Conciliation emphasizes the necessity of avoiding conflict-illustrate and explain.


Conciliation is the process by which the participants – together with the assistance of a neutral person or persons – systematically isolate disputed issues in order to develop options, to consider alternatives, and to reach a consensual settlement that will accommodate their needs.

Conciliation emphasizes the necessity of avoiding conflict, observing proper rules of behavior, and relying on the social group to resolve differences. At present, conciliation plays an important role in resolving disputes arising from almost all areas of society.

Conciliation is another dispute resolution process that involves building a positive relationship between the parties of dispute. The “conciliator” is an impartial person that assists the parties by driving their negotiations and directing them towards a satisfactory agreement.

Conciliation tries to individualize the optimal solution and direct parties towards a satisfactory common agreement. In conciliation, the conciliator plays a relatively direct role in the actual resolution of a dispute and even advises the parties on certain solutions by making proposals for settlement.

The conciliator, not the parties, often develops and proposes the terms of settlement. The parties come to the conciliator seeking guidance and the parties make decisions about proposals made by conciliators. In conciliation, they generally offer advice and guidance to clients about proposals made by conciliators.

In conciliation the conciliator may not follow a structured process, instead administering the conciliation process as a traditional negotiation, which may take different forms depending on the case.

The arbitration is considered an effective and rapid mean in solving problems and finding solution for any arising dispute between the trade partners. Judgments of the arbitrators and their decisions are always straight and neutral. The arbitration is an old method that was known and used on the old times during successive civilization’s epochs.

Before Islam the arbitration was widely used by the Arabs. Afterwards, Islam gave a significant importance to the arbitration in solving any arising problem in the marital relations as well as in other relations: The arbitration’s importance continued to flourish as international commerce and commercial activities are increasing day after day between countries, companies and even between individuals. As result, the arbitration was developed to take the form of national, international organization and centers to cope with the diffusion of all kind of investment agreements and performances.

Arbitration is an ADR (alternative dispute resolution) method where the disputing parties involved presents their disagreement to one arbitrator or a panel of private, independent and qualified third party “arbitrators.” The arbitrator(s) determine the outcome of the case. While it may be less expensive and more accessible than trial, the arbitration process has well-defined disadvantages. Some of disadvantages include the risk losing, formal or semi-formal rules of procedure and evidence, as well as the potential loss of control over the decision after transfer by the parties of decision-making authority to the arbitrator. By employing arbitration, the parties lose their ability to participate directly in the process. In addition, parties in arbitration are confined by traditional legal remedies that do not encompass creative, innovative, or forward-looking solutions to business disputes.

We mainly found two basic types of law. One is called as “Divine Law” – given by almighty and another one is “Human Law” made by the human. Divine Law is surely for the betterment of the mankind and it can be distinguished as Perpetual, Natural or Positive. On the other hand, Human law can be considered as Secular or non- perpetual and these laws are mainly made to run the society smoothly. [1]

Considering the above facts and circumstances, the present study was undertaken with the following three objectives:

  1. To describe model conciliation clause
  2. To describe model arbitration clause
  3. 3.      To describe the necessity  of model conciliation and arbitration.

Model Conciliation Clause

‘Model Conciliation Clause’ is under the human law. However, at below I am going to discuss my understanding about the above model conciliation laws. To understand the meaning of the Model Conciliation Clause first I had to understand the detail meaning of the Clause in terms of law. Actually Clause refers the requirement or condition in a formal document.

On the other hand, in a brief explanation of Clause generally mean the “portion of a contract that speaks to a specific issue”. [2] Here the contract refers the promise between two or more parties which is enforceable by law. For more deep understanding about the word clause we can say that Clause is prerequisite and section, which simplifies, defines or explains about the specific subject material. “Clauses are the ‘ifs,’ ‘buts,’ and ‘ands’ of a contract.” [3] Here ifs, buts, and ands refer the consideration of a contract more elaborately formal documentation.

The Dictionary meaning of Conciliation is “the settlement of a dispute by mutual and friendly agreement with a view to avoiding litigation”. [4] In another word it can be expressed as “the practice of bringing together the parties in a dispute with an independent third party, so that the dispute can be settled through a series of negotiations”. [5]

When there is any contract arises between two or more parties we may found the existence of a conciliation clause there. Conciliation is necessary to avoid the conflicts between or among the parties. In other word, “Conciliation means bringing two opposing sides together to reach a compromise in an attempt to avoid taking a case to trial.” [6] This is actually a friendly or amicable resolution to adjust the dispute through an extra judicial way.

