What is Conciliation?

Conciliation is an alternative dispute resolution (ADR) mechanism recognized under the Arbitration and Conciliation Act, 1996, designed to facilitate the amicable settlement of disputes outside formal litigation. It is a voluntary, confidential, and flexible process where parties engage a neutral conciliator to assist them in reaching a mutually acceptable resolution. Unlike arbitration, where a binding decision is imposed, conciliation focuses on collaboration and negotiation, allowing parties to control the outcome while benefiting from the expert guidance of an impartial third party.

The conciliation process begins when one party invites the other to conciliate, and upon acceptance, a conciliator is appointed either by mutual agreement or through an institution. The conciliator facilitates discussions, identifies key issues, explores settlement options, and suggests possible solutions. If the parties agree on a resolution, it is recorded in a settlement agreement, which, as per the Arbitration and Conciliation Act, 1996, is legally binding and enforceable as a court decree. If no agreement is reached, parties retain the right to pursue arbitration or litigation.