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E-NOTES

Class : B.A.LL.B /BBA LL.B VIII Semester

Paper Code : LLB 410 A
Subject : International Commercial Law
UNIT-IV

Arbitration: Kinds

Introduction

International commercial arbitration is a means of resolving disputes arising under

international commercial contracts. It is used as an alternative to litigation and is controlled
primarily by the terms previously agreed upon by the contracting parties, rather than by
national legislation or procedural rules.

Most contracts contain a dispute resolution clause specifying that any disputes arising under
the contract will be handled through arbitration rather than litigation. The parties can specify
the forum, procedural rules, and governing law at the time of the contract.

Arbitration can be either “institutional” or “ad hoc.”

The terms of the contract will dictate the type of arbitration.

If the parties have agreed to have an arbitral institution administer the dispute, it is an
institutional arbitration.

If the parties have set up their own rules for arbitration, it is an ad hoc arbitration. Ad hoc
arbitrations are conducted independently by the parties, who are responsible for deciding on
the forum, the number of arbitrators, the procedure that will be followed, and all other aspects
of administering the arbitration.

The types of law that are applied in arbitration include international treaties and national
laws, both procedural and substantive, as well as the procedural rules of the relevant arbitral

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institution. Previous arbitral awards carry persuasive authority, but are not binding. Scholarly
commentary, or “doctrine,” may also be applied.

Research Guides

There are many helpful research guides published by university libraries and professional
organizations on the topic of international arbitration.

The International Council for Commercial Arbitration provides a wealth of information on its
website, including a collection of full-text journal articles and extensive lists of links to
arbitration treaties and conventions, national arbitration laws, arbitral institutions, and
professional organizations.

Although membership is required to access portions of the site, the majority of the
information is publicly available.

The following guides provide helpful overviews of the mechanics of and reasons for
arbitration, as well as links and citations to relevant primary and secondary sources.
Overviews and links may also be found on individual arbitral institutions’ websites.

• ASIL Electronic Resource Guide to International Commercial Arbitration ,

• Columbia University Arthur W. Diamond Law Library Guide to International Commercial

Arbitration

• Cornell University Law Library International Commercial Arbitration Research Guide

• Georgetown Law Library International Commercial Arbitration Research Guide

• Harvard Law School Library International Commercial Arbitration Research Guide

• University of Washington Gallagher Law Library International Arbitration Research

• Yale University Lillian Goldman Law Library

Primary Sources of Arbitration Law

Treaties

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International commercial arbitration treaties have been collected in a number of resources.

The Electronic Information System for International Law (EISIL) maintains a section on
International Commercial Arbitration containing links to the texts of several major treaties
and other resources on international arbitration, including the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, the European Convention on International
Commercial Arbitration, the Inter-American Convention on International Commercial
Arbitration, and the Inter-American Convention on Extraterritorial Validity of Foreign
Judgments and Arbitral Awards. ASIL’s Electronic Resource Guide to International
Commercial Arbitration also contains a section on International Agreements, Conventions,
and Treaties that includes links to the texts of a number of treaties, including regional
multilateral and bilateral investment treaties. The International Council for Commercial
Arbitration provides links to regional and international arbitration treaties.

National Laws

Individual countries have legislation governing both domestic and international arbitration.
The International Council for Commercial Arbitration provides a list of national arbitration
laws on its website. ASIL’s Electronic Resource Guide to International Commercial
Arbitration also includes a list of links to all of the national arbitration statutes that are
available on the free web.

A number of print resources include the texts or bibliographies of national arbitration laws,
including International Commercial Arbitration (Eric Bergsten and Clive M. Schmitthoff,
eds., 2008-); the International Handbook on Commercial Arbitration: National Reports, Basic
Legal Texts (Peter Sanders, et al, eds., 2002-); National Arbitration Laws (Loukis Mistelis et
al, eds., 2nd ed., 2010-); and the World Arbitration Reporter: International Encyclopaedia of
Arbitration Law and Practice ( Loukas Mistelis and Laurence Shore, eds., 2010-).

