There is a famous proverb “where there are two minds there will be three opinions”. Everybody has their own opinion and views, hence there may be a conflict of opinions. In today’s society, such conflicts are inevitable and a quick, easy, and strong mechanism for resolution of such conflicts at minimum cost is need of time. Such a mechanism reduces the burden on the judiciary. Arbitration, Mediation, Conciliation, Negotiations, Lok Adalats are some methods which can be used in such situations. These methods are collectively known as the Alternate Dispute Resolution (ADR) System.

Conciliation:

Conciliation is a process of persuading parties to reach settlement in existing and ongoing conflict with the help of third impartial party called conciliator with the to preserve the relationship they have with each other. There is no need of pre-agreement for starting the process of conciliation but acceptance to the process by both parties is necessary. Sections 62 – 81 of the Arbitration and Conciliation Act thus provide a complete and a comprehensive procedure for Conciliation from initiation of the process of Conciliation to the settlement of dispute, evidence, roles of Conciliator etc. are completely covered in the aforesaid sections.

Conciliation is a voluntary proceeding, where the parties involved are free to agree and attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to define the time, structure and content of the conciliation proceedings. These proceedings are rarely public. They are interest-based, as the conciliator will when proposing a settlement, not only take into account the parties’ legal positions, but also their; commercial, financial and / or personal interests. Like in mediation proceedings, the ultimate decision to agree on the settlement remains with the parties.

Responsibilities of Conciliator:

Conciliators have a variety of roles and responsibilities to ensure that the parties reach a fair resolution. Some of the responsibilities of conciliator are as follows:

• Hold meetings with each individual party to discuss how the meeting will go
• Review relevant documents and information to help reach conclusions
• Maintain a neutral position within a meeting to ensure both parties receive fair considerations
• Allow parties involved to reach their own resolution 
• Be prepared to settle disputes by issuing their own resolution, should the parties ask
• Meet with witnesses and other persons related to the parties to obtain statements and additional information about the dispute in question
• Prepare settlement agreement documents based off of the resolution the parties reached
• Practice confidentiality regarding the parties, their personal information and details regarding the dispute

Role of Conciliator:

According to section 67 of the Act,

• the conciliator shall maintain his independence and impartiality and persuade the parties in away to help them reach an amicable settlement.
• the conciliator should not only uphold the principles of objectivity, fairness and justice but should also keep in mind the rights and obligations of the parties and various circumstances surrounding the dispute.
• the conciliator may conduct the proceedings of the case in a manner that is appropriate in his opinion. However, he should consider the circumstances leading to the case and the wishes of the parties or any other requests of the parties that are related to the subject of the dispute and are reasonable in the eyes of the law.
• a settlement of the dispute can be proposed by the conciliator at any time when the proceedings are still in force. Any such settlement proposition need not be in writing or accompanied by a statement of reasons, necessarily.

According to section 69 of the Act, the conciliator may communicate with the parties orally or in writing. The communication could take place either individually or in groups as suits the needs of the proceedings. The place of such meeting shall be decided by the conciliator in consultation with the parties.

According to sections 70 and 75, confidentiality should be ensured from the ends of both the conciliator as well as the parties. No information should be passed on to a third party except in cases of enforcement or implementation of the conciliation proceedings.

According to section 80 of the Act, a conciliator should not be an arbitrator or a representative of the parties in any kind of legal proceedings in respect to a matter that is subject of the dispute. He/she also cannot be presented as a witness for/against the parties in any arbitral or judicial proceeding.

Number of Conciliators:

Once the proposal of conciliation is accepted by the other party the next important step is to have a conciliator. Section 63 of the Arbitration and Conciliation Act, 1996 act provides that there under usual circumstances there will be only one conciliator and in no case the number of conciliators shall exceed three [section 63(2)] which is the maximum limit and the general rule is that they shall act jointly.

Commencement of Conciliation Procedure:

Section 62 of the Arbitration and Conciliation Act, 1996 provides for the commencement of proceedings for conciliation. For the purpose of settling the dispute through the process of conciliation all what is required is a proposal in writing and its acceptance thereof. When a proposal is made by one party the other party has the option of the acceptance of proposal or its rejection. Rejection does not always have to be expressed it may be implied. If the party who sends the proposal does not receive any follow up or reply within a period of thirty days or other stipulated period it shall amounts to rejection and hence the process of conciliation will not commence.

