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

Sundaram Textiles and Kaveri Dyes accepted in writing an invitation to conciliate a payment dispute. While the conciliation is in progress, Sundaram Textiles wants to file a civil suit on the same dispute, saying it is merely a precaution. Under the Arbitration and Conciliation Act, 1996, when may it do so?

A party may start arbitral or judicial proceedings during conciliation only where, in its own opinion, they are necessary for preserving its rights. Otherwise the ban in Section 77 applies. Consent of the conciliator or the other party is not required for this exception.

  1. AWhenever it likes, because conciliation is non-binding
  2. BOnly if the conciliator gives written consent to the suit
  3. COnly if the other party agrees to the suit being filed
  4. DIf, in its own opinion, the suit is necessary for preserving its rightsCorrect

Explanation

Section 77 bars parties from starting arbitral or judicial proceedings on the subject-matter during conciliation. The exception is that a party may do so where, in his opinion, such proceedings are necessary for preserving his rights. Neither the conciliator's nor the other party's consent is required, and a general freedom to sue is not allowed.

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