CONCILIATION

.
 WHAT IS CONCILIATION
NON BINDING

Conciliation is an out of court dispute resolution instrument,

through which parties under dispute can seek to an amicable
dispute resolution with the assistance of a third party who acts
as a neutral party. Conciliation is a voluntary, flexible,
confidential process. The third party is sought for the
conciliation proceedings are known as a conciliator. The
decision whether to settle depends on the parties.
EVOLUTION
• It is not a new concept in India. Kautilya’s Arthashastra also refers to the
process of conciliation.
• In India the efforts to provide the Third Party intervention in industrial
disputes date back to 1920, when the Trade Disputes Act was enacted,
providing for the Courts of Inquiry and Boards of Conciliation. But this
Act remained only on the Statute Book, instead of being enforced.
• The widespread industrial unrest in the mid l920s, however, forced the
Government to re-enact the Trade Disputes Act in 1929, thus marking
the beginning of the State efforts to provide for the third party
intervention in the industrial disputes through the Boards of
Conciliation.
• The provincial Government of Bombay enacted the Bombay Trade
Disputes Act in 1934, providing for the appointment of Government
Labour Officers to look after the interests of the workmen and to
promote better relations between employers and employees.
• It provided regular conciliation machinery, with the Commissioner of
Labour as the Ex-Officio Chief Conciliation Officer thus introducing the
conciliation officers for the first time in India.
• Then Government of India decided, as late as 1937, to set up conciliation
machinery consisting of the Conciliation Officers, in pursuance of the
recommendations of the Royal Commission on Labour by amending the
Trade Disputes Act, 1929 in 1938, for the settlement of the industrial
disputes between the Railways administration and its employees.
• During the Second World War, the Government felt it extremely
important to have a climate of industrial peace in all the industries.
Hence, the Government of India inserted a clause in the Defence of India
Rules in the year 1942, providing for the State intervention in the
industrial disputes for bringing about the amicable settlements, by way
of referring the disputes for conciliation and arbitration on a compulsory
basis.
• The Industrial Disputes Act, 1947 provides for both the board of
Conciliation and the Conciliation Officers.
• The Government of India appointed the National Commission on Labour
in the year 1966, to review the working of the labour legislations, and to
study the working and living conditions of the industrial and other
labour since Independence.
• The National Commission on Labour submitted its report in the year
1969. The Commission has found the functioning of the conciliation
machinery in most of the States rather disappointing. Its suggestion was
to set up the Industrial Relations Commissions to act as the third party at
different stages of disputes settlement process.
• the Industrial Relations Commissions consist a conciliation wing. The
Conciliation Wing is to consist of the Conciliation Officers with
prescribed qualifications- with or without the judicial qualifications.
• But it was a failure. Afterwards, the Indian Labour policy and
Conciliation was also not effective. Five year plans also tried to
implement the conciliation machinery but failed.
• In 1984- faced with the problem of surmounting arrears - the Himachal
Pradesh High Court evolved a unique project for disposal of cases
pending in courts by conciliation.
• Law Commission of India in its 77th and 131st reports and the
conference of the Chief Justices and Chief Ministers in December 1993
recommended conciliation.
• The Malimath Committee had also recommended the establishment of
conciliation courts in India.
• In the year 1980 UNCITRAL had adopted the UNCITRAL Conciliation
Rules. Parliament of India found it expedient to make a law respecting
conciliation, and the Arbitration and Conciliation Act, 1996 was enacted.
• The Permanent Court of Arbitration in 1930 opened its Arbitration and
conciliation services. PCA expanded its conciliatory services in the year
1939. Subsequently, In the year 1962, the PCA increased the scope of
conciliation practices by framing the “Rules of Arbitration and
Conciliation for settlement of international disputes between two parties
of which only one is a State.
• In the year 1951, the International Labour Organisation released a
recommendation – Voluntary Conciliation and Arbitration
Recommendation, 1951 wherein voluntary conciliation should be made
available for resolving industrial disputes. UNCITRAL model law on
international commercial conciliation,2002 serves as the guiding light.
• Article 42 of the International Covenant on Civil and Political Rights,
1966 enshrines the establishment of ad hoc Conciliation committees for
the amicable settlement of disputes. Subsequently, in Article 43 the
committee thus formed has been given facilities, privileges, and
immunities as per the United Nations.
SCOPE OF CONCILIATION
• Conciliation is a process of settlement of disputes that have been widely
spread throughout the centuries. In ancient cultures, parties in a dispute
would visit the village old men for advice. They sought ways to resolve
their dispute through the advice given by the old experienced men.
Consequently, with the evolution of ADR, conciliation as an informal
institutional practice gained popularity.
• Conciliation has spread in areas including industrial disputes, trade
disputes, labour disputes, human rights disputes, etc. 
TYPES
• Formal Conciliation or Voluntary Conciliation
Formal Conciliation is where the lawyer and his client meet together to
discuss and try to resolve the issue with the help of a conciliator present.
So, where the lawyer and his client meet together to examine and attempt
to determine the issue with the assistance of a conciliator who participated
in this discussion is known as Formal Conciliation. Formal conciliation is
also known as Voluntary Conciliation.
• Informal Conciliation
Informal Conciliation is where the disputes are addressed between the
lawyer and his client over the cell phone, by way of notice, email, or any
other electronic media, or in writing, etc. 
• Compulsory Conciliation
Conciliation procedure is made compulsory by the provisions of law requiring
the parties to attend conciliation
• Individual Conciliation
Individual conciliation is a way to find an alternate way to resolve a dispute
which may occur in an organization. Individual conciliation is done between an
employer and employee, an employer and employer or an employee and
employee. In individual conciliation, the aggrieved parties use a conciliator for
the process, the conciliator meets both the parties separately as well as together.
• Collective conciliation
When there’s a disagreement between an employer and a group of employees,
and both sides to try to come to an agreement and settle the dispute. This is
called ‘collective conciliation’.
FEATURES AND ADVANTAGES

