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The document provides an overview of conciliation under the Arbitration and Conciliation Act of 1996 in India. Some key points:
1) Conciliation is a voluntary, private, and confidential dispute resolution process in which a neutral third party (conciliator) assists parties in reaching a negotiated settlement.
2) The Act aims to facilitate speedy and inexpensive conciliation proceedings, with flexible procedures and recommendatory decisions rather than imposed outcomes.
3) Conciliation is less formal than arbitration and encourages parties to negotiate and settle disputes with minimal court intervention. The conciliator helps parties reach an amicable agreement.
The document provides an overview of conciliation under the Arbitration and Conciliation Act of 1996 in India. Some key points:
1) Conciliation is a voluntary, private, and confidential dispute resolution process in which a neutral third party (conciliator) assists parties in reaching a negotiated settlement.
2) The Act aims to facilitate speedy and inexpensive conciliation proceedings, with flexible procedures and recommendatory decisions rather than imposed outcomes.
3) Conciliation is less formal than arbitration and encourages parties to negotiate and settle disputes with minimal court intervention. The conciliator helps parties reach an amicable agreement.
The document provides an overview of conciliation under the Arbitration and Conciliation Act of 1996 in India. Some key points:
1) Conciliation is a voluntary, private, and confidential dispute resolution process in which a neutral third party (conciliator) assists parties in reaching a negotiated settlement.
2) The Act aims to facilitate speedy and inexpensive conciliation proceedings, with flexible procedures and recommendatory decisions rather than imposed outcomes.
3) Conciliation is less formal than arbitration and encourages parties to negotiate and settle disputes with minimal court intervention. The conciliator helps parties reach an amicable agreement.
• The Arbitration and Conciliation Act, 1996 (“the Act”)
is based on the UNCITRAL Model Law on international commercial arbitration and conciliation. • While the Act was not intended to displace the judicial system, the new law ushered in an era of private arbitration and conciliation. • It was also the first time that a comprehensive legislation was made on the subject of conciliation in India. • The UNCITRAL Rules on Conciliation, 1980 recognized “the value of conciliation as a method of amicably settling disputes arising in the context of international commercial relations” and that adoption of uniform conciliation rules by “countries with different legal, social and economic systems would significantly contribute to the development of harmonious international economic relations.” • Accordingly, these rules were closely followed by the Indian legislators to formulate conciliation rules under Part III of the Act. PRINCIPLES OF CONCILIATION
• (1) non-adversary nature of conciliation proceedings
– there is no claimant or plaintiff in conciliation proceedings, • (2) voluntary nature of proceedings – any party can commence and discontinue the proceedings, • (3) flexible procedure – the conciliator has the discretion to adopt any procedural law to ensure speedy and inexpensive conduct of proceedings, and • (4) decisions are recommendatory – disputes are settled by mutual agreement and not by imposed decisions. • The term conciliation is not defined in the Act. However, the intention that can be gather according to that • conciliation is a confidential, • voluntary and • private dispute resolution process in which a neutral person helps the parties to reach a negotiated settlement. • the Act covers both domestic and international disputes in the context of conciliation. • International conciliation is confined only to disputes of “commercial” nature. • As per the Act, the definition of international commercial conciliation is exactly similar to that of international commercial arbitration. • conciliation proceedings relating to a dispute between two or more parties where at least one of them is a foreign party. The foreign party may be (1) an individual who is foreign national, (2) a company incorporated outside India, or (3) the government of a foreign country. ROLE OF CONCILIATOR
• the main function of the conciliator is to assist the
parties to reach an amicable settlement. • For achieving this, a conciliator is obliged to • (1) act in an independent and impartial manner, and • (2) abide by the principles of objectivity, fairness and justice. • the conciliator, apart from assisting the parties to reach a settlement, is also permitted and empowered to make proposals for a settlement and formulate/reformulate the terms of a possible settlement. ARBITRATION V. CONCILIATION
• arbitration is considered private when compared
