The Conciliator's Role, and How a Conciliation Is Conducted

Section 67(3): he may conduct the proceedings in such manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request that the conciliator hear oral statements, and the need for a speedy settlement.

Section 67(4): the conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.

This is the most important sentence in Part III for distinguishing conciliation from mediation, and chapter 590 builds on it.

A mediator on the classical facilitative model does not propose terms; he helps the parties find their own. An Indian conciliator may propose terms at any stage, and the sub-section goes further: those proposals need not be in writing and need not be reasoned. He can simply say what he thinks would settle it.

Note the limit that is not stated but follows from section 67(1): a proposal is a proposal. He cannot impose it, and section 73 requires the parties to sign before anything binds.

Section 68: administrative assistance

In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Word for word the counterpart of section 6, chapter 220, and with the same condition: the conciliator may arrange it only with the parties' consent.

Section 69: how he communicates, and the caucus

Section 69(1): the conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

"Or with each of them separately" is the statutory basis of what practitioners call a caucus or private session: the conciliator sees one side alone. It is the single most useful tool in settlement practice, because a party will tell a neutral in private what it will never say across the table.

And it is exactly why section 70 exists. A process in which the neutral hears secrets from both sides needs a rule about what he may repeat.

Section 69(2): unless the parties have agreed on the place of meetings, the conciliator determines it after consultation with the parties, having regard to the circumstances of the proceedings.

Section 70: disclosure, and the proviso that qualifies it

When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate.

Proviso: when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.

Learn both halves, because the section is meaningless without either.

The rule is disclosure. The default is that factual information goes to the other side, so that it can explain. That is the fairness principle, and it is the conciliation analogue of section 24(3) in an arbitration.

The exception is express confidence. A party may hand over information subject to a specific condition that it be kept confidential, and then the conciliator shall not disclose it.

Note how narrow the exception is: the condition must be specific. Information handed over without any such condition must be disclosed, however sensitive the party thought it was. That is a trap for a party in a caucus and a good point for an answer.

Note also that the rule speaks of factual information concerning the dispute. A party's private view of its own negotiating position is not obviously factual information about the dispute, which is part of why a caucus works.

Sections 71 and 72: what the parties must do

Section 71: the parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests to submit written materials, provide evidence and attend meetings.

There is no sanction stated. A party who does not co-operate cannot be punished; the conciliation simply fails, and section 76 lets it be terminated. Compare section 22C(6) of the Legal Services Authorities Act, chapter 150, which imposes the same duty in a Permanent Lok Adalat, where the consequence is quite different because that body can go on to decide.

Section 72: each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

Read sections 67(4) and 72 together and the picture is complete: proposals may come from the conciliator and suggestions may come from the parties, in either direction, at any time. Part III is designed to keep ideas moving.

Conciliator and arbitrator, compared

The row that matters most is the caucus. An arbitrator who met one party privately would almost certainly destroy his award, because section 18 requires equal treatment and a full opportunity to present the case. A conciliator is expressly permitted to do it. That single difference explains why sections 80 and 81 have to exist, and chapter 580 takes them up.

A worked example

Two family companies are in a distribution dispute. They appoint a sole conciliator, a retired judge.

What does she do first? Under section 65(1) she may ask each side for a brief written statement of the nature of the dispute and the points at issue, each copied to the other; and under section 65(2) for a fuller statement with documents.

Must she follow the Evidence Act? No, section 66.

She meets the parties separately. Permitted by section 69(1), and it is where the real work happens.

In her private meeting, the first company's director says the company's bank has threatened to recall a loan, so it badly needs an early settlement. Is that disclosable? It is factual information concerning the dispute in the broad sense, so section 70 would require her to disclose the substance unless it was given subject to a specific condition that it be kept confidential. This is precisely the moment at which an experienced representative says the words "in confidence", and one who does not may find the information passed on.

She thinks the case will settle at 40 lakhs and says so. Permitted by section 67(4): she may make proposals at any stage, and they need not be in writing or reasoned.

One company then stops attending meetings. Section 71 requires good faith co-operation, but there is no sanction. If the conciliation cannot go on, it is terminated under section 76, chapter 580.

The other company has its own idea for settling. Section 72 lets it put suggestions to the conciliator on its own initiative.

What beginners get wrong

A conciliator may meet one party alone. Section 69(1). An arbitrator may not.

Section 70's duty of disclosure is the rule, and confidentiality the exception, and the exception needs a specific condition.

A conciliator may propose terms. Section 67(4), orally and without reasons. This is the main statutory difference from a facilitative mediator.

Section 71's duty of co-operation has no sanction. Non-co-operation ends the conciliation; it does not produce a decision against the party.

Nothing in this chapter binds anybody. Only a signed settlement agreement does, under section 73.

Quick revision

• 65: the conciliator may request a brief statement, then a fuller one with documents, then further information; each copied to the other party. The Explanation makes "conciliator" cover one, two or three.
• 66: not bound by the Code of Civil Procedure or the Evidence Act.
• 67(1): assist the parties, independently and impartially. (2): guided by objectivity, fairness and justice, considering the parties' rights and obligations, trade usages and previous business practices. (3): conduct proceedings as he considers appropriate, taking account of the parties' wishes including a request for oral statements, and the need for speed. (4): may make proposals for a settlement at any stage; not necessarily in writing; no reasons required.
• 68: administrative assistance by the parties, or by the conciliator with the parties' consent.
• 69: may meet or communicate with the parties together or separately; the place is fixed by the conciliator after consultation, failing agreement.
• 70: shall disclose the substance of factual information received from a party, unless it was given subject to a specific condition of confidentiality.
• 71: the parties shall in good faith co-operate. 72: either party may put suggestions for settlement.

Test yourself

1. May a conciliator meet one party without the other present? Yes. Section 69(1) expressly permits him to meet or communicate with the parties together or with each of them separately. An arbitrator could not, because section 18 requires equal treatment and a full opportunity to present the case.

2. State the rule and the exception in section 70. The rule is that when the conciliator receives factual information concerning the dispute from a party he shall disclose the substance to the other party, so that it may present any explanation it considers appropriate. The exception, in the proviso, is that where a party gives information subject to a specific condition that it be kept confidential, the conciliator shall not disclose it.

3. Can a conciliator suggest what the settlement should be? Yes. Section 67(4) permits him to make proposals for a settlement of the dispute at any stage, and provides that such proposals need not be in writing and need not be accompanied by a statement of reasons.

4. What is a conciliator guided by in deciding what to propose? Section 67(2): principles of objectivity, fairness and justice, giving consideration among other things to the rights and obligations of the parties, the usages of the trade concerned, and the circumstances surrounding the dispute including any previous business practices between the parties.

5. What happens if a party refuses to co-operate? Section 71 imposes a duty to co-operate in good faith but provides no sanction. In practice the conciliation fails and is terminated under section 76, since a conciliator cannot decide anything against a party.