Conciliation

The main features of conciliation are the willingness of both parties to sit down and resolve their differences. The parties to the dispute present their case to a neutral "Judge", i.e. the conciliator who assists in settlement which is normally acceptable to the disputing parties as it is coming from a neutral source. The conciliator is not an arbitrator and is not bound by law in order to do what he thinks just and reasonable. This is an accepted method of resolving differences and disputes across the developed world.

The Act of 1996 provides details of how conciliation would be carried out and what kind of assistance can be provided for any conciliation proceedings.

By virtue of the conciliation process, the parties may, with the help of the conciliator arrive at a settlement which will be in written form. The legal effect of such a settlement agreement which shall be signed by both parties will be final and binding upon them. This agreement will be authenticated by the conciliator and will have the same status and effect as if it were an arbitral award rendered by the arbitral tribunal on agreed terms. This, of course, can always be enforced as a decree of the court.

At the time of proceedings, the conciliator has to maintain objectivity, fairness and justice, and be guided by the wishes of the parties, keeping in mind the circumstances of the case and the need for speedy settlement.

During the pendency of conciliation proceedings, a party is barred from initiating any other proceedings, except those that may be necessary for the preservation of his rights. In the circumstances that no settlement is arrived at during the conciliation proceedings, the conciliator cannot act as an arbitrator nor be a witness. The conciliator is neither bound by the Code of Civil Procedure, 1908, nor the Indian Evidence Act, 1872.

The parties may agree for appointment of two or three conciliators, who should act jointly. In case of one conciliator, there should be an agreement on his name; in case of two, each party should appoint one each; and in case of three, the third conciliator will be the person agreed upon either by both the parties or both the conciliators, and will act as a Presiding Conciliator. The parties may enlist the assistance of suitable institutions or persons to recommend the names of suitable individuals or to appoint one or more persons as conciliators to which the parties should agree. The institution or the person should take into account the advisability of appointing as the sole conciliator a person of a nationality other than the nationality of the parties.

The Act of 1996 definitely instilled a lot of conlidence in the foreign investors as they are familiar with the UNCITRAL Model which is the basis for on which this Act is based. The Indian law now provides for an equally quick, speedy and cost-effective remedy as any other law in the world.