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The Negotiation works
when
a)
The parties are willing to
cooperate and communicate to meet their goals,
b)
The parties can mutually benefit
or avoid harm by influencing each other
c)
The parties know that they
have time constraints
d)
The parties realize that any
other procedure will not produce desired outcome
e)
the parties can identify on
what issues require to be sorted out
f)
the
parties also agree that their interests are not incompatible to each
other
g)
the parties knew that it is
preferable to participate in private cooperative process rather than go through
severe external constraints like loss of reputation, excessive cost, and
possibility of adversarial decision
The ‘do’s for the
negotiator are as follows:
It is always needed for a good negotiator to know the best and worst
alternatives for the process of settlement he is striving to achieve at.
The Best Alternative to Negotiated Settlement and the Worst Alternative to
Negotiated Settlement are significant points a negotiator is supposed to
find out and discuss at every level of discussion. If not discussing, he
should be conscious about it. Such an understanding will guide him properly
to steer through the difficulties.
a)
What is mediation?
The
mediation is a process, a facilitation, an empowerment.
The core value in mediation is that the process provides the parties with
an opportunity to negotiate, converse and explore options aided by a neutral
third party, the mediator, to exhaustively determine if a settlement is possible.
It is a process of empowerment of the parties to control their destiny in
their dispute.
Mediation
involves a determination of interests – the interests of the parties.
A concept frequently not found in the litigator’s lexicon, interests
are the needs, wants, and desires that are of importance to the parties –
the answer to the question “what is this dispute really all about for
you?” To get there, mediation provides a forum for principled negotiations.
These negotiations may at times become frustrating and troubling, but with
the mediator’s help the parties keep moving forward. Principled negotiations
stimulate exploration of settlement alternatives and an opportunity to evaluate
those alternatives, weighing them against the likely outcome of going to
trial and viewing proposals through the lenses of reality. Mediation - compared
to litigation, trial and appeal – is a veritable bullet train to certainty
and finality. If the dispute settles at the mediation, it settles on a basis
acceptable to the parties; the specter of trial is removed; and, the threat
of being tied up on appeal is eliminated.
Strategies and
Methods:
Role of
mediator: Mediation is accepted as
the most viable process of resolving a conflict between two parties before
any legal or physical conflict is opted for settling the score for any kind
of problem. The major difficulty is getting the parties to agree to prefer
the mediation as the process for resolving their problems. As this is known
as assisted negotiation or structured negotiation, it is basically a necessary
assistance to the negotiators who are the parties themselves. From the voluntary
submission to the drafting of settlement agreement, the parties have a major
role in
mediation rather than the role of mediator himself. The mediator
facilitates, renders assistance, gives advise if necessary, presents options
available, analyses the strategies, suggests strategies to be adopted, hammers
out the issues to be settled, drafts the agreement sentences so that the
parties do not find any difficulty in agreeing with them and finally authorizes
the settlement. The mediator does not settle. He will not give an award like
an arbitrator. He also does not prefer to adjudicate the issues. He will
also not prescribe the procedure. He does not examine the witnesses and insist
on the production of evidence etc.
Convening
for
Mediation:
The mediator may have to plan very carefully the best strategy to bring the
parties to the table of
discussion. If one of the parties not ready to send invitation to
the other, it is for the provider to initiate an invitation to the parties.
If the parties are rigid about going to the opponent, it is for the provider
to find a suitable seat of negotiation in his presence or absence, which
does not create problems for either of the parties. Whether the initial meeting
should be between himself and one of the parties separately or a joint meeting
with both the parties? It is the question to be decided depending upon the
circumstances and attitudes of the parties.
Flexible
Process: There is no rigid frame work
of rules for mediation. It is a very flexible process. A person who is acceptable
to both the parties would serve as mediator. He is perceived as neutral capable
of understanding the issues of their dispute and knowledgeable enough about
the mediation processes along with sense of time and attitude to resolve
the problems.
It is important to decide on
the cost of the mediation at the beginning itself. The Mediator should indicate
the possible cost and obtain the consent of parties to share the cost equally.
If not the cost of mediation would become an issue
of
conflict to be mediated between the mediator and the party.
Issues to be
discussed: The parties also should decide
on the procedure of mediation. In this endeavour,
the parties may state what issues need to be discussed and what should be
avoided. There also a need to decide about the privacy or secrecy or
confidentiality of certain procedures or aspects of the negotiable issues
of the dispute.
With the assistance or guidance
or knowledge of the mediator, the parties should decide on what issues to
be discussed what not to be. Generally in family matters the mediation between
spouses would bring out such problems. The spouses may agree on discussion
about custody of children and distribution of the joint party or maintenance
amount. At the same time they may not agree on discussing the relationships
they have with other persons.
Necessary
Parties: The parties have to recognize
all the necessary parties, who are either involved or interested or might
be affected by the decision on the issues before them. If a necessary party
is not joined, the decision may not be binding on him and entire process
may go waste. The persons who are capable of making commitments may be the
parties to the process. It is also necessary to decide in advance whether
the parties will represent themselves or be represented by the
counsel.
Initial
Steps:
The mediator has certain hard tasks before him at the initial stages
of mediation. He has to contact the distant and complex parties at their
places and convince them about the uses and benefits of the mediation, in
comparison with the other processes. Mediator has to build necessary credibility
and atmosphere to say that he has enough of courage and credibility to assist
in resolution of the dispute. Besides this, mediator has to establish a rapport
between the disputants. He has
to exhibit his personal credibility, build institutional credibility and
prove the procedural credibility also, so that parties are ready to establish
the rapport between them.
The
Beginning: The beginning of mediation
session is very important. The atmosphere of the first session sets
the
necessary atmosphere for
resolution. The greeting and
seating of participants, their strategic location around the table, either
across or along with others, the opening remarks of the mediator and starting
statements of the parties, every thing is significant in taking the process
a long way.
Collecting and Analyzing the
Relevant information:
The mediator obtains necessary clues
of the issues from
the
opening statements of the parties and develops further information
from that level which help him in establishing a focus and maintain a momentum
of the resolution process. One usual method is collecting the briefs from
the parties, which will reveal the flavour of the
dispute and help understanding the issues and contrasting view points. The
opening statement, the circumstances in which the dispute arose, the sum
and substance of the issues to be resolved are expected to be collected from
the parties at the first or second phase of the mediation.
Agenda Setting: Mediator has
to strategically draft the list of the issues, circulate among the parties,
collect their suggestions and then finally secure the consensus in listing
out and fixing priority of the issues in order of their preference in resolution
effort. If needed, he has to reframe the issues or reorient the list or
reprioritize the issues. He has to see whether all the interests and concerns
of all the parties reflected in the issues listed or not. This process completes
agenda setting.
Communication
Process: The next stage in mediation
is the flow of communication between the disputant parties. The parties
understanding of each other’s perspective and mediator’s understanding
of the issues and interests are important, which require perfect communication.
The body language, restatement, paraphrasing, summarizing are the elements
of communication. In understanding the communication, one has to cross the
barriers of cultural challenges, gender, personality,
language and perception challenges. The communication
can be re-established with frequent meetings, questions of closed,
open and
leading questions, active listening questions, elaboration questions,
clarification questions, confirmation questions, confrontation questions,
hypothetical questions and questions asked by the mediator establish the
required information bridge. Unless one listens to, it is difficult to understand
the message. There are four levels of listening- ignoring, pretending, selective
and attentive listening. The listener has to give up the feeling that he
wants to be more important than the speaker and allow the speaker to be most
important for some time at least. He has to quell his desire to talk. He
has to suspend his judgment and search out what is truly important for the
speaker and finally he should focus on the main event.
Meeting the parties and meeting
between
parties:
The mediator has to decide whether to have joint sittings with the parties
or individual caucusing. He has to choose whom to meet
first. The meetings of this kind
affect the party power balance. It is always important to retain the focus
on interest and remind the confidentiality of the process and information
to the parties. While the objective of initial meetings with parties and
arranging meetings between them is to collect more information about the
issues to be settled and increase the credibility and the bond of friendship
between the parties. The information collected by this process of establishing
communication and series of meetings help the mediator in evaluation of the
case and possible settlement points. The mediator also can use these meetings
for explaining the BATNA and WATNA for both the parties.
These meetings will facilitate
the negotiation process between the parties. All those strategies of negotiation
can be adopted, tested and the benefits realized.
j) Arbitration & Conciliation
Act:
Now, the proceedings relating to CONCILIATION are dealt under sections
61 to 81 of Arbitration and Conciliation Act, 1996. This Act is aimed at
permitting Mediation conciliation or other procedures during the arbitral
proceedings to encourage settlement of disputes. This Act also provides that
a settlement agreement reached by the parties as a result of conciliation
proceedings will have the same status and effect as an arbitral award on
agreed terms on the substance of the dispute rendered by an arbitral tribunal.
To
which disputes:
Section 61 says that conciliation shall apply to disputes arising
out of legal relationship, whether contractual or not and to all proceedings
relating thereto. Unless any
law excludes, these proceeding will apply to every such dispute while being
conciliated. The parties may agree to follow any procedure for conciliation
other than what is prescribed under the 1996 Act. If any law certain disputes
are excluded from submission to conciliation, the third part will not apply.
According to Section 62, a party can take initiative and send invitation
to conciliate under this part after identifying the dispute. Proceedings
shall commence when other party accepts the invitation. If rejects it stops
there itself. If other party does not reply within 30 days it can be treated
as rejection.
1
Conciliation
under the Arbitration and Conciliation Act
The
Act of 1996 (in sections 61 to 81 contained in Part
III) make express provisions as to conciliation by agreement of the parties
- a matter on which there has so far been no statute in
2
Conciliation
and Arbitration
Unlike
an arbitrator, a conciliator does not give a decision but his main function
is to induce the parties themselves to come to settlement. An arbitrator
is expected to give a hearing to the parties, but a conciliator does not
engage in any formal hearing, though he may informally consult the parties
separately or together. The arbitrator is vested with the power of final
decision and in that sense it is his contribution that becomes binding. In
contrast, a conciliator has to induce the parties to come to a settlement
by agreement.
3 The Emotional
Aspect
An
arbitrator generally decides after a contest between the parties while in
the case of conciliation the final result depends on the will of the parties.
Therefore, at the end of the proceedings, emotional harmony between the parties
may not suffer much, in the case of conciliation.
4
Scope
Under
Section 61(1) of the new law, conciliation can be resorted to in relation
to "disputes arising out of a legal relationship, whether contractual or
not".
5
Commencement
A party
initiating conciliation can, under Section 62, send to the other party a
written invitation to conciliation. Conciliation commences when the other
party accepts in writing this invitation. If it does not accept it, then
there will be no conciliation (section 62 ).
6 Conciliators
a.
There will be only one conciliator, unless the parties agree
to two or three.
b.
Where there are two or three conciliators, then as a rule, they
ought to act jointly.
c.
Where there is only one conciliator, the parties may agree on
his name
d.
Where there are two conciliators, each party may appoint one
conciliator.
e.
Where there are three conciliators, each party may appoint one,
and the parties may agree on the name of the third conciliator, who shall
act as presiding conciliator.
f.
But in each of the above cases, the parties may enlist the
assistance of a suitable institution or person.
The above provisions
are contained in section 63 and 64(1).
7 Institutional
Assistance
Section
64(2) and proviso of the new law lay down as under
:-
a.
Parties may enlist the assistance of a suitable institution
or person regarding appointment of conciliator. The institution may be requested
to recommend or to directly appoint the conciliator or
conciliators.
b.
In recommending such appointment, the institutions etc. shall
have regard to the considerations likely to secure an "independent and impartial
conciliator".
c.
In the case of a sole conciliator, the institution shall take
into account the advisability of appointing a conciliator other than the
one having the nationality of the parties.
Section 37 provides
that an appeal shall lie from certain orders. No second appeal will lie from
an order passed in an appeal. However, the right to appeal to the Supreme
Court is not affected.
Incidentally, the new list of appealable orders
is slightly narrower than that contained in Section 39 of the Arbitration
Act, 1940.
8 Stages
In
sections 65 to 73 contains provisions spread over a number of sections as
to the procedure of the conciliator. Their gist can be stated in short form.
a.
The conciliator, when appointed, may request each party to submit
a statement, setting out the general nature of the dispute and the points
at issue. Copy is to be given to the other party. If necessary, the parties
may be asked to submit further written statement and other
evidence.
b.
The conciliator shall assist the parties "in an independent
and impartial manner", in their attempt to reach an amicable settlement.
See Section 67(1) of the new law.
c.
The conciliator is to be guided by the principles of "objectivity,
fairness and justice". He is to give consideration to the following matters
:-
i.
rights and obligations of the parties;
ii.
trade usages; and
iii.
circumstances surrounding the
dispute, including previous business practices between the parties. [Section
67(2)].
d.
He may, at any stage, propose a settlement, even orally, and
without stating the reasons for the proposal.
[section 67(4)].
e.
He may invite the parties (for discussion) or communicate with
them jointly or separately. [Section 68].
f.
Parties themselves must, in good faith, co-operate with the
conciliator and supply the needed written material, provide evidence and
attend meetings, [Section 71].
g.
If the conciliator finds that there exist "elements of a settlement,
which may be acceptable to the parties", then he shall formulate the terms
of a possible settlement and submit the same to the parties for their
observation.
h.
On receipt of the observations of the parties, the conciliator
may re-formulate the terms of a possible settlement in the light of such
observation.
i.
If ultimately a settlement is reached, then the parties may
draw and sign a written settlement agreement. At their request, the conciliator
can help them in drawing up the same. [See Sections 73(1) and
73(2)].
9 Legal
Effect
a.
The settlement agreement signed by the parties shall be final
and binding on the parties. [See Section 73(1)].
b.
The agreement is to be authenticated by the conciliator. [See
Section 73(4)].
c.
The settlement agreement has the same status and effect as if
it were an arbitral award rendered by the arbitral tribunal on agreed terms.
[See section 74 read with section 30].
The net result
is that the settlement can be enforced as a decree of court by virtue of
section 36.
10
Role of the Parties
Under
section 72, a party may submit to the conciliator his own suggestions for
the settlement of a dispute. Such suggestions may be submitted by him on
his own initiative or on the conciliator's request.
11 Conciliator's
Procedure
The net result
of section 66, Section 67 (2) and Section 67(3) can be stated as
follows
:-
a.
The conciliator is not bound by the Code of Civil Procedure
or the Evidence Act.
b.
The conciliator is to be guided by the principles of objectivity,
fairness and justice.
c.
Subject to the above, he may conduct the proceedings in such
manner as he considers appropriate, taking into
account.
i.
the circumstances of the case;
ii.
wishes expressed by the parties;
iii.
need for speedy settlement.
12 Disclosure and
Confidentially
a.
Factual information received by the conciliator from one party
should be disclosed to the other party, so that the other party can present
his explanation, if he so desires. But information given on the conditions
of confidentiality cannot be so disclosed.
b.
Notwithstanding anything contained in any other law for the
time being in force, the conciliator and a party shall keep confidential
"all matters relating to the conciliation proceedings". This obligation extends
also to the settlement agreement, except where disclosure is necessary for
its implementation and enforcement. (Section 75).
13 Admissions
etc.
In
any arbitral or judicial proceedings (whether relating to the conciliated
dispute or otherwise), the party shall not rely on, or introduce as evidence
i.
views expressed or suggestions made by the other party for a
possible settlement;
ii.
admissions made by the other party in the course of conciliation
proceedings;
iii.
proposal made by the conciliator; and
iv.
the fact that the other party had indicated his
willingness to accept a settlement proposal (Section 81).
14 Parallel Proceedings
During
the pendency of conciliation proceedings, a party
is debarred from initiating arbitral or judicial proceedings on the same
dispute, except "such proceedings as are necessary for preserving his rights".
(Section 77) (There is no mention of arbitral or judicial proceedings which
are already initiated).
15 Conciliator Not to Act as Arbitrator
etc.
Unless
otherwise agreed by the parties, the conciliator cannot act as arbitrator,
representative or counsel in any arbitral or judicial proceedings in respect
of the conciliated dispute. Nor can he be "presented" by any party as a witness
in such proceedings. (Section 80).
16 Costs and Deposit
The new law also
contains provisions on certain other miscellaneous matters, such as costs
and deposit (Section 78 and 79).
How
to Draft and Execute a Settlement:
There is no standard format for drafting a settlement deed. The settlement
arrived of negotiation is different from that of conciliation, in its nature.
It is a mere contract and breach of which may lead to another litigation
before the court of law. Like every agreement this also has to be executed
in the stamp paper worth Rs 100. Whereas the settlement
in conciliation proceedings could be considered as the award provided some
formalities are fulfilled. If the document incorporating the settlement terms
is signed by the disputants, the conciliator has to authenticate those
signatures, which would complete the formalisation
of the document. However, the Indian Stamp Act makes it mandatory to affix
the Stamp worth Rs 250 for an award worth above
Rs 5000. (For award worth
Rs 1000 the stamp paper required is
Rs 10, for Rs 5000 it
is Rs 50). Then it will acquire legal validity
of being an award under Section 31 of Arbitration and Conciliation Act, which
would be equivalent to a decree and is immediately enforceable.
If the parties to dispute agree upon a negotiated settlement to the
extent of payment of a certain amount, for example, it will be executed
immediately when the settled amount is paid. No need of further enforcement
or execution. If the settlement is for payment on a future date, and that
was not made, the recourse available for the suffered party is only to file
a suit for breach of contract.
If the settlement is product of conciliation, with all the formalities
of reducing it into writing and authenticated by the conciliator, on a stamped
paper, it will be an award and thus a decree, which could be executed
immediately. Non compliance would lead the party affected to file execution
petition straight.
Advantages:
The following
are the advantages of resolving disputes by conciliation:
1.
The
parties and the third neutral party (in place of judge) sit together to
resolve.
2.
Matter
settles at threshold of the first count, and for all times to come instead
of resorting to all possible appeals to High Court and the Supreme Court,
as many times as the CPC provided.
3.
The
social advantage of parties going back home happily without broken relations
is of high value. The bickering and enmity will not be enhanced as happens
in other modes of rule based resolutions.
4.
Drastically
cuts down the cost of litigation and the time. The early disposal of the
case will reduce the hidden and unproductive costs like traveling to courts
and keeping off from working for several productive days.
5.
Execution
is done simultaneously of the settlement.
6.
It
offers a more flexible alternative, for a wide variety of disputes, small
as well as large.
7.
It
obviates the parties from seeking recourse to the system.
8.
It
reserves the freedom of the parties to withdraw from conciliation without
prejudice to their legal position inter se at any stage of the proceedings.
9.
It
is committed to maintenance of confidentiality throughout the proceedings
and thereafter of the dispute, information exchanged, the offers and counter
offers of solutions made and the settlement arrived at;
10.
It facilitates the maintenance
of continued relationship between the parties even after the settlement or
at least during the period the settlement is attempted at. This feature is
of particular significance to the parties who are required to continue their
relationship despite the dispute, as in the case of disputes arising out
of construction contracts, family relationships, family properties or disputes
between members of any business or other
orginisations.
11.
There is no scope for corruption
or bias.
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