Conciliation: meaning, kinds and the role of the conciliator

Alternative Dispute Resolution Systems · Unit III · Topic 11 of 18 · 5 min read

What conciliation is and how it differs from mediation and arbitration, its kinds (facilitative, evaluative, court-annexed, voluntary and compulsory), and the qualities, duties and role of a conciliator under sections 67 to 81 of the Arbitration and Conciliation Act, 1996.

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On this page

1. Meaning
2. Conciliation compared
3. Kinds of conciliation
4. Qualities of a conciliator
5. Role of the conciliator: section 67
6. Duties of the conciliator
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

A conciliator may propose; he may not impose. That distinguishes him from an arbitrator, who decides, and (in the Indian statutory scheme) from a mediator, who only facilitates. Section 67(4) of the 1996 Act lets the conciliator make proposals for settlement at any stage. The settlement is still the parties' own: it binds only when they sign it.

1. Meaning

Conciliation is a voluntary, confidential process in which a neutral third person, the conciliator, assists the parties to reach an amicable settlement of their dispute, and may for that purpose suggest terms of settlement. The 1996 Act does not define it, but Part III (sections 61 to 81), modelled on the UNCITRAL Conciliation Rules, 1980, describes it. Part III applies to conciliation of disputes arising out of a legal relationship, contractual or not (section 61(1)), except where a law bars conciliation of certain disputes (section 61(2)).

2. Conciliation compared

With arbitration: arbitration ends in a binding decision by the tribunal; conciliation ends either in a settlement signed by the parties or in nothing. No prior agreement is needed for conciliation; an invitation accepted in writing is enough (section 62).
With negotiation: negotiation has no third party.
With mediation: both are facilitated settlement. In Indian practice the conciliator is more active, evaluates and proposes terms (section 67(4), section 73(1)), whereas the mediator in court-annexed mediation and under the Mediation Act, 2023 facilitates and is told not to impose a settlement (section 16 of that Act, not yet in force). The Mediation Act defines “mediation” to include conciliation (section 3(h)), but its Sixth Schedule, which would replace Part III of the 1996 Act, is not yet in force.

3. Kinds of conciliation

Facilitative conciliation: the conciliator manages communication, helps the parties identify issues and interests, and leaves the generation of options to them. He offers no opinion on the merits.
Evaluative conciliation: the conciliator assesses the strengths and weaknesses of each side, predicts the likely outcome in court or arbitration, and proposes terms. This is the model section 67(4) and section 73(1) contemplate.
Court-annexed conciliation: conducted on reference by a court, under section 89 CPC (on consent, after Afcons), the Family Courts Act, 1984 or the Hindu Marriage Act, 1955, usually at a centre attached to the court.
Voluntary conciliation: the parties choose to conciliate, by agreement or by accepting an invitation under section 62. Either may withdraw at any time (section 76(d)).
Compulsory (statutory) conciliation: the law requires conciliation to be attempted before adjudication, as under the Industrial Relations Code, 2020 (formerly the Industrial Disputes Act, 1947), section 23(2) of the Hindu Marriage Act and section 9 of the Family Courts Act. The process is compulsory; a settlement is never compulsory.

4. Qualities of a conciliator

Independence and impartiality (section 67(1); section 64(2) proviso requires the appointing institution to aim for an independent and impartial conciliator).
Objectivity, fairness and justice (section 67(2)).
Knowledge of the subject matter and of the trade usages and business practices involved, since he must consider them (section 67(2)).
Communication and listening skills, patience, tact and empathy.
Creativity in formulating terms acceptable to both.
Discretion, because he receives confidential information (sections 70 and 75).
Credibility with both parties, so that his proposals are taken seriously.

5. Role of the conciliator: section 67

Section 67(1): assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement.
Section 67(2): be guided by principles of objectivity, fairness and justice, considering the rights and obligations of the parties, the usages of the trade and the circumstances, including previous business practices between the parties.
Section 67(3): conduct the proceedings as he considers appropriate, taking into account the circumstances, the wishes of the parties (including a request to hear oral statements) and the need for speedy settlement.
Section 67(4): make proposals for settlement at any stage; these need not be in writing or reasoned.

6. Duties of the conciliator

To disclose to the other party the substance of factual information received from one, so it may explain; but not information given on condition of confidentiality (section 70).
To formulate the terms of a possible settlement when elements of settlement appear, submit them for observations and reformulate them (section 73(1)).
To draw up or assist in drawing up the settlement agreement if requested, and to authenticate it and give each party a copy (section 73(2) and (4)).
To keep confidential all matters relating to the proceedings, including the settlement except where disclosure is needed for its enforcement (section 75).
To fix the costs on termination and give written notice (section 78), and to account for deposits (section 79(4)).
Not to act as arbitrator, representative or counsel of a party in arbitral or judicial proceedings on the same dispute, and not to be a witness, unless the parties agree otherwise (section 80).

The parties in turn must co-operate in good faith (section 71) and may suggest terms (section 72). Nothing said in conciliation (views, admissions, the conciliator's proposals, willingness to accept a proposal) may be relied on as evidence in later arbitral or judicial proceedings (section 81). An award made in violation of section 75 or 81 is against the public policy of India (Explanation 1 to section 34(2)(b)).

Trap. The conciliator's proposal is not a decision. If the parties do not accept and sign, there is no settlement, however reasonable the proposal. A conciliator who “decides” the dispute has acted outside Part III, as the next note shows from Haresh Dayaram Thakur.

How this is examined

“Discuss in detail the different kinds of conciliation” (November 2021, June 2019) and “Explain the role of a conciliator in conciliation proceedings” (December 2019) are the two favourites. For kinds, use the five heads in part 3 with a statutory example for each. For role, quote section 67(1) to (4) and then the duties in sections 70, 73, 75 and 80. Qualities can be added in either answer.

Now try the real questions: Alternative Dispute Resolution Systems past question papers.