Meaning and Scope of Conciliation

By | September 13, 2019

Meaning and Scope of Conciliation | Overview

This article discusses the meaning and scope of conciliation. It may be noted that conciliation is an art of consistent persuasion and has little to do with passing judgments to expedite the process.[1] Conciliation is a type of Alternative Dispute Resolution wherein the parties present their arguments in front of a neutral third party (one or more than one based on the agreement of the parties).

The conciliator suggests a measure to resolve the conflict which is non-binding on the parties. Conciliation differs from both arbitration, mediation and any other system with the involvement of the third party.

To intrinsically understand the meaning of conciliation it is essential to understand its difference in terms of arbitration and mediation

The difference with arbitration: Arbitration is the process where a third party adjudges the dispute and creates an arbitral award that is binding on both parties. Conciliation, on the other hand, is a non-binding process where the conciliator is an advisor suggesting the parties of a suitable way to resolve the conflict.

The difference with mediation: Mediation is the process wherein a neutral third party facilitates dialogue between the parties. The role of the conciliator surpasses that of a mediator. The conciliator has to suggest an effective way of resolving the dispute to the parties.

The major difference that arises among the three is the role of the moderator and the binding effect of the process.

The UNCITRAL rules on conciliation define conciliation as a method of “amicable” settlement of disputes. In the introduction to the Optional Conciliatory Rules of the Permanent Court of Arbitration, it is admitted that conciliation bears all the advantages the same as that of mediation, arbitration. The advantages include it being a voluntary, flexible, amicable settlement, party based process, etc.

The rules also acknowledge the problems faced in the process of conciliation which includes the problem faced by parties while choosing a non-binding process and the hesitation by the parties to enter into conciliation.


Conciliation is a process of settlement of disputes that have been widely spread throughout the centuries. In ancient cultures, parties in a dispute would visit the village oldmen for advice. They sought ways to resolve their dispute through the advice given by the old experienced men. Consequently, with the evolution of ADR, conciliation as an informal institutional practice gained popularity. This was furthered by the introduction of various guidelines framed to regulate the process of conciliation.

Conciliation has spread in areas including industrial disputes, trade disputes, labour disputes, human rights disputes, etc. In this article conciliation from both the international as well as the Indian perspective is focused upon.


The Permanent Court of Arbitration in 1930 opened its Arbitration and conciliation services. PCA expanded its conciliatory services in the year 1939. Subsequently, In the year 1962, the PCA increased the scope of conciliation practices by framing the “Rules of Arbitration and Conciliation for settlement of international disputes between two parties of which only one is a State. In 1966 Optional Conciliatory Rules in the lines of the UNCITRAL rules on conciliation.

Additionally WIPO and other organizations such as UNESCO, ICSID group have their own conciliation rules.

In the year 1951, the International Labour Organisation released a recommendation R092 – Voluntary Conciliation and Arbitration Recommendation, 1951 wherein voluntary conciliation should be made available for resolving industrial disputes. On the trade lines UNCITRAL model law on international commercial conciliation,2002 serves as the guiding light.

According to it “conciliation” means a process, whether referred to by the expression conciliation, mediation or an expression of similar import, whereby parties request a third person or persons (“the conciliator”) to assist them in their attempt to reach an amicable settlement of their dispute arising out of or relating to a contractual or other legal relationship.”

Article 42 of the International Covenant on civil and political rights, 1966 enshrines the establishment of ad hoc Conciliation committees for the amicable settlement of disputes. Subsequently, in Article 43 the committee thus formed has been given facilities, privileges, and immunities as per the United Nations.

In addition to all the above Article 33 of Chapter VI ( Pacific Settlement of Disputes) of the Charter of United Nations mentions conciliation as a process to settle disputes amicably.

Indian Context

The Indian legal system has always been adaptive to the development in the international scenario in the case of amicable settlement of disputes. Section 89 of the Code of Civil Procedure contains the term conciliation providing the provision for out-of-court settlement of disputes. Furthermore, the Arbitration and Conciliation Act, 1996 made on the lines of UNCITRAL model laws contains explicit instructions to regulate the conduct of the process of conciliation.

In the Arbitration and Conciliation Act, 1996 Sections 61-81 contain the clauses with regards to Conciliation. It has a detailed list of guidelines from the commencement of the proceeding with the selection of the conciliator to the principals of confidentiality and privacy to be maintained and later the provisions of the termination of judicial proceedings. The office of the conciliatory officer is specifically provided under Section 12 of the Industrial Disputes Act,1947. The powers and functions of the officer are also mentioned in the section.

Conciliation like other types of Alternative Dispute Resolution provides several advantages for which the parties are always intent on choosing Conciliation.

Advantages of Conciliation

Voluntary :

Since the process is voluntary therefore informal in nature. The conciliators are chosen by the parties themselves. The conciliators are not bound by the CPC or the Evidence Act.


Maintaining confidentiality is one of the important aspects of enshrined under section 75 of the Arbitration and Conciliation Act, 1996. Conciliation provides for express confidentiality when the parties can be privately summoned for pleading their cases in front of the conciliator.

Non-binding process:

conciliation is a non-binding process. This means that the advice given by the conciliator is not binding on the parties. The parties are free to consider other options or continue with the advice given by the conciliator.

Conciliation practices will increase in the near future with the focus given to the amicable settlement of disputes.

[1] Basu, Shubhabrata. “A Game Theoretic Approach to Conciliation-Adjudication Model.” Indian Journal of Industrial Relations, vol. 47, no. 3, 2012, pp. 423–435. JSTOR,

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