This Article is written by Paras Nath Mishra and the article has been edited by Khushi Sharma (Trainee Associate, Blog iPleaders) and Vanshika Kapoor (Senior Managing Editor, Blog iPleaders).
Table of Contents
Introduction
Conciliation is an advanced mechanism of getting justice in very limited time with an expenditure of reasonable cost where parties are free to negotiate the dispute and conciliator will help to assist the same for the settlement of the dispute. In the process of conciliation, the conciliator is free to have his own rules; he is not bound by the Civil Procedure Court or Evidence Act, which makes this proceeding even easier to have and it is as effective as that of judicial proceedings.
Why is this proceeding easier to have? Because the parties are free to have the conciliation according to the time with which they mutually agree. A conciliation is an advanced form of panchayat where parties before the Panch (the deciders) will express their statements and then the deciders will assist the parties to settle the dispute but it has a slight difference while the formulation of the agreed agenda. In conciliation the parties after negotiation and settling the dispute they have to sign the written agreement which has to be authenticated by the conciliator but in the panchayat, everything is done verbally no signing of the agreement is done.
Section-wise explanation of the Act
Section 61: talks about the conciliation and its application and scope
This part will apply when a dispute arises between the parties who share any legal relationship. But if any law restricts the use of conciliation then this part will not apply or this conciliation process will not be entertained.
A legal relationship can be contractual or non-contractual and if we want to invite parties for conciliation we can do so.
61(2): This part will not apply to those laws that have already been mentioned, about these types of disputes will not be taken for conciliation then the process of conciliation to those laws will not apply.
Section 62: talks about how the conciliation proceedings start
62(1): says the party needs to send a written invitation to the other party with a brief about the disputes and for what type of dispute the party is asking for conciliation.
62(2): says the conciliation proceeding will only take place when the other party accepts the written invitation of being tried through conciliation.
62(3): says if the other party rejects the written invitation of being tried through conciliation then the matter will not be decided through conciliation.
62(4): if the invitation is not accepted within 30 days of the day he (initiating party) sends the invitation or didn’t get a reply within the time prescribed in the written invitation then the party is free to assume that his invitation stands rejected by the party and has to inform about the rejection of an invitation to the other party accordingly.
Section 63: talks about the appointment of a conciliator for conciliation
63(1): says there shall be one conciliator which is mandatory for conciliation until the parties agreed to call more than one conciliator.
63(2): says if there is more than one conciliator then the conciliators will work together and jointly.
Section 64: talk about the process of appointment of the conciliator.
- Subject to sub-section-2 of section 63;
64(1)(a): says if parties want to appoint one conciliator for the proceeding then the mutually agreed conciliator will be appointed as a sole conciliator.
64(1)(b) says if parties want to appoint two conciliators then each party can elect or appoint one conciliator from each side.
64(1)(c). says if parties want to appoint three conciliators then each party will appoint one conciliator from each side and will mutually agree and elect a third conciliator who will act as a presiding conciliator for the proceeding.
64(2): says the parties can take help or assistance from the institution or person for the appointment of a conciliator for the proceeding.
- Says the party can ask for a recommendation of the conciliator from such suitable institution or person and then the institution or person is free to recommend the name of a suitable conciliator to the parties.
- Says that the party may agree to appoint the conciliator directly by the institution or the person for the conciliation but,
the institution or person who is directly appointing the conciliator should keep in mind while appointing the conciliator that it must be independent, impartial, and of different nationality other than the nationality of the parties, it should not be more favourable to the one party of the dispute.
Section 65: talk about the submission of statement before the conciliator
65(1): says that the conciliator upon his/her appointment ask the parties to submit the statement of the issue in brief so that a conciliator be aware of the issue of the dispute and one copy of the statement will be sent to the other party of the dispute which is mandatory for the conciliation proceeding.
65(2): says that the conciliator can further request the parties to provide more statements of facts so that clarity can be made to the case with the evidence which supports the facts of the case if available or not presented before the conciliator and the same has to sent to the other party which is also a mandatory case.
65(3): says that if the conciliator believes that he needs more explanation or any additional information of the particular point or case he can even further request the party or parties to submit more about the asked point or case to the conciliator.
Section 66: talk about the restriction of conciliator
The Conciliator is not bound to follow the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. He can even conciliate the proceedings by making his own rules.
Section 67: talks about the role of the conciliator which he needs to perform while proceedings
67(1): says that the conciliator will assist the parties to come up with an amicable solution for a dispute and while doing so he has to be independent and impartial while assisting the parties.
67(2): says that the conciliator needs to follow the principle of objectivity, fairness, and justice while assisting the parties and also keeps in mind the business practices and circumstances between the parties which can be broken if a dispute went ungraceful.
67(3): says that the conciliator can conduct the proceeding in which he thinks appropriate according to the situation and circumstances demands. If the parties request to sum up the process in quick succession then the conciliator can ask for the oral statement rather than the written statement from the parties.
67(4): says that the conciliator can even propose before the party in disputes if he believes that particular proposal is in benefit of both the parties, and that proposal need not be in writing it can be orally as well as in writing and proposal need not be accompanied with the statements of proceedings.
Section 68: talk about administrative assistance
That can be taken for the parties as well as for the conciliator with the consent of the parties from any institution or person for any particular assistance over the point of proceedings.
(Administrative Assistance means* If the conciliator or the parties needs any help to explain their point of view which is helpful for the proceeding, they can ask the conciliator to arrange the assistance from any institution or person for that matter).
Section 69: talk about the communication between the parties and the conciliator
69(1): says that the conciliator may invite the parties orally or in writing to communicate with him or he may communicate with the parties if they are not comfortable telling something related to the dispute before the other party then the conciliator can have a private caucus with the parties together or separately.
