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

Sunrise Textiles Ltd (Surat) and Kaveri Dyes Pvt Ltd (Chennai) held conciliation proceedings over a supply dispute, which failed. Kaveri Dyes then started arbitration on the same dispute. Sunrise Textiles wants to produce, as evidence in the arbitration, a written suggestion Kaveri's representative made during conciliation about a possible settlement amount. What is the correct position?

Sunrise Textiles cannot rely on the suggestion. Section 81(a) prohibits parties from introducing the other party's views or settlement suggestions made during conciliation as evidence in arbitral or judicial proceedings. The tribunal's freedom from the Evidence Act does not override this express statutory bar.

  1. AIt cannot be relied on, because views or suggestions by the other party on a possible settlement are inadmissible in arbitral or judicial proceedingsCorrect
  2. BIt can be relied on, because arbitral tribunals are not bound by the Indian Evidence Act, 1872
  3. CIt can be relied on if the conciliator consents to its production
  4. DIt can be relied on only if the arbitration is an international commercial arbitration

Explanation

Section 81(a) bars parties from relying on or introducing views expressed or suggestions made by the other party about a possible settlement, in arbitral or judicial proceedings. Section 19(1) frees the tribunal from the Evidence Act but does not override the specific bar in section 81. Conciliator consent is not an exception in the text.

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