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

Kiran Steels Ltd invited Bharat Alloys Ltd in writing to conciliate a supply dispute. Bharat accepted in writing on 5 May. On 8 May, Kiran, fearing that its claim might become time-barred, files a suit in a civil court on the same dispute. Which statement is correct?

Kiran may file only if, in its opinion, the suit is necessary to preserve its rights. Conciliation began on written acceptance, and Section 77 bars judicial or arbitral proceedings on the subject-matter during conciliation except where a party considers them necessary to preserve its rights.

  1. AThe suit is barred absolutely because conciliation has commenced
  2. BThe suit is permitted only if Bharat consents in writing
  3. CThe suit is valid because conciliation commences only on appointment of a conciliator
  4. DKiran may file it only if, in its opinion, the proceedings are necessary for preserving its rightsCorrect

Explanation

Conciliation commenced on 5 May on written acceptance (Section 62(2)). Section 77 bars initiating arbitral or judicial proceedings on the subject-matter during conciliation, except where the party considers them necessary to preserve its rights. Option A ignores this exception, and option C misstates commencement.

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