69(2): says that if the parties have not decided the place for private caucus then the conciliator according to the situation and circumstances of proceedings can decide the place in consultation with the parties for the private caucus.
Section 70: talk about the disclosure of information
If the conciliator receives any factual information regarding the disputes then the conciliator can disclose to the other party if he thinks it appropriate to disclose so that the other party can have the opportunity to present his view, but if the party reveals certain information before the conciliator with specific conditions of non-disclosure of the information then the conciliator is bound not to disclose the same before the other party.
Section 71: talks about cooperation with the conciliator
The parties shall cooperate with the conciliator in good faith and if anything is requested by the conciliator, parties are compelled to submit the written materials, any evidence, and attend meetings thereof.
Section 72: talk about the suggestion given by the parties for settlement of a dispute
After the invitation by the conciliator or each party may submit their suggestion on his initiative to the conciliator for the settlement of a dispute.
Section 73: talk about the settlement agreement
73(1): says that when it appears to the conciliator that there’s a requirement for formulation within the settlement which may be acceptable to both the parties he can formulate such settlement and submit to the parties for his or her observation and after receiving the observation from the parties, if parties need an extra reformation within the settlement then the conciliator may reformulate the settlement consistent with their observations.
73(2): says if parties reach the conclusion or final settlement of dispute then they may sign a settlement agreement and if parties need any help while signing the agreement they may request the conciliator to assist and he then assists the parties in signing the agreement for settlement of a dispute.
73(3): says when the parties sign the settlement agreement, it will be final and binding on the parties and they may even use it for any claim.
73(4): says that the conciliator needs to authenticate the agreement and provide one copy of an agreement to each party.
Section 74: talk about the status and effect of the settlement agreement,
It says that the settlement agreement will have the same effect as if it is an arbitral award (same as the court’s decree) on agreed terms of dispute passed by the arbitral tribunal in section 30 of this act.
Section 75: talk about confidentiality
Which says that the parties and the conciliator shall keep all the matters or anything related to conciliation proceedings, confidential which shall extend to settlement agreement until it is necessary to disclose the settlement for the enforcement and implementation of this agreement.
Section 76: talk about the termination of conciliation proceedings
Which will be terminated on the below given points.
[the day means the date of declaration when the parties declare in writing]**- The proceeding will be terminated on the day parties sign the settlement agreement; or
- The day conciliator declared on writing after consulting with the parties that the further proceeding will no longer be fruitful or useful for the parties then the conciliation proceedings will be terminated; or
- The day parties address the conciliator on writing to terminate the conciliation proceedings; or
- The day, one party addresses the other party and the conciliator in writing to terminate the conciliation proceedings.
Section 77: talk about resort to arbitral and judicial proceedings
The parties shall not initiate any arbitral or judicial proceeding for the dispute while ongoing conciliation proceedings. The arbitral or judicial proceedings can be initiated only when it becomes necessary for the preservation of its rights.
Section 78: talk about the cost of proceeding
78(1): says after the termination of the conciliation proceeding, the conciliator shall fix the cost of conciliation and send the written notice of an equivalent to the parties involved.
78(2): [For the purpose of sub-section-1] defines the term “cost” which means a reasonable cost-
- Fee and expenses of the conciliator which has been spent while proceeding including the cost of calling witnesses to appear for the proceeding with the consent of the parties;
- Any expert advice requested by the conciliator for the proceeding after the consent of the parties;
- If any assistance has been taken including the assistance from sections 64* and 68** for the proceeding in pursuance of clause (b) of this section;
- And any other expenses incurred related to the conciliation proceeding and the settlement agreement.
78(3): The expenses of the proceedings will be asked from the parties equally until and unless there is a proportion divided or stated in an agreement that the parties are required to bear all the costs of the proceedings and if any other expenses have been incurred then that party will pay the money due to which the extra expenses have been incurred.
Section 79: talks about a deposit
79(1): says that the conciliator may direct the parties to deposit the money in advance for the cost including the cost of sub-section 2 of section 78 which he expects can often be incurred for the conciliation proceeding.
79(2): while in the course of proceeding if the conciliator believes that there will be a need for an extra amount other than the deposited amount then the conciliator may direct the parties to deposit the amount in equal proportion.
79(3): if the parties are not depositing the full amount of proceeding which is required according to the sub-section 1 and 2 of this section within 30 days of the proceeding then the conciliator may suspend the proceeding or make a written declaration of the termination of the proceeding to the parties which will be effective from the day conciliator sign the declaration.
79(4): says that if any amount is left after the expenses of till the declaration date then the conciliator will return the amount to the parties.
Section 80: talk about the role of the conciliator in other proceedings
Unless and otherwise agreed by the parties:
- The conciliator shall not act as arbitrator, representative, or counsel of a party in any arbitral or judicial proceeding in reference to the conciliation proceeding.
- The parties are not allowed to present the conciliator as a witness for any arbitral or judicial proceeding.
Section 81: talk about the admissibility of evidence on other proceedings
The evidence that has been presented during the conciliation proceeding has no reliability including the below-given points and the same cannot be presented before any arbitral or judicial proceeding irrespective of the proceeding is related to dispute or not:
- Any views or suggestions made by the other party to settle the dispute;
- Any admission made by another party during the process of conciliation;
- Any proposal made by the conciliator;
- Or the other party made a proposal to accept the settlement of the dispute.
The above points will have no reliability if a case went for any arbitral or judicial proceedings for the resolution of a dispute.
Reference
- Bare act of Arbitration and conciliation act, 1996
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