Prachi Mediation Chambers
Conciliation: A Commercial Mediation In India - 1/3


ADR Options

 One has several choices in dealing with a dispute. To begin with, it could be dealt with in an adjudicatory way or a resolutionary way. And depending on the jurisdiction in which the dispute arises or the laws of which apply thereto, the available choices in each stream may vary. Where one chooses to deal with it using an adjudicatory mechanism, there is usually not much choice – if your contract stipulates Arbitration, that is what you are stuck with; and if not, it is litigation. Few jurisdictions offer more ‘adjudicatory’ options.

Where, however, one chooses to address the dispute with a resolutionary approach, one would have wider options. One could attempt a negotiation; should that fail, one could opt for either Mediation (a facilitative approach) or Conciliation (an evaluative approach), or maybe even a combination of the two, where the neutral would start off in a facilitative manner and later on get a bit evaluative and even make some suggestions, with the consent of the parties. This combination is coming to be increasingly expected of Mediators.

The beauty of these, or for that matter any other resolutionary process, is that they can usually be attempted even if you have an arbitration clause stipulated in your contract. The flip side, however, is that these resolutionary mechanisms, even where successful, do not lead to an outcome which is immediately enforceable in a court of law as would an outcome of a litigation or an arbitration. One can only sue for specific performance or file a regular process as one would in the case of any other contract or agreement.

Usually, because outcomes of resolutionary processes are voluntary, they do not require execution as the parties abide by their stated obligations simply because they chose to state them of their own free will. However, where:

a.     a party may be prone to subsequent adverse influence;

b.     the obligations stretch over a long period of time;

c.      legal hurdles unduly affect the burden of compliance;

d.     the attending representatives on either side are likely to change sooner than the obligations are to be met;


e.     the dynamics of their engagement or their priorities are expected to be fluid,

then, in one or more of such or similar circumstances, it is possible that interpretations of the stated obligations will alter. What is more, when the outcome of a resolutionary process - a process borne out of ‘mutual trust and understanding’ & ‘good-faith participation’ – is brought into question, it often leads to a relapse in the trust-building which this time round will have a huge cloud of ‘bad faith’ cast over the arena, making another ‘resolutionary’ attempt a steep uphill task.


Executability Of Resolutionary Outcomes

Should a party renege on its obligations, the other party would be forced to go to court to enforce the agreement brought about in a process which was preferred for the very purpose of avoiding the arduous court procedure in the first place. This is unlike an arbitration award or a decree of a court which, after the expiry of the period of limitation of challenge thereto or appeal against the same, as the case may be, can be directly proceeded to be executed. Thus, immediate non-executability of resolutionary outcomes is proving a major deterrent for preferring these processes. And this would be a stark reality in some countries like India, where court process extends beyond a decade in several of its jurisdictions.

Where one chooses to first initiate litigation or arbitration proceedings and then thereunder proceed to Mediation, one can get a wholesome outcome tailor-made by the parties in a resolutionary process and get the assurance of an enforceable outcome by then getting the settlement terms being incorporated in the court’s consent order, or the arbitration award. But short of a pending adjudicatory process, a resolutionary outcome in the related dispute would be at the mercy of the parties’ ‘gentlemanliness’.


The Indian Position

In India, parties have the benefit of avoiding the circuitous adjudicatory route of first initiating litigation or arbitration and then seeking reference thereunder to a resolutionary process of choice so as to secure a binding, executable resolutionary outcome in the given dispute. They can directly opt for a resolutionary process and come out with a binding agreement which is enforceable akin to an award in arbitration or a decree of the court. This is possible by choosing to do mediation/conciliation under the Arbitration & Conciliation Act, 1996 (“the A&C Act”) by terming it as ‘Conciliation’ and following the procedure set down thereunder.

The said Act contains provisions for Arbitration as well as Conciliation. The provisions relating to Arbitration are based on the UNCITRAL Model Law on International Commercial Arbitration, 1985. The Conciliation provisions, contained in PART III of the A&C Act, are based on the UNCITRAL Conciliation Rules, 1980.



Whereas an elaborate analysis of some of the features of the Conciliation aspect of the A&C Act will be the topic of a separate article, suffice it to say that not only have the key ingredients of the UNCITRAL Conciliation Rules been nicely incorporated, but have in fact been improved upon to better suit the business community for effectively dealing with their commercial disputes in an efficacious and efficient manner by affording a legal framework for a binding, forthwith executable outcome from a resolutionary process.