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

In a conciliation between Bharat Steels Ltd and Ganga Logistics LLP, the conciliator proposed that Ganga reduce its freight claim by Rs 4 lakh. The conciliation ended without settlement. In later court proceedings on a different contract between the same parties, Ganga wants to produce the conciliator's proposal to show Bharat's attitude. Which statement is correct?

The proposal cannot be produced. Section 81(c) bars parties from relying on proposals made by the conciliator in arbitral or judicial proceedings, and the bar applies whether or not those proceedings relate to the conciliated dispute. Termination of conciliation does not remove it.

  1. AIt is barred, because Section 81 applies even if the proceedings relate to a different disputeCorrect
  2. BIt is permitted, because the court proceedings concern a different dispute
  3. CIt is permitted, because the conciliator is not a party to the proceedings
  4. DIt is permitted, because conciliation has terminated

Explanation

Section 81 applies to proposals made by the conciliator (clause c) and operates in arbitral or judicial proceedings whether or not they relate to the dispute subject to conciliation. Termination of conciliation does not lift the bar, and a different dispute does not help.

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