Alternative Dispute Resolution, as the name suggests, is an alternative way to get the disputes solved, that is when litigation can’t work because of its many infirmities, Alternative Dispute Resolution is chosen by the parties in a dispute.
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Mediation is a form of Alternative Dispute Resolution Mechanism in which two parties to a dispute meet and solve their issues in the presence of a third neutral party, generally called mediator. The role of the third neutral party is mostly to facilitate the process of mediation by helping the parties understand each other’s viewpoints and the complexities of the matter.
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The Singapore Convention formally known as the United Nation Convention on International Settlement Agreements Resulting from Mediation entered into force on 12 September 2020 with 53 signatories and 6 ratifications. It facilitates the enforcement of settlement agreements arrived through mediation in a manner that is similar to the Convention on Recognition and Enforcement of Foreign Arbitral Award,1958. Currently, negotiated mediation agreements are enforceable only as a contract and a civil suit is filed for its compliance, the Singapore Convention will authorise the court to enforce the mediated arrangement directly. This establishes a stable and harmonised procedural basis for the invocation and compliance of the settlement agreement. A settlement arrangement to be considered within the framework of the convention has to be reached by negotiations, should be agreed in writing, an international commercial dispute should be resolved and the mediator should not have the right to force a solution on the parties. The convention can be seen as a game changer and will be instrumental in encouraging mediation and fostering cross-border trade. The International Dispute Resolution Survey 2020 undertaken by SIDRA points out that parties to a trade agreement are unlikely to use negotiations to resolve conflicts because of the uncertainties inherent in implementation. The Singapore Convention would reduce the confusion and reluctance on the part of the parties over the mediation of cross-border transactions. However, the convention is not without ambiguity and certain provisions have been considered as problematic by mediators. APPLICATION AND EXCLUSION Article 1 of the Convention states that the terms of the Convention shall apply to a written dispute settlement arrangement arising from mediation and concluded by the parties to resolve a corporate dispute. Article 1 also covers those subjects and agreements which fall beyond the scope of the Convention, including matters relating to labour, inheritance and family law and agreements concluded by the customer for personal or household purposes.[1] Settlement arrangements enforceable as decisions of court or arbitral awards are exempt from the application of the Convention in order to prevent any interference with current conventions. In addition, pursuant to Article 8(1)(a) the Member States may decide that the Convention may extend only to the degree that the parties to the negotiated settlement authorise it to be applicable.[2] It is noteworthy to mention that, unlike most prior international conventions, the adoption of the Singapore Convention is not limited exclusively to Member States. There is no nationality in settlement agreements because they are enforceable as long as they are international and are the product of mediation. The location of the mediation or the point of origin is irrelevant. ENFORCEMENT AND REFUSAL OF RELIEFS Article 4 of the Convention provides that a party claiming relief must provide a signed mediated settlement agreement along with proof that the agreement was the product of mediation.[3] This clause is controversial because it means a change in the current nature of mediation. The essence of mediation is secrecy, which also ensures that the parties cannot rely on the mediator to become a witness in a case related to the mediation process. The incorporation of such a Clause in the convention could create apprehensions with respect to the objectivity of the mediator and his/her perceived role in the enforcement of the mediated settlement. It is reasonable that the Convention does not deem the mediator’s signature of the contract to be similar to the evidence offered in a court of law, but that the clause also creates an uncertainty with respect to a substantive question, in certain situations the parties do not agree to conclude the conflict on the day of mediation but may often settle the dispute in the time after mediation without the help of the mediator, but the Convention does not mention if such a post-mediation resolution will be enforced if the dispute has been settled in the mediation process, with only peripheral issues being considered on the following days. No clause has been provided in the Convention for creating a substantial relation between the settlement arrangement and the mediation. The reasons for denial of relief are laid out in Article 5 and are classified into three groups.[4] In addition, the court can refuse to provide relief on the basis that the settlement agreement is contrary to public policy or that the subject matter cannot be resolved by mediation. As far as international agreements are concerned, the foreign court may have to consider the subject matter and the conditions explicitly and, depending on the legal regime of the implementing State, the court may accept the arrangement within a legal context that is different from the one under which the agreement is drawn up. Negotiating partners would also have to take into account the interpretation of international courts when drawing up a mediation deal. This requires the incorporation of greater information and explanation rather than the presumption of expertise on the part of the compliance authorities. It adds a new dimension of compliance to the parties. FALLACIES AND AMBIGUITIES Perhaps the most problematic provision in the Convention is Article 5.1(e) that provides that an authority can refuse to provide relief to a party if the other party is able to prove that there was a serious breach of conduct by the mediator.[5] This provision is of special interest for the counsels as they can relieve their client of the performance by focusing on the conduct of the mediator. The convention at the same time fails to provide what standards are applicable to the mediator, this combined with the confidentiality of the mediator would make ascertainment of unfairness difficult. The conduct of the mediator will be open to scrutiny and this could potentially hamper the process as the mediator might become over concerned with his own conduct or the process rather than help the parties resolve the dispute, any advice or suggestion by the mediator to a party might be seen as unfair by the other party. The fact that mediation is a voluntary process and the mediator cannot ask for
