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Meaning of Conciliation: Conciliation is one of the methods of Alternative Dispute Resolution (ADR) which is employed to settle disputes, while simultaneously maintaining cordial relations between parties. Conciliation aims to exhaustively explore possibilities of a settlement, favourable to both the parties, unlike arbitration and litigation where the award/ decree favours only one side.
Who is a Conciliator: Parties appoint a neutral third person called a ‘Conciliator’ to assist in arriving at a solution to their conflict. The conciliator doesn’t render the decision but instead advises the parties in reaching the most appropriate solution.
Advantages: One of the key advantages of conciliation is ‘confidentiality of information’. Should the parties decide to take the dispute to the Court after rounds of conciliation, they are still under no obligation to share the details exchanged in the conciliation proceedings. Moreover, conciliation is considerably cheaper than arbitration and litigation. Additionally, parties across the world opt for conciliation as it is informal and not burdened with tedious procedures.
Is it mandatory to abide by the decision arrived at in the conciliation proceedings: A party may choose not to abide by the decision arrived at in the conciliation proceedings, if it finds it to be unfavorable to it. This is in contrast to arbitration, where the award is binding on the parties and therefore would have to appeal against the award in Court, should they find it unfavorable. [Section 34, Arbitration and Conciliation Act, 1996]. However, once the parties consent to a decision arrived at via conciliation, they are estopped from refusing to adhere to it on any grounds.
Can you withdraw from Conciliation Proceedings: Parties are free to withdraw from conciliation proceedings at any stage regardless of their legal position.
Laws relating to Conciliation: Section 89 of the Civil Procedural Code, 1908 and Part III of the Arbitration and Conciliation Act, 1996 are the primary provisions of law on conciliation, which have been modelled based on the UNCITRAL Conciliation Rules, 1980.
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