• COST EFFECTIVE AND EXPEDITIOUS PROCESS

Conciliation is an economical and expeditious mechanism for resolution
of disputes in comparison to litigation and arbitration. The conciliator
follows a simplified procedure suited to the aspirations of the parties and
keeping in mind the need for speedy settlement of the dispute. The end
result in conciliation is a negotiated settlement which is treated to be an
arbitral award on agreed terms, thereby obviating the possibility of
successive appeals and finally resolving the dispute in an expeditious and
cost effective manner.
• AUTONOMY AND CONVENIENCE OF PARTIES
Conciliation is flexible and convenient. The parties are free to agree on the
procedure to be followed by the conciliator, the time and venue of the
proceedings and thus eventually control the process. The parties not only
control the procedure in conciliation proceedings but also the final
outcome of the proceedings. Indeed party autonomy is a very laudable
feature of conciliation.
• CONFIDENTIALITY
In contradistinction to judicial proceedings conciliation is a private closed
door affair and therefore offers privacy and confidentiality. In fact,
confidentiality in conciliation proceedings is a statutory guarantee which
makes conciliation an excellent dispute resolution mechanism.
• CREATIVE SOLUTIONS
In litigation or arbitration what solution or resolution would be
contained in the judgment or award is not within the control or prior
knowledge of the parties and moreover the ultimate decision is based on a
straightforward decision on merits keeping in view the rights and
positions of the parties
In conciliation however the parties control the outcome and can
incorporate terms and conditions in the settlement agreement as per
mutual agreement.
• PARTY SATISFACTION AND HARMONY
Unlike litigation and arbitration where one party wins and the other
loses, in conciliation both parties are winners as the decision is acceptable
to both. Both parties are in favour of the decision, as until both parties
agree to a proposal, the settlement or agreement does not take place.
Therefore it is a win-win situation
Even where the conciliation proceedings do not fructify into a
settlement, they prove to be useful by enabling the parties to understand
each other’s versions, positions and aspirations in a better perspective.
• ENFORCEABILITY OF CONCILIATION SETTLEMENT
AGREEMENT
The settlement agreement drawn up in conciliation proceedings has the
same status and effect as if it is an arbitral award. Thus the settlement
agreement in conciliation is executable as a decree of the civil court. It is
open to any party to apply for execution of the settlement agreement by
filing an execution petition before the civil court.
• MAINTENANCE OF CONTINUED RELATIONSHIP BETWEEN
THE PARTIES
• NO SCOPE FOR CORRUPTION OR BIAS
CONCILIATOR
• If the number of conciliators is not fixed by the parties, there shall be 1
conciliator (sec 63)
• If it is 1 conciliator, parties can agree on the name of a sole conciliator
• If it is 2 conciliators, each party may appoint one conciliator
• If it is 3 conciliators, each party may appoint one conciliator and the
parties may agree on the name of the third conciliator who shall act as
the presiding conciliator.
• Parties can even approach any institution or person for the appointment
of conciliators
• After the appointment of the conciliator each party should submit a written
statement and serve a copy to the opposite party. Conciliator can request for
any further written statement or documents or additional information from the
parties (sec 65)
• The conciliator is not bound by the Code of Civil Procedure, 1908 (or the
Indian Evidence Act, 1872 (sec 66)
• ROLE OF CONCILIATOR(SEC 67)
- The conciliator shall assist the parties in an independent and impartial manner
in their attempt to reach an amicable settlement of their dispute.
- The conciliator shall be guided by principles of objectivity, fairness and