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Authors – Naman Gowda & Ibban Javed Year – 3rd Year Institute – National Law Institute University, Bhopal Introduction Mediation is a form of Alternative Dispute Resolution (ADR) outside the confines of courts wherein a neutral third party assists the parties to the dispute in arriving at a mutually amicable solution. ADR as a whole is gaining more traction nowadays due to the strenuous process of resolving disputes in a court of law. However, the drawbacks associated with different forms of ADR makes it necessary to look at the suitability of each approach. Section 89 of the Code of Civil Procedure allows Courts to refer a dispute to ADR for resolution. The four methods of ADR that are mentioned under section 89 are: – Arbitration, Conciliation, Judicial settlement including settlement through Lok Adalat, or Mediation Effectiveness of mediation In the Afcons Construction Ltd. v. Cherian Varkey Construction[1] judgement, the Supreme Court held that the while the court can consider the aforementioned methods, arbitration can only be referred when both the parties to the dispute have consented to the same. The reason behind this is that arbitration is the only adjudicatory method amongst the four and the absence of consent of a party makes it even more likely that one of them may not be content with the award pronounced by the tribunal. Making things worse, an appeal cannot be made against the award of a tribunal based on its merits and it can only be set aside based on certain grounds mentioned under section 34 of the Arbitration and Conciliation Act, 1996[2]. In this regard, why is mediation more effective? It is a non-adjudicatory method which keeps the dispute within the judicial system and in case an amicable settlement is not reached between the parties the same goes back to trial. While this may seem to be defeating the intention behind referring the dispute to ADR, it preserves the essence of the justice system in ensuring aggrieved parties have some form of legal recourse. Additionally, the Court also enumerated certain types of disputes as unsuitable for ADR and thus reducing the chance of failure of the those referred to ADR. Disputes suitable for ADR Disputes that are suitable for resolution through mediation are ones which are complicated and lengthy and mediation would be very effective as there is a chance of quicker resolution. The court listed the types of disputes suitable for ADR:- All cases relating to trade, commerce and contracts; All cases arising from strained or soured relationships such as matrimonial disputes and partnership disputes. All cases where there is need to continue a pre-existing relationship in spite of the dispute such as disputes arising between employers and employee. All cases relating to tortious liability including claims for motor accidents; All consumer disputes. The Supreme Court, in the matter of M.R. Krishna Murthi v. The New India Assurance Co. Ltd and Ors.[3], laid emphasis on the need for ADR with regard to motor vehicle accident claims. The Court recognized the need for speedy resolution of accident claims in order to ensure that victims are awarded compensation at the earliest. The Court also recommended the establishment of a Motor Accidents Mediation Authority (MAMA) in every district and incorporating a provision for the same in the Motor Vehicles Act[4]. Furthermore, it also recommended the National Legal Services Authority to oversee the setting up of Motor Accident Mediation Cells as an interim measure until a provision is made for the same in the Motor Vehicles Act. The Supreme Court’s effort in this regard has been continuous as it recently constituted a panel of mediation experts to prepare a draft mediation law, seeking to define a code of conduct for mediators and address aspects such as the enforceability of mediation settlements, confidentiality of the proceedings and neutrality to name a few[5]. Conclusion There is a very minimal chance of a mediation settlement being appealed by one of the parties. A mediation settlement can be challenged on the same grounds as an arbitral award is challenged. But the non-adjudicatory nature of mediation significantly reduces the risk a settlement being challenged as both the parties work together towards reaching a mutually beneficial compromise and after having made such an effort, the likelihood of them being content with the same is more as opposed to an arbitration. Despite all these benefits, conventional methods are still preferred by a vast majority. The shift to mediation was never expected to be immediate one, but a central legislation, which provides legal sanctity to mediation settlements, is necessary in order make mediation the go-to platform for dispute resolution. [1](2010) 8 SCC 24. [2]The Arbitration and Conciliation Act, 1996, d 34. [3]2019 (4) SCALE 362. [4]Motor Vehicles Act. [5]Ajmer Singh, Supreme Court forms committee to draft mediation law, will send to government, The Economic Times, (Sept. 9, 2020, 11:45 PM), https://economictimes.indiatimes.com/news/politics-and-nation/supreme-court-forms-committee-to-draft-mediation-law-will-send-to-government/articleshow/73394043.cms?from=mdr.
