5. Arbitration & Conciliation

5.    Arbitration & Conciliation 

ARBITRATION & CONCILIATION

It is governed under the provisions of Arbitration and Conciliation Act 1996. The conciliation received statutory recognition in - The Code of Civil Procedure, 1908, The Industrial Dispute Act, 1947, The Hindu Marriage Act, 1955

ARBITRATION : 

It means settlement or determination of dispute by private person outside the court in a judicial manner.

For that the parties are free to determine the number of arbitrators, provided that such number shall not be an even number. Under this Act the reference must be either to a single arbitrator or to a panel of odd number of arbitrators .

CONCILIATION :

Conciliation is one of the method for settlement of dispute outside the Court. It is non-binding procedure in which an impartial 3rd party known as Conciliator assists the parties to a dispute in reaching a mutually satisfactory and agreed settlement of dispute.

Any dispute which has arisen between the parties or may arise in respect of their legal relationship, whether contractual or not, can be settled by conciliation where the parties agreed to seek amicable settlement of the dispute.

 

ARBITRATION	CONCILIATION
Arbitration is more rigid process.	Conciliation is more flexible process.
There must be prior Agreement to refer present or future dispute to the arbitration.	There is no need of prior Agreement to refer present or future dispute to the Conciliation.
The refusal to refer any dispute to arbitration by one of the party does not affect the proceeding of arbitration.	Conciliation proceedings affects, if the other party rejects the invitation of conciliate.
Chief Justice of High Court or Supreme Court appoint Arbitrators.	Chief Justice of High Court or Supreme Court has no role in appointment of conciliator.
There is a specific provision as to grounds for challenge of an arbitrator.	There is no specific provision as to grounds for challenge of conciliator.
Arbitral Tribunal has power to pass interim order of protection of subject matter of dispute.	Conciliator has no power to pass interim order during conciliation proceedings.
Award of tribunal is binding on parties.	Parties are free to disregard the proposal of conciliator.
Arbitral Tribunal to give reasons for arbitral award.	Conciliator cannot use arbitration method during conciliation.
There is provision of appeal against the order of arbitral tribunal.	No provision of Appeal.
There is provision of recourse to court against arbitral award for setting aside arbitral award.	There is no such provision of recourse.
The Arbitral tribunal can take the assistance of court in taking evidence.	No such provision in conciliation proceeding.
The court has supervisory role over arbitral tribunal.	No such role of court over conciliator.
Arbitral tribunal may use conciliation methods during arbitral proceeding to encourage settlement of disputes.	Conciliator cannot use arbitration method during conciliation proceeding.
The number of Arbitrator shall be odd number and not even number.	The number of conciliator may be even number.
Parties to the dispute cannot withdraw to the prejudice the other party at any stage of the proceeding.	Parties have freedom to withdraw from conciliation without prejudice to their legal position at any stage of the proceeding.