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

In a conciliation between Orion Pharma Ltd and Bhatia Logistics, the conciliator directed each party to deposit Rs 50,000 as an advance for costs. Orion paid; Bhatia did not pay within thirty days. Which course is open to the conciliator under the Act?

The conciliator may either suspend the proceedings or make a written declaration of termination to the parties. Under Section 79(3), where deposits are not paid in full by both parties within thirty days, termination takes effect on the date of that declaration, not retrospectively.

  1. AOnly to suspend the proceedings, since termination needs both parties' declaration
  2. BTo suspend the proceedings or to make a written declaration of termination to the parties, effective on the date of that declarationCorrect
  3. CTo refer the matter to an arbitral tribunal for an award on the unpaid deposit
  4. DTo terminate the proceedings retrospectively from the date of the deposit direction

Explanation

Section 79(3) provides that if required deposits are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or make a written declaration of termination, effective on the date of that declaration. It is not retrospective and does not need a joint declaration.

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