Section 66 of the Arbitration and Conciliation Act, 1996 addresses the role and authority of conciliators in conciliation proceedings. Unlike in traditional court proceedings, where strict adherence to the Code of Civil Procedure (CPC) and the Indian Evidence Act is mandatory, Section 66 grants conciliators the flexibility to conduct proceedings without being bound by these laws. This provision reflects the essence of alternative dispute resolution (ADR) — a more informal, flexible, and collaborative approach to resolving disputes.

This article explores the significance of Section 66, the challenges it presents, and its implications for both parties involved in the conciliation process.

 

Key Provisions of Section 66

Section 66 explicitly states that “the conciliator is not bound by the provisions of the Code of Civil Procedure, 1908, and the Indian Evidence Act, 1872.” This means that:

1. Discretionary Power in Evidence Gathering

One of the most important provisions of Section 66 is that the conciliator has discretionary power to determine the methods and procedures for gathering evidence. Unlike formal court proceedings, where strict rules govern the submission and examination of evidence (as set out in the CPC and Evidence Act), Section 66 allows the conciliator to decide how evidence should be presented and whether certain procedures should be followed.

• Informality in Evidence Presentation: Conciliators may choose to gather evidence through informal discussions, written submissions, or documents, without the need for witnesses to be cross-examined in a court-like setting.
• Flexibility in Admissibility: The conciliator can determine the relevance of evidence without being restricted by the rigid standards of the Evidence Act, which can allow for a more fluid and efficient dispute resolution process.

This flexibility is particularly useful in resolving disputes in industries where time-sensitive decisions are required, or where parties wish to avoid formal judicial procedures.

2. Relaxation of Formal Court Procedures

In traditional court proceedings, parties are required to follow detailed procedural rules regarding how cases are presented, including strict timelines, filing of documents, and the cross-examination of witnesses. Section 66 significantly relaxes these formalities in conciliation proceedings, allowing the conciliator to:

• Set the pace of the process: The conciliator is not bound by judicial time constraints and can structure the proceeding to allow for flexible and open communication between the parties.
• Choose the format of hearings: The conciliator may not hold formal hearings or may hold only informal meetings with the parties to explore potential solutions.
• Decide how to engage the parties: The conciliator may directly engage with the parties in private sessions (caucus) or joint sessions, depending on the situation, instead of adhering to formal rules of interaction.

This informal nature of the process is designed to encourage dialogue and cooperation between the parties, helping them reach an agreement without the adversarial nature of traditional litigation.

3. Independence from the Indian Evidence Act

The Indian Evidence Act establishes a strict framework for what constitutes admissible evidence and how it should be handled in court. Section 66, however, exempts conciliators from the application of the Evidence Act, meaning that:

• No formal rules on hearsay or relevance: The conciliator is free to accept any relevant material that they believe will help resolve the dispute, without worrying about whether it meets the technical definitions in the Evidence Act.
• Alternative methods of presenting evidence: For instance, parties may submit oral evidence, documents, or even informal communications that might not meet the traditional standards for evidence in a courtroom.
• Encouraging flexible solutions: This provision allows for a more creative approach to resolving disputes, where the emphasis is on finding common ground rather than focusing on strict legal formalities.

While this provision helps streamline the conciliation process, it may also lead to uncertainty about what evidence will be considered credible by the conciliator.

4. Focus on Informality and Speed

Another significant feature of Section 66 is its focus on informality and speed in resolving disputes. Conciliation is meant to be a quicker and more flexible alternative to litigation. The conciliator has the discretion to:

• Move away from rigid procedural requirements: Since the conciliator is not required to follow the formalities of court procedures, the parties can have a more open, informal discussion, which can lead to faster resolution of the dispute.
• Resolve matters without the delays of court hearings: By removing the need for strict formal procedures, the conciliator can act swiftly to address issues, potentially preventing prolonged disputes.
• Encourage direct settlement: The conciliator can assist the parties in resolving issues directly, without needing the formal step-by-step process typical in litigation. This can often result in quicker, more satisfactory resolutions.

The informal nature of Section 66’s provisions is especially advantageous in business and commercial disputes, where long delays and formalities may hinder economic performance.

5. Control Over the Process

Under Section 66, the conciliator has a significant amount of control over how the conciliation process is conducted. This is a distinct feature of conciliation compared to litigation, where court procedures are generally predetermined. The key points here include:

• Selection of Procedure: The conciliator can decide on the steps to be taken, including when to meet with the parties, what evidence to consider, and how the process will unfold.
• Non-adversarial approach: Unlike litigation, where each side often tries to prove the other’s wrongdoing, conciliation aims for a mutually agreeable solution. The conciliator’s role is more about facilitating a resolution that meets the interests of both parties.
• Flexibility in resolving disputes: The conciliator may decide to try various methods, such as mediation or neutral evaluation, to help resolve the conflict.

This autonomy gives the conciliator the ability to adapt to the specific needs of the dispute and the parties involved, which may ultimately help achieve a better outcome for both parties.

6. Emphasis on Party Autonomy

Section 66 recognizes the autonomy of the parties involved in the conciliation process. The conciliator’s role is to facilitate discussions, not impose decisions. This ensures that:

• Parties remain in control: Both parties retain the ability to accept or reject solutions offered by the conciliator. This prevents the process from becoming coercive.
• Voluntary Agreement: The final agreement in conciliation is always voluntary. The conciliator does not have the power to make binding decisions unless the parties agree to the terms. This ensures that both parties are satisfied with the resolution.
• Parties can withdraw: If at any point the conciliation process is no longer viable or if either party is dissatisfied, they can withdraw from the process without any formal consequences, which adds to the flexibility and autonomy of the process.

