Distinguish between Arbitration and Conciliation under the Arbitration and Conciliation Act, 1996.

Arbitration: Arbitration is the means by which parties to a dispute get the same settled through the intervention of a third person (or more persons) but without recourse to a Court of Law. The settlement of dispute is arrived by the judgment of the third person (or more persons) who are called Arbitrators. The parties repose confidence in the judgement of the arbitrator and show their willingness to abide by his decision. The essence of arbitration is thus based upon the principle of keeping away the dispute from the ordinary Courts enabling the parties to substitute by a domestic tribunal. Section 2(1)(a) of the Arbitration and Conciliation Act, 1996, defines the term "arbitration" as to mean any arbitration whether or not administered by a permanent arbitral institution. Conciliation: Conciliation is an informal process in which the conciliator (the third party) tries to bring the disputants to agreement. He does this by lowering tensions, improving communications, interpreting issues, providing technical assistance, exploring potential solutions and bringing about a negotiated settlement. It can succeed only if the parties are willing to re-adjust. Conciliation involves building a positive relationship between the parties to the dispute. Conciliation tries to individualize the optimal solution and direct parties towards a satisfactory common agreement. The Arbitration and Conciliation Act, 1996 (Part III containing Section 61 to 81) gives a formal recognition to conciliation in India.