Dec 21, 2017
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How is Arbitration different from Conciliation?

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How is Arbitration different from Conciliation?


Alternative dispute resolution (ADR) is a dispute resolution technique which unable the parties to resolve their disputes and disagreements. It settles the dispute by discussions and negotiation. Conciliation and arbitration are two types of Alternative dispute resolution. They are used as alternative for resolving disputes. Even if their purpose is same, there are a number of differences between conciliation and arbitration to be carried out. There are many types or forms of Alternative dispute resolution and some of them are Arbitration , conciliation, mediation, negotiation etc. Further, how is arbitration different from conciliation is discussed in detail.

What is Arbitration?

“Arbitration” means any arbitration whether or not administered by permanent arbitral institution”

ICADR, Official site of “The International Centre for Alternative Dispute Resolution”  Retrieved on 21 st December 2017

It is the private, judicial and an independent body. Arbitration resolves disputes between two parties. It is a powerful means of resolving disputes between the organisation and its employees. In this process, arbitrator is an independent person who analyses the matter and considers statement of both parties. It also collects necessary data and make recommendations which are binding on the parties concerned. Arbitration process proved successful for resolving disputes between labour and management. The contract between parties contain arbitration clause. When dispute arises between parties the arbitration clause comes into force. The arbitrator decision is annexed with written opinion . Further, the procedure is comparatively expeditious than courts and tribunals. However, the process is a bit expensive, and if there is a mistake in selecting an arbitrator, the judgement becomes arbitrary.

What is Conciliation?

Conciliation is also alternative dispute resolution which helps in resolving the disputes between the parties. In this, the representatives of the parties come together to resolve the dispute by third person(Arbitrator). Any one of the party can appoint the conciliators by mutual agreement. There can be one or more conciliation officer or conciliator. If both the parties reject conciliation offer then conciliation will not take place. The primary duty of the conciliator is to mediate in and advocate settlement of industrial disputes. Further, he/she is also responsible for holding conciliatory proceedings, investigating disputes, sending the report of settlement to Appropriate Government ( Central or State government) Conciliation is a method of resolving the dispute, wherein an independent person, who meet the parties jointly and severally and helps them to arrive at negotiated settlement or resolve their differences.

Conciliation vs Arbitration

Both have same purpose of peacefully resolving the disputes between parties. The main objective of both processes is to avoid the hassle and cost involved in courts proceedings. Despite of their similarities in the outcome that they try to achieve, a number of major differences between the two are there. In conciliation, the conciliator does all the communication to the parties. In arbitration, two or more arbitrators hear the statement of both parties and examine evidence to come at a resolution. While the decision given by the conciliator is not binding, with room for appeal or negotiation, the decision of arbitrators are final and legally binding thereby leaving little room for appeal.

The difference between arbitration and conciliation

1. Arbitration refers to a method of resolving industrial disputes. The management and the labour present their disputes or issues to the Arbitrator (independent person), who decides and imposes it. Conciliation is a method of resolving the dispute, where a conciliator helps the parties to arrive at solution or settlement of their disputes.

2. The Arbitrator decision is enforceable and binding on the parties to dispute. On the other hand, the conciliator decision is not enforceable and binding on the parties.

3. Agreement between the parties should contain arbitration clause known as Arbitration Clause.  As against this, the process of conciliation doesn’t require any prior agreement.

4. Arbitration handles current and future disputes whereas the conciliation handles existing disputes only.

5. Arbitration is like a courtroom proceeding, wherein witnesses, evidence, cross-examination, transcripts and legal counsel are used. On the contrary, Conciliation is an informal way of resolving disputes between the management and labour.


Arbitration and conciliation both handles industrial disputes. But both have different procedure and ways to resolve the disputes. Arbitration resolves disputes after hearing the statements of  parties whereas conciliation  helps them to arrive at negotiated settlement or resolve their differences. Industrial disputes are nothing but the differences and conflicts between the employer and employees of the organisation. It can arise because of unfair labour practices, wage demand, political interference, labour laws and so on. The methods discussed above are alternative dispute resolution, undertaken with the view to agreeably and peacefully settling the disputes, out of court.

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