In a brief explanation we can say that Model Conciliation Clause is a marginal way of solving raised disputes between parties by assigning a third party who will work as a general conciliator but need not to be neutral while performing the conciliation. This third party will meet both of the parties; discuss about their arguments help them to find the best solution to settle down their current disputes.[7]

In business there huge numbers of contract take place each and every day that’s why dispute can arise anytime between the parties. But to run the company smoothly and profitably it is very necessary to resolve those arguments as early as possible with a minimizing of the expense plus avoiding meet the court for a trial. According to the model conciliation clause “the parties in dispute are not in the same room. A conciliator meets with each party separately in an attempt to narrow the differences and convince the parties to agree to a general meeting”. [8]

The best way to make sure that the conflict will be resolved normally through including a model conciliation clause while signing the contract. Actually, as these clauses are legally enforceable that’s why it needs no arbitration or mediation through lawsuit. On other hand, by utilize these model conciliation clauses parties can avoid the hassle while a contract is going on and also can escape themselves from the extra expense of the secular legal system. [9]

 Preparation of conciliation

      Conciliation is an informal, quick, and cost effective way to resolve a complaint.

Conciliation gives the person who made the complaint (the complainant) and the person or organization being complained about (the respondent) the opportunity to talk about the issues in the complaint and try to resolve the matter themselves.

Conciliation can take place in a face-to-face meeting called a ‘conciliation conference’ or through a telephone conference. In some cases, complaints can be resolved through an exchange of letters or by passing messages through the conciliator (shuttle conciliation).

Conciliation is not like a court hearing. The conciliator does not decide who is right or wrong and does not tell either side what they must do.

After talking with both sides, the conciliator will decide how conciliation will take place and who will participate.

The conciliator is not an advocate for either side. The conciliator helps both sides talk about the issues in the complaint and makes sure that the process is as fair as possible for everyone involved.

While the conciliator does not decide who is right or wrong, the conciliator can provide information about the law and how the law may apply to the complaint.

The conciliator also helps the complainant and respondent think about ways to resolve the complaint and helps them negotiate an outcome they can agree on.

While the conciliator does not tell either side what they should do to resolve the complaint, the conciliator can provide information about how other complaints have been resolved.

Arbitration Agreement

A good arbitration agreement is one which minimizes complications when a dispute arise. However, many a times people neglect to pay attention while drafting an arbitration agreement.

Before finalizing an arbitration agreement, the terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. Arbitration lawyers from all applicable jurisdictions must be consulted before finalizing any arbitration agreement.

The a bad Arbitration Agreement could result in double jeopardy: arbitration as well as litigation arising out of arbitration. Therefore, care should be taken to draft an enforceable arbitration agreement. Lawyers from all applicable jurisdictions should review the arbitration agreement before its executed. lBefore signing an Arbitration Agreement the following must be properly addressed:

Applicable law to arbitration

Location of Arbitration

Number of Arbitrators

Language of Arbitration

Discovery procedure

Limitation to arbitration powers

Interim measures/Provisional Remedies


Rules Applicable

Appeal & Enforcement

Be aware of local peculiarities

Survival after Termination of the main agreement.

The arbitration agreement should be modified as applicable under different circumstances. One brush should not paint all the painting.

Arbitration and Alternative Dispute Settlement specifies that an Arbitration Agreement made by the parties after the occurrence of dispute must formulated in writing and must consist of:

The matters of dispute

Full name of the parties and their addresses

Full name of Arbitrator/Arbitral Tribunal and his/her addresses

The place where the Arbitrator/Arbitral Tribunal make the award

Full name of the secretary of the proceedings

Settlement timeframe

Acceptance statement of the appointed Arbitrator

Statement of the parties to bear any cost payable related to Arbitration proceedings.

The disputing parties must bear in mind to the above items because, if an Arbitration Agreement does not conclude all items completely, by law, such agreement will be null and void.

 Model Arbitration Clause

According to the meaning of the online business dictionary Arbitration refers, the settlement of a dispute whether this argument can be based on some sorts of fact, regulation or method of the contract between or among parties need to be resolve  by a neutral third party generally called as the Arbitrator without meeting the court for a litigation.[10] In other word we can say “An arbitration is a setting in which two parties submit their differences to an impartial third party to determine a solution or negotiation to a problem”. [11] Actually the Model Arbitration clause is usually like unprofessional but it is legally enforceable plus sometimes it is required by law based on the level of disputes between parties.

I think by providing an example of arbitration the idea about the Model Arbitration Clause will be clearer. Suppose a married couple want to get divorce between them but failed to come to agree on the terms and condition, so they can let a third party to involve between them for the best negotiation. [12]

According to the legal definition Arbitration Clause is a technique of alternative argumentative determination beside a dispute between parties. While this arbitration is taking place obviously there should be agreement of all the parties, and they will submit their all sorts of disputes to a neutral person or group for a better decision. Here this whole process typically including full evidentiary hearing and presentations by lawyers for the both parties.

In other word we can say “Arbitration Clause in a contract requiring the parties to submit all disputes arising from the contract to an arbitrator or group of arbitrators rather than to proceed with litigation. Usually, a breach or repudiation of a contract will not nullify the clause.” [13]

While running the company any disputes can be arisen anytime. So if we going to define the arbitration in terms of business then we would find Arbitration is “a process for settling disputes between parties. For example, arbitration is often used between securities firms and their customers when the parties submit their differences to the judgment of an impartial third party or parties. Many brokerage firms require their customers to sign an agreement for binding arbitration to resolve disputes”. [14]

 Arbitration Clause is necessary almost in every business contract. By using Arbitration the raised dispute can be settled out of court. As in arbitration the two parties in argument agree in advance to accept the decision made by a third party that’s why business transaction can go on easily.

