ALTERNATIVE DISPUTE RESOLUTION METHODS
by Vinod K. Agarwal
Reference: Document No.14, Chapter 1, March 2001)
Conciliation is the process by which one or more independent person(s)
selected by the parties to an agreement generally by mutual consent,
either at the time of making the agreement or subsequently when a dispute
has arisen between them, to bring about a settlement of their dispute
through consensus between the parties by employing various persuasive
and other similar techniques. It is a process of confidence and faith.
Sometimes, and in some systems it is also called mediation. There may
be technical or legal differences between the two expressions, namely,
conciliation and mediation, but for the present purpose the expression
"conciliation' is used to refer to both the processes, namely,
the conciliation and mediation. Conciliation is an effective means of
alternative dispute resolution and can be usefully deployed for both
international as well as domestic disputes, except that in the conciliation
of an international dispute certain facts assume greater importance
than they would in a domestic conciliation.
United Nations Commission on International
Trade Law (UNCITRAL) has prepared and circulated "Conciliation
Rules'. These Conciliation Rules were adopted by the UNCITAL at its
thirteenth session after consideration of the observations of Governments
and interested organizations. The General Assembly of the United Nations
has also adopted them through a Resolution 35/52 on 4 December, 1980.
The U.N. has recommended, "the use of the Conciliation Rules of
the United Nations Commission on International Trade Law in cases where
a dispute arises in the context of international commercial relations
and the parties seek an amicable settlement of that dispute by recourse
to conciliation". The UNCITRAL Conciliation Rules contain 20 Articles.
The countries who have adopted the Model
Law on International Commercial Arbitration of UNCITRAL have also adopted
the Rules of Conciliation of the UNCITRAL or other international institutions
and have enacted a composite law called Arbitration and Conciliation
Act. Such statutes provide for the resolution of disputes through either
of these methods, that is, arbitration or conciliation.
Many other international organisations
and institutions have issued conciliation rules for the resolution of
disputes between the parties. The International Chamber of Commerce
has promulgated, "ICC Rules of Optional Conciliation". The
Preamble to these Rules says that, "Settlement is a desirable solution
for business disputes of an international character. The International
Chamber of Commerce therefore sets out these Rules of Optional Conciliation
in order to facilitate the amicable settlement of such disputes".
The conciliation process can be commenced
by either party to the dispute. When one party invites the other party
for resolution of their dispute through conciliation, the conciliation
proceedings are said to have been initiated. When the other party accepts
the invitation, the conciliation proceedings commence. If the other
party rejects the invitation, there are no conciliation proceedings
for the resolution of that dispute. Generally, only one conciliator
is appointed to resolve the dispute between the parties. The sole conciliator
is appointed by the parties by mutual consent. If the parties fail to
arrive at a mutual agreement, they can enlist the support of any international
or national institution for the appointment of a conciliator. There
is no bar to the appointment of two or more conciliators. In conciliation
proceedings with three conciliators, each party appoints one conciliator.
The third conciliator is appointed by the parties by mutual consent.
Unlike arbitration where the third arbitrator is called the Presiding
Arbitrator, the third conciliator is not terms as Presiding conciliator.
He is just the third conciliator. The conciliator is supposed to be
impartial and conduct the conciliation proceedings in an impartial manner.
He is guided by the principles of objectivity, fairness and justice,
and by the usage of the trade concerned and the circumstances surrounding
the dispute, including any previous business practices between the parties.
The conciliator is not bound by the rules of procedure and evidence.
The conciliator does not give any award or order. He tries to bring
an acceptable agreement as to the dispute between the parties by mutual
consent. The agreement so arrived at is signed by the parties and authenticated
by the conciliator. In some legal systems, the agreement so arrived
at between the parties resolving their dispute has been given the status
of an arbitral award. If no consensus could be arrived at between the
parties and the conciliation proceedings fail, the parties can resort
A conciliator is not expected to act, after
the conciliation proceedings are over, as an arbitrator unless the parties
expressly agree that the conciliator can act as arbitrator. Similarly,
the conciliation proceedings are confidential in nature. Rules of Conciliation
of most of the international institutions provide that the parties shall
not rely on or introduce as evidence in arbitral or judicial proceedings,
(a) the views expressed or suggestions made for a possible settlement
during the conciliation proceedings; (b) admissions made by any party
during the course of the conciliation proceedings; (c) proposals made
conciliator for the consideration of the parties; (d) the fact that
any party had indicated its willingness to accept a proposal for settlement
made by the conciliator; and that the conciliator shall not be produced
or presented as a witness in any such arbitral or judicial proceedings.
"Where, in the event of a dispute arising out of or relating
to this contract, the parties wish to seek an amicable settlement of
that dispute by conciliation, the conciliation shall take place in accordance
with the UNCITRAL Conciliation Rules as at present in force."
"If any dispute arises between the parties out of or relating
to this contract, or in respect of any defined legal relationship associated
therewith, the parties agree to refer the same to sole conciliator for
amicable settlement. The conciliator shall be appointed by the parties
by mutual consent. If the parties shall fail to arrive at an agreement,
the conciliator shall be appointed by_________(give the name of any
person or institution)
The conciliation shall be conducted in
accordance with the Rules of
Conciliation of __________(give the name of any institution).
(The parties can mention specific technical
or other qualifications and experience, if any, of the conciliator)
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