Knowledge Centre


Payal Dubey

3rd Year, National Law Institute University, Bhopal

Conciliation is yet another process of alternative dispute resolution which is voluntary, time effective, ensures confidentiality, party autonomy and expertise of the decision-maker. It is flexible and allows the parties to define content, terms and structure of the conciliation proceedings. Conciliation as a method is used to resolve almost all types of civil disputes, however, in India, it is prevalent for industrial, family and trade matters. Arbitration and Conciliation Act, 1996 provides the legal framework for the conciliation along with the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872. The conciliator plays an active role in helping the parties to reach a settlement, that is binding or not binding as per the decisions of the parties.




History of Board of Conciliation or Conciliation in general, dates back to 1929 when the Trade Disputes Act was enacted and provided for the voluntary conciliation through the Board of Conciliation. The Act also provided for the reference of the disputes by the disputants themselves. However, owing to several implementational gaps and delays in setting the machinery in motion, the method was not resorted to by the parties even when they felt the need. Later, in 1947, the Industrial Disputes Act (‘Act’) provided detailed provisions for the appointment of the Board of Conciliation. It also incorporated the provisions for Conciliation officers, lack of which was one of the main criticisms of the Trade Disputes Act. The Industrial Disputes Act, 1947 to-date remains one of the most elaborate central legislations on the Board of Conciliation.


Principles of the Board of Conciliation – To ensure that the process remains impartial, the conciliation office (or the Chairman in the Indian context) remains independent. The satisfaction of the parties and transparency in proceedings are the other principles which are given the highest priority. It is made sure that the parties have freedom of action and the opportunity to access all the necessary documents and information. The case is judged on the basis of merits giving the parties the right to put forth their arguments and argue on the disputed matters. In some jurisdictions, opportunities to act through the third party is also provided.


Nature and Composition[1]– Board of Conciliation is usually an ad-hoc body constituted for a specific purpose; comprises of an independent Chairman and two or four members. The members represent the parties in equal numbers and are, therefore, appointed on the recommendations of the parties. If no such recommendation is received by the parties, then the authority itself appoints the members. In order to tackle the issue of delays, the Board is supposed to function in spite of the absence of any of its members (in the prescribed quorum), however, it cannot work if its Chairman ceases to be a chairman or until a new Chairman is appointed.


Duties of the Board[2]– One of the primary duties of the Board is to employ all the necessary processes required to bring about a fair and amicable settlement of the dispute. Investigation of all the matters connected with and affecting the merits and right settlement of the dispute needs to be done to induce the parties to come to a settlement. After the settlement (complete or partial) is arrived at, the Board is required to submit the report along with the settlement agreement duly signed by the parties to the dispute. In case, the settlement is not arrived at, then also a detailed report is to be submitted highlighting all the facts & findings, steps taken and circumstances arisen during the course of the proceedings. The report has to be signed by all the members of the Board. A member may record his dissent or reservations from the report or recommendations made therein. The Board is also required to act in a time-bound manner. Under the Act, the Board is expected to conclude the case within a period of two months from the date on which the matter was referred to it. However, if the parties furnish in writing, the time can be extended.


Powers of the Board of Conciliation – The Board is vested with the rights of a civil court and therefore, has powers such as to enforce the attendance and examine people on oath, impel the production of the documents and other material objects, and to issue orders for the examination of witnesses. It also has certain executive powers like, to enter the premises to conduct the enquiry.




Conciliation has attained a statutory recognition and it is preferred to refer the dispute for conciliation before referring it to the civil, industrial or family courts, etc. The Arbitration and Conciliation Act, 1996 applies when the matter is referred for conciliation.[3] Under Section 62 of the above-mentioned Act, the matter is referred for conciliation by agreement of the parties, while under Section 89 of the Arbitration and Conciliation Act, if the court deems fit, the matter can be referred to even when there is no consent of the parties. Post litigation conciliation was thus recognized as a mode of dispute resolution when Section 89 was incorporated in the Code of Civil Procedure, 1908 which affords an option for reference of sub-judice matters.[4]


Conciliation as a dispute resolution method is often preferred at the pre-litigation stage. Various public and private companies incorporate the conciliation clause in their agreements agreeing to refer any disputes to conciliation. Parties may appoint individual conciliators or resort to institutional conciliation. It is a notion that usually corporates prefer institutional conciliation, however, trends show that various PSUs also go in for conciliation conducted by ad-hoc conciliators. Various legislations vividly provide for the method of conciliation and assign the responsibility to the court to make every possible effort to settle the matter between two parties, for e.g., the Hindu Marriage Act, 1955.




Even after the presence of the statutory frameworks, conciliation is becoming less popular and people are resorting to other modes of alternative dispute resolution. The reason for the same could be lack of recognition because at the district courts, the centres are designated as Mediation Centres only and there is not even a reference to conciliation. The other reason could be extra cost involved because be it institutional conciliation, appointing individual conciliator or court referred conciliation, the parties have to bear extra expenditure. Moreover, there is no certainty as to when the matter will be referred to the conciliation process; which is not an enabling factor for the conciliation to operate at its full potential. These gaps need to be filled since conciliation is an efficient and systematic method of dispute resolution.

[1] Arbitration and Conciliation Act, sec. 5 (1996).

[2] Id., Sec. 13.

[3] Code of Civil Procedure, sec. 89 (1908).

[4] Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., JT 2010 (7) SC 616.

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