UNIT 8
ARBITRATION AND CONCILLATION ORDINANCE ACT 1996, AS AMENDED 2015
INTRODUCTION
ARBITRATION:
a) Form of other Dispute Resolution
b) Alternative to court room litigation
c) Parties submit their disputes to a NEUTRAL third party called the Arbitrator (s) or Arbiter (s) for resolution
d) Binding dispute resolution, like litigation within the courts
DEFINITION
Arbitration is “a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound.”
In other words, arbitration may be a sort of dispute settlement, where parties can avoid resolving their dispute within the public litigation. it's used mainly in solving disputes arising out of economic matters. Arbitration shouldn't be confused with mediation. within the arbitration, the arbitrator obliged to work out the dispute by regard to certain rules, instead of to hunt compromise which is mediator’s task.
WHY THIS AMENDENT NEEDED?
The Law Commission of India issued a report in 2014 (246thReport) which gave the great overview of the matter and also suggested the answer like following-
a) Encouraging institutional Arbitration
b) Introducing a schedule of fees for arbitrators in ad-hoc arbitration
c) Issuing guidance that hearing should be heard in continuous sittings, to avoid the "culture of frequent adjour e ts”
d) Requiring that the courts refer disputes to arbitration as long as they're clear satisfied that there's a legitimate arbitration agreement;
e) Restricting the utilization of "public policy" when challenging a gift or resisting enforcement etc.
GENERAL OVERVIEW-
a) Government promulgated the Arbitration and Conciliation (Amendment) Ordinance, on 23rd October, 2015.
b) The Arbitration and Conciliation (Amendment) Bill, 2015 (Amendment Bill) was introduced in both houses of Parliament in its recent session to exchange the Arbitration and Conciliation (Amendment) Ordinance, 2015
c) Passed by the Lok Sabha on 17th December, 2015.
d) Passed by Rajya Sabha on 23rd December, 2015.
e) Received the Preside t s assent on 31.12.2015.
f) Date of Enforcement: 23rd October, 2015.
BENEFITS OF ARBITRATION
a) Confidentiality
b) Limited Discovery
c) Speed
d) Expert Neutrals
e) Cost Savings
f) Preservation of Business Relationships
DRAWBACKS OF ARBITRATION
a) Arbitration agreements are sometimes misleading
b) If arbitration isn't mandatory parties waive their to access the courts.
TYPES OF ARBITRATION
1. Ad-hoc Arbitration.
2. Institutional Arbitration.
3. Statutory Arbitration.
4. Domestic or International Arbitration.
5. Foreign Arbitration.
SOURCES OF ARBITRATION
a) State regulate arbitration through a spread of laws.
b) A number of national procedural laws can also contain provisions concerning arbitration.
c) Key international instrument – 1958 NY Convention on Recognition and Enforcement of Foreign Arbitral Awards.
INTERNATIONAL INSTRUMENTS
a) The Geneva Protocol of 1923.
b) The Geneva Convention of 1927.
c) The European Convention of 1961.
d) The Washington Convention of 1965 (governing settlement of international investment disputes).
e) The UNCITRAL Model Law (providing a model for a national law of arbitration).
f) The UNCITRAL Arbitration Rules (providing a group of rules for a billboard hoc arbitration).
ARBITRAL DISPUTES
Some sorts of arbitral disputes are
a) Property
b) Insurance
c) Contract (including employment contracts)
d) Business / partnership disputes
e) Family disputes (except divorce matters)
f) Construction
g) Commercial recoveries
NON ARBITRAL DISPUTES
The following can't be resolved by arbitration
a) Insolvency
b) Matrimony
c) Criminal matters
d) Torts etc.
ARBITRATION AND CONCILIATION ACT, 1996
• It extends to the entire of India: provided that Parts I, III and IV shall reach the State of Jammu and Kashmir only in thus far as they relate to international commercial arbitration or, because the case could also be , international commercial conciliation.