Global v. Indo Unique: Extrapolating Arbitration Clause from Unstamped Substantive Contract Date: 06/02/2021 Authors: Samyak Jain, Shalini Mishra Institute of Authors: B.A. LLB (Hons.)Institute of Law, Nirma University, Allahabad Year: 4th A three judge bench of the Supreme Court on 11 January 2021 pronounced the judgment in the case of NN Global Mercantile Pvt. Ltd v. Indo Unique Flame Ltd. & Ors. (‘Global Mercantile’). It was set forth that there is no legal impediment for enforcement of the arbitration clause if the underlying contract is unstamped. Additionally, the bench differed with the positions previously laid down in cases of SMS Tea Estates Pvt. Ltd. v. Chandmari Tea Co. Pvt. Ltd (‘SMS Tea Estates’), Garware Wall Ropes Limited v. Coastal Marine Construction and Engineering Limited (‘Garware Wall Ropes’) and the recent judgment of Vidya Drolia v. Durga Trading Corporation (‘Vidya Drolia ’). The court dealt with two interesting issues in the instant case, one pertaining to the validity of an arbitration agreement in an unstamped contract and the other issue was concerned with the arbitrability of allegations of fraud. The article broadly addresses the former issue pertaining to the doctrine of separability. The bench ruled that non-payment of stamp duty by Indo Unique would not render the arbitration agreement unenforceable on the ground of initial defect or irregularity. The post critiques the Court’s position in Global Mercantile on the question of whether an arbitration agreement would be non-existent in law, invalid or unenforceable, if the underlying contract was not stamped as per the relevant Stamp Act. Factual Background Indo Unique entered into a contract with Karnataka Power Corp. Ltd for washing of coal. It entered into a subcontract termed as Work Order with Global Mercantile for the transportation of coal. In regards of this Work Order, Global Mercantile furnished a bank guarantee of Rs. 3,36,00,000 in favor of the Indo Unique. Certain disputes arose which led to the invocation of the bank guarantee. Thereafter Global Mercantile filed a civil suit before Commercial Court stating that invocation of the bank guarantee was fraudulent in nature wherein the Commercial Court then passed an ex parte order for the enforcement of the said bank guarantee. Subsequently, Indo Unique filed a suit under Section 8 of the Arbitration Act before the High Court to refer disputes to Arbitration which was rejected by the High Court. Aggrieved by the order of the High Court, Global Mercantile filed a Special Leave Petition before the Supreme Court. The Muddy Waters of Doctrine of Separability in Indian Cases There is an incessant dilemma surrounding the admissibility of an unstamped document and the Supreme Court has time and again delivered contradicting judgment on the same issue. The three judge bench in Global Mercantile posited that the finding in SMS Tea Estates and Garware Wall Ropes is not a correct position in law. Furthermore, the bench does not also concur with the position taken in paragraph 92 of Vidya Drolia by a coordinate bench which affirms the judgment made in Garware Wall Ropes. The Supreme Court in SMS Tea Estates dealt with the question of whether an arbitration agreement was valid and enforceable in an unregistered and unstamped lease deed which entailed compulsory registration under the Registration Act 1908, being a part of the said lease deed which was invalid and unenforceable. The Court decided that an arbitration agreement in an unregistered instrument would be valid and enforceable but an arbitration agreement in an unstamped commercial contract is unenforceable in law and it cannot be acted upon. In Garware Wall Ropes, the Apex Court had examined the question of stamp duty in an underlying substantive contract with an arbitration agreement. The Court reasoned that it is unfeasible to separate the arbitration clause from such agreement so as to give it an independent existence. The Garware Wall Ropes judgment has followed the judgment in SMS Tea Estates to contend that the arbitration clause would be non-existent in law, and unenforceable, till Stamp Duty is adjudicated and paid on the substantive contract. It was held that an arbitration clause in an agreement would not exist if it is unenforceable by law. In the recent judgment of Vidya Drolia, the Supreme Court briefly discussed the issue of arbitrability of the arbitration agreement. Moreover, the Court stated that an arbitration agreement exists if it is enforceable in law and wherein it satisfies the statutory requirements of both the Arbitration Act and the Contract Act. The three judge bench in Vidya Drolia relied on the case of Garware Wall Ropes, which drew distinction between the two aforesaid terms. Judgment Analysis A conjoint reading of SMS Tea Estates and Garware Wall Ropes shows that the Apex Court erred in finding that Maharashtra Stamp Duty Act applies to the whole contract including an arbitration clause. Further, in case of non-payment of Stamp duty in respect of the instrument, the