tan by la/.
2onciliation may tus be defined as a non6contentious and non6bindin! procedure in /ic an impartial tird party$ te conciliator$ assists te parties by understandin! te pros and cons of te respecti1e positions ta3en by tem and elp tem in reacin! a mutually a!reed settlement of te dispute. 0nli3e courts$ tribunals and arbitrators$ te
conciliator does not !i1e a decisionE is function is to induce te parties in te dispute to come to a settlement 2onciliation is as old as te #ndian istory. #n Maabarata /en bot parties /ere determined to resol1e te conflict in battle fields$ ord Krisna made efforts to resol1e te conflict.
7e best e9ample /ere conciliation played an inte!ral role is of te i!ly politically sensiti1e case of te %ea!le cannel dispute o1er te o/nersip of certain islands in te entrance to te cannel bet/een 2ile and Ar!entina. 7e mediator /as te "atican. 7e process /as remar3able because it /as fle9ible enou! to accommodate te can!in! political en1ironments in bot countries and te mediator used a ran!e of tools to !reat ad1anta!e. 7is process ser1ed to protect a fra!ile peace bet/een te countries and ultimately allo/ed tem to create an a!reement tat as lasted until tis day. So from te abo1e set of findin!s and study /e can say tat it is one of te best metod of ADR$ to sol1e te dispute bet/een te parties$ due to its uniCue ad1anta!es$ /ic /e do not !et in arbitration$ its success rate is i!$ in te comin! years people mi!t not sol1e teir dispute by arbitration but conciliation.
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a/ Relatin! to Arbitration and 2onciliation in #ndia$ %y Dr. -.".Paranjpe ( t ?dition) ;.P. Malotra$ The la! and "ract#ce of $r%#trat#on & Conc#l#at#on (nd edn$ e9is-e9is %utter/orts $ -e/ Deli **+). Arbitration and 2onciliation Act$ &>>+ %y A1tar Sin!.
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