• Explanation.—In this sub-section, the expression “international commercial conciliation” shall have an equivalent meaning because the expression “international commercial arbitration” in clause (f) of sub-section (1) of section 2, subject to the modification that for the word “arbitration” occurring therein, the word “conciliation” shall be substituted.
• It shall inherit force on such date1 because the Central Government may, by notification within the official Gazette, appoint.
• In this Part, “arbitration agreement” means an agreement by the parties to undergo arbitration all or certain disputes which have arisen or which can arise between them in respect of an outlined legal relationship, whether contractual or not.
• An arbitration agreement could also be within the sort of an article during a contract or within the sort of a separate agreement.
• An arbitration agreement shall be in writing.
• An arbitration agreement is in writing if it's contained in
a. a document signed by the parties;
b. an exchange of letters, telex, telegrams or other means of telecommunication which give a record of the agreement; or
c. an exchange of statements of claim and defense during which the existence of the agreement is alleged by one party and not denied by the opposite .
• The reference during a contract to a document containing an article constitutes an arbitration agreement if the contract is in writing and therefore the reference is like to form that article a part of the contract.
REGARD TO ARBITRATION
• A judicial authority before which an action is brought during a matter which is that the subject of an arbitration agreement shall, refer the parties to arbitration
• If the difficulty is pending before a judicial authority, arbitration could also be commenced or continued and an arbitral award made.
COMPOSITION OF ARBITRAL TRIBUNAL
Number of Arbitrators.
a. The parties are liberal to determine the amount of arbitrators, as long as such number shall not be a good number.
b. Failing the determination referred above the Arbitral Tribunal shall contains a sole arbitrator.
APPOINTMENT OF ARBITRATORS
a) A person of any nationality could also be an arbitrator, unless otherwise agreed by the parties.
b) The parties are liberal to agree on a procedure for appointing the arbitrator or arbitrators.
c) An arbitration with three arbitrators, each party appoints one arbitrator, and therefore the two appointed arbitrators appoints the third arbitrator who shall act because the presiding arbitrator.
d) If the appointment procedure isn't followed and therefore the arbitrators not appointed then the appointment shall be made, upon request of a celebration , by the judge of the State supreme court or a person or institution designated by him
e) In the case of appointment of sole or third arbitrator in a world commercial arbitration, an arbitrator of a nationality aside from the nationalities of the parties where the parties belong to different nationalities could also be appointed
f) Where the dispute with regards to appointment of arbitrators arise in a world commercial arbitration the regard to “Chief Justice of supreme court shall be construed as a regard to the judge of India.”
GROUNDS FOR CHALLENGE
TERMINATION OF MANDATE
The mandate of an arbitrator shall terminate if, he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and he withdraws from his office or the parties comply with the termination of his mandate.
CHALLENGE PROCEDURE
Amended by Act 17 June 2005 No. 90 as amended by Act 26 January 2007 No. 3 (in force 1 January 2008)
FAILURE BY AN ARBITRATOR TO PERFORM HIS FUNCTIONS/ TERMINATION OF MANDATE
APPOINTMENT OF SUBSTITUTE ARBITRATOR
ARBITRATION AND CONCILIATION AMNEDMENT 2015
A. Change within the definition of the term court defined in Section 2(1) (e)
Before Amendment
• Prior to the amendment the definition of the term court was ambiguous.
• It was ambiguous within the sense that it didn't clearly demarcate the boundary between the jurisdiction of the district court and Supreme Court.
After Amendment
• After the amendment the word court to be referred as principal civil court of original jurisdiction just in case just in case of domestic arbitration and supreme court in case of international commercial Arbitration.
B. Application of some provisions of Part 1 of the act to International Commercial Arbitration, Section 2(2)
Before Amendment
• Prior the part 1 of the act i.e. domestic arbitration was only applicable to those arbitrations where the place of arbitration in India and it created a lot of confusions that when Part 1 shall be applicable to the international commercial arbitration and when it'll not be applicable.
