Conciliation in India- Policy, Law and Challenges

Introduction:

Conciliation is an alternative method to solve the dispute between the parties. Under this method, the parties appoint a conciliator who listens to the parties dispute and solves them. This method is flexible and confidential. The conciliator appointed is a neutral 3^rd party. In other words, it’s a method to solve the dispute without going to court.

Merriam Webster dictionary defines conciliation as “the settlement of a dispute by mutual and friendly agreement with a view to avoiding litigation”

It is not necessary that dispute will be solved through conciliation but only those parties will choose this option who have an interest in solving the dispute outside the court.

Meaning of Conciliation

 Conciliation can be defined as the settlement of the conflict outside the court. It is a cycle by which the conversations between the parties are continued with the help of a conciliator. Conciliation is one of the non-restricting techniques where a fair-minded outsider, known as the conciliator, help the parties to a question in arriving at a commonly concurred settlement of the debate. According to the Halsbury Laws of England, appeasement is a cycle of convincing parties to reach an arrangement. Due to its non-legal character, assuagement is viewed as in a general sense not the same as that of prosecution. By and large Judges and Arbitrators choose the case as a judgment or an honour which is authoritative on the gatherings while in the technique of the appeasement, the conciliator who is regularly an administration official gives its report as suggestions which is unveiled.

Arbitration and Conciliation Act, 1996

Arbitration and Conciliation Act, 1996 doesn’t define the term conciliation but it does state that conciliation is a private, confidential and voluntary dispute resolving method in which a 3^rd party is involved who is unbiased and helps in reaching a settlement which both the parties prefer.

This Act is based upon the United Nations Commission on International Commercial Trade Law (UNCITRAL) Conciliation Rules which was adopted on 23^rd July 1980. Conciliation rules provide a comprehensive set of procedural rules. It recognised the value of conciliation as a technique for settling conflicts emerging with regards to international business relations and that appropriation of uniform appeasement rules by nations with various lawful, social and monetary frameworks would essentially add to the advancement of agreeable global financial relations. Accordingly, these principles were firmly trailed by the Indian administrators to detail pacification rules under Part III of the Act.

This act covers international and domestic dispute in the context of conciliation.

This act has been amended in 2015 and 2019.

In order to start conciliation proceedings, it is important that party who decides to do so shall send an invitation to the other party for conciliation and the other party has to accept the invitation for the conciliation proceedings to begin(Section 62). If no reply is received within 30 days the party who sent invitation can elect to think that the invitation has been rejected and if the party decides to elect it as rejection it has to do so in writing.

Section 63 of the act states how many conciliators can be appointed by the parties. Generally, one conciliator is appointed but two can be appointed with the agreement between the parties.

Section 66 of the act states that the conciliators aren’t bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872.

Role of Conciliator

Section 67 of the act provides the role of conciliatory –

1. The conciliator should help the parties in an autonomous and unbiased way in their endeavour to arrive at a peaceful settlement of their issue.
2. The conciliator should be fair and unbiased.
3. The conciliator should take account of factors surrounding the case and wishes of parties and need for a speedy solution
4. The conciliator can at any given time give a proposal for settlement of dispute it isn’t necessary that it should be in writing.

Section 72 of the act states that the parties in dispute can on its own or on the invitation of conciliator send suggestions.

According to section 74, the settlement agreement has the same effect as the arbitral award.

Section 77 of the act, states that the parties during conciliation shouldn’t proceed with arbitral or judicial proceedings except a party considers it important or necessary.

Termination of Conciliation Proceedings

Section 76 of the act states that conciliation proceedings can be terminated by –

1.  Approval of the settlement agreement by both the parties
2. A written declaration by the conciliator that further proceeding will be fruitless.
3. By written declaration by the parties that conciliation is terminated from the date
4. By a party through a written declaration to the conciliator and other party.

Advantages of using Conciliation

1.  The conciliator is unbiased or impartial
2. Parties can themselves choose a conciliator according to their preference
3. It’s flexible in nature
4. Section 75 of the act promises confidentiality which means that the conciliator and the parties have to keep the proceedings confidential.
5. It is pocket friendly in the sense that it is cost-efficient
6. Parties are engaged in the process of settlement
7. It consumes less time in comparison to litigation
8. It’s a non-binding process
9. Chances of judicial proceedings are lower as the conclusion reached by the parties mutual.

This method can greatly help the courts in reducing the workload if the courts transfer their pending cases. High Court of Himachal Pradesh took the initiative of expanding its pending cases by conciliation. This idea has been adopted from mediation in Canada and Michigan. The effort made by the High Court has been appreciated by the Law Commission of India and has recommended other states to adopt the same.

Conciliation under C.P.C (Civil Procedure Code 1908)

C.P.C amended in 1999 brought section 89 which allowed the courts to refer pending cases to conciliation, arbitration and mediation. Before this amendment, the courts didn’t have the power to refer the cases to ADR. The cases are to be referred only if the court feels that both the parties can come to a settlement.

Section 89 of the act enables the court to plan the terms of the settlement and offer them to the parties for their perception and in the wake of accepting the perceptions, reformulate the conditions of a potential settlement and allude the same for mediation, conciliation and arbitration.

