Conciliation is a process in which independent persons or persons are appointed by the parties. This is done with mutual consent to bring about a settlement of their disputes through consensus or by using similar techniques, which is persuasive. The essence of conciliation consists of trust, faith & mutual compromise. It is one of the Alternative Dispute Resolution (ADR) mechanisms but it surpasses its counterparts due its simplicity and suggestive nature. Conciliation is, simply put, a flexible, confidential and interest-based process, in which parties seek to reach an amicable settlement.

The session is led under the assistance of a Conciliator, who as a mediator has a neutral role, but in addition to it, has the authority to recommend proposals. The proposals offered are admitted after considering a more holistic analysis of the situation by third parties (without personal interest) by understanding not just the legal but commercial, financial & personal aspects thereof.

Some provisions that ensure competency of conciliation are:

• Conciliation ensures more autonomy than the arbitral settings. The parties have the liberty to decide the timings, language, place, structure and content of the proceedings.
• Like other ADR forms, it also has confidentiality provisions. This means that information divulged in the session shall be used against either of the parties in any court of law or any public forum.
• Conciliation is considered more cost and time efficient, especially with the introduction of online conciliation set-ups.
• On top of all, conciliation ensures the involvement of expertise decision-making. The parties are free to select their conciliator, based on their experience, professional–personal expertise, availability, language and cultural convenience.
• The flexibility of procedure is ensured by the fact that the Delhi High Court, in M/S Oasis Projects Ltd. v. Managing Director, National Highway and Infrastructure Development Corporation Limited, held that a conciliation clause is not mandatory, but is only directory in nature. On the other hand, the Supreme Court has held that an arbitration agreement shall be considered mandatory and conclusive even though it doesn’t express the binding or mandatory principle.
• Conciliation obviates the parties from seeking recourse to the court system. The settlement agreement or award is not binding in nature in a court of law, thereby allowing an alternate review of the rationality and feasibility of the decision by both parties separately.

A Practical Application:

The following case analysis provides the practical, on-field example of conciliation & its achievements.

Case 1:

‘A’ and her family lived in a rental home near her children’s school.  She believed herself to be a good tenant as she kept the house clean and always paid the rent on time. The landlord sent a termination notice to ‘A’ telling her she had 90 days to vacate the premises.  There was no reason for the eviction.  However, ‘A’ was unable to find a suitable home for rent in the local area and did not move out. The landlord then lodged with IDRC to end the tenancy.

During conciliation, ‘A’ explained she was unable to find a house for herself and would need more time at hand.  The landlord explained that he required the house for his pregnant sister and her family, who were coming from overseas to live with them.  He had promised that they could live in the house when she arrived and she was due in 3 weeks. The Conciliator asked the parties to consider options and suggested alternative solutions.  The landlord agreed to arrange temporary accommodation for his sister with other family members.  ‘A’ agreed to move out in 4 weeks.  They returned to the hearing room with their conciliated agreement, and a Tribunal Member made legally binding consent orders.

Had the parties for any other means, they would have ended up draining huge sums of money without either party living at peace. This would have also resulted in souring their relationship. This is just a possible example of a completely resolved issue. Conciliation may also provide speedy justice even if a partial agreement has been reached.

Case 2:

‘X’ had lived in her rental property for 5 years when she needed to move due to work commitments.  She gave notice to the real estate agency and, after vacating the property, applied for a rental bond refund. The real estate agency was notified and they lodged a rental bond application to IDRC claiming costs for cleaning and repairs. At IDRC, ‘X’ and the real estate agent were asked to attempt conciliation.  During conciliation, it became clear that the agent had not spoken to ‘X’ at all about the claim for cleaning and repair costs.  ‘X’ was in complete shock about the size of their claim, and the agent was not prepared to negotiate at all as he had strict instructions from the property owner.  The Conciliator spent some time with the parties, allowing them to discuss the outgoing condition report and to discuss items which might be considered ‘fair wear and tear’ rather than damage. 

The parties were unable to settle and the matter went to a hearing before a Tribunal Member. Conciliation had given the parties a clearer understanding of the issues in dispute, and several aspects of the condition report were agreed upon.  The Tribunal Member noted their agreement and the hearing was faster due to the partial agreement reached at conciliation.  Both the agent and ‘X’ felt they were able to present their case more clearly as a result of the conciliation process, as reported by IDRC. This is the potential conciliation commands in today’s time. ​​Hence, it is considered competent to the modern & fast-moving society to resolve the disputes smoothly.