Section 77 Arbitration Act: Resort to arbitral or judicial proceedings during conciliation prohibited

Section 77 of Arbitration and Conciliation Act, 1996: Resort to arbitral or judicial proceedings during conciliation prohibited

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings, except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Arbitration Sec 2(1)(a)

Legal Commentary & Landmark Judgments: Section 77

Section 77 of the Arbitration and Conciliation Act, 1996 strictly prohibits the parties from initiating any arbitral or judicial proceedings during conciliation proceedings in respect of a dispute that is the subject-matter of the conciliation, saving only proceedings necessary for preserving rights.

Absolute Bar on Parallel Proceedings: The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings.
Sole Statutory Exception: Preserving Rights: A party may initiate arbitral or judicial proceedings where, in their opinion, such proceedings are necessary for preserving their rights (e.g., Section 9 interim injunction to prevent asset dissipation, or filing before limitation expires).
Protection of Conciliation Integrity: Prevents parties from abusing conciliation while simultaneously aggressively litigating in court.

Key Landmark Precedents:

Mysore Cements Ltd. v. Svedala Barmac Ltd., (2003) 10 SCC 375: The Supreme Court noted that Section 77 is designed to provide conciliation a tranquil window without parallel litigation, while permitting urgent preservative steps.
Haresh Dayaram Thakur v. State of Maharashtra, (2000) 6 SCC 179: Affirmed that judicial proceedings initiated during conciliation without preservative justification violate Section 77.

Courtroom Practice & Strategic Litigation Guidance:

If limitation is about to expire or an asset is about to be sold during conciliation, initiate an urgent Section 9 petition or suit, explicitly invoking the Section 77 exception for 'preserving rights' in paragraph 1 of the plaint.

Section 77: Resort to arbitral or judicial proceedings during conciliation prohibited

Section 77 of Arbitration and Conciliation Act, 1996: Resort to arbitral or judicial proceedings during conciliation prohibited

Legal Commentary & Landmark Judgments: Section 77