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Arbitration, Mediation and Conciliation · Introduction to Conciliation and its Importance for MSMEs

Commencement of Conciliation Proceedings under Section 62

Updated 11 October 2026 · Fact-checked

Under Section 62 of the Arbitration and Conciliation Act, 1996, conciliation starts when one party sends a written invitation identifying the dispute and the other party accepts it in writing. Rejection means no conciliation. Silence for thirty days, or the period in the invitation, may be treated as rejection if the inviting party says so in writing.

Understand Commencement of Conciliation Proceedings

Conciliation is a voluntary process. A neutral conciliator helps the parties reach a settlement. Because it depends on consent, the law needs a clear point at which the process begins. Section 62 gives that point.

The process begins with the party initiating conciliation. That party must send the other party a written invitation to conciliate under Part III of the Act. The invitation must briefly identify the subject of the dispute. It need not be a detailed claim. It only has to tell the other side what the dispute is about.

Sending the invitation does not start conciliation. Conciliation proceedings commence when the other party accepts the invitation in writing. Acceptance must be in writing. A phone call or an oral assurance does not meet the section.

If the other party rejects the invitation, there are no conciliation proceedings. If the other party does not reply, the initiating party is not stuck. If there is no reply within thirty days from the date the invitation was sent, or within such other period as the invitation specifies, the initiating party may elect to treat the silence as rejection. If it so elects, it must inform the other party in writing.

This matters for MSMEs. A small supplier chasing a delayed payment can invite the buyer to conciliate. The supplier then knows exactly when the process has begun and when it can move to other remedies. Under Section 18 of the MSMED Act, 2006, a reference to the Facilitation Council is a separate route. There, Sections 65 to 81 apply as if conciliation were initiated under Part III. Do not mix the Section 62 invitation route with the Section 18 reference route.

Key rules to remember

Invitation
Initiating party → written invitation → other party, briefly identifying the subject of the dispute
Section 62(1). The invitation must be in writing and must identify the dispute briefly.
Commencement
Conciliation commences = date the other party accepts the invitation in writing
Section 62(2). Sending the invitation alone does not commence the proceedings.
Rejection
Other party rejects invitation ⇒ no conciliation proceedings
Section 62(3).
Deemed rejection by silence
No reply within 30 days from sending (or the period stated in the invitation) ⇒ initiating party may elect to treat it as rejection, and must inform the other party in writing
Section 62(4). It is the initiating party's option. It does not happen automatically, and the election must be communicated in writing.

How to solve Commencement of Conciliation Proceedings questions

Use this method for any fact-based question on how conciliation begins. Follow the sequence and tie each fact to a limb of Section 62.

  1. 1Identify who initiated and whether the invitation was in writing. An oral or informal approach is not an invitation under Section 62(1).
  2. 2Check that the invitation briefly identifies the subject of the dispute.
  3. 3Note the date the invitation was sent. The thirty days run from this date, unless the invitation specifies another period.
  4. 4Check how the other party responded: written acceptance, rejection, or silence.
  5. 5If accepted in writing, state that conciliation commenced on the date of acceptance (Section 62(2)).
  6. 6If rejected, state that there are no conciliation proceedings (Section 62(3)).
  7. 7If silent, check whether the period has expired and whether the initiating party elected in writing to treat silence as rejection (Section 62(4)).
  8. 8Write the conclusion in one line and add the practical next step, such as drafting the invitation or informing the other party.

Quickest way: Four-check method for Section 62

When to use it: Use it when you have little time and the question gives dates and a reply or no reply.

  1. Check 1: Was the invitation written and did it identify the dispute?
  2. Check 2: Was there written acceptance? If yes, commencement is the acceptance date.
  3. Check 3: Was there rejection? If yes, no conciliation.
  4. Check 4: Was there silence? Count thirty days or the stated period, then look for the written election. Without it, the invitation is not treated as rejected.

Common mistakes in Commencement of Conciliation Proceedings

  • Saying conciliation begins when the invitation is sent.

