Introduction
In an era of increasing litigation backlog, Alternative Dispute Resolution (ADR) mechanisms such as conciliation play a crucial role in providing speedy, cost-effective, and amicable settlement of disputes. Under Part III of the Arbitration and Conciliation Act, 1996, conciliation is emphasized as a flexible and voluntary process that allows parties to settle disputes with the help of a neutral third party — the conciliator.
This article elaborates on the powers and functions of the conciliator, highlighting its legal framework, judicial interpretations, and relevance in the Indian dispute resolution system.
Legal Framework: Arbitration and Conciliation Act, 1996
Part III (Sections 61 to 81) of the Act governs conciliation in India. While arbitration ends with a binding decision (award), conciliation leads to a mutual settlement agreement that is enforceable like a court decree under Section 74.
Functions of the Conciliator
1. Facilitating Communication Between Parties (Section 67)
The primary function of the conciliator is to bridge communication gaps and ensure a cooperative environment. The conciliator helps both parties understand each other’s points of view and strives to remove misunderstandings.
2. Proposing Solutions for Settlement
Unlike a judge or arbitrator, a conciliator can suggest or propose solutions for resolving the dispute. These suggestions are not binding unless the parties agree.
3. Holding Joint and Separate Meetings
The conciliator can meet both parties jointly or hold separate meetings (caucuses) to better understand the root of the conflict and facilitate honest discussion.
4. Encouraging Amicable Settlement (Section 67[1])
The conciliator actively promotes voluntary and fair settlements. Their role is advisory, not adjudicatory. The goal is to help parties find middle ground without imposing a decision.
5. Formulating Settlement Proposals (Section 67[4])
If the conciliator believes a settlement is possible, they can prepare a draft settlement agreement for both parties to consider, revise, and approve.
Powers of the Conciliator
1. Access to Information (Section 70)
The conciliator has the power to request relevant documents, evidence, or facts from either party. This helps them understand the dispute clearly and propose appropriate solutions.
2. Maintaining Confidentiality (Section 75)
Any information shared by one party with the conciliator must be kept confidential, unless explicitly authorized. This builds trust between parties and encourages open dialogue.
3. Decision on Procedural Matters
While conciliation is informal, the conciliator has discretion to decide the time, place, and language of the proceedings, with parties’ agreement.
4. Non-Admissibility in Court
Under Section 75 and 81, any views expressed or suggestions made during conciliation are not admissible in any court. This safeguards the sanctity of the conciliation process.
5. Drafting and Finalizing Settlement Agreement (Section 73)
If parties reach a consensus, the conciliator helps document the agreement, ensuring that all legal elements are covered. Once signed, the settlement has the same legal effect as an arbitral award under Section 74.
Judicial Interpretations
Haresh Dayaram Thakur v. State of Maharashtra (2000)
The Supreme Court held that the role of a conciliator is fundamentally different from an arbitrator. The conciliator does not decide a dispute but facilitates settlement.
Bipromasz Bipron Trading SA v. Bharat Electronics Ltd (2012)
This case highlighted that conciliation cannot proceed without mutual consent, reinforcing the voluntary nature of the process.
Advantages of Conciliator’s Powers
- Promotes amicable resolution without confrontation
- Maintains confidentiality, encouraging honest dialogue
- Flexible and less technical than arbitration or court litigation
- Saves time and cost
- Ensures party autonomy in decision-making
Limitations on Powers of Conciliator
- Cannot impose a decision
- Lacks power to summon witnesses or compel evidence
- Relies entirely on parties’ willingness to cooperate
- Cannot be used if legal rights require strict adjudication
Summary Table: Memory Code to Remember Functions & Powers
| Mnemonic Code | Concept | Section |
|---|---|---|
| C-COMM | Communicate effectively | 67(1) |
| S-SUGG | Suggest solutions | 67(4) |
| J-MEET | Joint/Separate meetings | 67(3) |
| D-DRAFT | Draft agreement | 73 |
| I-INFORM | Ask for info/documents | 70 |
| C-CONF | Maintain confidentiality | 75 |
| P-PROC | Decide procedure | Not Specified |
| N-NOTADMIT | Not admissible in court | 81 |
| L-LEGAL | Legal effect like arbitral award | 74 |
Memory Code: “C-S-J-D-I-C-P-N-L”
(Communicate, Suggest, Joint Meeting, Draft, Inform, Confidential, Procedure, Not admissible, Legal enforceability)