• Till the amendment the guideline was the choice of the Apex court in Bharat Aluminum Co. & Others v. Kaiser Aluminum Technical Services Inc., (2012) 9 SCC 552 wherein the constitutional bench of the Hon’ ble Supreme Court.
• Part I of the Arbitration & Conciliation Act is applicable only to arbitrations which takes place within the territory of India. Part I of Arbitration & Conciliation Act, 1996 would haven't any application to international commercial arbitration held outside India.
• Therefore, such awards would only be subject to the jurisdiction of the Indian courts when an equivalent are sought to be enforced in India in accordance with the provisions contained partially II of the Arbitration & Conciliation Act, 1996.
After Amendment
• After the 2015 amendment the position has been made clear.
• Sec 2(2) has been amended and now subject to an agreement to the contrary the provisions of section 9, 27 and clause (a) of sub section (1) and sub-section (3) of Section 37, this part shall also apply to international commercial arbitration i.e. where the place of arbitration is outside India.
C. Recognition of Communications through Electronic Means as an agreement in writing, Section 7 (4) (b)
• An agreement shall be considered in writing for the aim of assuring the validity of arbitration agreement if the communication has been made or words are exchanged between the parties through electronic means.
• Thus now if the parties have exchanged words through emails or maybe through messengers that can also be considered as agreement in writing.
D. Recognition of copy of arbitration agreement for referring the parties for arbitration in certain circumstances, Section 8
Before Amendment
• Party was required to supply original or duly certified copy of the Arbitration Agreement to the Court for referring the dispute to the Arbitral Tribunal.
• There won’t to be the situations frequently that one party wont to be willing to refer the dispute for arbitration but the first or duly certified copy was retained with another party.
• That is why the court wont to refuse the appliance on the bottom of not producing original or duly certified copy.
After Amendment
• The amended section 8 of the act provides that the facility of the judicial authority to refer the parties to arbitration notwithstanding any judgment, decree or order of the Supreme Court or any Court unless it finds that clear no valid arbitration agreement exists.
• Further a proviso has been added to Sub section (2) which provides that if the first arbitration agreement or a licensed copy thereof isn't available with the party applying for regard to arbitration under sub sec (1),and the said agreement or certified copy is retained by the opposite party then the party so applying shall file such application alongside a replica of the arbitration agreement and a petition praying the court to call upon the opposite party to supply the first arbitration agreement or its duly certified copy before the court.
• Thus most prevalent misuse of the sooner provision has been done away with amendment
E. Reduction within the Power of Court under Section 9
• The power of the court u/s 9 and arbitral tribunal u/s 17 has become almost equal by virtue of the amendment of 2015.
• Two sub sections (2 and 3) are added to section 9 Sub Section (2) provides where before the commencement of the arbitral proceedings, a Court passes an order for any interim measures of protection under sub section (1), the arbitral proceedings shall be commenced within a period of 90 days from the date of such order or within such further time because the Court may determine.
• Further sub section (3) limits on the jurisdiction of the court from entertaining any application under sub section (1) where the arbitral tribunal has been constituted.
• Once the arbitration tribunal is constituted, the court shall not entertain any interim applications unless such circumstances exist which can render the remedy under section 17 of the Act not efficacious.
F. Amendments within the Procedure of Appointment of Arbitrators, Section 11
1. Appointment of arbitrator shall now be made by the Supreme Court or the high court, because the case could also be , rather than the chief justice of India or the chief justice of the high court.
Before Amendment
• it provided for a default procedure i.e. appointment of arbitrator by the chief justice or any person or institution designated by him just in case a party fails to appoint an arbitrator or the 2 appointed arbitrators fail to agree on the third arbitrator .
After Amendment
• It provides for a default procedure i.e. appointment of arbitrator by the Supreme Court or, because the case could also be , the high court or a person or institution designated by such Court just in case a celebration fails to appoint an arbitrator or the 2 appointed arbitrators fail to agree on the third arbitrator.