Appointment of Conciliator:

There are two ways that are provided for the appointment of conciliators:

First, the parties may on a mutual agreement appoint the conciliator according to the guidelines provided in section 64 (I)

1. A sole conciliator—The parties may with their understanding mutually agree upon the name   of the sole conciliator;
2. Two conciliators— according to this provision each of the party may appoint one conciliator;
3. Three conciliators— according to this a third conciliator may be appointed who will act as the presiding conciliator.

Second, the parties may take advice and take assistance of an institution or person for the appointment of conciliators.

Conciliation Proceedings:

• Section 65 – It deals with the Submission of statements by the parties to the conciliator.
• Section 66 – This section provides that Conciliator is not bound by the procedures envisaged in CPC, or Evidence Act.
• Section 67 – This section talks about the role of a Conciliator. These roles include acting impartially, fairly, and independently and strive towards reaching an amicable resolution of the dispute.
• Section 69 – This section deals with the communication between the parties and the conciliator.
• Section 71 – This section provides that the parties should act in good faith and co-operate with the Conciliator
• Section 73 – This section provides for the provision of the Settlement agreement and its components.
• Section 75 – This section deals with the important principle of Confidentiality.
• Section 76 – This section talks about the termination of proceedings which can be done by the signing of the settlement agreement or by a declaration by a written declaration of a party to other party.
• Section 78 – It talks about the costs that are included in the conciliation proceedings.
• Section 81 – This section deals with evidence and its admissibility of certain kinds of evidence that cannot be used in other proceedings like proposals made by the conciliator or the fact that the other party was willing to accept a proposal.

Settlement Agreement:

The settlement process takes place under section 73 of The Arbitration and Conciliation Act, 1996 when the conciliator sees the possibility of settlement of dispute. Generally decision of the conciliation proceedings are not binding on the parties but if the parties resort to settlement of award under this section then the settlement agreement becomes binding on the parties. Parties have the option of either drawing up the terms settlement agreement by themselves or take the assistance of conciliator and at last the agreement is signed by both the parties and authenticated by the conciliator.  Such agreement reached is called settlement agreement or conciliation agreement. As per section 74 of The Arbitration and Conciliation Act, 1996  settlement agreement drawn under section 73 is kept in par with arbitral award in the arbitration proceedings  under section 30 of The Arbitration and Conciliation Act, 1996 and it is binding like arbitral award.

Confidentiality in Conciliation:

Black’s Law Dictionary defines the word “confidential” as “intrusted with the confidence of another or with his secret affairs or purposes; intended to be held in confidence or kept secret”.  Section 75 of the Arbitration Act provides that the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings and such confidentiality shall extend to the settlement agreement except where its disclosure is necessary for purposes of implementation and enforcement.

Termination of Conciliation:

Section 76 of the Act deals with the termination of conciliation process it lays down that: The conciliation proceedings shall be terminated –

(a) by the signing of the settlement agreement by the parties, on the date of the agreement; or

(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings am terminated, on the date of the declaration.

Cost of Conciliation:

Section 78 deals with cost of conciliation. Costs means reasonable costs relating to the following:

• The fee and expenses of the conciliator and witness requested by the conciliator with the consent of the parties
• Any expert advice requested by the conciliator with the consent of the parties
• Any assistance provided to sec 64(2)(b) and sec 68
• Any other expenses incurred in connection with the conciliation proceedings and the settlement agreement. (Sec 78(2))

It is the conciliator who fixes the costs of the conciliation proceedings upon their termination and gives written notice of it to the parties. (Sec78 (1)) The costs are borne by the parties in equal shares. (Sec 78(3))

Conclusion:

Conciliation is a valuable tool for dispute resolution that emphasizes cooperation and mutual benefit. It offers a less adversarial and more cost-effective alternative to traditional litigation, making it especially suitable for resolving disputes where the parties wish to maintain their relationship. However, its success largely depends on the willingness of the parties to negotiate in good faith and the ability to enforce the agreement reached.

In conclusion, while conciliation may not be suitable for all types of disputes, its advantages make it a highly effective method for many situations, particularly where flexibility, confidentiality, and preserving relationships are priorities. For it to reach its full potential, increased awareness and trust in the process, as well as supportive legal frameworks for the enforcement of conciliation agreements, are essential.