case also invalidates the arbitration clause. The aforementioned cases considered it essential to read the whole agreement as one without bifurcating between the underlying agreement and the arbitration clause on the basis of severability principle. The argument stems from the reasoning that as per Section 49 of the Registration Act, an unregistered document can be used as evidence in collateral transaction, i.e. an arbitration clause is separable and can be used for the resolution of parties. Whereas, Section 35 of Stamp Act does not prescribe any condition similar to Section 49 of Registration Act enabling the instrument to be used as collateral transaction. Furthermore, the Court opined that in absence of provision similar to Section 49 of the Registration Act, it is unviable to bifurcate the arbitration clause mentioned in the agreement so as to give it an independent existence. According to Section 34, unless the stamp duty is paid, the Court cannot act upon such an instrument; meaning thereby that an arbitration clause cannot be forced. It can be concluded that the arbitration clause in the main contract would be non-existent until the contract is duly stamped.
Rights and Duties of the Parties in the Mediation Process The very essence of mediation as a dispute resolution process is that it puts the needs and interests of the parties above anything else. It gives a chance to the parties to determine what kind of solution they want while the mediator only facilitates the process. While the mediation process is not binding, it still has certain rights and limitations for the parties and the mediator to keep the process in check and make sure that no one party is left feeling the process was unjust. The role of the parties is to have an open and honest discussion upon the matter that brought them in for mediation and the role of the mediator is to facilitate the said discussions by helping the parties if they are in a deadlock situation during the discussion and to elucidate the points of both the parties so that there is no misunderstanding during the process. These are the basic functions of the mediator and the parties. As discussed earlier, attached with these roles are certain rights and limitations for governing the mediation process. We shall be discussing the rights and limitations that the parties have to keep in mind during the mediation. Rights of the Parties The parties to the mediation essentially have five types of rights under the mediation process. These rights are in place to help the parties feel in a position of power during the resolution process. Selecting Mediation as a Resolution process Neither of the parties is bound to comply with mediation as their dispute resolution process as they are free to choose the method in which they seek to resolve the subject matter of the dispute. In the case where one party sends a proposal for the matter to be resolved through mediation, the other party is not bound to accept such proposal. In addition to that, there are no legal sanctions or repercussions on the party ignoring the proposal, refusing the mediation process or frustrating the mediation process. While no reason has to be provided for refusing to the aforementioned proposal, refusing a court-mandated mediation has a few requisites. A party who refuses an offer of mediation must file a witness statement at court giving their reasons for refusing.[1] Withdrawing from the Mediation Process at any time There is no restriction over when a party can and cannot withdraw from the process. As when of the most basic features of mediation is that it is completely voluntary, to deny a party from withdrawing is to go against that very principle. Even in this case, the parties need not state any reason for their withdrawal. But, this might have negative consequences on the party that has pulled out from the process. A UK court decided in a case that the party that withdrew from the mediation process was liable to pay the claimant the wasted costs that they sought for post the withdrawal.[2] Even though the costs awarded in this case were on a standard, proportionate and reasonable basis rather than that of indemnity, one should not withdraw from the mediation at the very last moment or at a point of time which might seem morally incorrect. Appointment of an Impartial and Neutral Mediator Appointing an impartial mediator is one of the most crucial components of the mediation process. No party would want to have the mediator to be partial towards the other party as that would hinder the chances of them getting a fair settlement. The parties rely on the mediator and share sensitive information which is to be kept confidential at any cost. The mediators hold private caucuses for understanding the stance of each party in a better manner and further facilitate the smooth functioning of the joint session. While the parties might want the mediator to share certain details of what they shared, there are also some facts which the party might disclose so that the mediator