The ICFAI University, Dehradun ICFAI Law School

The ICFAI University, Dehradun
ICFAI Law School
International commercial CONCILLIATION
Submitted To
Mr. Jai Huda
Asst. Professor
Submitted By
AYUSHI SRIVASTAVA
17FLICDDN01036
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INTRODUCTION
The UNCITRAL Model Law on International Commercial Conciliation was
introduced in 2002. Now over a decade later, it is important to assess the impact of
the Model Law. The assignment seeks to highlight positive lessons learned from the
international commercial conciliation.
What is conciliation?
Conciliation is an alternative out-of-court dispute resolution instrument.
Like mediation, conciliation is a voluntary, flexible, confidential, and interest based process.
The parties seek to reach an amicable dispute settlement with the assistance of the conciliator,
who acts as a neutral third party.
The main difference between conciliation and mediation proceedings is that, at some point
during the conciliation, the conciliator will be asked by the parties to provide them with a
non-binding settlement proposal. A mediator, by contrast, will in most cases and as a matter
of principle, refrain from making such a proposal.
Conciliation is a voluntary proceeding, where the parties involved are free to agree and
attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to
define the time, structure and content of the conciliation proceedings. These proceedings are
rarely public. They are interest-based, as the conciliator will when proposing a settlement, not
only take into account the parties' legal positions, but also their; commercial, financial and /
or personal interests.
Like in mediation proceedings, the ultimate decision to agree on the settlement remains with
the parties.
Main benefits
Conciliation ensures party autonomy.
The parties can choose the timing, language, place, structure and content of the conciliation
proceedings.
Conciliation ensures the expertise of the decision maker.
The parties are free to select their conciliator. A conciliator does not have to have a specific
professional background. The parties may base their selection on criteria such as; experience,
professional and / or personal expertise, availability, language and cultural skills. A
conciliator should be impartial and independent.
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Conciliation is time and cost efficient.
Due to the informal and flexible nature of conciliation proceedings, they can be conducted in
a time and cost-efficient manner.
Conciliation ensures confidentiality.
The parties usually agree on confidentiality. Thus, disputes can be settled discretely and
business secrets will remain confidential.
UNDERSTANDING THE CONCEPT OF CONCILIATION AS DEFINED BY THE
MODEL LAW
The definition of "conciliation" is provided in article 1 of the UNCITRAL Model
Law ("Model Law") as a broad notion referring to proceedings in which a person or
a panel of persons assists the parties in their attempt to reach an amicable settlement
of their dispute.
Conciliation is different from party negotiations in that conciliation involves third-
person assistance in an independent and impartial manner to settle the dispute. It
differs from arbitration because in conciliation the parties retain full control over the
process and the outcome, and the process is non- adjudicatory. In conciliation, the
conciliator assists the parties in negotiating a settlement that is designed to meet the
needs and interests of the parties in dispute. The conciliation process is an entirely
consensual one in which parties that are in dispute determine how to resolve the
dispute, with the assistance of a neutral third party. The neutral third party has no
authority to impose on the parties a solution to the dispute.
The Model Law uses the term "conciliation" to encompass all the procedures which
are assisted by a third person to settle a dispute, such as conciliation, mediation,
neutral evaluation, mini-trial or similar terms. In any event, all these processes share
the common characteristic that the role of the third person is limited to assisting the
parties to settle the dispute and does not include the power to impose a binding
decision in the parties. 'Alternative dispute resolution' procedures are covered by the
Model Law. However, its scope is limited to non-binding types of dispute resolution.
PURPOSE OF THE UNCITRAL MODEL LAW
UNCITRAL prepared a model law on conciliation to support its increased use by
courts, government agencies, community and commercial spheres. Such use has
been encouraged given its relatively high success rate.
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It was noted that while certain issues, such as the admissibility of certain evidence in
subsequent judicial or arbitral proceedings or the role of the conciliator in subsequent
proceedings, could typically be solved by reference to sets of rules such as the
UNCITRAL Conciliation Rules, there were many cases where no such rules were
agreed upon. The conciliation process might thus benefit from the establishment of
non-mandatory legislative provisions that would apply when the parties mutually
desired to conciliate but had not agreed on a set of conciliation rules.
The provisions in the Model Law governing such proceedings are designed to accommodate
differences in procedural details and leave the parties and conciliators free to carry out the
conciliatory process as they consider appropriate. Essentially, the provisions seek to strike a
balance between protecting the integrity of the conciliation process, for example, by ensuring
that the parties' expectations regarding the confidentiality of the conciliation are met while
also providing maximum flexibility by preserving party autonomy.
The objectives of the Model Law, which include encouraging the use of conciliation and
providing greater predictability and certainty in its use, are important for fostering economy
and efficiency in international trade.
CONCLUSION
Hopefully, by now we are able to decide upon the issue raised in the beginning of this paper
and can safely conclude by mentioning that Conciliation has a great potential to provide a
lasting solution to a dispute.
Since, the Settlement Agreement signed by the parties to the dispute has the same status and
effect as an Arbitral Award, Conciliation may be particularly suitable where the parties to the
dispute desires to safeguard their commercial relationships. Organisations often enter into
contractual relations for carrying out their projects. They float Tenders inviting Bids, evaluate
Bids and finally award the Contract. This consumes time and funds. Hence, it is best to
maintain cordial relations so that this time consuming procedure need not be undertaken
again and again.
The success of Conciliation process depends upon the factors affecting it. It is necessary for
both the parties to accept the conciliation process with open mind and have to put up the
issues accordingly. An essential factor for success in the conciliation proceedings is the
personal appearance of the parties, or their representation by someone having full power to
reach agreement.
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International commercial CONCILLIATION

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