About Conciliation
Conciliation is an alternative dispute resolution (ADR) method aimed at resolving conflicts outside the court system through mutual agreement facilitated by a neutral third party, known as a conciliator. Unlike arbitration, conciliation does not involve a binding decision; instead, it seeks to guide disputing parties toward a mutually acceptable resolution. This process is often used for commercial, family, employment, and contractual disputes where preserving relationships is a priority.
Conciliation Process
In conciliation:
- Appointment of Conciliator(s): A conciliator, who is impartial and experienced in negotiation, is appointed by both parties.
- Information Gathering: The conciliator meets with the parties, gathers information, and clarifies the issues at hand.
- Proposal and Negotiation: The conciliator proposes solutions based on the concerns of both parties. Unlike arbitration, the conciliator does not impose a decision but works to build an agreement between the parties.
- Agreement or Settlement: If an agreement is reached, it is recorded in writing and signed by both parties. In some jurisdictions, this agreement can be legally binding.
Legal Framework for Conciliation
The laws governing conciliation vary across countries, but there are international guidelines, such as the UNCITRAL (United Nations Commission on International Trade Law) Conciliation Rules. These provide a model for national laws to follow, emphasizing voluntary participation, neutrality, confidentiality, and enforceability of settlements reached through conciliation.
- Key Points in UNCITRAL Conciliation Rules:
- Voluntary Nature: Parties voluntarily agree to conciliate, and they can withdraw at any stage.
- Neutrality and Independence: The conciliator must remain impartial.
- Confidentiality: Information disclosed during conciliation is kept confidential and is typically inadmissible in court.
- Settlement Agreement: If an agreement is reached, it is binding and enforceable in some jurisdictions under the UNCITRAL Model Law.
- Models of Conciliation
There are several models of conciliation, differing mainly in how actively the conciliator engages with the disputing parties:
- Evaluative Conciliation: The conciliator takes an active role, assessing the strengths and weaknesses of each party’s position and providing opinions on the likely outcome if the dispute were to go to court.
- Facilitative Conciliation: Here, the conciliator facilitates open communication between parties, encouraging them to find a mutually acceptable solution but not offering opinions or advice.
- Transformative Conciliation: The conciliator helps parties understand each other’s perspectives and aims to transform their relationship, often focusing on improving communication and cooperation.
- Mediation-Conciliation (Med-Arb): Some models combine conciliation and mediation, where the conciliator may, if agreed by the parties, switch roles to become a mediator if conciliation alone does not yield a resolution.
Conciliation in India
In India, conciliation is governed primarily by the Arbitration and Conciliation Act, 1996, which incorporates the UNCITRAL Model Law on International Commercial Arbitration and UNCITRAL Conciliation Rules. The Act aims to facilitate smooth, efficient, and confidential dispute resolution processes. Here are some key provisions:
- Arbitration and Conciliation Act, 1996
- Part III of the Act: Specifically deals with conciliation, outlining procedures, appointment of conciliators, confidentiality obligations, and the effect of settlement agreements.
- Section 62 to 81: These sections outline the conciliation process, including the appointment of conciliators, rights and duties of parties, and termination of conciliation proceedings.
- Key Aspects of Conciliation Under Indian Law
- Voluntary Participation: Parties voluntarily enter into conciliation, and can withdraw any time before signing a settlement.
- Appointment of Conciliators: Conciliators are appointed by agreement of the parties, and there is flexibility to appoint more than one if necessary.
- Confidentiality: All matters related to the conciliation process remain confidential, as outlined in Section 75 of the Act.
- Legal Effect of Settlement: Once a settlement is reached and signed, it has the same legal standing as an arbitral award under Section 30 of the Arbitration and Conciliation Act, making it binding and enforceable.
- Government Initiatives: The Government of India has been encouraging conciliation in commercial disputes to reduce the burden on the judiciary. For example, sectors like banking and insurance encourage ADR, and there are special conciliation centers for labor and industrial disputes.