ARBITRATION AND CONCILIATION

ARBITRATION- MEANING

According to clause (a) of article 2 of UNCITRAL model law: Arbitration is the means by which the parties to dispute get the matter settled through the intervention of an agreed third person. A process in which a disagreement between two or more parties is resolved by impartial individuals, called arbitrators, in order to avoid costly and lengthy litigation. The arbitration is a sort of private judicature, based on the principle of the well power.

IMPORTANCE
Aristotle said that disputed parties might prefer the arbitration than judicature, because the arbitrator perceives the justice while judge considers only the full application of the legislation. The arbitration is considered an effective and rapid mean in solving problems and finding solution for any arising dispute between the trade partners. Judgments of the arbitrators and their decisions are always straight and neutral.

POWERS AND FUNCTIONS OF ARBITRATOR

Section 13 lays down the powers of arbitrators The various powers are as under : (1) To administer oath to parties and witnesses appearing before him (2) To state a special case for the opinion of the court on any question of law or state the decision in the form of a special case for the opinion of the court. (3) To make the decision conditional or in the alternative; (4) To correct in decision any clerical mistake or error arising from any accidental slip or omission. (5) To administer any party interrogatories.

DUTIES OF ARBITRATOR
1. Duty to follow rules of natural justice 2. Duty to act fairly to both parties 3. Duty not to delegate

4. Duty to decide according to law

5. Duty not to exceed his authority 6. Duty to decide all matters referred 7. Duty to act together
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8. Duty not to accept hospitality

OVERVIEW OF HEARING PROCESS

Both the employer party and worker party are required to attend the arbitration hearing, as well as any other sessions called by the Arbitration Panel. Persons directly involved in a dispute and any relevant witnesses for either party should also attend the hearing. The style of each Arbitration Panel may vary, but in general the arbitration hearing takes between two to four hours. However it may take longer than this if there are many issues or they are particularly complex. The Arbitration Panel will sometimes schedule a second or third hearing.

THE HEARING WILL INCLUDE THE FOLLOWING

STEPS

The Arbitrators explain his/her role and the manner in which the hearing is to be run. The Arbitrators will ask each party to introduce themselves briefly. The Arbitration Panel tries to help parties resolve their dispute by agreement during an informal voluntary conciliation. If no settlement can be reached during the conciliation, then the Arbitration Panel proceeds to formal mandatory arbitration. The Arbitration Panel can require the parties to provide additional evidence or information and will set a deadline or additional hearing for the submission of such information. All sessions of the Arbitration Council are closed to the general public, unless there is agreement to allow observers.
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PROCEDURE OF ARBITRATION
PROCEEDINGS
In theory, arbitration is a consensual process; a party cannot be forced to arbitrate a dispute unless he agrees to do so. In practice, however, many fine-print arbitration agreements are inserted in situations in which consumers and employees have no bargaining power

Such agreements are generally divided into two types: 1. agreements which provide that, if a dispute should arise, it will be resolved by arbitration. These will generally be normal contracts, but they contain an arbitration clause. 2. agreements which are signed after a dispute has arisen, agreeing that the dispute should be resolved by arbitration (sometimes called a "submission agreement")

The former is the far more prevalent type of arbitration agreement. For example, in certain Commonwealth countries, it is possible to provide that each party should bear their own costs in a conventional arbitration clause, but not in a submission agreement.
In keeping with the informality of the arbitration process, the law is generally keen to uphold the validity of arbitration clauses even when they lack the normal formal language associated with legal contracts.

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Agreements to refer disputes to arbitration generally have a special status in the eyes of the law. For example, in disputes on a contract, a common defense is to plead the contract is void and thus any claim based upon it fails. It follows that if a party successfully claims that a contract is void, then each clause contained within the contract, including the arbitration clause, would be void.

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However, in most countries, the courts have accepted that a contract can only be declared void by a court or other tribunal and if the contract (valid or otherwise) contains an arbitration clause, then the proper forum to determine whether the contract is void or not, is the arbitration tribunal. Arguably, either position is potentially unfair; if a person is made to sign a contract under duress, and the contract contains an arbitration clause highly favorable to the other party, the dispute may still referred to that arbitration tribunal. Conversely a court may be persuaded that the arbitration agreement itself is void having been signed under duress. However, most courts will be reluctant to interfere with the general rule which does allow for commercial expediency; any other solution (where one first had to go to court to decide whether one had to go to arbitration) would be self defeating.
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AWARD AND ITS EXECUTION

Arbitral Awards

An Arbitral Award is the official name for the final written decision of the Arbitration Council. The final decision of an Arbitration Panel regarding a labour dispute case becomes the Arbitral Award of the Council. Generally, an Arbitral Award is issued within 15 working days from the date the Council receives a case

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BINDING AND NON BINDING AWARDS

During the arbitration hearing process, before the Arbitration Panel begins the formal mandatory arbitration, the Panel will ask the parties whether they choose a binding or non-binding Arbitral Award.
If both parties agree to a binding Arbitral Award, then the decision of the AC is immediately enforceable. This means that, by law, the parties must follow the terms of the Arbitral Award once it is issued.

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If both parties do not agree to a binding Arbitral Award (for example, one or both parties choose a non-binding Award), this means that the decision of the AC is not immediately enforceable; instead, either party can file an opposition to the Arbitral Award with the SAC within eight calendar days of the date the Award is issued. If either party files an opposition within the eight day limit, then the Arbitral Award will not be enforceable. If neither party files an opposition to the Arbitral Award within the 8 days limit, then the Award will become enforceable.
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CONCILIATION
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Conciliation means settling of disputes without litigation.

