Mediation and Conciliation

In one line

Both are assisted settlement, and the difference is that the conciliator may put a proposal on the table.

In the wording a student can write in an exam: MEDIATION is a process in which a neutral third person assists the parties to reach their own settlement, and the mediator does not decide and does not impose or propose the terms. CONCILIATION is a process in which a neutral third person assists them and MAY FORMULATE AND REFORMULATE the terms of a possible settlement, so he proposes though he does not decide. Conciliation is governed by Part III of the Arbitration and Conciliation Act 1996, sections 61 to 81, whose section 74 gives the settlement agreement the STATUS AND EFFECT OF AN ARBITRAL AWARD ON AGREED TERMS. Mediation had no statute of its own until the MEDIATION ACT 2023, which provides for PRE-LITIGATION mediation in section 5, an indicative list of matters NOT FIT for mediation in section 6 and the First Schedule, a time limit of ONE HUNDRED AND TWENTY DAYS in section 18, the enforcement of a mediated settlement agreement as a JUDGMENT OR DECREE in section 27, and a challenge on FOUR GROUNDS ONLY in section 28.

The distinction

Mediation. The mediator facilitates. He helps the parties identify the issues, understand each other's position, clarify priorities and explore options, and he communicates each party's view to the other so far as they permit. Section 16 of the Act of 2023 says exactly that, and requires the mediator to inform the parties EXPRESSLY that he only facilitates in arriving at a decision and will not impose any settlement.

Conciliation. The conciliator assists in an independent and impartial manner, guided by objectivity, fairness and justice, having regard to the rights and obligations of the parties, the usages of the trade and the circumstances, and MAY MAKE PROPOSALS for a settlement at any stage, under section 67 of the Act of 1996; and under section 73, when it appears to him that elements of a settlement exist, he SHALL FORMULATE the terms, submit them for observations and may REFORMULATE them.

Why the difference mattered in Indian law. Because of enforceability. Section 74 of the Act of 1996 gave a conciliated settlement the status of an arbitral award, so it was enforceable as a decree; a mediated settlement was a contract and had to be sued upon, unless the mediation was court-annexed under section 89 and the settlement was recorded in the suit. The Mediation Act 2023 removes the difference by section 27.

And the confusion in the statute book. Section 89 of the Code of Civil Procedure lists both, and Afcons had to interchange its definitions of judicial settlement and mediation. The vocabulary in this area is genuinely inconsistent, and saying so is worth a sentence.