Conciliation

Conciliation is a voluntary, confidential form of alternative dispute resolution in which a neutral third party, the conciliator, helps disputing parties reach an amicable settlement by clarifying issues, developing options and proposing terms of settlement. Unlike arbitration, the conciliator does not adjudicate or impose a decision, so the parties retain full control over the outcome. In India it is governed by Part III (Sections 61 to 81) of the Arbitration and Conciliation Act, 1996, which is modelled on the UNCITRAL Conciliation Rules, 1980.

How it works

• Proceedings commence when one party sends a written invitation to conciliate and the other party accepts in writing (Section 62).
• There is ordinarily a single conciliator, unless the parties agree on two or three (Section 63).
• The conciliator is guided by principles of objectivity, fairness and justice and is not bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act (Sections 66 and 67).
• Statements, admissions and settlement proposals made during conciliation are confidential and inadmissible in any later arbitral or judicial proceedings (Sections 75 and 81).

Legal effect of the settlement

When the parties reach agreement, the conciliator draws up a written settlement agreement signed by the parties (Section 73). Under Section 74 it carries the same status and effect as an arbitral award on agreed terms rendered under Section 30 — final, binding on the parties and enforceable as a decree of court. So while the conciliator's suggestions are non-binding, a concluded settlement is fully enforceable.

Current position (Mediation Act, 2023)

The Mediation Act, 2023 subsumes conciliation within the wider definition of mediation. Through its Section 61 and Sixth Schedule it progressively renders Part III of the 1996 Act redundant, so fresh statutory references to conciliation are construed as mediation, while conciliation proceedings begun before that commencement continue under the earlier provisions.