can keep that in mind while steering the other party into any direction. This includes financial conditions, details regarding one’s family, any medical condition, etc. With a partial and biased mediator, the whole process of mediation could go to waste, causing losses in terms of time and money. Therefore, the parties are the ones who appoint the mediator that will be facilitating the process as this ensures maximum transparency and ensures that no party gains an undue advantage through the mediator. Confidentiality Confidentiality is a key to the mediation proceedings and has thus been spelled out in the Arbitration and Conciliation Act, 1996 and the parties are bound to keep all information shared during the proceedings, confidential except where its disclosure is necessary for purposes of implementation and enforcement.[3] In order for parties to be able to open up and talk about the subject matter freely, it is critical that they be assured of the fact that what they are going to share is going to stay between the people present. Confidentiality acts as a relaxation for the fear of sharing personal details and further facilitates full disclosure and guarantee a fair outcome. If discussions with the mediator are not confidential and privileged, the mediation process, the mediator’s role and the potential for resolution are significantly diminished. Signing an agreement before the commencement of the mediation process which outlines confidentiality and other key features goes a long way in ensuring a spirit of full disclosure which will further lead to a successful mediation proceeding. This concludes the basic rights that parties have during the mediation proceedings. It is vital for the mediation process to be governed by the aforementioned in order for it to be successful. But with these rights also come the duties that are to be fulfilled by the parties during the mediation proceedings. They ensure that the parties understand their responsibilities and while the mediator facilitates the proceeding, the parties can also further the agenda by complying with the duties and make the process
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Mediation of Consumer Disputes Date: 20/10/2020 Author: Ibban Javed Institute of Author: NLIU, Bhopal Year: 3rd Introduction Litigation is often a resource-intensive endeavor that involves the investment of large amounts of money, time, and other resources that consumers have limited access to. Most consumer disputes that lead to litigation are tilted in favor of the relatively dominant producers by default, stemming from the disparity in access to these resources. Litigation is neither a cost-effective solution to consumer disputes nor does it save time – India Today reports that the average pendency of a civil suit in India is about six years[1], which is much longer than what most consumers can dedicate themselves to. This is an issue that has been deliberated upon since the introduction of the three-tier consumer dispute redressal mechanism of The Consumer Protection Act, 1986 until it was finally addressed in The Consumer Protection Act, 2019 which introduced mediation as an effective means to resolve consumer disputes. Mediation is an alternative dispute resolution (ADR) mechanism whose purpose is to settle disputes between parties amicably and efficiently through the mutual understanding of all parties involved. As part of the process, the parties discuss their disputes while an impartial third-party – the mediator — facilitates communication between them until a mutually agreeable settlement is reached. The Consumer Protection Act, 2019 makes provisions for mediation in cases of consumer disputes under Chapter V. Further, the Draft Consumer Protection (Mediation) Regulations, 2019 issued by the Department of Consumer Affairs under the Ministry of Consumer Affairs, Food and Public Distribution, Government of India proposes the framework for the mediation procedure to be employed in the settlement of consumer disputes, as per the provisions of the Consumer Protection Act, 2019. Sections 37 and 38 of The Consumer Protection Act, 2019 With a change in how consumers and producers transact and the evolution of e-commerce, multi-level marketing schemes, and other nouveau approaches to do business, The Consumer Protection Act, 1986 required an overhaul that would encompass situations such as those listed above to better protect the interests of consumers. The Consumer Protection Act, 2019 was passed to address these concerns and to better protect consumers at a time when producers could take advantage of the legal grey area that the lack of relevant legislation gave rise to. The revamped Act envisaged the establishment of a Central Consumer Protection Authority that would seek to protect the interests of consumers and enforce their rights while making interventions as may be necessary to prevent unfair trade practices. Sections 37 and 38 of the Act make provisions to simplify the adjudication process of consumer disputes by employing mediation, an alternative dispute resolution mechanism. This addressed the primary shortcoming of the erstwhile Consumer Protection Act of 1986, which was the long delay in the disposal of cases presented by the three-tier redressal system. Section 37 provides that post-admission of the complaint and at the first hearing if the District Commission believes that has elements of a settlement that may be acceptable to the parties, it may direct the parties to give it consent to have the dispute settled by mediation within five days and if such consent is given, the District Commission may then refer the dispute for resolution through mediation as per the provisions of Chapter V.