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CS Professional · Arbitration, Mediation and Conciliation · Arbitral Proceedings, Pleadings and Evidence

Shree Textiles and Kaveri Dyes entered conciliation over a disputed invoice. During the conciliation, Kaveri's manager said in writing that a part of the amount might be payable. Conciliation failed, and Shree Textiles started arbitration on the same invoice. Shree Textiles wants to produce the manager's statement as evidence. What is the position under the Act?

The statement cannot be used. Section 81(b) prohibits a party from relying on admissions made by the other party during conciliation as evidence in later arbitral or judicial proceedings, and this bar applies regardless of the tribunal not being bound by the Indian Evidence Act.

  1. AIt can be produced, because the arbitral tribunal is not bound by the Indian Evidence Act, 1872
  2. BIt cannot be relied on, because admissions made by the other party in the conciliation proceedings are barred as evidence in arbitral proceedingsCorrect
  3. CIt can be produced only if the conciliator gives written consent
  4. DIt can be produced only if the arbitration relates to a different dispute from the conciliation

Explanation

Section 81(b) bars a party from relying on admissions made by the other party in conciliation proceedings as evidence in arbitral or judicial proceedings. The bar applies whether or not the later proceedings relate to the same dispute. Section 19(1) frees the tribunal from the Evidence Act but does not override the specific bar in section 81.

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