2. Nature of the facility exercised under section 11
Before Amendment
• There was a really big point of controversy that the appointment of arbitrator by the court are going to be considered because the exercise of judicial power or the administrative power.
• And if this is often delegated to any person or institution designation by it, whether the exercise of such power by such person or institution are going to be considered because the judicial power or administrative power in nature.
• Till date the leading authority was the judgment of M/s. S.B.P v. M/s. Patel Engineering Ltd, during this case the seven judges’ bench of the Supreme Court held the power under Sec 11 to be Judicial in nature.
After Amendment
• The amendment act of 2015 has made the position crystal clear.
• Sub section 6(B) added by the amendment provides that the designation of any person or institution by the Supreme Court or, because the case could also be , the high court, for the purposes of this section shall not be considered a delegation of judicial power by the Supreme Court or the high court.
• Thus if the facility to appoint the arbitrator is exercised by the court itself it shall be considered as judicial power and when it's exercised by any designated person or institution , it shall be considered because the administrative power 2. Nature of the facility exercised under section 11
3. Determination of the fees of the arbitrators
• Prior to the amendment, the fees of the arbitrators were determined by the parties thereto and it had been totally trusted the whims and fancy of the parties though subjected to the acceptance of the designated arbitrator.
• But now the high court has been empowered to frame rules for the aim of determination of fees of the arbitral tribunal and therefore the manner of such payment and it shall take under consideration the rates of fee laid out in the Fourth Schedule to the Act while framing such rules.
• The explanation added to Section 11(14) clarifies that it shall not apply to international commercial arbitration and in arbitrations (other than international commercial arbitration) just in case where parties have agreed for determination of fees as per the rules of an arbitral institution.
• Section11A has been introduced which empowers the central Government to revise the fee within the 4th schedule by following the procedure prescribed therein.
CRITICISM:
Section 11(13) provides that an application for appointment of arbitrator shall be disposed of as expeditiously as possible and an endeavor shall be made to eliminate the matter within a period of sixty days from the date of service of notice on the opposite party.
G. New Measures introduced for ensuring impartiality and skill of Arbitrator, Section 12
• Now when a person is approached in reference to the possible appointment as arbitrator he's required: -
a. to disclose within the writing the existence of any relationship or interest of any kind which is probably going to offer rise to justifiable doubts on his neutrality
b. to disclose any circumstances which are likely to affect his ability to devote sufficient time to the arbitration and complete the arbitration within the specified period.
• Schedule V and VI has been added to the act which give for the circumstances exist which give rise to justifiable doubts on the independence or impartiality of an arbitrator and therefore the format of the disclosure by such one that has been approached to be appointed as arbitrator respectively.
• Section 12 (5) provides that a person having relationships as laid out in the Seventh Schedule shall be ineligible to be appointed as an arbitrator; For example: The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party to the dispute; or the arbitrator may be a manager, director or a part of the management, or features a similar controlling influence over the parties to the dispute.
• But that parties may, after disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.
• Thus section 12 doesn't prescribe any disqualification, it only provides the duty of the person to disclose such relation and it's on the option of the party to appoint him as arbitrator. If the parties rather than disclosure agree to appoint him as arbitrator, such appointment can't be questioned.
H. Expansion of the powers of arbitral tribunal for granting interim measures etc., Section 17
• The arbitral tribunal shall have power to grant all types of interim measures which the Court is empowered to grant under section 9 of the Act.
• Such interim measures are often granted by the arbitral tribunal during the arbitral proceedings or at any time after making the arbitral award, but before it's enforced under section 36 of the Act.
• Further Section 17(2) of the section provides that any order issued by the arbitral tribunal for grant of interim measures shall be deemed to be an order of the Court for all purposes and shall be enforceable under the Code of Civil Procedure, 1908 within the same manner as if it were an order of the Court.