[2] Section 38 details the procedure on the admission of a complaint and allows the District Commission to: Refer the copy of the admitted complaint to the opposite party and seek their version of the case within thirty days Examine the evidence and seek its analysis by a designated laboratory Provide a reasonable opportunity for parties of both sides to represent their cases Decide the case on the merit of the affidavit and documentary evidence on record Pass interim orders as per the situation Have the same powers as those vested in civil courts as per the Code of Civil Procedure, 1908, insofar as this section is concerned. Chapter V of the Consumer Protection Act, 2019 The provisions mentioned herein are subject to the Draft Consumer Protection (Mediation) Regulation, 2019. §74 Establishment of consumer mediation cell[3] This section allows the State Government to establish consumer mediation cells that shall be attached to the State and District Commissions of each state. Likewise, it allows the Central Government to establish such consumer mediation cells that shall be attached to the National Commission as well as each of the regional benches. Further, it provides that the consumer mediation cell must maintain lists of the empaneled mediators, cases handled by the cell, record of proceedings, and any other information that might be required as per regulations. §75 Empanelment of mediators[4] Section 75 details the process by which mediators may be empaneled, that is, by recommendation of a selection committee consisting of the President and a member of either the National, State, or District Commission as the case may be. The panel of mediators as nominated by the selection committee mentioned above is valid for five years and can be considered for re-empanelment for a maximum of two terms. The specifics of the qualifications of the mediators, fees payable to them, training to be undergone, and other terms and conditions of empanelment are subject to the Draft Consumer Protection (Mediation) Regulations, 2019. §76 Nomination of mediators from panel[5] Section 76 provides that the District, State, or National commissions must consider the suitability of a mediator for the present case before nominating to resolve a dispute. §77 Duty of mediator to disclose certain facts[6] As per the provisions of Section 77, the mediator is dutybound to disclose any personal, professional, or financial interest that he may have in the outcome of the dispute. He is also required to furnish the circumstances that may raise doubt on his impartiality as a mediator. §78 Replacement of mediator in certain cases[7] Based on what is disclosed by the mediator, the District, State, or National Commissions are vested with the power to replace such a mediator if a conflict of interest
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Conciliation as a Dispute Resolution Mechanism: Merits & Demerits Date: 10/11/2020 Author: Ashhab Khan Institute of Author: NLIU Bhopal Year: 2nd Introduction Conciliation is one of the alternative dispute resolution (hereinafter “ADR”) methods, wherein the parties go out-of-court to seek remedy. The Halsbury’s Laws of England defines conciliation as a process of persuading the parties to reach an agreement. It is a procedure where a neutral third person is appointed as a conciliator by the parties to the dispute to reach a settlement. The mutual consent in this allows parties to engage in a friendly search for a solution, without litigation and formal technicalities and enables parties to envision alternatives which provide solutions keeping in view the interests and priorities of both. Conciliation under Arbitration & Conciliation Act of 1996 Section 61 of the Arbitration & Conciliation Act, 1996 (hereinafter “Act”) defines the application and scope of conciliation. Section 61 says that the process of conciliation applies to disputes, whether contractual or not, arising out of a legal relationship. This means that the one party to the dispute has the right to sue the other party and the other party can be sued. Secondly, the Part III of the Act will not be applied to any disputes which cannot be submitted to conciliation by the virtue of any law for the time being in force. A written invitation to conciliate is sent to the other party briefly identifying the subject matter of the dispute by the