Procedure of Conciliation

• Commencement of conciliation proceedings (Section 62) – The conciliation proceedings are initiated by one party sending a written invitation to the other party to conciliate. The invitation should identify the subject of the dispute. Conciliation proceedings are commenced when the other party accepts the invitation to conciliate in writing. If the party rejects the invitation to the conciliation proceeding then there will be no conciliation. If one party sends the invitation to conciliate to the other party and does not receive a reply within 30 days from the date, he sends the invitation or within such period of time as is specified in the invitation, he may elect to treat this as rejection of the invitation to conciliate. If he so elects he should inform the other party in writing.

• Submission of statements to conciliator (Section 65)  – The conciliator may request the parties to submit a brief written statement. The statement should mention the general nature of the dispute. Parties must send a copy of the statement to each other. The conciliator may also seek a statement from the parties regarding their position, facts and the grounds. Further, appropriate documents and evidence can supplement the same. The party submitting such evidence must also send a copy of the same to the other party.

• Conduct of conciliation proceedings [Section 69(1)]  The conciliator may invite the parties to meet him which he may communicate orally or in writing. It is his decisions as to communicate with the parties together or separately. Considering the circumstances of the case at hand, the express wishes of the parties and the need to settle the dispute in a speedy manner, the conciliator shall exercise the freedom given to him to execute the process in a manner he considers appropriate [Section 67(3)].

• Administrative assistance (Section 68) – The parties can seek administrative assistance for the conduct of conciliation proceedings. Accordingly, the parties and the conciliator may seek administrative assistance by a suitable institution or the person with the consent of the parties.

Settlement

• Settlement of disputes [Section 67(4)] – The role and the duty of the conciliator is to assist the parties to reach an amicable settlement in the dispute. He may at any stage of the conciliation make proposals for the purpose of settlement. Such proposals need not be in writing or accompanied by a statement of reasons. Each party may submit to the conciliator the suggestions for the settlement of the dispute (Section 72).

When the conciliator feels at any point of time there are elements of a settlement that are likely to be accepted by the parties, he shall formulate the terms and conditions of a possible settlement and submit it to the parties for any inputs. Considering the inputs and observations from the parties, the conciliator may reformulate the agreements and structure a possible settlement.

If the parties reach a settlement, then the parties will draw up an agreement and shall be signed by the parties. If the parties request, the conciliator shall assist the parties in drawing up the settlement agreements. Once the parties have signed the agreement, it becomes final and binding on the parties and persons claiming under them respectively. The conciliator shall authenticate the agreement and provide a copy of the document to both parties (Section 73).

The conciliator shall draw up the settlement agreement in front of the parties and shall be signed accordingly. The section clearly provides that in order to be binding and to have the status of an arbitral award, it must be signed by the parties.

• Status and effect of settlement agreement– This section provides that the settlement agreement shall have the same status and effect as an arbitral award on agreed terms under Section 30. This means that it shall be treated as a decree of the court and shall be enforceable as such.

Mysore Cements Ltd. v. Svedela Barmac Ltd. – The Supreme Court has emphasized the need for complete compliance with the provisions. Mere substantial compliance may not be enough. The agreement must satisfy the essential pre-requisites of Section 73 for it to get the status of an Arbitral award under Section 74 and for being enforced as a decree of the court under Section 36.

References

• Arbitration and Conciliation Act, 1996
• Mysore Cements Ltd. v. Svedela Barmac Ltd., (2003) 10 SCC 375
• NALSAR University, Law of Arbitration and Conciliation in India

Aishwarya Says:

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