Arbitration:It is the process by which parties select an independent person, who renders a decision regarding the case.

Conciliation: Conciliation is a process where the parties to a dispute discuss the issues in disputes, generate ideas and options for possible terms of the settlement, consider alternatives and aim to reach a mutual agreement.

Further Reading:

• The Arbitration and Conciliation (Amendment) Bill, 2015
• Indian Polity Notes For UPSC