(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.
(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.
(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.
(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
Legal Commentary & Landmark Judgments: Section 73
Section 73 of the Arbitration and Conciliation Act, 1996 prescribes the mandatory procedure for formulating, executing, and finalizing a settlement agreement in conciliation, requiring the agreement to be signed by the parties to attain finality.
Ensure that the settlement agreement is signed by the authorized directors/representatives of both parties and authenticated by the conciliator under Section 73; an agreement signed merely by advocates or left as an unsigned report cannot be executed under Section 74.