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

Conciliator Mr. Bose proposed that Lotus Pharma pay Orion Labs Rs 40 lakh to settle a licence dispute. Orion Labs told him it was willing to accept the proposal, but Lotus Pharma refused. Conciliation was terminated by Mr. Bose's written declaration. Orion Labs now files a suit on a different dispute with Lotus Pharma. Lotus wants to produce in that suit Orion's willingness to accept, and Mr. Bose's proposal. Which view is correct?

Both are barred. Section 81 stops parties from relying on conciliator proposals and on the other party's indicated willingness to accept them, in arbitral or judicial proceedings, whether or not those proceedings relate to the conciliated dispute. The different subject matter of the suit makes no difference.

  1. ABoth are barred, because the section applies even to proceedings not relating to the conciliated disputeCorrect
  2. BBoth are allowed, because the suit concerns a different dispute
  3. COnly Mr. Bose's proposal is barred; Orion's willingness is allowed
  4. DOnly Orion's willingness is barred; the proposal is allowed since the conciliator made it

Explanation

Section 81 bars reliance on proposals made by the conciliator (clause c) and on the fact that the other party indicated willingness to accept a proposal (clause d). It applies whether or not the proceedings relate to the conciliated dispute. So both items are inadmissible despite the different subject matter.

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