CONCILIATION

Procedure
 Conciliation shall apply to disputes arising out of legal relationship, whether
contractual or not. [s.61(1) AACA]
 The party initiating conciliation shall send to the other party a written invitation to
conciliate under this part, briefly identifying the subject of the dispute. [s.62(1)]
 Conciliation proceedings, shall commence when the other party accepts in writing the
invitation to conciliate. [s.62(2)]
 If that other party rejects the invitation there will be no conciliation proceedings.
[s.62(3]
 If the party initiating conciliation does not receive a reply within 30 days from the
date on which he sends the invitation or within such period of time as specified in the
invitation, he may elect to treat his invitation as rejected. If he so elects, he shall
inform in writing the other party accordingly. [s.62(4)
 Number of conciliators maybe one or more as decided by the parties [s.63(1)]
  If it is one conciliator there has to be consensus among the parties. [s.64(1)(a)]
 If it is two conciliators each party may appoint one conciliator. [s.64(1)(b)]. Can have
even no. because unlike arbitration, don’t have to arrive at a decision.
 If it is three then each party to appoint one and the parties to again agree on the third
conciliator. The third conciliator shall act as the presiding conciliator. [s.64(1)(c)]
 Parties may engage the services of an individual or institution in appointing the
conciliator or conciliators. [s.64(2)]
 The institute or the individual will have to keep in mind the independence and
impartiality of the conciliator they are appointing.[s.64(2) Proviso]
 Once the appointment of the conciliator is completed, the conciliator may require
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. [s.65(1)]
 The conciliator may request each party further to submit in writing the parties’
position and the facts and grounds in support thereof, it may be supported by any
documents or any other evidence, the party deems appropriate. [s.65(2)]
 At any stage of the proceedings the conciliator may ask for additional information as
he deems fit. [s.65(3)]
Role of the Conciliator
 The conciliator is not bound by CPC or the Indian Evidence Act [s.66]
 The conciliator shall assist the parties in an independent and impartial manner in their
attempt to reach an amicable settlement. [s.67(1)]
 The conciliator shall be guided by the principles of objectivity, fairness and justice.
[s.67(2)]. However, the conciliator cannot say no to a settlement agreement parties
have agreed to even if he feels it is unfair.
 While facilitating a settlement the conciliator to keep in mind 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.
[s.67(2)].
 The conciliator may conduct the conciliation proceedings in such manner as he
considers appropriate including the wishes parties may express. [s.67(3)]
 The conciliator may hear oral statements if he feels it necessary or the parties desire.
[s.67(3)]
  The conciliator may at any stage of the proceedings, make proposals for a settlement
of the dispute. [s.67(4)]
 Such proposals need not be in writing and need not be accompanied by a statement of
reasons [s.67(4)]
 Suggestions may come from the parties also [s.72]
 Communications from the conciliator may be in writing or oral. [s.69(1)]
 Conciliator can meet the parties together or if he desires there can be private
meetings.[s.69(1)]
 Unless the parties have agreed upon the place of meeting, the conciliator to decide the
place of meeting in consultation with the parties. [s.69(2)]
Disclosure of Information
 When the conciliator receives factual information concerning the dispute from a party,
he shall disclose the substance of that information to the other party for his response if
any. [s.70]
 If the information is given in confidence (a specific condition) that it be kept
confidential, the conciliator is required not to disclose it to the other party. [s.70
Proviso]. Nagraj suggests that ever disclosure if such additional information be
accompanied by an NDA.
 Parties to cooperate with the conciliator in good  faith [s.71]
Settlement Agreement
 If there is a settlement possible, the conciliator prepare the draft and submit it to the
parties for their observations. [s.73]
 Based on the observations if any, conciliator to prepare the settlement.
 Parties may come up with a settlement, in which case the conciliator to prepare the
written settlement 
 The settlement to be signed by the parties
 Once signed by the parties it becomes binding on them and persons claiming under
them respectively
 The conciliator shall authenticate the settlement agreement and furnish a copy to each
of the parties.
 Reading sections 74 and 30 together the settlement will have the status of an award on
agreed terms. It means the agreement will have the status of a deemed decree on
agreed terms
 Sec.75 notwithstanding anything contained in any other law for the time being in
force, the conciliator and the parties shall keep confidential all matters relating to the
conciliation proceedings. Confidentiality shall extend to the settlement agreement,
except where its disclosure is necessary for purposes of implementation and
enforcement. There is no consequence to breach – this gap should be filled through
contract – liquidated damages for breach. 
Termination of Conciliation Proceedings [s.76]
 By signing the settlement agreement by the parties on the date of the agreement
 By a written declaration by the conciliator after consulting the parties that conciliation
efforts have failed.
 By a written declaration of the parties addressed to the conciliator that conciliation
proceedings are terminated the written declaration has to dated.
 By a written of one of the parties and the conciliator that the conciliation proceedings
are terminated and date of the termination.
Resort to Arbitral or Judicial Proceedings [s.77]
 The parties shall not initiate during the conciliation proceedings
 However they may initiate judicial or arbitral proceedings to preserve their legal
rights (for the sake of limitation period because conciliation is not excluded from
limitation period)
Costs [s.78]
 On termination of the conciliation proceedings the conciliator shall fix the cost of
conciliation  
 Costs means –the fee and expenses of the conciliator and witnesses requested by
conciliator with the consent of parties
 Any expert advice requested by the conciliator with the consent of the parties
 Costs towards administrative assistance
 The costs shall be born equally by the parties unless the settlement provides for
different apportionment
 Expenses incurred by a party shall be borne by that party ( parties to bear their
expenses)
 There is no fee schedule as it is provided for Arbitration. For arbitration the schedule
was provided by 2015 amendment in schedule 4
Deposits [s.79]
 The conciliator may direct each party to deposit an equal amount as an advance for
the costs-costs of conciliator, witnesses, experts etc.
 During the conciliation, may direct for deposit of supplementary costs.
 If the required deposits are not paid in full by both parties within 30 days of the
direction or order, the conciliator may suspend the proceedings or make a written
declaration of termination of proceedings. Acc. to Nagaraj, 30 days for deposits is
very lenient and leaves scope for misuse by parties to delay proceedings because
suit/arbitration cannot proceed while conciliation is on. 
 Upon termination, conciliator shall render accounts of deposits made and return any
unspent balance.
Role of Conciliator in Other Proceedings [s.80]
 The conciliator shall not act as 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
 What about quasi-judicial or administrative proceedings with respect to the same
subject matter? In order to fill this gap in the law, advisable for parties to mention it in
contract.
 The conciliator shall not be presented by the parties as a witness in any arbitral or
judicial proceedings.
 Again what about quasi-judicial or administrative proceedings?
Admissibility of Evidence [s.81]
 Parties shall not relay or introduce as evidence in arbitral or judicial proceedings,
whether or not such proceedings relate to that dispute  that is subject of the
conciliation proceedings:
1. Views expressed or suggestions made by the other party in respect of a possible
settlement of the dispute
 2. Admissions made by the other party in the course of conciliation proceedings
3. Proposals made by the conciliator; and
4. The fact that the other party had indicated his willingness to accept a proposal for
settlement made by the conciliator
 This section also does not refer to quasi-judicial, administrative proceedings