with the court system, conciliation is even more private than arbitration. • parties to a conciliation proceeding have the privilege to negotiate and arrive at an amicable settlement with the assistance of a conciliator in a less formal setting. • while section 7(2) requires that an arbitration agreement be in writing, there is no such express provision regarding conciliation in the Act. • section 30 of the Act permits the parties to engage in conciliation process even during the course of arbitral proceedings. They may do so suo motu or under the directions of the arbitrator. • during arbitral or court proceedings, the parties are encouraged to initiate conciliation proceedings, but once conciliation proceedings commence, they are barred from initiating arbitration or approaching the court. CONCILIATION UNDER THE C.P.C
• A 1999 amendment to the CPC enabled the courts
to refer pending cases to arbitration, conciliation and mediation to facilitate early and amicable resolution of disputes. • After the insertion of section 89 in the CPC, a court can refer the case to arbitration, conciliation, judicial settlement or mediation, “where it appears to the court that there exist elements of settlement which may be acceptable to the parties.” SEC 61 – APPLICATION AND SCOPE
(1) This part shall apply to conciliation of disputes
arising out of legal relationship whether contractual or not, unless parties have agreed otherwise (2) This Part shall not apply where by virtue of any law in force certain disputes may not be submitted to conciliation • Adopts with little variations the UNCITRAL Conciliation Rules 1980 • Three exceptions to the application of this Part - Parties agree not to be governed by the Part - Law for the time being in force provides otherwise - Law prohibits certain disputes to be submitted to conciliation • Sec 30 – not incompatible with arbitration agreement for arbitral tribunal to encourage settlement of dispute using mediation, conciliation and other procedures • Sect 89 CPC – requires court to refer dispute for settlement by arbitration, conciliation, judicial settlement and mediation • Conciliation and Mediation – degree of initiative taken by the third party • Conciliation and Arbitration – assist parties in settling disputes, principles of natural justice, procedure SEC 62 – COMMENCEMENT OF CONCILIATION PROCEEDINGS (1) The Party initiating conciliation shall send a written invitation to conciliate to the other party, briefly identifying the subject of dispute (2) When the other party accepts in writing the invitation, then conciliation proceedings shall commence (3) If other party rejects the invitation, then there shall be no conciliation proceedings (4) If the party initiating conciliation does not receive the reply within 30 days or any other specified period in invitation, he may elect to treat it as rejection of invitation to arbitrate and if does so, inform in writing the other party SEC 63 – NUMBER OF CONCILIATORS
• There shall be one conciliator unless the parties
agree for two or three • More than one conciliator, they have to act jointly SEC 64 - APPOINTMENT OF CONCILIATORS (1) Subject to Sub-section (2) (a)One conciliator, parties agree on the name (b)Two conciliators, each party may appoint one (c) Three conciliators, each party may appoint one, and parties agree on a third (presiding conciliator) (2) Parties may enlist assistance of institution or person for appointment, and (a)Request them for name of individuals (b)Agree on the appointment made by them The institution or person shall give due regard to secure the appointment of independent and impartial conciliators and for sole and third conciliator, not from the nationalities if the parties SEC 65 – SUBMISSION OF STATEMENTS TO CONCILIATOR (1) The conciliator may request each party to submit a brief written statement describing the general nature of the dispute and the points at issue; send a copy to other party (2) Conciliator may request parties to submit to him further written statements supplemented by documents and evidence; copy to other parties (3) At any stage of the conciliation proceedings, the conciliator shall request a party to submit to him such additional information S 66 – CONCILIATOR NOT BOUND BY
Conciliator not bound by Code of Civil Procedure,
1908 and The Indian Evidence Act, 1872 SEC 67 – ROLE OF CONCILIATOR (1) Conciliator shall assist in an independent and impartial manner in the parties’ attempt to reach an amicable settlement of their dispute (2) Conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to rights and obligations of the parties, usages of trade and circumstances surrounding the dispute (3) Conciliator conduct the proceeding in a manner he thinks appropriate, taking into account circumstances of case, wishes of the parties, including request for oral hearing and need for speedy settlement (4) At any stage of proceeding, conciliator make proposals for settlement of dispute; need not be writing or accompanied by statement of reasons SEC 68 – ADMINISTRATIVE ASSISTANCE
The parties or the conciliator with the consent of the
parties arrange for suitable administrative assistance by suitable institution or person to facilitate the conduct of the conciliation proceedings SEC 69 – COMMUNICATION BETWEEN CONCILIATORS AND PARTIES (1) Conciliator may invite the parties to meet him or may communicate to them orally or in writing ; meet and communicate with both parties together or separately (2) If parties have not agreed upon place where meetings to be held, determined by conciliator after consultation with parties and having regard to circumstances of conciliation proceedings SEC 70 – DISCLOSURE OF INFORMATION