This provision encourages self-determination and allows parties to preserve their interests, ensuring that the solution is fair and balanced.

 

Significance of Section 66

1. Enhancing Flexibility in Dispute Resolution:
   Section 66 offers significant flexibility in how conciliation proceedings are conducted. Unlike the strict courtroom procedures governed by the CPC and Evidence Act, the provision allows the conciliator to adapt the process to the specific needs and circumstances of the dispute, promoting a more tailored and efficient resolution. This flexibility is particularly important in complex or sensitive cases where the rigid rules of evidence may be more of a hindrance than a help.
2. Promoting Informality and Accessibility:
   By not requiring strict adherence to procedural rules, Section 66 makes the conciliation process more informal and accessible, lowering the barriers for parties to engage in dispute resolution. This can be especially beneficial for individuals and businesses seeking to avoid the often lengthy and expensive court process. Conciliation becomes an attractive option as it offers a quicker and less adversarial route to resolving disputes.
3. Facilitating Better Communication:
   The flexibility of Section 66 enables the conciliator to focus on the parties’ mutual interests rather than strictly adhering to legal formalities. As a result, there is often better communication between the disputing parties, which can foster more constructive dialogue and lead to more creative solutions. The conciliator can decide how to collect and review evidence in a way that suits the parties’ needs, enabling the process to remain dynamic and responsive.
4. Reduced Legal Formalities:
   In traditional litigation, parties often face delays and confusion due to the legal formalities required by the CPC and Evidence Act. Section 66 eliminates this issue by giving the conciliator the freedom to assess evidence without the constraints of these laws. This reduces unnecessary delays, making the process faster and more efficient.
5. Encouraging Settlement Without Legal Complexity:
   By not being bound by rigid rules, conciliators can focus on helping parties come to a mutual agreement rather than getting bogged down by procedural complexities. This often results in settlements that are both satisfying and legally sound, without the parties needing to engage in a formal legal process.

 

Challenges and Criticism of Section 66

1. Risk of Inconsistent Decisions:
   One of the primary criticisms of Section 66 is that the lack of formal procedures can result in inconsistent decisions. Without the oversight of formal legal standards, there is a risk that conciliators may not follow established legal principles when resolving disputes, leading to outcomes that might not be consistent with judicial interpretations or legal norms.
2. Lack of Legal Clarity for Parties:
   The informality of the process can leave parties uncertain about what is acceptable in terms of procedure and evidence. Since the conciliator has the discretion to decide the rules of the process, this can lead to a lack of legal clarity, especially for parties that are more accustomed to the formal structure of court proceedings.
3. Potential for Bias:
   The informality of Section 66, while offering flexibility, also opens the door to the potential for bias on the part of the conciliator. Without a clear framework to guide their decisions, some conciliators may inadvertently favor one party over the other or fail to follow objective standards when evaluating evidence.
4. Vulnerability to Power Imbalances:
   The absence of formal rules and the discretionary nature of the process can also lead to situations where one party takes advantage of a power imbalance. For example, a more knowledgeable or resourceful party might overwhelm a less experienced one, leading to an unfair resolution. Formal rules help to mitigate such risks in court, but their absence in conciliation may expose weaker parties to exploitation.
5. Limited Enforcement Mechanism:
   Section 66 does not explicitly address the enforceability of a conciliator’s decision if the parties reach a resolution. While conciliation is generally a voluntary process, the lack of clarity around enforcement mechanisms can pose challenges if one party decides not to comply with the agreement reached.

 

Conclusion

Section 66 of the Arbitration and Conciliation Act, 1996 marks a significant departure from traditional litigation, offering a more flexible and informal route for dispute resolution through conciliation. By allowing conciliators to work outside the strictures of the CPC and Evidence Act, this provision encourages a collaborative approach that can lead to quicker and more creative solutions to disputes. However, the provision is not without its challenges, such as the potential for inconsistent decisions and a lack of clarity for the parties involved. Despite these challenges, the informality and flexibility it offers make conciliation an appealing choice for resolving disputes in many cases.

 

Frequently Asked Questions (FAQs)

1. What does Section 66 of the Arbitration and Conciliation Act, 1996 state? 

Section 66 provides that a conciliator is not bound by the provisions of the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872 when conducting conciliation proceedings.

1. How does Section 66 affect the conciliation process? 

It allows the conciliator to adopt a flexible approach, adapting the process to the unique needs of the dispute, rather than being constrained by formal legal procedures.

1. Does Section 66 apply to all types of disputes? 

Yes, Section 66 applies to all conciliation proceedings under the Arbitration and Conciliation Act, 1996, allowing conciliators flexibility in resolving disputes.

1. Can the conciliator ignore the evidence presented? 

No, the conciliator is still required to assess the evidence presented, but they are free to decide how it should be collected and presented without being bound by formal court rules.

1. What are the benefits of Section 66? 

It enables faster, less formal, and more collaborative dispute resolution, which is particularly helpful for parties seeking an informal way to resolve conflicts.

1. Are there any risks involved with Section 66? 

Yes, the lack of formal procedures can lead to inconsistent decisions, bias, or challenges related to enforcement of the outcome.

1. How does Section 66 impact the enforceability of the conciliator’s decision?

While Section 66 makes the conciliation process more flexible, it does not specify how the conciliator’s decision is to be enforced if the parties reach an agreement.

1. Is Section 66 useful for commercial disputes? 

Yes, Section 66 is particularly useful for commercial disputes as it offers an efficient and flexible alternative to lengthy, formal litigation, promoting quicker resolution of issues.