Arbitration conciliation Act 1996

Last updated: December 2020 | 5 min read

Purpose of the Act

Conciliation is for dispute settlements. Conciliation is defined as the process of amicable settlement of disputes by the parties with the assistance of a conciliator. It differs from arbitration in the sense that in arbitration the award is the decision of the third party or the arbitral tribunal, while in the case of conciliation the decision is of the parties which is arrived at with the mediation of the conciliator.

Benefits of the act for the society

The major provisions relating to Conciliation in the Act are. A party initiating the conciliation shall send a written notice to the other party, briefly identifying the subject of the dispute and inviting it for conciliation. The conciliation proceedings shall commence on acceptance of invitation by the other party. If the party initiating conciliation does not receive a reply within 30 days from the date the invitation was sent or within the specified period, it may opt to treat this as a rejection and inform the same to the other party.

If it rejects the invitation, there can be no conciliation proceeding. Unless otherwise agreed there shall be one conciliator. The parties may however, agree that there shall be two or three conciliators, who shall act jointly. The sole conciliator shall be appointed by mutual consent of the parties. In case of two conciliators, each party may appoint one conciliator. In case of three conciliators, each party may appoint one conciliator and the third conciliator may be appointed by mutual agreement of the parties who shall act as the presiding conciliator. However, the parties may agree that a conciliator shall be appointed or recommended by an institution or a person.

Procedure for filling a case

Each party shall submit to the conciliator a brief written statement describing the general nature of the dispute and the points at issue. A copy of the same shall be sent to the other party. The conciliator may require of each party to send a detailed statement supported by documents and other evidence, a copy whereof shall be sent to the other party also. Any factual information concerning the dispute received by the conciliator from a party, shall be disclosed to the other party to allow it an opportunity to present any explanation, except however, when a party gives any information subject to a condition that should be kept confidential.

The parties involved shall co-operate with the conciliator in good faith, comply with requests for submitting written materials, providing evidence and attending meetings. A party may submit to the conciliator suggestions for the settlement of the dispute. The Act explains about the functions of conciliator in details as to how it deals with problems and how the proceeding shall be continued.

Conciliator’s Duty

The functions of a Conciliator are discussed in detailed and someone the functions are to assist the parties in an independent and impartial manner, to reach an amicable settlement of their dispute.  The conciliator should guide by principles of objectivity, fairness and justice.  He should give consideration to rights and obligations of the parties, trade usages, circumstances surrounding the dispute and any previous business practice between the parties. Also conduct the conciliation proceedings in an appropriate manner, taking into account the circumstances of the case and wishes of the parties. He should also make proposals for a settlement of the dispute ad not to act as an arbitrator or as a representative of a party in any arbitral or judicial proceeding in respect of the same dispute, unless otherwise agreed by the parties.

If it appears to the conciliator that a settlement is possible, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. The conciliator shall then reformulate the possible settlement in the light of observations received from the parties. If the parties reach on a settlement, they may draw up and sign a written settlement agreement with the assistance of the conciliator. The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties. The settlement agreement shall be final and binding on the parties and shall have the same effect as of an arbitral award.

Ingredients of the Act

The Act also explains about the conciliation proceedings shall be terminated when, a settlement agreement is signed by the parties, It explains that a written declaration is made by the conciliators after consultation with the parties, that further efforts at conciliation are no longer justified. A written declaration is made by the conciliator, after the deposits required in relation to costs of the proceedings are not received from the parties, that the proceedings are terminated. A written declaration is made by the parties to the conciliator, that the conciliation proceedings are terminated. A written declaration is sent by a party to the other party and the conciliator, that the conciliation proceedings are terminated.

A commercial dispute covered by an arbitration agreement to which either of the Convention apply, arises before a judicial authority in India, it shall at the request of the party be referred to arbitration. The party applying for the enforcement of a foreign award shall produce the original award or a duly authenticated copy thereof, the original arbitration agreement or a certified copy thereof, and evidence to prove that the award is a foreign award and If the court is satisfied that the foreign award is enforceable, the award shall be deemed to be a decree of the court. An appeal shall lie against the order of the court refusing to refer the parties to arbitration or refusing to enforce a foreign award.

The arbitration act is about counseling the disputed parties and to reach a conclusion where all settlements can be made. The Act is a good for parties who wish to avoid delayed and intense court work and want dispute to be settled in a quickly and in a proper manner.

Full text of "Arbitration conciliation Act 1996" available here

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