Conciliation is the process by which discussion between parties is kept going through the participation of the conciliator. The main difference between arbitration and conciliation is that in arbitration proceedings, the award is the decision of arbitral tribunal while in the case of conciliation the decision is that of the parties arrived at with the assistance of the conciliator.

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The Parties are at liberty to evolve their own procedure of conciliation for negotiating and arriving at settlement of disputes. It is only when no such agreement or procedure has been evolved by the parties that the parties that the provisions of part 3 of the act are invoked and made applicable.

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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

1.

2.

The method of conciliation is generally applicable to existing disputes, while the mode of arbitration is available for existing as well as for the future disputes. For adopting the method of conciliation, there is no need for a prior agreement for resorting to this method, but in arbitration a prior agreement for arbitration between the parties is required.

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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

3. The pre-agreement in arbitration must be in writing but since no pre agreements are required in conciliation, there is no such binding in the case of conciliation. 4. The conciliation proceedings start by sending a written invitation and a written acceptance thereof in between the parties. The invitation may be accepted or rejected by the other party as it has no binding effect, being an invitation only. The prior written agreement in arbitration commands a binding effect upon the parties and its breach by resorting to court, compels court to refer the matter to the arbitration and parties are bound by the arbitral agreement

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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

5. While conciliation proceedings are in progress, there is a bar on parties from initiating arbitral or judicial proceedings as per section 77 of the new act 1996.In arbitration, the arbitral agreement itself suggest for redressal of disputes through arbitration and if any party approaches court, the other party may request the court to refer the matter to arbitration and court is bound to refer such matter to the arbitral Tribunal.

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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

6. Where parties fail to determine the number of arbitrators/conciliators, the act envisages odd number of arbitrators or sole arbitrators/conciliators. Parties may agree for two or three conciliators and maximum number of conciliators cannot exceed three. Where the number of conciliators is more than one, they as a matter of general rule should act jointly. Parties may seek assistance in appointment of conciliators, the assistance of any suitable institution or person. In case of arbitrators there is no bar on their maximum number but the total should not be even number. when parties agree for three arbitrators, each party shall appoint one and these two shall appoint the third arbitrator who shall be presiding arbitrator.
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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

7. While the role of conciliator is to help and assist the parties to reach an amicable settlement of their dispute, the arbitrator does not merely assist the parties but he also actively arbitrates and resolves the dispute by making an arbitral award. 8. In case of conciliation a party may require the conciliator to keep the factual information confidential and not disclose it to the other party, but it is not so in arbitration as the information given by a party is subjected to scrutiny by the other party. Thus there is no question of confidentiality in case of arbitration awards.
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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

9. A settlement agreement may be made by the parties themselves and the conciliator shall authenticate the same. An arbitration award on other hand is not merely a settlement agreement but it is judgment duly signed by the arbitrator. 10. The conciliation proceedings may be unilaterally terminated by a written declaration by a party to the other party and the conciliator, but arbitration proceedings cannot be so terminated.

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DIFFERENCE BETWEEN ARBITRATION AND CONCILIATION

11. Conciliator is subjected to certain disabilities under section 80 of the act and he cannot act as a arbitrator or as a councilor a witness in any arbitral or judicial proceedings but there is no such disabilities imposed on an arbitrator or parties to arbitral proceedings. 12. The arbitration proceedings or awards may be used as evidence in any judicial proceedings but the conciliation proceedings cannot be used as evidence in any arbitral or judicial proceedings. 13. An arbitrator has to decide according to law, but a conciliator can conciliate irrespective of law.
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POWER AND FUNCTION OF CONCILIATOR

The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute. The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, 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.

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POWER AND FUNCTION OF CONCILIATOR

The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute. The conciliator-may, at any stage of the conciliation proceedings, makes proposals for a settlement of the dispute. Such proposals need not be writing and need not be accompanied by a statement of the reasons therefore.

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Procedure

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COMMENCEMENT OF CONCILIATION PROCEEDINGS

The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute. Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate. If the other party rejects the invitation, there will be no conciliation proceedings. If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.
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NUMBER OF CONCILIATORS
There shall be one conciliator unless the parties agree that there shall be two or three conciliators. Where there is more than one conciliator, they ought, as a general rule, to act jointly

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Appointment of conciliators
1. Subject to sub-section (2), In conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator; In conciliation proceedings with two conciliators, each party may appoint one conciliator; In conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.

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APPOINTMENT OF CONCILIATORS
2. Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular, A party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or The parties may agree that the appointment of one or more conciliators be made directly by such an institution or person:

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Submission of statements to conciliator

The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party. The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party. At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information, as he deems appropriate

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Communication between conciliator and parties The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately. Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.

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Disclosure of information
When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation, which he considers appropriate. Provided that when a party gives any information to the conciliator subject to a specific condition that is to be kept confidential, the conciliator shall not disclose that information to the other party.

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Co-operation of parties with conciliator

The parties shall in good faith cooperate with the conciliator and, in particular, shall endeavor to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.

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SUGGESTIONS BY PARTIES FOR SETTLEMENT

OF DISPUTE

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

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SETTLEMENT AGREEMENTS

When it appears to the conciliator that there exist elements of a settlement, which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

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SETTLEMENT AGREEMENTS
If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement. When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively. The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

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Status and effect of settlement agreement

The settlement agreement shall have the same status and effect as if it is an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.

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Confidentiality

Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

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Termination of conciliation proceedings

By the signing of the settlement agreement by the parties on the date of the agreement; or By a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or By a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or By a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.
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Resort to arbitral or judicial proceedings

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

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