Getting the Deal Through , available in print, by online subscription, or through Bloomberg
Law, offers guides to arbitration in nearly fifty different countries, written by local
practitioners. Each chapter includes a brief listing of the national laws relating both to
domestic and foreign arbitral proceedings and to recognition and enforcement of awards.

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Depending on which country’s substantive law the contracting parties have agreed to apply,
you will also need to locate statutes, cases, and other sources of national law. Research
guides and other sources, such as the Foreign Law Guide and the country profiles on
GlobaLex, provide assistance with locating a country’s national laws in print, in commercial
databases, and on the free web.

Arbitration Rules

Arbitration rules are generally available on the relevant arbitral institution's web site.
Individual institutions’ rules may also be available in print, either from the institution itself or
as part of a larger work discussing the particular institution and its process. The rules of some
of the key international arbitral institutions are also available through subscription databases
such as WestlawNext and Lexis Advance.

A number of print resources have also been created to assist researchers with finding and
comparing the rules of different arbitral institutions. The World Arbitration Reporter:
International Encyclopaedia of Arbitration Law and Practice ( Loukas Mistelis and Laurence
Shore, eds., 2010-), contains the texts of various arbitration rules, as well as their history and
background. Comparison of International Arbitration Rules (John J. Kerr, et al, 3rd ed.,
2008), offers side-by-side comparisons of provisions from the International Chamber of
Commerce, the American Arbitration Association/International Center for Dispute
Resolution, the London Court of International Arbitration, the Stockholm Chamber of
Commerce, the International Center for Settlement of Investment Disputes, the United
Nations Commission on International Trade Law (UNCITRAL), and the International
Institute for Conflict Prevention and Resolution. The comparison is presented in chart format,
with the provisions arranged by topic. International Arbitration Rules: A Comparative Guide
(Bridget Wheeler, 2000) discusses the rules of different arbitral institutions at each stage of
the arbitration process.

Arbitral Awards

Unlike litigation proceedings, commercial arbitration proceedings are usually confidential.

Decisions, awards, and other documents relating to arbitration proceedings are generally not

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published, and there is no centralized database or publication for researching arbitration

proceedings.

An increasing number of arbitral awards, however, can be found in commercial databases.

Kluwer Arbitration and Juris’s Arbitration Law Online are both specialized databases
offering collections of arbitral awards texts and summaries. WestlawNext and Lexis Advance
both have arbitration sections containing both domestic and international arbitration awards.
In WestlawNext, this section can be accessed through the Arbitration Materials link on the
main page, which Lexis Advance requires browsing through the topical headings for
International Law, Dispute Resolution, and Arbitration and Mediation. Both platforms offer
an online tutorial to assist users with retrieving arbitration materials. HeinOnline’s Foreign
and International Law Resources Database also contains some arbitral awards, as well as
related secondary sources and commentary. Reports of International Arbitral Awards
(RIAA), available in print, in HeinOnline, and on the United Nations website, publishes
arbitration decisions; however, it is limited to disputes between state parties and does not
consider disputes involving private individuals or entities.

Pace Law School’s CISG Database is available on the free web, and integrates arbitral
awards into its case law database. Awards can be found by searching the case law database
directly, or by browsing the section entitled “Legal Materials Organized by CISG Articles.”

Some arbitral institutions publish their decisions on their websites or in print volumes.
Publishing of these decisions is not always comprehensive. Arbitral awards and related
commentary can also be found in international arbitration law yearbooks and journals, such
as the ones listed below.

Secondary Sources

Books, Treatises, and Encyclopedias

International commercial arbitration is a burgeoning topic, and numerous books, treatises,

encyclopedias, and other resources have been published both on international commercial
arbitration generally and on specific aspects of international commercial arbitration. Books

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and other resources can also be found on arbitration in specific countries or regions and on
arbitration in specific industries.

