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Section 72 of the Arbitration and Conciliation Act, 1996

Suggestions by parties for settlement of dispute: Section 72 forms part of the statutory framework governing conciliation under Part III of the Arbitration and Conciliation Act, 1996. It enables either party to place settlement suggestions before the conciliator voluntarily or when invited to do so.

Text of Section 72

Section 72 - Suggestions by parties for settlement of dispute.

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

Meaning and scope of Section 72

Section 72 permits active participation by the parties in the settlement process. A party does not have to wait for the conciliator to propose terms. Either side may independently suggest a possible basis for settlement, compromise, payment arrangement, performance obligation or other mutually acceptable solution.

The provision also authorizes the conciliator to invite such suggestions. In practice, this supports a flexible and cooperative process in which the parties remain responsible for deciding whether a settlement is acceptable.

How Section 72 operates in conciliation

Voluntary initiative: either party may submit settlement suggestions without being asked.
Invitation by conciliator: the conciliator may ask one or both parties to suggest possible settlement terms.
No automatic settlement: a suggestion does not itself bind the other party. A settlement becomes effective only when the statutory requirements for a settlement agreement are satisfied.
Connection with Section 73: if common ground emerges, the process may move toward formulation and signing of a settlement agreement under Section 73.

Relationship with nearby provisions

Section 72 should be read with the surrounding conciliation provisions. Section 71 deals with the parties' duty to cooperate with the conciliator, while Section 73 governs the settlement agreement. Section 75 addresses confidentiality of conciliation proceedings.

Current legal position: The Mediation Act, 2023 contains a future amendment mechanism under Section 61 and the Sixth Schedule for substitution of Sections 61 to 81 of the Arbitration and Conciliation Act, 1996. However, the official commencement note presently records commencement of specified provisions of the Mediation Act from 9 October 2023 and does not include Section 61. Accordingly, Section 72 continues to appear in the current India Code text of the Arbitration and Conciliation Act, 1996. For the latest official text, refer to the official links on this page.

Related conciliation provisions

Last reviewed: 7 September 2026. This page is intended for general legal information and should be read with the current statutory text and applicable judicial decisions.