party initiating the conciliation. Conciliation proceedings commence when the other party accepts the invitation in writing. Section 64 of the Act provides for the appointment of the conciliators. When the other part accepts the written invitation to conciliation, the parties must agree on the composition of the conciliation tribunal. There will be only one conciliator in the absence of any agreement to the contrary. The conciliation process may be conducted by a single conciliator, appointed with the consent of both sides. If it is failed, then two conciliators may conduct the same (maximum number is three), where each party appoints its own conciliator, and all parties jointly appoint the third conciliator. The third conciliator so named shall be the conciliator who shall preside. The conciliator may ask each of the parties to send, with a copy to the opposing side, a brief written statement outlining the basic nature of the dispute and the points at issue. The conciliator can require a party to submit such additional details to him at any point of the conciliation process as it considers necessary. Section 67 provides that the conciliator should assist the parties in an independent and impartial manner to reach a settlement. Further it says that he must follow the principles of objectivity, fairness and justice considering the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties. The conciliator and the parties to the dispute are obliged to keep all matters relating to conciliation confidential. Also, when a party provides the conciliator with some information on the condition that it shall be kept confidential, the conciliator should not reveal such information to the other party. The parties should act in good faith and cooperate with the conciliator. They should provide the conciliator with written materials, evidence and attend meetings, when asked by him for the purpose of proceeding. If it occurs to the conciliator that there are aspects of a settlement that might be agreeable to both the parties, the conciliator may develop the terms of a settlement and send them to the parties for their input. After obtaining the observations of the parties, the conciliator may, in the light of those observations, reformulate the conditions of a potential settlement. The legislative provisions instruct the conciliator to draw up a settlement document and to authenticate it. He should ensure the parties are well informed of the terms of the settlement. It is available to the parties, by conciliation, to settle some of their disputes and to leave the pending disputes between them for resolution by other forms of adjudication. The settlement document must have the parties’ signatures. Until the parties have signed the agreement, the parties and individuals suing under them, respectively, shall be valid and binding. Merits and Demerits of Conciliation Merits: Demerits: Conclusion Conciliation is a beneficial mode of dispute resolution due to the fact that it is cost effective, flexible because parties the control the proceedings, fast and convenient as opposed to that of litigation. It is also secure due to the confidentiality of the process. However, its effectiveness relies on the attitude of parties, competence of the conciliator and proper environment. But overall, it is should preferred over litigation to resolve disputes.
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Principles and Applications of Conciliation Date: 05/12/2020 Author: Shadab Mohammad Shah Institute of Author: NLIU, Bhopal Year: 3rd Conciliation is a form of Alternate Dispute Resolution (hereinafter to be referred to as ADR); therefore all the proceedings and sessions of conciliation are done outside the court. How is conciliation different from other forms of ADRs? What are the principles of conciliation? Is the outcome of conciliation binding on the parties? Who appoints the conciliator? Who has the final say in conciliation proceedings? Can the decision of conciliation be challenged in the court of law? These are the few questions we’ll be dealing with in this article. Conciliation and other forms of ADR There are many forms of ADR, majorly used and most popular are, Arbitration, Mediation, Med-Arb, Conciliation, and Negotiation. Only common thing among the former four forms is the presence of third party, by virtue third party is neutral; negotiation on the other hand does not necessarily involve a presence of third party and it is usually done by the parties-in-dispute. Principles of Conciliation Part III of the Arbitration and Conciliation Act, 1996 governs the functioning of Conciliation in the territory of India. Application and Procedure of Conciliation in India The Arbitration and Conciliation Act, 1996 describes the process of conciliation in part III of the act. Procedure is as follows: Once the settlement agreement has been authenticated the process of conciliation comes to an end; the settlement agreement has the same status as that of an arbitral award rendered by the Arbitral Tribunal.