Redfern and Hunter on International Arbitration , now in its 5 th edition, is widely regarded
as one of the leading texts on the law and practice of international arbitration. Though geared
toward practitioners and arbitrators, this source covers both the theory and practice of
international arbitration, contains extensive discussion of each aspect of the arbitration
process, and draws upon awards from arbitral institutions around the world to illustrate its
discussions. Most of the material contained in the print resource is also available online
through Kluwer Arbitration.

Gary Born’s International Commercial Arbitration : Commentary and Materials (2d ed.) is
another well-known treatise in international arbitration. It provides an extensive overview of
the international arbitration process and major arbitral institutions, as well as the texts of a
number of international arbitration treaties, domestic statutes, and arbitration rules.
International Commercial Arbitration : Commentary and Materials is also available online
through Kluwer Arbitration.

The American Law Institute is currently in the process of drafting the Restatement of the Law
Third: The U.S. Law of International Commercial Arbitration. The project will restate the
American law of international commercial arbitration and is expected to cover, among other
topics, arbitration agreements, judicial conduct and the judicial role in international arbitral
proceedings in the United States, arbitral awards, recourse from and enforcement of
international arbitral awards rendered in the United States, the judicial role in international
arbitral proceedings abroad, enforcement of international arbitral awards rendered abroad, the
preclusive effect of international arbitral awards, and ICSID Convention arbitration.
Tentative drafts of the Restatement are available for purchase on the ALI website .

Domke on Commercial Arbitration is a treatise covering all aspects of commercial

arbitration, both foreign and domestic. In addition to scholarly commentary, Domke on
Commercial Arbitration contains the texts of a number of different arbitration rules. It is
available as a continually updated loose-leaf service or online through WestlawNext.

Arbitration Law Yearbooks

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Yearbooks are annual publications intended to provide the reader with updates to the law that
have occurred over the course of the past year. Arbitration law yearbooks may contain
articles on new developments in the law of international arbitration, case notes or texts of
arbitral decisions, new legislation and treaties, and other information.

One of the most prominent publications, the International Council for Commercial
Arbitration’s Yearbook: Commercial Arbitration is available both in print and by online
subscription through Kluwer Arbitration. It includes information on arbitral awards from the
International Chamber of Commerce and several other arbitral institutions, as well as ad hoc
awards made under UNCITRAL rules. The Yearbook on International Arbitration is a
relatively new publication covering recent trends in international commercial arbitration, as
well as sports controversies and investor-state conflicts. The AAA Yearbook on Arbitration
and the Law , published by the American Arbitration Association, focuses primarily on
United States arbitration and national laws but also covers international arbitration topics.

Some yearbooks focus exclusively on developments in international arbitration as they

related to a particular country or region. Examples include the Austrian Yearbook on
International Arbitration, available in print or online through Kluwer Arbitration, the
Croatian Arbitration Yearbook , available in print or online through Lexis Academic, and the
Czech and Central European Yearbook of Arbitration , also available in print.

Yearbooks dealing with international law in general may also contain information on
international arbitration. These can be found in print or in a variety of commercial databases,
including Lexis Advance, WestlawNext, and HeinOnline.

Law Journals

Scholarly journal articles on international commercial arbitration can be found using

commercial databases and indexes, such as WestlawNext, Lexis Advance, HeinOnline, and
the Index to Foreign Legal Periodicals. There are a number of journals dealing specifically
with arbitration. The following are a few examples.

• American Review of International Arbitration

• Arbitration International

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• Arbitration Law Reports and Review

• Arbitration Materials (continued by World Trade and Arbitration Materials )

• Arbitration Review of the Americas

• Asian International Arbitration Journal

• Emory Journal of International Dispute Resolution (continued by Emory International

Law)

• European & Middle Eastern Arbitration Review

• Global Arbitration Review

• ICC International Court of Arbitration Bulletin

• International Arbitration Law Review

• International Dispute Settlement

• International Journal of Arab Arbitration

• Journal of International Arbitration

• Stockholm International Arbitration Review

• The Asia-Pacific Arbitration Review

• World Arbitration & Mediation Report (continued by World Arbitration & Mediation)

Practice Guides

There are many international arbitration resources that take a practical approach to the topic
and that are therefore well-suited to attorneys and judges who find themselves involved in
international arbitration proceedings.