Model Conciliation Clause vs. Model Arbitration Clause

Arbitration and Conciliation both is an alternative dispute resolution method to resolve the dispute between or among the parties. In both case the main target is to settle down the argument of the parties. In both term an arbitrator and a Conciliator work like a third party and try to hear from both side to help them to come with a mutual understanding and resolve the disputes.

Here one thing I want to mention there is another legal term called Mediation which is almost like the Arbitration. However, here I am not going to discuss about the mediation. Let’s again come to point of Arbitration and Conciliation. Actually the fundamental difference between the arbitration and the conciliation is, Conciliation is a method employed in civil law countries while Arbitration normally can be applied in all legal system. [15]

Both in personal as well as business contract we can see the use of arbitration and conciliation but in Bangladesh normally the arbitration process take places to resolve the disputes between the parties. However, in the business of our country we may found the arbitration clause is including when there is a contract is going to sign between labor union and the management. We also may found the arbitration while a married couple is going to get divorce or going to resolve their disputes of marriage if they themselves fail to make a mutual decision.

In our country Bangladesh, the present law of arbitration is mainly based on the Arbitration Act, 1940. As there are three types of arbitration we can found in the Arbitration Act of 1940 that’s why those are applicable in Bangladesh. The three types are-

      Arbitration in the course of a suit.

      Arbitration with the intervention of the court.

Arbitration otherwise than in the course of a suit and without the intervention of the court in practice. [16]

Here the 3rd type of arbitration is commonly used in Bangladesh.

The parties are free to construct their arbitration clause considering the nature of the contract and refer all or certain disputes which have arisen or which may arise to the BCA. The Bangladesh Council of Arbitration, however, recommends to the parties desirous of making reference to arbitration by the Bangladesh Council of Arbitration to use any of the following arbitration clauses in writing in their contracts:

“Any dispute or difference whatsoever arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Rules of Arbitration of the Bangladesh Council of Arbitration and the Award made in pursuance thereof shall be binding on the parties.” Or

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the Bangladesh Council of Arbitration by one or more arbitrators appointed in accordance with the said Rules.”

According to the rule of Arbitration Act of 1940, an arbitration agreement needs to be in written format. Parties can register it or if they want they can avoid the registering procedure also. While the Arbitration agreement is writing a reference can be made about current and future disputes which can arise between the parties. In absence of the specific legal rules, the rule for arbitration will be assigned by the arbitrator.

The arbitrator will hear from the both side of disputes to confirm the equity in decision making. The arbitrator will collect all sorts of necessary evidence related to the disputes. If one party fails to provide appropriately assembled hearing then the arbitrator may proceed in the absence of the party and can try to find solution based on collected evidence but without proper evidence arbitration should not be applied. [17]


So from the above analysis I think the detail understanding about the Model Conciliation Clause as well as the Model Arbitration Clause is very much clear. Even though there are some sorts of similarities plus dissimilarities we have found between these two but the main purpose is almost same, that is resolved the disputes between or among parties signing or signed contract. We also have found some practical example of the terms. On the other hand we have found the position of these two terms in the context of the legal system of Bangladesh plus the procedure of using these terms appropriately. And I think there are necessity of these two terms in both of our personal life and business life to maintain the society and to run company smoothly. Finally we can say that, including Model Conciliation Clause or Model Arbitration Clause while signing any contract can help the parties to resolve the resolved their future disputes easily. And also these two terms can help them for existing contract disputes between the parties. So I think based on the terms and condition of the contract as well as the types of the contract all parties need to agree in conciliation or arbitration to resolve the disputes which has raised or possibly would be raised in future.


  1. Online PDF document, “The Necessity of Law and Right Order”, 3rd paragraph, Retrieved From:
  2. Meaning search at online, Retrieved From:
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  6. Html document, Retrieved From:
  7. Html document, ‘Conciliation Legal Definition’, Retrieved From:
  8. Html document, ‘Conciliation Business Definition’, Retrieved From:
  9. Online html document, ‘Conciliation Clause’, 1st & 2nd paragraph, Retrieved From:
  10. Html page, meaning search online about arbitration, Retrieved From:
  11. Meaning of arbitration at,
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  13. Html document, ‘Arbitration Legal Definition’ Retrieved From:
  14. Html document, ‘Arbitration Business Definition’ Retrieved From:
  15. Online Document, ‘Arbitration, Mediation and Conciliation: differences and similarities from an International and Italian business perspective’,1st & 2nd Paragraph of the title Arbitration, Mediation and Conciliation, Retrieved From:
  16. Online html document, ‘Arbitration Law in Bangladesh’, 1st paragraph, Retrieved From:

17. Online html document, ‘Arbitration Law in Bangladesh’, 2nd & 6th  paragraph, Retrieved From: