Question

Which Section of the 1996 Arbitration Act permits the parties to engage in conciliation process even while the arbitral proceedings are on?

• A. Sec.30
• B. Sec.10
• C. Sec.40
• D. Sec.20

Hint:

Remember that the Arbitration Act, 1996, promotes alternative dispute resolution in a holistic way. Section 30 is a key provision that shows how different mechanisms like arbitration and conciliation can work together to achieve a resolution.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question asks for the specific provision in the Arbitration and Conciliation Act, 1996, that allows and encourages settlement between parties during the course of arbitration proceedings, including through methods like conciliation.
Step 2: Key Formula or Approach:
The relevant section is Section 30 of the Act.
Section 30 - Settlement:
(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.
(2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.
Step 3: Detailed Explanation:
Section 30 explicitly empowers the arbitral tribunal to facilitate settlement. It clarifies that with the consent of the parties, the tribunal can use procedures like conciliation even while the arbitration is ongoing. If a settlement is reached, it can be recorded as an "award on agreed terms," which has the same status and effect as a regular arbitral award.
- Section 10 deals with the number of arbitrators.
- Section 40 deals with the effect of the death of a party.
- Section 20 deals with the place of arbitration.
Step 4: Final Answer:
The section that permits parties to engage in conciliation during arbitration is Sec. 30.

Answer 2

The question asks which section of the Arbitration and Conciliation Act, 1996, allows the parties to pursue conciliation while arbitral proceedings are still ongoing. Let us eliminate the incorrect sections by their actual subject matter.

1. Sec.30: This section, titled Settlement, provides that it is not incompatible with an arbitration agreement for the arbitral tribunal to encourage settlement, and that with the agreement of the parties, the tribunal may use mediation, conciliation, or other procedures at any time during the arbitral proceedings to encourage settlement, and if a settlement is reached it may be recorded as an arbitral award on agreed terms. This is exactly what the question describes.
2. Sec.10: This section deals with the number of arbitrators that may be appointed to a tribunal, a matter of tribunal composition, not conciliation during arbitration.
3. Sec.40: This section addresses what happens to an arbitration agreement and pending proceedings upon the death of a party, a matter of succession, not conciliation.
4. Sec.20: This section concerns the place, or seat, of arbitration and how it is determined, an entirely procedural venue question unrelated to conciliation.

Since only Section 30 specifically permits conciliation or mediation to be pursued alongside ongoing arbitral proceedings, the correct answer is Sec.30.