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CS Professional · Arbitration, Mediation and Conciliation · Introduction to Conciliation and its Importance for MSMEs

Sharma Textiles invites Delta Dyes in writing to conciliate a payment dispute, briefly identifying the subject. Delta Dyes sends no reply. Under Part III of the Arbitration and Conciliation Act, 1996, what may Sharma Textiles do if it receives no reply within thirty days of sending the invitation?

Sharma Textiles may elect to treat the silence after thirty days as a rejection of its invitation and must inform Delta Dyes of that election in writing. Conciliation begins only on written acceptance, so silence cannot amount to acceptance and no conciliation proceedings arise.

  1. ATreat the silence as acceptance and begin conciliation proceedings at once
  2. BElect to treat the silence as rejection, and inform Delta Dyes in writing accordinglyCorrect
  3. CApply to the Court to appoint a conciliator automatically
  4. DTreat the conciliation as terminated by the conciliator's declaration

Explanation

Conciliation commences only when the other party accepts the invitation in writing. If there is no reply within thirty days (or any other period stated in the invitation), the initiating party may elect to treat this as rejection and must inform the other party in writing. Silence is never acceptance, so option A is wrong.

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