• Now there's a conflict and ambiguity between the starting point of section 17 and ending point of section 17.
I. Recognition of counter claims and set off, Section 23 (2A)
• Prior to this amendment the position regarding filing or counter claim or set–off wasn't clear but this amendment made this position clear.
• Inserted section 23 (2A) recognizes the counter claim and defense of set–off on the part of the respondent.
• It provides that the respondent, in support of his case, can also submit a counter claim or plead a set- off, which shall be adjudicated upon by the arbitral tribunal, if such counterclaim or set- off falls within the scope of the arbitration agreement.
J. Day- to- day oral hearings and prohibition on adjournments
• Newly added proviso to section 24 provides that the arbitral tribunal shall as far as possible, hold oral hearings for the presentation of evidence or for oral argument on day-to-day basis .
• It further provides that the arbitral tribunal shall not grant any adjournments unless sufficient cause is formed out, and should impose costs including exemplary costs on the party seeking adjournment without any sufficient cause.
K. time limit for arbitral award, Section 29 A
• Section 29 A has been inserted within the act which provides for time limit for arbitral award.
• Arbitral tribunal shall pass the award within 12 months from the date on which the arbitration tribunal enters upon the reference.
• However the tribunal may extend the period by a maximum of 6 months with the consent of the parties to the arbitration agreement.
• But if still the award isn't made then the court has the prerogative of extending the period beyond 18 months. The court will exercise this power on the application given by any of the parties and after being satisfied by the reasons mentioned within the application it's going to grant extension
• Such application shall be decided by the court within 60 days.
• If the court finds that the extension is due to the delay on the part of the arbitrator, the court may order reduction within the fee of the arbitrator by an amount not exceeding 5% for each months delay.
• The court has also been empowered to impose actual and exemplary costs on the party at default.
• Further an incentive has been offered by the amendment that just in case the tribunal passes the award within 6 months rather than allowed 12 months, the arbitral tribunal shall be entitled to receive additional fees as determined by the parties
• It further provides that if the arbitral tribunal is reconstituted or all the members of the tribunal are substituted under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.
CRITICISM: Thus on analyzing this section it appears that thought the legislators have made a beautiful attempt to make arbitration proceeding as expeditious as possible but by inserting the provisions for further extension by court for unlimited time, has made its attempt futile. it's going to be said that it's closed all the doors to stop delay in arbitral proceedings but has left one window open.
L. Introduction of fast track Procedure, Section 29 B
• The fast track procedure is an effort within the direction of creating the arbitration as expeditious as possible.
• The parties to an arbitration agreement may either before or at the time of appointment of the arbitral tribunal, agree in writing to possess their dispute resolved by the means procedure and during this process they'll agree on an arbitral tribunal consisting of a sole arbitrator which shall be chosen by them
a. Under the means procedure, the arbitral tribunal shall follow the following procedure: The arbitral tribunal shall decide the dispute on the idea of written pleadings , documents and submissions filed by the parties without any oral hearing ;
b. The arbitral tribunal shall have power to involve any further information or clarification from the parties additionally to the pleadings and documents filed by them ;
c. An oral hearing could also be held only, if, all the parties make a request or if the arbitral tribunal considers it necessary to have oral hearing for clarifying certain issues;
d. The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and adopt such procedure as deemed appropriate for expeditious disposal of the case.
• It provides that the arbitral tribunal shall pass the award within 6 months from the date on which the arbitration tribunal enters upon the reference. But the conditions as prescribed under Sec 29 A (3) to Section 29 A (9) also are applicable thereto .
M. Defined Public Policy, Section 34
Before Amendment
• What exactly the public policy means wasn't clear.
• Explanation of the section only as long as it might be considered as opposed to public policy of India if the making of the award was induced or suffering from fraud or corruption or was in violation of section 75 or section 81.
• In the shortage of elaborate provision, there was major scope for judiciary for interpretation.
