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ADR mechanisms involve alternative dispute resolutions by way of Negotiation, Arbitration, Conciliation, Mediation, Lok Adalats, etc. Conciliation is an out-of-court settlement through which parties seek the help of a third party to resolve their conflicts. The conciliator merely facilitates the process to ease their difficulties and differences and get to an amicable settlement.

Under the Arbitration and Conciliation Act, 1996, the term ‘Conciliation’ is not defined. Conciliation is not binding on the parties and merely helps them in reaching a suggestive conclusion. The conciliator instigates the parties to settle by maintaining the relationships. But many times, the conciliation proceedings are unsuccessful due to the nature of proceedings.


Under the act, Part III confers to Conciliation. Sec. 61 to 81 lay down the conciliation provisions and proceedings.

Commencement: The proceedings initiate by written invitation from one party to another when a dispute persists. However, the proceedings commence only when the party accepts the invitation to conciliate by writing to the other party. 30days time is given before which the party can accept the invitation or else it stands rejected.

Conciliator: Sec 64 deals with the appointment of a conciliator. There shall be one conciliator unless the parties agree mutually to have two or three conciliators. The conciliator eases the conversation between the parties by guiding them to an amicable settlement. Each party is requested to submit suggestions to settle the dispute.

If the conclusions or suggestions are acceptable to both parties, then the conciliation is successful, or else it fails. Finally, the Conciliator will write and sign a written agreement with the same legal force as an arbitral award issued by an arbitral tribunal according to section 30 of the AC Act. These procedures, including the settlement agreement, are kept private until disclosure is required for implementation and enforcement, such as under Section 42A of the AC Act.

After communication with each other, the parties or the conciliator might end the proceedings. A person designated as a conciliator cannot function as an arbitrator or counsel for a party in arbitral or judicial proceedings. The parties cannot call them a witness in any arbitral or judicial proceedings about the disputes.


As per Sec.77, the Conciliation process is merely a pre-condition, and parties are still at liberty to exercise their rights according to law. In Saraswati Construction Co. v. Cooperative Group Housing Society[1], the court stated that conciliation proceedings do not bar parties from being referred to arbitration. Contractually, there is no time fixed for the conciliation proceeding in Ravindra Kumar Verma v. M/S. BPTP Ltd[2], the court fixed three months to conclude the conciliation proceedings and move on with arbitration proceedings after completing the said reasonable period.


The conciliation mechanism is a well-opted one for many issues. Often it does not receive the desired results as expected from the act. It is seen as a pre-condition before arbitration proceeding that has to be fulfilled. A conciliation proceeding can prove fruitful if parties effort to conciliate the issue by compromising and negotiating. There must be more institutionalised conciliation committees and departments with independent conciliators who speed up the cases. Conciliation should not be just another formality for parties to approach courts. Its objective has to be achieved and for these new provisions strengthening the process of conciliation has to be also introduced with setting up more like committees.

The proceedings also must be quick, and a period must be added to the act within which the conciliator shall send a report to the parties. A maximum of one month to two months should only be allowed for conciliation proceedings. Otherwise, the duration can be endless, which will be a wastage of time for the parties and the conciliator. Hence, adequate legal backing and openness from the parties’ side to conciliate can improve the procedure of conciliation.

[1] 1994 RLR 458.

[2] (2015) 147 DRJ 175.



This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.


BY : Devika Jayaraj

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