CS Professional · Arbitration, Mediation and Conciliation · Introduction to Conciliation and its Importance for MSMEs
Iyer Metals sent Banerjee Polymers a written invitation to conciliate on 1 April, stating that a reply was required within 15 days. No reply came by 20 April, and Iyer Metals wants to treat the invitation as rejected. Banerjee Polymers sends a written acceptance on 25 April, before Iyer Metals has given any written notice of its election. Which is the best view under section 62?
The written acceptance on 25 April commenced the proceedings. The invitation could specify 15 days, but silence becomes a rejection only if the initiating party elects so and informs the other side in writing. Iyer Metals had not done this, so the invitation was still open.
- AProceedings cannot commence because 15 days is shorter than the statutory 30 days and the stated period is void
- BProceedings commenced automatically on 16 April when the stated period expired
- CIyer Metals could elect rejection after the 15-day period and had to inform Banerjee in writing; since it had not done so, the written acceptance on 25 April commenced the proceedingsCorrect
- DThe acceptance is ineffective because any reply after 15 days is invalid
Explanation
Section 62(4) allows the initiating party to treat silence as rejection after thirty days or such other period as specified in the invitation, so 15 days is valid. But rejection arises only if the party elects to treat it so and informs the other party in writing. No such election was communicated, so the written acceptance of 25 April commences proceedings under section 62(2).
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