Redfern and Hunter on International Arbitration , discussed above, is one of the leading texts
on international arbitration, and it is geared toward practitioners and arbitrators. The text
covers both practice and theory, and draws upon past arbitral awards for illustration.

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Peter Ashford’s Handbook of International Commercial Arbitration , 2d ed., provides an up-

to-date discussion of each stage of the arbitration process, and comes with a CD-ROM
containing sample filings, correspondence, and other documents to assist practitioners with
the arbitration process.

Getting the Deal Through , described above under “National Laws,” offers guides to
arbitration in nearly fifty different countries, written by local practitioners, as well as guides
to arbitration under a number of specific international and regional arbitral institutions. These
guides are designed as quick reference sources for practicing attorneys, and are written in a
“frequently asked questions” format.

International Arbitration and Mediation: A Practical Guide , by Michael McIlwrath and John
Savage, contains detailed, straightforward discussions of each step of the arbitration process,
as well as the mechanics of negotiating and drafting an international dispute resolution
agreement. Emphasis is placed on early case assessment and cost analysis, as well as
alternatives to arbitration, such as mediation and arb-med. The book includes model dispute
resolution clauses and arbitration documents, as well as an extensive bibliography of both
general and specialized arbitration treatises and materials and a list of websites and other
online resources on arbitration. International Arbitration and Mediation: A Practical Guide is
available in print and online through Kluwer Arbitration.

Newsletters and Related Publications

One way to stay current on arbitral decisions and developments in arbitration law is by
following newsletters, newsfeeds, blogs, and other similar publications. Many such
publications are available, whether in print or electronic format.

Mealey's International Arbitration Report , available in print and online through LexisNexis,
is a monthly bulletin covering arbitration and related litigation in international and domestic
courts world-wide. The Report contains articles, news stories, case summaries, attorney
listings, and full-text court documents relating to international arbitration.

The Kluwer Arbitration Blog is published by Wolters Kluwer Law and Business and is
available on the free web. The blog publishes articles on international commercial arbitration,

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written by experts in the field. Transnational Dispute Management (TDM) is an online, peer-
reviewed journal covering international arbitration law topics. While a subscription is
necessary to access most of the content, there are news posts that can be accessed without a
subscription.

International Dispute Negotiation is a podcast series hosted by the International Institute for
Conflict Prevention and Resolution (CPR Institute.) The podcasts discuss how professionals
from different countries and backgrounds approach dispute resolution, as well as the risks
involved in dispute resolution and ways of mitigating and managing those risks.

The internet contains innumerable blog posts, news feeds, law firm newsletters, and other
sources of arbitration news. General business news sources also frequently publish
information on international arbitration proceedings and related topics.

List of Arbitral Institutions

The following are a few of the major arbitral institutions in the area of international
commercial arbitration. Information on procedural rules, arbitrators, and other aspects of the
arbitration process can be found on each institution’s website.

 American Arbitration Association

 European Court of Arbitration
 International Chamber of Commerce (ICC): International Court of Arbitration
 International Institute for Conflict Prevention and Resolution (CPR)
 JAMS International
 London Court of International Arbitration
 Permanent Court of Arbitration
 United Nations Commission on International Trade Law (UNCITRAL)
 World Intellectual Property Organization (WIPO) Arbitration and Mediation Center

Kinds of Arbitration

Institutional arbitration

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An institutional arbitration is one where a specialised institution is appointed and takes on the
role of administering the arbitration process / case management. Each institution has its own
set of rules which provides a framework (such as timelines for the filing of documents or
procedures for making applications etc) for the arbitration and its own form of administration
to assist in the process. Common institutions include the Hong Kong International Arbitration
Centre (HKIAC) and the International Chamber of Commerce (ICC)

The obvious advantage of institutional arbitration is the administrative assistance given by the
institution. For example, the HKIAC now offers tribunal secretary services to the parties. The
availability of established rules also helps move the arbitration forward in a timely manner.
The institution will usually charge a percentage of the disputed sum as their fee – which can
sometimes be substantial in large disputes.