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Virtual Hearings in Arbitration: A Mistouted Panacea? Date: 01/03/2021 Author: Neeraja Rajesh Institute of Author: B.B.A LL.B. (Hons.), JSS Law College, Mysuru Introduction Countries across the world are yet again clamping down on physical gatherings and travel in a bid to fight the second wave of the pandemic. Parallelly, the most promising vaccine candidates threaten to be a logistical nightmare to administer, not just by the sheer volume of the exercise, but also due to their ‘sub-zero temperature’ storage requirements. Ultimately, the second wave in most nations strike at a time when vaccines offer little to no refuge, rendering lockdowns a sine qua non and making it abundantly clear that virtual hearings will continue to be an integral part of dispensation of justice for the foreseeable future. International Arbitration was quick to adapt to the new normal. Several major arbitral institutions were keen on facilitating a smooth transition from in-person hearings to ODR to ensure expeditious and cost- effective resolution of existing and emerging disputes. The Seoul Protocol on Video Conference in International Arbitration promoted by the KCAB and Seoul IDRC led the way with ICC, CIArb, HKIAC and others following suit. This rapid adaptation, undoubtedly made virtual hearings practicable but there still prevails inhibitions as to the sanctity of the proceedings in a virtual space and the enforceability of the final award. These concerns are compounded in cases where one of the parties raise objections to a virtual hearing, setting the stage to challenge the award on due process grounds. The right to equal treatment of parties is set out under Article 18 of the UNCITRAL Model law. Article V of the New York Convention lays down exhaustive grounds for refusal of enforcement of an award. Art.V(1)(b) and (d) allow for such a challenge where an award debtor was unable to present his case or the arbitral procedure was not in accordance with the arbitration agreement or the law of the seat of arbitration. Hence, outside of ensuring that there is no manifest bar on virtual hearings in an arbitration agreement, the arbitrators need to follow “due process” by meting out equal treatment and by giving each party a fair opportunity to be heard. Due Process Concerns Though virtual hearings seem the inevitable answer during the current health emergency, they are plagued by a multitude of apprehensions. The most detrimental of all would be unequal access to technology. The parties to an international commercial dispute may be from any corner of the world. If the objecting party is prejudiced due to lack of internet access and other ancillary amenities, it allows for the challenge of the award based on unequal treatment or inability to present the case under Sec.18 and Sec. 34(2)(a)(iii) of the Arbitration and Conciliation Act, 1996 (hereinafter “Arbitration Act”), respectively. The fairness of the arbitral process also comes into question due to the possibility of witness coaching, the difficulty in cross-examination and the impediments when interpreters are needed (especially when the translation is simultaneous instead of consecutive). The inability to be in the same physical space and the involvement of numerous parties, further complicate the process due to the difference in time zones, intensity of Covid-19 restrictions and legitimate concerns about confidentiality. However, all such trepidations must be juxtaposed and ultimately balanced against the counterparty’s right against undue delay due to an indefinite adjournment, necessitated by the current situation, if an in-person hearing is insisted upon.[1] In fact, most major arbitral institutions have express provisions, empowering the tribunal, to prevent unnecessary delay and expense due to dilatory tactics.[2] The Path Ahead Despite evident concerns about the integrity of virtual hearings and final awards emerging therefrom, embracing the new normal and remedying existing lacunas seems to spell the way ahead. It must be noted that the transition to ODR is merely more conspicuous in the present scenario but the foundations to this transition have for long been in subsistence. Rule 32(c) of the AAA Arbitration Rules (2013), Art. 19.2 of LCIA (2014) and Art. 50(3) of the JCAA Commercial Arbitration Rules (2019) expressly provide for the possibility of virtual hearings. Other major arbitral institutions including SIAC Rules, 2016 give tribunals ample discretion in the conduct of proceedings to ensure the fair, expeditious, economical and final resolution of the disputes.[3] In India, the institutional impetus to this shift is evidenced by the 103rd Parliamentary Standing Committee Interim Report on the functioning of virtual courts, the guidance note issued by Delhi High Court to the DIAC and the discretionary powers granted to the tribunal under Sec.19(3) of the Arbitration Act. In addition to such recognition of virtual proceedings, arbitral institutions across the world have released protocols and guidance notes to ensure that a robust institutional framework is in place to support the transition. The International Institute for Conflict Prevention & Resolution provides an annotated Model Procedural Order for Remote Video Arbitration Proceedings, covering various facets of virtual hearings. The ICC Guidance Note encourages increased reliance on documents in resolution, and the replacement of “live testimony” of witnesses or experts with written question and answers, wherever possible, to tackle access related issues. Other suggestions in tackling impediments include: the use of screen sharing, 360° cameras and hot-tubbing in ensuring the integrity of witness and expert testimony; management of time difference by commencing hearing at different hours; early dismissal of claims or defences that are manifestly without merit;[4] making provisions to accommodate technical interruptions by ensuring flexibility in the hearing schedule; and agreement on the use of electronic hearing bundles, VPN and other encryption methods, and recording or transcribing the hearing. The Courts on Enforceability The Contracting States under the New York Convention, overwhelmingly adopt a pro-enforcement approach to arbitral awards. Most notably, the Austrian Supreme Court pronounced a landmark decision[5] holding that the conduct of virtual hearings despite one party’s objection, lies within the discretionary power of the arbitrator. The Court clearly held that fair and equal treatment did not mean that the involvement of one party must be
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