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Sat 19 May 2007 12:00 AM

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Resolution by conciliation

When disputes arise in projects various legal methods can be used to resolve the problem. Dennis Brand, senior legal advisor for Berrymans Lace Mawer, outlines conciliation.

Conciliation is a form of alternative dispute resolution (ADR) process. Within this process the parties to a dispute agree to utilise the services of a conciliator, who then meets with each of them separately in an attempt to resolve their differences. Conciliation differs from arbitration in that the process has no legal standing. It differs from mediation in that the parties seldom, if ever, actually face each other across the table in the presence of a conciliator.

A conciliator usually has no authority to require the presentation of evidence or call witnesses; indeed they usually write no decision and make no award. However, if the conciliator is successful in negotiating an understanding between the parties then that is almost always recorded in writing, often with the assistance of the respective parties' legal advisors, and signed by the parties. At this time it becomes a legally binding agreement.

Conciliation can be carried out by a person that is appointed by the parties, being someone that they both respect and consider able to bring about a resolution of the dispute. A common method of conciliation is ‘shuttle diplomacy' or ‘caucusing'. Here the disputing parties are placed in separate rooms and the conciliator goes in turn from one room to the other, trying to find common ground in order to bring about a resolution.

A variation of that method is where the conciliator asks the parties to independently list their objectives and the outcomes they desire from the conciliation. The conciliator then discusses with the parties their respective lists, requiring them to prioritise the items. Thereafter they will encourage them to ‘give' on the objectives one at a time from the least important upwards, thus reducing the number of issues that are in dispute.

Although conciliation can be carried out by a person appointed by the parties, often they will prefer to use a professional conciliator. This is someone who is trained in the conciliation process and is best able to assist the parties towards a resolution.

There are several organisations that provide dispute resolution services. The International Chamber of Commerce (ICC) launched its
ADR Rules

in 2001 to replace the former
1988 Rules of Conciliation

. Under the ICC
ADR Rules

the parties can choose the settlement technique that they consider to be the most appropriate for their individual situation.

Conciliation in the UAE

Rules of Commercial Conciliation and Arbitration

of the Dubai Chamber of Commerce and Industry (DCCI) provide for conciliation on the basis of the Secretariat to the Committee of the DCCI appointing a conciliation panel. The form of the conciliation proceeding is contained in Chapter 5: Articles 21 and 22 of the Rules.

Article 21 states: A party desiring conciliation shall submit a written application to the committee's secretariat. This application shall include a presentation of the facts of the dispute and the views of the applicant, together with the supporting documents.

The Committee's Secretariat shall notify the other party with the application of conciliation within a period not exceeding seven days from the date of the receipt. The other party shall present their views with respect to the dispute within 15 days of being informed of the application for conciliation.

The conciliation panel shall be appointed by the Committee in accordance with the provisions of Article 17 of these Rules. The parties may object to the conciliator(s) within two weeks of receiving notification of their name(s) and the proceedings shall begin immediately after this period ends.

The Committee may request an advance payment against the costs of the conciliation process in accordance with the provisions of Part Seven of the
Rules of Commercial Conciliation and Arbitration

. The conciliation panel shall study the dispute and summon the parties before it to hear their statements and each party must attend personally or through a representative.

The conciliation panel will bring together the views of the parties. Upon their agreement on a final formula for the settlement it will be recorded and authenticated by the panel. The conciliation panel must accomplish its duties within two months of the conciliation proceedings beginning, but by a decision of the committee this period may be extended for another similar period.

In Article 22 it states that if the conciliation attempt fails, the dispute shall be considered to be no longer pending before the chamber. The rights of the parties shall not be affected in any manner by what was presented or written during the course of the conciliation proceedings.

At the request of any of the parties, the chamber will issue a certificate stating that the dispute had been referred to it but that attempts for conciliation failed without giving any comment or opinion regarding the subject of the dispute.

It is worth noting that while some believe conciliation is of little benefit because of its limitations, when the International Federation of Consulting Engineers (FIDIC) published its
1999 Rainbow

suite of contracts, it maintained the same provision for amicable settlement in Clause 20.5 as was included in Clause 67.2 of the 1987
4th Edition Conditions of Contract for Works of Civil Engineering Construction


Conciliation remains one of the several available forms of alternative dispute resolution. If the parties involved in a dispute consider this to be an effective way of resolving their issues, then it is a method that should be retained.

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