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CS Professional · Arbitration, Mediation and Conciliation · Arbitral Proceedings, Pleadings and Evidence

In a conciliation between Meridian Steel and Bharat Forgings, the conciliator proposed that Bharat pay Rs 40 lakh in full settlement. Bharat's counsel orally indicated willingness to accept it, but Meridian later refused. In subsequent court proceedings on the same dispute, Bharat wants to show that Meridian had made and then withdrawn the proposal, and Meridian wants to show Bharat's willingness to accept. Which statement is correct?

Neither party may rely on them. Section 81 bars reliance in arbitral or judicial proceedings on the conciliator's proposals and on the fact that the other party indicated willingness to accept a proposal, so the failure of conciliation and the court forum make no difference.

  1. AMeridian may prove Bharat's willingness to accept, but Bharat may not rely on the conciliator's proposal
  2. BNeither party may rely on the conciliator's proposal or the fact that the other party indicated willingness to accept itCorrect
  3. CBoth may rely on them because the conciliation has failed and ended
  4. DBoth may rely on them because court proceedings are not arbitral proceedings

Explanation

Section 81(c) bars reliance on proposals made by the conciliator and section 81(d) bars reliance on the fact that the other party indicated willingness to accept a proposal. The bar covers arbitral or judicial proceedings, so court proceedings are included. Failure of conciliation does not lift it.

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