• In Renusagar Power Co v. General Electric co, (1994) Supp (1) SCC 644, the Apex Court determined the term public policy as anything contrary to- 1. Fundamental policy of Indian Law 2. The interest of India 3. Justice or morality
• In ONGC v. Saw Pipes Ltd (2003)5SCC705 The Apex Court added another ground to the meaning of public policy. It held that the award are often put aside if it's patently illegal.
• Patently illegal means the illegality must attend the basis of the matter.
After Amendment
• Arbitration and Conciliation (Amendment) Act, 2015 incorporated the ratio of those two decisions within the act itself.
• Now explanation which explains what are in conflict of public policy of India also includes these two: 1. it's in contravention with the fundamental policy of Indian Law, and 2.It is in conflict with the most basic notions of morality or justice.
• Further a new explanation has been added which provides that for the avoidance of doubt, the test whether there's a violation with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
• The decision of the ONGC s case has been incorporated in sub section 2A of the section 34.
• It provides that an arbitral award arising out of arbitrations other than international commercial arbitrations, can also be put aside by the Court, if the Court finds that the awards is vitiated by patent illegality appearing on the face of the award.
• A proviso has been added thereto which provides that a gift shall not be put aside merely on the ground of an erroneous application of the law or by re- appreciation of evidence.
N. Enforcement of Arbitral Award, Section 36
Before Amendment
• Where the time for making an application to line aside the arbitral award under section 34 has expired, or such application having been made, it's been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) within the same manner as if it were a decree of the court.
• Thus the award couldn't be enforced if the application for setting aside the award has been moved to the court.
After Amendment
• Mere filing of application for setting aside an arbitral award wouldn't render ipso facto that award unenforceable until and unless the court grants an order of stay the operation of the said award on a separate application made for that purpose.
• Thus the if the application for setting aside the award has been moved to the court and therefore the court doesn't give stay, the award could also be enforced within the meanwhile and if the court wishes to grant stay , it'll need to mention the reasons for granting such stay.
O. Amendment within the grounds of Appeal, Section 37
In section 37 which talks about appealable orders, the following additional ground has been added for appeal:
a. Refusing to refer the parties to arbitration under section 8. the other two grounds are the same as contained within the act i.e.
b. Granting or refusing to grant any measure under sec tion.9;
c. Setting aside or refusing to set aside an arbitral award under section 34.
POWERS AND DUTIES OF ARBITRATORS
(1) Arbitrators shall have the duty to appoint a time and place of hearing at a convenient location in the state of Montana and provide reasonable notice to the manufacturer and consumer of such time and place, to conduct fair and impartial hearings, to take all necessary actions to avoid delay in the disposition of proceedings, to maintain order and to render a final decision no later than 60 days after the department has accepted a request for arbitration. The decision must comply with Title 61, chapter 4, part 5 and Title 27, chapter 5, MCA. The arbitrators shall have all powers necessary to meet these ends including, but not limited to, the following:
(a) to consider any and all evidence offered by the parties which the panel deems necessary to an understanding and determination of the dispute;
(b) to request the department to issue subpoenas to compel the attendance of witnesses and the production of documents, papers and records relevant to the dispute;
(c) to request the department to forward a copy of all written testimony and documentary evidence to an independent technical expert certified by the national institute of automotive excellence, to consult with the technical expert as necessary and to request the technical expert to sit as a nonvoting member of the arbitration panel during presentation of oral testimony;
(d) to regulate the course of the hearings and the conduct of the parties and their counsel therein;
(e) to hold conferences for simplification of the issues or for other purposes;
(f) to schedule vehicle inspections, if deemed necessary, at such facility as the arbitrators determine;
(g) to continue the arbitration hearing to a subsequent date if a party requests a continuance before hearing, or at the initial hearing or if the panel determines that additional information is necessary in order for the panel to render a fair and accurate decision. A continuance shall be held within five days of the initial hearing;
(h) to reopen the hearing at will or upon motion of either party for good cause shown at any time before the decision is rendered; and
(i) to permit a deposition to be taken of a witness who cannot be subpoenaed or is unable to attend the hearing upon the application of a party and for use as evidence, in the manner and upon the terms designated by the arbitrators.