Ad hoc arbitration

On the flip side of the coin, we have ad hoc arbitration. An ad hoc arbitration is one that is
not administered by an institution. Parties will determine between themselves all aspects of
the arbitration, such as the appointment of arbitrator, applicable rules and timetable for filing
various documents.

Without the administering institution, parties in ad hoc arbitrations are free to agree to use the
procedure of their choice. In cases where no procedural rules are agreed, the arbitral tribunal
will administer the arbitration in the way it thinks fit.

An ad hoc arbitration can also be turned into an institutional arbitration. If parties feel they
require the assistance of a specialised institution to run the case at some point, they may by
agreement make such an appointment.

In many jurisdictions, ad hoc arbitration is not common. For example, in Mainland China, the
Arbitration Law states that an arbitration agreement must designate an arbitration
commission. Therefore, arbitration agreements providing for domestic ad hoc arbitrations are
generally considered invalid in China. However, in recent years, the Supreme People’s Court
of China released an “Opinion on Providing Judicial Protection for the Development of the
Pilot Free-Trade Zones” which was regarded as allowing ad hoc arbitration in China. Last

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year, the Management Committee of Hengqin New Zone and Zhuhai Arbitration Commission
jointly published the “Ad Hoc Arbitration Rules of (Guandong) Pilot Free Trade Zone
Hengqin Area of Zhuhai”. Thus it seems that ad hoc arbitration is making its way into
Mainland China, but more time and judicial support will be needed before it can truly become
a practical dispute resolution method in China.

Domestic and International Arbitration

Nowadays the terms domestic and international arbitration carry much less legal significance.
In the old Arbitration Ordinance (Cap.341), there were separate regimes for the conduct of
domestic and international arbitrations in Hong Kong, the latter being governed by the United
Nations Commission on International Trade Law Model Laws (Model Law). Under the new
Arbitration Ordinance (Cap. 609), however, that distinction has essentially been abolished
and there is now a single regime, governed by the Model Law, subject to modifications and
supplements.

An example of the modifications and supplements is Schedule 2 of the new Arbitration

Ordinance which retains some of the old provisions under the old domestic arbitration regime
which parties (now in both domestic and international arbitrations) may opt into.

These days, international and domestic arbitrations are simply used to describe the dispute
and the parties, as opposed to carrying different meanings in law.

Mediation is a flexible and consensual technique in which a neutral facility helps the parties
reach a negotiated settlement of their dispute. The parties have control over the decision to
settle and the terms of any agreement. Settlements are contractually binding and widely
enforceable.

The mediation process is designed to give parties a better understanding of each other’s
business needs. As such, each can look for a win-win solution that upholds their respective
interests. The result always remains in the parties’ hands, which reduces potential risks that
are so often associated with other forms of dispute resolution

Mediation .

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Mediation is a useful approach when parties in dispute have an ongoing relationship that they
wish to preserve, such as a joint venture or long-term supply contract. With mediation, this is
possible whereas there is unlikely to be any legal basis for seeking such relief in arbitration or
litigation.

All ICC Mediations are administered by the ICC International Centre for ADR and follow the
ICC Mediation Rules.

Just as the Court is the only body empowered to administer proceedings under the ICC Rules
of Arbitration, the Centre is the only body entitled to administer proceedings under the ICC
Mediation Rules.

Mediation is one of the alternative dispute resolutions which are voluntary and informal
process for resolution of disputes. Mediation is a process which is under the control of the
parties. The mediator acts as a middle person who helps to come on a negotiated common
point of their dispute. They are trained professionals or sometimes attorneys who assist the
parties in dispute to meet at a common place where they can discuss their issues and can try
to negotiate to reach at a common output. A mediator uses special kind of conversation and
communication to resolve the parties dispute.

