Understanding Conciliation under Indian Arbitration and Conciliation Act 2015

The Arbitration and Conciliation Act 1996 as amended by the Arbitration and Conciliation (Amendment) Act, 2015 (ACA-2015), under Part III, Sections 61-81 address the issue of “Conciliation”.

Under Section 89 of CPC, a Court has the power to refer a dispute for settlement through arbitration, conciliation, judicial settlement including settlement through Lok Adalat or Mediation. In these ADR processes, Arbitration or Conciliation will be under the Arbitration Act. Mediation has been referred to differently and Section 89( 2) (d) states that for mediation, the Court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.

The Conciliation mentioned here may be referred to as “Court Referred Conciliation” as against a purely voluntary “Mediation”. The Conciliator would be appointed by the Court and the decision arrived at in the form of a settlement in these Court referred Conciliation would be considered binding  since it is only a formality for  the Court to ratify.

Part III of the ACA 2015 is the guideline for the Court appointed conciliator to follow. It may be appropriate to consider that this needs to be followed strictly as a mandate under law.

However, in the case of a private “Mediation”, which is undertaken by a Mediator whom all the disputing parties have agreed on but he is a person Chosen by the parties and not from a Court annexed Council , the process suggested in Part III is still a guideline but the mediator may have a little more freedom to use procedures that are creative and leading to an amicable settlement.

It would be less probable that the Court appointed conciliator may accept a settlement that is not fully protecting the available legal rights of either of the parties without bringing it to the notice of the party who may be ignoring the legal rights available to him.

In the case of a Mediation, the mediator may not focus much on the legal rights of the parties but on the points of difference, the interests as identified by each of the parties and strive to obtain a mutually acceptable agreement.

There is an ethical issue in mediation where by a mediator may find a situation where one of the parties is ignoring what is legally his right and is agreeable to a settlement which is to the advantage of the other party. At this point of time, the Mediator has to take a view on whether it is his duty to point out to the person that he is foregoing his right or whether it would be considered as an “Escalation” of the dispute and introducing new elements of disputes which are not present when the conflict was first brought to the Mediator.

There could be differences of opinion on this point between experts. However, the undersigned considers this as a major difference between “Mediation” and “Conciliation”. In the Case of “Conciliation”, the parties recognize that the “Conciliator” is a man of knowledge and authority and is expected to intervene and obtain a fair justice in the matter. A certain level of intervention is considered acceptable and is also expected. Here the ethics of the Conciliator is to perhaps point out to the parties what are their mutual rights and what they are pressing or not pressing.

In the Case of the Mediation however, “Intervention” by the Mediator to introduce new points of conflict is not considered ethical nor strategically correct. Such suggestions should normally come from the counsels of the parties.

CDMAC would use the terminology of “Mediation” and “Conciliation” with appropriate distinction as to the level on intervention that is appropriate to the process as explained earlier. i.o.w.

when CDMAC considers a ADR process as a “Mediation”, the Mediator is expected to work within the list of conflicts that have been identified by the parties and try not to add more conflicts to the lists. During the process of mediation, it is possible that the parties may themselves realize that more conflicts do exist and bring it before the Mediator. That is fine. But the mediator should not instigate either parties to add more conflicts to the lists as they perceive.

When CDMAC terms a process as “Conciliation”, it is considered that the “Conciliator” is a trusted person of authority by both parties to strike a negotiation which is fair and reasonable. A certain element of introduction of clarification of mutual parties is therefore considered acceptable. Still the “Conciliator” is not like an “Advocate” appointed by either of the parties who may try to find new grounds to expand the zone of conflict and complicate the matter.

Managing the fine balance between the “Neutral, non -interventionist Mediator” and an “Advocate”, and finding a middle ground is the responsibility of a skilled “Conciliator”.


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