Arbitration, Mediation and Conciliation · Conciliation Proceedings and International Perspective of Conciliation

Resort to Arbitral or Judicial Proceedings During Conciliation (Section 77)

Updated 11 October 2026 · Fact-checked

Section 77 says parties must not start arbitral or judicial proceedings during conciliation on a dispute that is the subject of the conciliation. The one exception: a party may start such proceedings if, in his opinion, they are necessary for preserving his rights. To solve a question, test the dispute, the timing and the purpose.

Understand Resort to Arbitral or Judicial Proceedings

Conciliation is a voluntary, settlement-seeking process. A conciliator helps the parties reach an amicable settlement. If one party could rush to court or arbitration while talks are on, the process would lose trust. Section 77 protects the process from this.

The rule is a bar on parallel proceedings. During the conciliation proceedings, parties shall not initiate any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation. The word is "initiate". The section stops new proceedings. It does not speak of proceedings already pending.

The bar has one exception. A party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights. The test is the party's own opinion. The section does not say a court must agree that the step was necessary. A typical case is a claim about to become time-barred, or a need for urgent protection of an asset.

Three features limit the bar. It operates only during the conciliation proceedings. It covers only the dispute that is the subject-matter of the conciliation. And it binds the parties, not the conciliator. The conciliator's own limits in later proceedings sit in Section 80, and the bar on using conciliation material as evidence sits in Section 81.

In an answer, state the rule, apply it to the facts, then conclude. Always check whether the proceedings are about the same dispute, and whether the conciliation is still running.

Key rules to remember

General rule of Section 77: During conciliation proceedings: no initiation of arbitral or judicial proceedings on the dispute that is the subject-matter of the conciliation; Applies to the parties. The word is "initiate".
Exception: Proceedings allowed if, in the party's opinion, they are necessary for preserving his rights; The test is the party's opinion. Purpose is preservation of rights, not winning the dispute.
Scope conditions: Bar applies only if (1) conciliation proceedings are on, and (2) the dispute is the subject-matter of that conciliation; A different dispute between the same parties is not covered.
Related sections: Section 80: conciliator's role in other proceedings. Section 81: admissibility of evidence in other proceedings; Do not mix these with Section 77. They deal with the conciliator and with evidence.

How to solve Resort to Arbitral or Judicial Proceedings questions

Use this sequence for any problem or theory question on Section 77.

1Identify whether conciliation proceedings are actually going on at the date of the step. Check facts on commencement and termination.
2Identify the dispute under conciliation and compare it with the dispute in the proposed proceedings. Are they the same subject-matter?
3Identify who is acting. Section 77 binds the parties.
4State the rule: no initiation of arbitral or judicial proceedings during conciliation on that dispute.
5Check the exception: was the step taken to preserve the party's rights, for example against a limitation period or to secure urgent protection?
6Apply to the facts and conclude clearly: barred, or permitted under the exception.
7Add a short practical note: record the reason for the protective step in writing and inform the conciliator and the other party.

Quickest way: Three-question test for Section 77

When to use it: Use for short case questions when time is tight.

Is conciliation on right now?
Is it the same dispute?
Is the step needed to preserve rights?
If the first two are yes and the third is no, the step is barred. If the third is yes, it is allowed. If either of the first two is no, Section 77 does not apply.

Common mistakes in Resort to Arbitral or Judicial Proceedings

Saying parties can never go to court during conciliation.
Students remember only the bar and forget the exception.
Fix: Always write both parts: the bar and the exception for preserving rights.
Treating the exception as needing court approval.
Students assume every exception needs an external check.
Fix: Quote the text: the proceedings must be necessary for preserving his rights "in his opinion".
Applying Section 77 to a different dispute between the same parties.
Students focus on the parties and ignore the subject-matter.
Fix: Check that the dispute is the subject-matter of the conciliation.
Applying the bar before conciliation starts or after it ends.
Students ignore the word "during".
Fix: Fix the timeline first. The bar operates only while the conciliation proceedings are on.
Mixing Section 77 with Sections 80 and 81.
All three deal with conciliation and other proceedings.
Fix: Section 77: parties starting proceedings. Section 80: conciliator as arbitrator, representative, counsel or witness. Section 81: evidence.

Worked examples

Example 1

Alpha Components Ltd and Beta Steels Ltd are in conciliation over a disputed supply contract. Midway, Beta Steels files a civil suit for the same dispute only because it is dissatisfied with the pace of talks. Is the suit permissible?

Show the solution

Conciliation proceedings are on, and the suit relates to the dispute that is their subject-matter.
Section 77 bars the parties from initiating judicial proceedings in such a case.
The exception applies only if the suit is necessary for preserving rights. Slow pace is not a threat to rights.
So the exception is not made out on these facts.

Answer: The suit is barred by Section 77. Beta Steels should continue the conciliation, or terminate it in accordance with the Act before going to court.

Example 2

Rao Textiles Ltd is in conciliation with Sharma Dyes Pvt Ltd over unpaid dues. The limitation period for its claim will expire in a few days, and conciliation is still on. Rao Textiles files proceedings. Can Sharma Dyes object under Section 77?

Show the solution

Conciliation is going on and the dispute is the same, so the general bar is attracted.
Check the exception: expiry of limitation would harm Rao Textiles' right to claim.
Filing to avoid this is a step necessary for preserving its rights, and the section turns on the party's opinion.
Rao Textiles can rely on the proviso-type exception in Section 77.

Answer: The objection should fail. Rao Textiles may initiate the proceedings under the exception, since they are necessary, in its opinion, for preserving its rights. It is sensible to state the protective purpose in the filing and keep the conciliation going.

Exam tips

Quote the exception almost verbatim: "necessary for preserving his rights". Examiners look for it.
In case questions, write the timeline first: when conciliation began, whether it ended, and when the step was taken.
Name the subject-matter test. Many answers lose marks by skipping it.
If asked about the conciliator's conduct or evidence, shift to Sections 80 and 81 instead of Section 77.
Close every answer with a clear conclusion and one practical line on documentation.

Practice questions from Conciliation Proceedings and International Perspective of Conciliation

Resort to Arbitral or Judicial Proceedings: frequently asked questions

Can parties go to court during conciliation proceedings?

Not on the dispute that is the subject-matter of the conciliation. Section 77 bars initiating arbitral or judicial proceedings during that time. The exception is a step the party considers necessary for preserving his rights.

Does Section 77 stop proceedings already pending?

The section speaks of initiating proceedings during conciliation. Its text does not deal with proceedings already pending, so base your answer on the word "initiate".

Who decides if the proceedings are necessary to preserve rights?

The section says "in his opinion", so the test is the party's own view. In practice, give a genuine reason such as imminent limitation or the need to protect an asset.

Does Section 77 apply to a different dispute between the same parties?

No. The bar covers only the dispute that is the subject-matter of the conciliation proceedings. A separate dispute is outside it.