    Students link the start with the first step taken.

    Fix: Write that conciliation commences only when the other party accepts the invitation in writing.

  • Treating silence after thirty days as automatic rejection.

    Students remember the thirty-day period and forget the word 'may elect'.

    Fix: State that the initiating party may elect to treat silence as rejection and must inform the other party in writing.

  • Accepting oral acceptance as enough.

    Conciliation is informal, so students assume the start is informal too.

    Fix: Section 62(2) requires acceptance in writing. Mention this in your answer.

  • Counting thirty days from the date the other party received the invitation.

    Students assume receipt is the trigger.

    Fix: The text says thirty days from the date on which the initiating party sends the invitation, or such other period as specified in the invitation.

  • Mixing Section 62 with the reference to the Facilitation Council under Section 18 of the MSMED Act, 2006.

    Both topics concern conciliation for MSMEs.

    Fix: Keep the two routes apart. Section 62 covers a party's invitation. Section 18 covers a reference to the Council, where Sections 65 to 81 apply as if conciliation were initiated under Part III.

Worked examples

Example 1

Sunrise Packaging Pvt. Ltd., Pune, sends a letter on 1 March to Kaveri Foods Ltd. inviting it to conciliate a dispute over unpaid invoices. On 10 March, Kaveri Foods replies in writing accepting the invitation. When did conciliation commence? Does the invitation fulfil Section 62?

Show the solution
  1. The letter is a written invitation and it names the dispute, unpaid invoices. This meets Section 62(1).
  2. Under Section 62(2), proceedings commence when the other party accepts the invitation in writing.
  3. Kaveri Foods accepted in writing on 10 March.
  4. The date of sending, 1 March, does not matter for commencement.

Answer: The invitation satisfies Section 62(1). Conciliation proceedings commenced on 10 March, when Kaveri Foods accepted in writing.

Example 2

Meena Traders sends a written invitation to conciliate to Rao Steel Ltd. on 5 June. The invitation does not state any special period. Rao Steel does not reply. On 10 July, Meena Traders wants to proceed to other remedies. Advise.

Show the solution
  1. The invitation was in writing, so Section 62(1) is met. No written acceptance was given, so conciliation has not commenced under Section 62(2).
  2. The invitation states no other period, so the thirty-day period under Section 62(4) applies, running from 5 June, the date of sending.
  3. Thirty days from 5 June end on 5 July. By 10 July the period has expired.
  4. Silence is not automatically rejection. Meena Traders may elect to treat it as rejection.
  5. If it so elects, it must inform Rao Steel in writing.

Answer: No conciliation has commenced. Because the thirty days have expired, Meena Traders may elect to treat the silence as rejection. It must send Rao Steel a written notice of that election. It can then pursue other remedies.

Exam tips

  • Quote the sub-section with each point: 62(1) invitation, 62(2) commencement, 62(3) rejection, 62(4) silence.
  • Underline the words 'in writing' in your answer. Examiners look for them in both the invitation and the acceptance.
  • In a problem, list the dates in order and say which date triggers which consequence.
  • Mention the written election requirement under Section 62(4). Many answers miss it.
  • Add one practical line, such as drafting a short invitation that names the dispute and sets a reply period.

Practice questions from Introduction to Conciliation and its Importance for MSMEs

Commencement of Conciliation Proceedings: frequently asked questions

When do conciliation proceedings commence under Section 62?

They commence when the other party accepts the written invitation to conciliate in writing. Sending the invitation is only the first step.

What must a conciliation invitation contain?

It must be in writing and must briefly identify the subject of the dispute. The section does not require a detailed statement of claim.

What if the other party does not reply to the invitation?

If there is no reply within thirty days from the date of sending, or within the period specified in the invitation, the initiating party may elect to treat it as rejection. It must inform the other party in writing if it does so.

Can the invitation set a different reply period?

Yes. Section 62(4) refers to thirty days or such other period of time as specified in the invitation. The invitation can therefore state a different period.