justice, giving consideration to 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.
- The conciliator may conduct the conciliation proceedings in such a
manner as he considers appropriate, taking into account the circumstances
of the case, the wishes the parties may express, including any request by a
party that the conciliator hears oral statements and the need for a speedy
settlement of the dispute.
- The conciliator may, at any stage of the conciliation proceedings, make
proposals for a settlement of the dispute. Such proposals need not be in
writing and need not be accompanied by a statement of the reasons
therefor.
- The conciliator may hold several joint or private meetings with the parties
so as to enable the parties to clarify their cases and so as to persuade the
parties to arrive at a mutually acceptable solution.
- In actual practice conciliator needs to be a person who is not
only well-informed and diplomatic but can also influence the
parties by his persona and persuasive skills.
- When the conciliator receives factual information concerning
the dispute from a party, he shall disclose the substance of that
information to the other party in order that the other party may
have the opportunity to present any explanation which he
considers appropriate(Sec 70)
- Parties and conciliators should maintain confidentiality (sec 75)
- Unless otherwise agreed by the parties, the conciliator shall not
act as an arbitrator or as a representative or counsel of a party
in any arbitral or judicial proceeding in respect of a dispute that
is the subject of the conciliation proceedings and the
conciliator shall not be presented by the parties as a witness in
any arbitral or judicial proceedings.
PROCESS
• COMMENCEMENT OF CONCILIATION
The conciliation process commences when the disputing parties agree
to conciliate and a neutral conciliator is appointed. The party initiating
conciliation sends a written invitation to conciliate to the other party
briefly identifying the subject matter of the dispute. when the other party
accepts in writing the invitation to conciliate, the conciliation proceedings
commence.
Part III of the Arbitration and Conciliation Act, 1996 does not envisage
any agreement for conciliation of future disputes. conciliation agreement
should be an ad hoc agreement entered by the parties after the dispute has
actually arisen and not before.
• APPOINTMENT OF CONCILIATOR
In conciliation proceedings ordinarily there is one conciliator unless
the parties agree that there shall be two or three conciliators. The parties
may also request any institution or person to recommend suitable names
of conciliators or directly appoint them
• THE SETTLEMENT AGREEMENT
When it appears to the conciliator that there exist elements of a settlement,
which may be acceptable to the parties, he is supposed to formulate the
terms of a possible settlement and submit them to the parties for their
observations. Parties should have full understanding of the settlement
terms. The agreement must embody the terms and conditions of the
settlement with clarity and precision
Agreement which has been arrived at in conformity with the manner
stipulated and form envisaged and got duly authenticated in accordance
with section 73 of the Arbitration and Conciliation Act, 1996, which can
be assigned the status of a true settlement agreement and can be enforced
as an arbitral award.
TERMINATION OF CONCILIATION
PROCEEDINGS
• By signing settlement agreement
• Any party may terminate conciliation proceedings at any time even
without giving any reason since it is purely voluntary process. The
parties can terminate conciliation proceedings at any stage by a written
declaration of either party.
• A written declaration of the conciliator, after consultation with the
parties, to the effect that further efforts at conciliation are no longer
justified, also terminates conciliation proceedings on the date of such
declaration.