(2) Arbitrators shall maintain their impartiality throughout the course of the arbitration proceedings.
(3) An arbitrator shall not be assigned to an arbitration panel if he or she has any relationship to either party to the dispute to be decided by that panel.
(4) There shall be no direct communication between the parties and the arbitrators other than at the oral hearing. Any other oral or written communications between the parties and the arbitrators shall be channeled through the department for transmittal to the appropriate individual(s) . Any such prohibited contact shall be reported by the arbitrators to the department and noted in the case record.
COMMENCEMENT OF CONCILIATION PROCEEDINGS-
a) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the topic of the dispute.
b) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.
c) If the other party rejects the invitation, there'll be no conciliation proceedings.
d) If the party initiating conciliation doesn't 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.
NUMBER OF CONCILIATORS-
a) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.
b) Where there's more than one conciliator, they ought, as a general rule, to act jointly.
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 therefore the parties may agree on the name of the third conciliator who shall act because the presiding conciliator.
(2) Parties may enlist the help of an appropriate institution or person in reference to 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 1 or more conciliators be made directly by such an institution or person: as long as in recommending or appointing individuals to act as conciliator, the institution or person shall have reference to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with reference to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.
SUBMISSION OF STATEMENTS TO CONCILIATOR-
a) The conciliator, upon his appointment, may request each party to undergo him a quick written statement describing the overall nature of the dispute and therefore the points at issue. Each party shall send a copy of such statement to the other party.
b) The conciliator may request each party to undergo him a further written statement of his position and therefore 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 opposite party.
c) At any stage of the conciliation proceedings, the conciliator may request a party to undergo him such additional information as he deems appropriate.
ROLE OF CONCILIATOR-
a) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.
b) 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 therefore the circumstances surrounding the dispute, including any previous business practices between the parties.
c) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the needs the parties may express, including any request by a party that the conciliator hear oral statements, and therefore the need for a speedy settlement of the dispute.
d) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals needn't be in writing and wish not be accompanied by a statement of the reasons therefor.
COMMUNICATION BETWEEN CONCILIATOR AND PARTIES-
a) The conciliator may invite the parties to satisfy 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.
b) 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 reference to the circumstances of the conciliation proceedings.
DISCLOSURE OF INFORMATION
a) When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party so as that the other party may have the chance to present any explanation which he considers appropriate: as long as when a party gives any information to the conciliator subject to a selected condition that it's kept confidential, the conciliator shall not disclose that information to the opposite party.
CO-OPERATION OF PARTIES WITH CONCILIATOR-
The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavor to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.
SUGGESTIONS BY PARTIES FOR SETTLEMENT OF DISPUTE-
Each party may, on his own initiative or at the invitation of the conciliator, undergo the conciliator suggestions for the settlement of the dispute.
SETTLEMENT AGREEMENT-
a) When it appears to the conciliator that there exist elements of a settlement which can 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 within the light of such observations.
b) If the parties reach agreement on a settlement of the dispute, they'll 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.
c) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
d) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
STATUS AND EFFECT OF SETTLEMENT AGREEMENT
a) The settlement agreement shall have an equivalent status and effect as if it's an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
CONFIDENTIALITY
a) Notwithstanding anything contained in any other law for the time being in force, the conciliator and therefore the parties shall keep confidential all matters concerning the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is important for purposes of implementation and enforcement.
TERMINATION OF CONCILIATION PROCEEDINGS-
a. The conciliation proceedings shall be terminated
b. by the signing of the settlement agreement by the parties on the date of the agreement; or
c. 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
d. 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
e. by a written declaration of a party to the other party and therefore the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.
RESORT TO ARBITRAL OR JUDICIAL PROCEEDINGS
a) The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that's 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.