The parties can appoint the mediators themselves with mutual consent or the court may
appoint the arbitrators in pending litigation. In Mediation, the parties are the decision makers.
Mediators don’t decide what is right or wrong or what is fair or unfair. Mediator can’t impose
his opinion upon the parties but he can suggest and help the parties to reach a mutual
accepted agreement. Mediators may hold joint meetings or can meet with the disputed parties
together or separately and can suggest some possible solutions, provide options to
compromise, or provide advice and guidance but they cannot impose their opinion or try to
solve the dispute forcefully. In mediation, both parties are responsible for reaching the
outcome. The role of the parties in mediation is not to convince the mediator but to come up
with a common solution which is acceptable by both the parties.

Mediation is an informal method of settling disputes, while it consists of basic rules or

procedures. The decision of the mediation is non-binding upon the parties. If the disputed
parties have agreed for the process of mediation then it is not binding upon them to agree
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upon the proposed opinion of the Mediator. The mediator can suggest, give opinions and can
tell what to do or what not but he can’t force the parties to attend the mediation if they are not
interested to continue.

Mediation can be divided into two categories which is commonly followed in India:

1. Court referred mediation

The court may refer the pending case to a mediator for mediation if they think there is
possibility for the settlement of the case. The act of referring cases is given in Section 89 of
the civil procedure code, 1908. These kinds of mediation are used in matters like divorce
cases or cases which deals under Negotiable Instrument Act, 1881.

2. Private mediation

In this kind of mediation, the professional and trained person works as Mediator. The general
public, government authorities, personnel from corporate sector or anyone from court can
approach them for settling their dispute through mediation.

Mediation in India

Mediation is one of the ancient methods of resolving disputes between the parties.Various
forms of Mediation among businessmen gained recognition during Pre-British rule in India.
The Mahajans were respected, impartial and wise businessmen who resolved disputes
between merchants through mediation. The informal process practiced in India’s western
province of Gujarat was a combination of Mediation and Arbitration, now known as Med-
Arb in the Western world. Despite of getting widespread acceptance in the business world,
arbitration had no legal sanction.

The East India Company gained control from England and divided Indian rulers and
converted their commercial purpose in political aggression. By 1753, Britishers established
their colonies and British-style courts came into existence in India. By 1775, Britishers
ignored the local indigenous processes for settling disputes and set up courts based on British
laws of that period. However, there was an underground dispute going on between British
values which gives clear decision on cases and Indian values which promote the parties to

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work with their differences and end it with some kind of settlement. British courts slowly
became recognized for their integrity and by gaining people’s confidence. Even after the
Independence of India in 1947, the Indian judiciary has been declared as Nation’s Pride.
Commerce, trade and industry began to expand rapidly in the 21st century the British system
quickly dispensed justice while maintaining respect and honour. In Independence, mediation
has also played an important role in awareness of fundamental and individual rights,
Government’s participation in the growth of trade, commerce and industry of the nation,
establishment of Parliament and State Assemblies, Government Corporation, Financial
Participation in institutions, fast growing international commerce and public sector business.

The explosion in litigation resulted from the increase of civil litigation, Business
opportunities beyond local borders, increase in population, creation of new acts, new rights
and measures and increase dependence on sole Judicial Forum of Courts.. Due to lack of
facilities there was a challenge to handle the overload of cases efficiently and effectively by
the judicial forum. The concept of Arbitration got legislative recognition for the first time in
India through Industrial Disputes Act, 1947. Almost all democratic countries of the world
have faced similar problems regarding access to justice. The United States faced the most
major changes in their law reform in 30 years and the same was being followed in Australia.
United Kingdom has also adopted alternative dispute resolution as part of its legal system.
European Union also favoured the arbitration for the settling of commercial disputes between
member states.

Conciliation

Conciliation means settling disputes without litigation. It is an informal process in which

conciliator i.e. third party tries to bring the disputants to agreement. He overcomes the
disputable issues by lowering the tension, improvement in communication, interpreting
issues, providing technical assistance, exploring potential solutions and bringing the
negotiated settlement before the parties. Conciliator adopts his own method to resolve the
dispute and the steps taken by him are not strict and legal. There is no need of agreement like
arbitration agreement. The acceptance of settlement is needed by both of the parties.

