Conciliation: Part-I

Background of Law of Conciliation in India

The UNCITRAL Model Law on International Commercial Conciliation defines “conciliation” means a process, whether referred to by the expression conciliation, mediation, or an expression of similar import, whereby parties request a third person or persons “the conciliator” to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship. The conciliator does not have the authority to impose upon the parties a solution to the dispute.

The UNCITRAL Perspective

Conciliation, unlike Litigation and Arbitration, is a unique form of dispute resolution. This procedure has no systematic procedure for dispute resolution. It is more voluntary and less binding. Conciliation as understood is that its use depends on the agreement of the parties, where either of them may withdraw from the proceedings at any point time such withdrawal is a part of the process and can be exercised even if the parties have an agreement to conciliate or have a conciliation clause in the contract.

There is no stage in a conciliation proceeding where there is any binding commitment on the part of the parties to the dispute; compliance with the settlement reached at the end of the proceedings is also purely voluntary. Therefore, it is not binding on the parties and the implementation of it purely depends upon the good faith of the parties.

The conciliator plays an important role in this process. The conciliator has a greater or a pro-active role in making proposals for a settlement or formulating and reformulating the terms of a settlement. A mediator is a mere facilitator. The meaning of these words in India is the same in the UNCITRAL and Conciliation Rules and in UK and Japan. But, in the USA and in regard to certain institutions abroad, the meaning is just the reverse, a ‘conciliator is a mere ‘facilitator’ whereas a ‘mediator’ has a greater pro-active role. The goal of the conciliator is to encourage the parties to settle on their own. The conciliator can help each party to appreciate better the difficulties perceived by his opposite number so that they both corporate towards a mutually accepted resolution of their dispute.

The procedure as discussed under these rules is that the conciliator may first, bring the parties together despite this not being necessary always.  At times, the parties themselves come together or do so through their representatives. Once the parties have come together, the conciliator would set the agenda and lay the ground rules for the procedure. A vital role of the conciliator is to collect and communicate information between the parties while respecting confidentiality. This relay of information between the parties will help them gain a better understanding of the other side’s position in the dispute. This helps the parties explore options and various possibilities in the given circumstances to mutually settle their differences. The exploring of what is acceptable to both parties in their own accord, with the assistance of the mediator makes conciliation different from other modes of dispute resolution. It is necessary for the parties to this process to remember that there are no winners and losers. In order for a settlement to happen, both parties will believe they are winners in this process.

Another characteristic that distinguishes conciliation from its counterparts is the aspect of withdrawing from the process at any period of time. In simple words, any step in this process is not binding on the parties.

Conciliation is a fast and less expensive method of dispute resolution than Arbitration. While arbitration is itself a faster and less expensive method of dispute resolution as compared to Litigation, Conciliation as a process requires less capital to be invested in the process. Usually, there is only one conciliator as compared to arbitration where there are three arbitrators. Three arbitrators are generally used to avoid partiality and allow for parties to choose one arbitrator each. In conciliation, it is more desirable for only conciliators as it allows for easy flow of the process with the exchange of information. It further allows for the conciliator to better understand the dispute and the positions of the parties. Not only does this reduce costs but also is more conducive to promoting consensus and compromise among the parties.

The costs are also significantly less as compared to the other two processes due to procedural relaxations. Conciliation does not require a strict procedure to be followed, in fact, this mode of dispute resolution allows for the parties and the conciliator to follow a method that is best suited to them and to expedite the procedure in the most efficient manner possible. This procedure is beneficial for disputes where neither arbitration nor litigation can aid and assist in resolving the dispute.

References

  • Law Commission of India, Concepts of Conciliation and Mediation and their differences
  • Report of the Secretary General: Conciliation of International Trade Disputes; commentary on the revised draft of UNCITRAL conciliation rules
  • Bryson, Neutral Ground: mediation and the legal profession in Victoria (1984)
  • NALSAR University, Law of Arbitration and Conciliation in India

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