Conciliation Proceedings in India (Sections 62 to 81)

1. Commencement of Conciliation Proceedings [Section 62]

Conciliation begins with a written proposal from one party and
acceptance by the other. If the other party does not respond within 30
days or a speci ed time, it is treated as a rejection.
2. Number of Conciliators [Section 63]
Typically, there is one conciliator, but up to three are allowed. If multiple
conciliators are appointed, they should act jointly.
3. Appointment of Conciliators [Section 64]
Conciliators can be appointed either by mutual agreement of the parties
or through assistance from a suitable institution. Options include:
• Sole conciliator: chosen by mutual agreement.
• Two conciliators: each party appoints one.
• Three conciliators: each party appoints one, and they agree
on a third to preside.
4. Submission of Statements to Conciliator [Section 65]
Each party submits a written statement about the dispute, shared with
the other party. The conciliator may request additional statements or
documents as needed.
5. Conciliator Not Bound by Certain Laws [Section 66]
The conciliator is not bound by the Code of Civil Procedure (CPC) or
the Evidence Act but should follow principles of fairness, impartiality,
and natural justice.
6. Role of Conciliator [Section 67]
The conciliator assists the parties impartially, guided by fairness,
objectivity, and justice. They may propose settlements at any stage.
7. Administrative Assistance [Section 68]
The conciliator, with consent, can seek help from an institution to
manage the conciliation process smoothly.
8. Communication with Parties [Section 69]
The conciliator can communicate with both parties together or
separately, either orally or in writing. The location for meetings is
decided in consultation with the parties.
9. Disclosure of Information [Section 70]
The conciliator must share information from one party with the other,
unless marked con dential by the disclosing party.
10. Cooperation of Parties [Section 71]
Parties must cooperate by submitting documents, providing evidence,
and attending meetings as requested by the conciliator.
11. Suggestions by Parties [Section 72]
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 Parties may o er suggestions for settlement, either on their own or
when invited by the conciliator, who assesses their fairness.

12. Settlement Agreement [Section 73]

If the conciliator sees potential for a settlement, they propose terms to
the parties. After gathering feedback, the conciliator may revise these
terms. If both parties agree, they sign a written settlement agreement,
making it legally binding. The conciliator authenticates it, and the
agreement has the same e ect as an arbitral award.
13. Status of Settlement Agreement [Section 74]
The settlement agreement is treated as an arbitral award, giving it full
legal e ect.
14. Con dentiality [Section 75]
All details of the conciliation proceedings and the settlement are
con dential, except when disclosure is needed to enforce the
settlement.
15. Termination of Conciliation [Section 76]
Conciliation ends in one of four ways:
• By signing the settlement agreement.
• When the conciliator declares further attempts are futile.
• By mutual declaration from the parties.
• By one party declaring termination to the other party and
conciliator.
16. Restriction on Other Proceedings [Section 77]
During conciliation, parties cannot start any arbitration or legal
proceedings on the same dispute. However, if necessary to protect
rights, arbitration may be allowed.
17. Costs [Section 78]
Costs include the conciliator’s fees, witness expenses, and any expert
advice. Costs are typically split equally unless otherwise agreed in the
settlement.
18. Deposits [Section 79]
The conciliator may ask for equal deposits from each party to cover
costs. If parties fail to deposit, the conciliator may suspend or terminate
proceedings. Any remaining funds after termination are returned equally
to both parties.
19. Conciliator’s Role Restriction [Section 80]
The conciliator cannot later act as an arbitrator, lawyer, or witness in
any further proceedings related to the dispute.
20. Admissibility of Evidence [Section 81]
Certain conciliation-related evidence cannot be used in later legal or
arbitration cases, including:
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 • Settlement suggestions or admissions by either party.
• Proposals made by the conciliator.
• Statements indicating a party’s willingness to settle.

In the case of Haresh Dayaram Thakur v. State of Maharashtra (AIR

2000 SC 2281), the High Court had appointed a conciliator to help
resolve a dispute between two parties, instructing him to submit his
report within six months. After meeting with the parties, the conciliator
created a settlement agreement privately and submitted it to the High
Court in a sealed envelope without the parties’ knowledge or
signatures. When one party objected, the High Court dismissed the
objections without reviewing them. The Supreme Court, however, found
that the conciliator’s approach violated the Arbitration and Conciliation
Act, 1996. According to the Act, a conciliator’s role is to assist parties in
reaching a mutual settlement and to provide terms of the settlement for
the parties’ review and approval. The Supreme Court ruled that a
settlement agreement only becomes binding when both parties sign it.
Because the conciliator bypassed this process and kept the settlement
secret, the Supreme Court held that the High Court’s acceptance of this
awed settlement was legally invalid.
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