The Current Status Of Conciliation In India & Required Reforms

The Current Status Of Conciliation In India & Required Reforms

Introduction

This article titled “The Current Status Of Conciliation In India & Required Reforms” is written by Akshit Mishra, a 4th Year  BA LLB (Hons) Student, at The Institute of Law, Nirma University, Ahmedabad.

Out of the dispute resolution triplets that consist of Arbitration, Mediation & Conciliation, one is particularly confused and actively neglected. Conciliation has long been considered a formal step before arbitration proceedings. The recent popularity of Arbitration has dwarfed the growth of Mediation and Conciliation.

There has been a massive surge in parties actively moving away from litigation to arbitration. In fact, ICC suggested that it has gotten the highest number of Arbitration cases since 2016 in the year of the pandemic. The same goes for Singapore International Arbitration Centre, which grabbed over 1000 cases in 2020.

Arbitration has been popular in both domestic and international commercial arbitration matters. Similar trends have been witnessed in India, although institutional arbitration still remains to be a challenge yet India is doing well in the Ad-Hoc arena. The government has been taking active steps in improving the institutional aspect of arbitration in India.

These are good trends, yet an increment in the rate of parties opting for conciliation would further help the Indian Dispute resolution regime to enhance and expand its contours.

also read- Arbitration and Conciliation (Amendment) Bill, 2021: A Smart Move or Utopian Thought?

Conciliation; Meaning, Features & History

Conciliation is a process in which parties along with a conciliator attempt to arrive at an agreement as and when a dispute arises. The proceedings are confidential in nature and are completely voluntary. The conclusion reached in private dispute resolution processes of conciliation is a negotiated settlement. Its key characteristics are-

1.) Non-Adversary in Nature – there are no oppositions. Parties arrive at the table not to argue or win a claim against the other party but attempt to arrive at a compromised conclusion.

2.) Voluntary Proceedings – party autonomy is upheld by virtue of there being no mandate on parties and the initiation is completely on the willingness to conciliate.

3.)  Flexible Process – There are no strict, rigid procedures to follow when going into conciliation. Provides more space for negotiations and striking an understanding between the parties.

4.) Recommendatory Decisions – the suggestive settlement is a mere recommendation. The conciliator can only suggest how and what to do that can resolve the dispute between said parties. Unlike arbitration and litigation, there is no binding finality to awards. This can be seen under Section 72 of the Act

5.) Time & Limitation – There exists no time limitation on the process of conciliation. In the case of Ravindra Kumar Verma v. M/S BPTP Ltd[i]. it was observed by the Delhi High Court that arbitration can be referred to if the conciliation does not arrive at a conclusion in a reasonable amount of time.

The UNCITRAL Rules on Conciliation, 1980 paved the way for an international conciliation regime. It provided for a comprehensive understanding of procedures for Conciliation matters. This became the parameter that helped in the creation of newer conciliation-based legislations.

Since the Arbitration & Conciliation Act 1996 was based on the UNCITRAL Model Law there was the incorporation of Arbitration and Conciliation proceedings in the domestic legislation as well. Part-III of the Arbitration & Conciliation Act 1996 provides a comprehensive set of provisions with regards to conciliation.

A conciliator facilitates the process of conciliation and presides over the proceedings. Section-67 also talks about the role of conciliators. The main highlights of the provision are that the conciliator has the autonomy of conducting the proceedings in a manner that they deem to be fit. Conciliators have been empowered to share proposals for settlement of dispute anytime during the proceedings.

must read- Emergency Arbitration and Issues Related Thereto

Status of Conciliation in India

Conciliation in India has been successfully integrated into three specific laws, the Industrial Disputes Act 1947, Family Courts Act 1984, and the Code of Civil Procedure 1908. The Industrial Disputes Act has done exemplary work in institutionalizing conciliation. The law establishes a board of conciliation to oversee conciliation proceedings between stakeholders.

There has been the appointment of conciliation officers too. The Industrial dispute act has rooted conciliation as an integral part of dispute management in labour-related matters. Even though the effective application has been marred by complex structures of trade unions and bureaucracy, the institutionalization in this specific field can be used as a model for bringing institutional conciliation to India.

The Family Courts Act also adopted conciliation as a prime method of dispute resolution. There are provisions for conciliation in the process of appointing judges yet the law does not have a comprehensive structure like the Industrial Disputes Act.

do visit: THE CASE FOR INSTITUTIONAL ARBITRATION IN INDIA

Possible Reforms & Improvements

The conciliation regime in India is lackluster, to say the least. Apart from a select few, no other law has particularly infused conciliation as a preferred method of dispute resolution. But there are a few reasons behind these shortcomings, here are a few of them-

1.) Conciliators lack recognition as professionals – In India there exists no Chartered Institute of Conciliation. There exist such institutions for Arbitration and mediation too. Yet, given that there is no professional training for conciliation, the profession by itself is not given accreditation as a class of professionals. None of the legislation that talks about Conciliation mentions the same in the context of institutionalization.

2.) Lack of Institutionalization of Conciliation – There is no dedicated institution for conciliation either this means that at all points in time the idea of conciliation exists as a fringe in the dispute resolution regime of India. Such gaps in the legislative and policy aspects leave the process minimized.

3.) No sense of finality- Given the fact that the proposals given by conciliators under the Arbitration & Conciliation Act hold no finality, they are mere suggestive agreements that the parties can arrive too. This means that at no point in time the parties consider conciliation as the final step towards reaching an amicable conclusion.

In the case of Saraswati Co. vs Cooperative Group Housing Society[ii], it was held that even if conciliation is the prior requirement for going into arbitration, not going for the same would not bar the parties from exercising their right to proceed with arbitration.

read- Positive and Negative Attributes of Alternative Dispute Resolution

Conclusion

Internationally Conciliation has been recognized and it has even shown a lot of promise. It has the ability to prevent excess wastage of time in the resolution of disputes and can persuade parties into arriving at a solution that is less contentious and more mutually agreed upon. The institutionalization of conciliation in India can do wonders for those that will eventually benefit from it.

Dispute resolution is not about having a more technical and formal process but rather about how to resolve the conflict efficiently. It does not matter which of the three help in reaching that solution, Arbitration, Mediation, or Conciliation.

INDIA’s arbitration friendliness in light of the enforcement regime

 

[i] Ravindra Kumar Verma v. M/S BPTP Ltd. Del 6602 (2015).

[ii] Saraswati Co v. Cooperative Group Housing Society. 1995(57) DLT 343.

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