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

Sharma Textiles Pvt Ltd, a supplier, sends Gupta Retail Ltd a written invitation to conciliate under Part III of the Arbitration and Conciliation Act, 1996, briefly identifying a payment dispute. Gupta Retail's managing director telephones Sharma Textiles and orally says he is happy to conciliate, but sends nothing in writing. What is the position?

Conciliation has not commenced. Section 62(2) provides that proceedings commence only when the other party accepts the invitation to conciliate in writing. An oral assurance over the telephone is not enough, and the mere sending of the invitation does not begin proceedings.

  1. AConciliation proceedings have commenced on the date of the phone call
  2. BConciliation proceedings have commenced on the date the invitation was sent
  3. CConciliation proceedings have not commenced because acceptance must be in writingCorrect
  4. DConciliation proceedings commence automatically after thirty days of silence

Explanation

Under Section 62(2), conciliation proceedings commence only when the other party accepts the invitation in writing. An oral acceptance does not satisfy this requirement. Sending the invitation alone does not commence proceedings, and silence for thirty days is not acceptance; it only lets the initiating party treat it as rejection.

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