Conciliation: The Lesser Used ADR

WHAT IS CONCILIATION Conciliation is one of the Alternative Dispute Redressal (ADR) procedures/ mechanisms. Conciliation is a non-adjudicatory, negotiatory ADR process, which is also governed by the provisions of the Arbitration and Conciliation Act, 1986 (AC Act). CONCILIATION: THE GOVERNING STATUTES/ RULES The law relating to Conciliation has been codified for the first time in India on the pattern of UNCITRAL Conciliation Rules. One of the objects of the UNCITRAL Conciliation Rules embodied in Part III of the Act is to make "a significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in International commercial relations." Although provided for in Section 89 of the Code of Civil Procedure (CPC), 1908 Conciliation, as a specific mechanism for dispute resolution is provided for and specifically dealt with under Part-III titled 'Conciliation' of the Arbitration and Conciliation Act, 1996 (AC Act). Conciliation proceedings in India are governed by: 1. Arbitration and Conciliation Act, 1996 (AC Act) 2. Section 89 of the Code of Civil Procedure, 1908 (CPC) 3. Delhi High Court Mediation & Conciliation Rules, 2004 framed under Section 89 CPC, 1908 Section 89 CPC specifically empowers the Court, with the consent of the parties, to refer the matter for settlement under sub-section 2(a) of Section 89 CPC for ADR process. It refers to five types of ADR procedures, made up of one adjudicatory process i.e. Arbitration and four negotiatory/ non-adjudicatory processes i.e. Conciliation, Mediation, Judicial settlement and Lok Adalat settlement. The object of Section 89 CPC is that settlement should be attempted by adopting an appropriate ADR process before the case proceeds to trial. Neither Section 89 nor Rule 1-A of Order 10 CPC is intended to supersede or modify the provisions of the Arbitration and Conciliation Act, 1996 or the Legal Services Authorities Act, 1987. Rather, it clarifies that two of the ADR processes i.e. Arbitration and Conciliation, will be governed by the provisions of the AC Act and the two other ADR processes i.e. Lok Adalat settlement and Mediation, will be governed by the Legal Services Authorities Act. As for the last of the ADR processes i.e. Judicial settlement, Section 89 makes it clear that it is not governed by any enactment and the Court will follow such procedure as may be prescribed (by appropriate rules). The Delhi High Court Mediation and Conciliation Rules cannot override the statutory Provisions. HOW CONCILIATION CAN BE INITIATED AND WHETHER PARTIES CAN BE REFERRED TO CONCILIATION BY COURT Conciliation as a dispute redressal mechanism can only be initiated voluntarily by the parties in the manner envisaged under Part-III of the Arbitration and Conciliation Act, 1996. There can be a valid reference to Conciliation 'only' if both parties to the dispute agree to have negotiations with the help of a third party or third parties either by an agreement or by the process of invitation and acceptance provided in Section 62 AC Act, followed by appointment of Conciliator(s) as provided in Section 64 AC Act. If both parties do not agree for Conciliation, the process of Conciliation cannot be initiated. Even in a case before the Court, with the consent of the parties, the pending suit/proceeding can be referred to Conciliation under Section 89 CPC. If a dispute is referred for Conciliation, sub-section 2(a) of Section 89 CPC specifically mandates that the provisions of the Arbitration and Conciliation Act shall apply as if the proceedings for Conciliation were referred for settlement under it. The settlement, if any, shall be governed by Section 74 AC Act and would require to be enforced in the manner of an Arbitral Award. The Settlement Agreement in Conciliation may not require the seal of approval of the Court for its enforcement when they are made in a direct reference by parties without the intervention of Court. When a matter is settled through Conciliation, the Settlement Agreement executed thereof within the meaning of Section 74 AC Act is to be treated as an Arbitral Award under Section 30 AC Act so as to be enforced under Section 36 AC Act. However, if Conciliation proceedings are made on a reference by a Court in a pending suit/proceeding, the Court retains its control and jurisdiction over the case, even when the matter is before the ADR forum. As the Court continues to retain control and jurisdiction over the cases referred by it for Conciliation, the Settlement Agreement in Conciliation will have to be placed essentially placed before the Court for recording it and disposal in its terms. PROCEDURE Elaborate steps are prescribed for Conciliation under Part-III (Section 76 to Section 81) titled...

Conciliation: The Lesser Used ADR

Udayan Tandan

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