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Part III of the Arbitration and Conciliation Act, 1996 deals with conciliation. it is a voluntary
proceeding where parties in dispute agree to resolve their dispute through conciliation. It is a
flexible process which allows the parties to decide the time and place for conciliation,
structure, content and terms of negotiations. In Conciliation, the conciliators are trained and
qualified neutral person who help the conflicting parties to make them understand the issues
in dispute and their interest to reach mutually accepted agreements. The conciliation process
includes the discussion between the parties which is made with the participation of the
conciliator. It covers many disputes like industrial disputes, marriage disputes, family
disputes etc. This allows the parties to control the output of their dispute. The result is also
likely to be satisfactory.

Conciliator is the third party who is involved in settling the dispute of the parties. Generally,
there is one conciliator for the settlement but there can be more than one conciliator, if the
parties have requested for the same. If there is more than one conciliator then they will act
jointly in the matter. Section 64 deals with the appointment of conciliator which states that if
there is more than one conciliator then the third conciliator will act as the Presiding
Conciliator.

Kinds of Conciliation

1. Voluntary Conciliation- In this method parties can voluntarily participate in the process of
conciliation for resolving their dispute.

2. Compulsory Conciliation- If parties do not want to take the opportunity of voluntary

conciliation then they can go for compulsory conciliation. In this method, if the parties do not
want to meet the other party to resolve the dispute then the process is said to be compulsory.
This method is commonly used in labour cases.

Procedure of Conciliation

The objective of the conciliation proceedings is to reach upon mutual terms, speedy and cost-
effective settlement of the dispute. Section 62 discuss the initiative of conciliation will start
when one party will send Written Invitation to conciliate upon the matter to the other party.
There will be the commencement of procedure if the other party accepts the invitation in

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School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)

writing to conciliate. If the other party rejects the invitation or the party who is willing for the
conciliation does not get a reply from the other party within Thirty days then it will be treated
as a Rejection of the Invitation.

Section 65 explains the submission of the statements of both the parties to the conciliators.
Each party should submit a brief written statement regarding dispute as requested by the
conciliator. The statement should describe the general nature of the dispute and the points of
issue. Each party should send a copy of their statement to the other party. The conciliator can
also ask for the submission of written statements which includes issues of the parties, grounds
of settlement etc. These statements must be supplemented by evidence, documents or visual
representation. The copy of the same statement must be sent to the other party. Conciliator
can also request for additional documents whenever he needs them. According to Section
67(3) and 69(1), the conciliator can set up meetings for the parties or he can meet parties
together or separately. The place of meeting can be decided by parties or conciliators. He can
also communicate with the parties orally or in written form. He must also consider the party’s
expressed wishes like quick settlement of the case which also depends upon the
circumstances of the case.

Advantages and disadvantages of Conciliation

Advantages

1. The conciliation procedure is of private nature. The documents, evidences or any other
information which are used during the process are Confidential.

2. One of the most important advantages is that they are Informal process and contains
Simple procedures which can be easily followed by the general people.

3. The process depends upon the circumstances of the case. In these processes the need of the
parties comes first like quick settlement of their cases so there is no chance for delay.

4. The selection of the conciliators depends upon the parties. The parties can choose
conciliator on the basis of their availability, experience in particular field, previous track
records of the cases, knowledge in subject area.

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 Chanderprabhu Jain College of Higher Studies
&
School of Law
An ISO 9001:2015 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi& Approved by Bar Council of India)

5. The conciliation is cheap as compared to litigation. They are cost effective and most opted
process for resolving disputes. It purely depends upon the nature of the dispute but is widely
acceptable.

Disadvantages

1. Conciliator is not a legally qualified person for resolving disputes. His decision is not
binding upon the parties.

2. As the procedure of conciliation is informal and simple there is high possibility of

delivering injustice.

3. Miscommunication of information: The role of the conciliator to settle up the case by

giving information of one party to another and vice versa. The process of sending and
receiving information sometimes leads to mixed and incorrect information. So, by these
processes one can easily interpret the information given.

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