Conciliation under Industrial Dispute Act, 1947

Section 4 of the act states that appropriate government may by notification in official gazette appoint conciliation officer who will promote settlement in industrial disputes. The number of officers appointed by the government may differ and the officer appointed can be for specific area or industry (one or more) there is no fixed tenure can be a permanent or limited amount of time.

Section 5 of the act states that appropriate government can appoint Boards of Conciliation by notification in the official gazette. Work of the board of conciliation is similar to a conciliation officer. The board shall consist of a Chairman and 2 or 4 other members. The chairman has to be an independent person which means no connection with the industrial dispute.

Section 12 mentions Duties of Conciliation Officer-

1. If any dispute arises or suspicion is there that a dispute may arise the officer may hold proceedings
2. He shall investigate and should try to find out the reason for differences between the parties.
3. If the dispute is solved through conciliation proceedings then he should submit his report to the appropriate government
4. The report has to be submitted within the time fixed by the government or 14 days. If the report isn’t submitted with prescribed time the proceedings will be considered legal.

Section 13 deals with Duties of Board –

1. The board has to settle the dispute if it has been referred.
2. If the dispute has been settled the board has to sense the report to the government with a memorandum of settlement signed by both the parties.  If no conclusion is drawn then the full report has to be submitted which mentions the steps taken by the board
3. The board has to submit the report within 2 months or as decided by the government. The time period can be extended if the parties in dispute agree to it in writing.

The only difference between section 12 and 13 is that in section 13 the dispute has to be referred to the Board of Conciliation by the Appropriate government where Conciliation Officer can hold proceedings if there is any suspicious of dispute.

Difference between Arbitration and Conciliation

     Arbitration                                                         Conciliation

Arbitration is a process under which an arbitrator is appointed who hears both the parties and gives judgment.	Conciliation is a process under which a conciliatory is appointed by the parties who helps in negotiations or reaching an agreement.
Judgement given by an arbitrator is binding upon the parties like the court.	Whereas any conclusion which the parties come through conciliation is not binding.
Process of arbitration doesn’t allow the arbitrator to meet the parties independently and discuss the case.	Under conciliation, the conciliator has the power to meet the parties independently.
Under arbitration, it is important that parties should have given consent.	Prior consent under conciliation is not required.
This process is applicable for future and existing conflicts.	This process is applicable to existing conflicts only.

Difference between Mediation and Conciliation

Mediation                                                       Conciliation

Under mediation, the parties in conflict are encouraged to talk and come to a solution. The mediator just helps the parties talking.	Under conciliation, the conciliator doesn’t only encourage in talking and solving the problems but also provides input and solutions which it deems fit.
It is governed under the Civil Procedure Code 1908.	It is governed under the Arbitration and Conciliation Act 1996.
Confidentiality depends upon the parties.	Under this extent of confidentiality is decided by law.
Under this, the mediator is a mere facilitator.	Under this, the conciliator is a facilitator and provides the solution.
It ends with an agreement within the parties.	It ends with the settlement within the parties.

Challenges

The only challenge faced by the Conciliation method is that it isn’t as known as arbitration. The conciliator appointed by the parties also plays an important role in settling the dispute so it is important that the conciliator has to be good in his work.

The subject matter which can be sent to the panel of conciliators is limited to family matters and auto accidents.

Present conciliation regulations don’t require the parties to meet and present preceding entering into either litigation or their other options. No joint assertion of the particular purposes of difference is required. The nonattendance of meeting, gathering as well as joint articulations necessity is required. The nonappearance of a gathering, meeting or joint articulation necessities permits contending sides to remain protected from each other.

The conciliator is not a legally qualified person due to which the decision isn’t binding upon the parties.

Under this method the conciliator has to solve the dispute by delivering the message from one party to another are times it could lead to misinformation.

Some people believe that conciliation will only lead to a delay in justice rather than helping.

Case Laws

1. Haresh Dayaram Thakur v. the State of Maharashtra and Ors[1] – Under this case, the court stated that a conciliator is a person who assists the parties in conflict and has the power to decide the procedure of conciliation.
2. Mysore cements v. Svedala Bramac Ltd.[2] – Under this case, the court stated that if any solution provided by the conciliator is accepted by the parties than a settlement is to be signed by them. Once it is signed it becomes binding upon both the parties

Conclusion

It is apparent that unlike many countries, India has given separate acknowledgement to Mediation and Conciliation as independent methods of ADR measure. Notwithstanding, while mediation is widely recognised in India, conciliation is not.

The significance of conciliation is that in other methods decision is given by the presiding authority and it is compelling as needs are. However, in conciliation, there is a friendly settlement where parties themselves reach a decision. The conciliator is simply assisting with the settlement and is not directing the term of choice.

Conciliation is a better option in solving the case as it is cost-efficient, less time consuming and flexible in nature. Conciliation method is mostly chosen by those parties who believe that they can solve their dispute without going to court.

The achievement of conciliation relies upon the psychological disposition of the parties, the expertise of the conciliator which is backed proper framework offices for overhauling the conciliation methodology.

---

References:

• Arbitration and Conciliation Act 1996 https://www.indiacode.nic.in/handle/123456789/1978?sam_handle=123456789/1362

• Labour and Industrial Law by S.N. Misra

[1] Haresh Dayaram Thakur v. Sate of Maharashtra and Ors (2000) 3 SCR 1140

[2] Mysore cements v. Svedala Bramac Ltd. 2003(2) SCC 1028