• When conciliator receives factual information
concerning the dispute from a party, he shall disclose the substance of information to other party in order that the party may have appropriate opportunity to present any explanation which he considers appropriate. • Party gives info subject to a specific condition to keep it confidential, conciliator shall not disclose the info to other party. SEC 71 – COOPERATION OF PARTIES WITH CONCILIATOR • The parties shall in good faith cooperate with conciliator • They shall endeavor to comply with the requests by the conciliator to submit written materials, provide evidence and attend meetings. SEC 72 – SUGGESTIONS BY PARTIES FOR SETTLEMENT OF DISPUTE Each party may on his own initiative or at the invitation by conciliator submit to conciliator suggestions for the settlement of disputes SEC 73 – SETTLEMENT AGREEMENT
(1) Conciliator feels that there exists elements of a
settlement acceptable to the parties, he shall formulate the terms of a possible settlement and submit to parties for their observations; based on it reformulate the terms of a possible settlement (2) If parties reach agreement on a settlement of dispute, draw up and sign a written settlement agreement; if requested conciliator may draw or assist parties in drawing up the settlement agreement (3) It shall be final and binding on the parties and persons claiming under him (4) Conciliator authenticate the settlement agreement and furnish copy to each party • Haresh Dayaram Thakur v. State of Maharashtra (2000) - Conducted discussions with parties and drew a settlement agreement himself in secrecy without signature of parties and sent it to Court - Held : The Statute prescribes a procedure for doing a thing, which has to be done accordingly and held that the order of high court confirming the settlement agreement was wholly unsustainable
• Mysore Cements Ltd. v. Svedala Barmac Ltd. (2003)
- The Memorandum of Conciliation proceedings and Letter of Comfort cannot be enforced - Cannot be assigned status of a settlement agreement, fall short of essential legal pre-requisites SEC 74 – 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 on the substance of dispute rendered by the arbitral tribunal under Section 30 SEC 75 - CONFIDENTIALITY
• The conciliator and the parties shall keep
confidential all matters relating to the conciliation proceedings. • Confidentiality shall extend to the settlement agreement also • Except where its disclosure is necessary for purposes of implementation and enforcement SEC 76 – TERMINATION OF CONCILIATION PROCEEDINGS The conciliation proceedings shall be terminated – (a)By signing of settlement agreement by parties (b)By a written declaration by conciliator, after consultation with parties, to the effect that further efforts at conciliation are no longer justified (c) By a written declaration by parties addressed to conciliator to the effect that the conciliation proceedings are terminated (d)By a written declaration of a party to other party and conciliator to the effect that the conciliation proceedings are terminated SEC 77 – RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS • The parties shall not initiate during conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is subject- matter of conciliation proceedings • Except if it is necessary for preserving his rights SEC 78 - COSTS (1) Upon termination of conciliation proceedings, the Conciliator shall fix the costs of the conciliation and give written notice to parties (2) Cost means reasonable costs relating to – (a)The fee and expenses of the conciliator and witnesses requested by conciliator with the consent of parties (b)Any expert advice requested by conciliator with consent of parties (c) Assistance provided pursuant to sec 64 and 68 (d)Other expenses incurred in connection with the conciliation proceedings and the settlement agreement (3) Costs borne equally by parties unless settlement agreement provides for different apportionment SEC 79 - DEPOSITS
(1) Conciliator direct each party to deposit an equal
amount as an advance for the costs (2) During the conciliation proceedings, conciliator may direct supplementary deposits in an equal amount from each party (3) If the required deposits are not made in full within thirty days, conciliator may suspend or may make a written declaration for the termination of proceedings (4) Upon termination, conciliator shall render accounting to the parties and return unexpended balance to the parties SEC 80 – ROLE OF CONCILIATOR IN OTHER PROCEEDINGS • 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 subject of the conciliation proceedings • The conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings SEC 81 – ADMISSIBILITY OF EVIDENCE IN OTHER PROCEEDINGS
The Parties shall not rely on or introduce as evidence in
any arbitral or judicial proceedings (even if not related to the dispute that is subject to conciliation proceedings) – (a)Views expressed or suggestions made by the other party in respect of a possible settlement of dispute (b)Admissions made by other party in course of the conciliation proceedings (c) Proposals made by the conciliator (d)The fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator
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