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

Meridian Textiles Ltd and Kaveri Dyes Pvt Ltd attempt conciliation over a disputed invoice. During the conciliation, Kaveri's director writes that his firm could consider paying 70% of the claim. Conciliation fails and Meridian begins arbitration. Meridian wants to rely on that statement as evidence. What is the position under the Act?

Meridian cannot rely on the statement. Section 81(a) prohibits a party from introducing, in arbitral or judicial proceedings, the other party's views or suggestions on a possible settlement made during conciliation. Section 19's freedom from the Evidence Act does not override this specific statutory bar.

  1. AMeridian may rely on it, because the arbitral tribunal is not bound by the Indian Evidence Act, 1872
  2. BMeridian may rely on it, because the arbitration relates to the same dispute
  3. CMeridian may not rely on it, because views or suggestions of the other party about a possible settlement cannot be introduced in arbitral proceedingsCorrect
  4. DMeridian may rely on it only if Kaveri's director signed the statement

Explanation

Section 81(a) bars a party from relying on or introducing views expressed or suggestions made by the other party about a possible settlement, in arbitral or judicial proceedings, whether or not they concern the same dispute. The option based on Section 19(1) is wrong because that provision frees the tribunal from the CPC and Evidence Act but does not override the specific bar in Section 81.

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