Facilitating settlement during arbitration: Is it time for the tribunal to get involved?

Competing legal cultures

It is a fundamental tenet of international arbitration that tribunals are independent, impartial and neutral. Out of concern to preserve tribunals’ neutrality, the traditional approach at least in common law jurisdictions was that a tribunal had no role in promoting settlement of a dispute. Instead, settlement considerations were left entirely to the parties and a tribunal would limit its role to determining the dispute in an enforceable award. 

That said, civil law arbitrators historically have been more willing to encourage the parties to engage in settlement talks. That approach reflected the more inquisitorial nature of domestic court proceedings in many civil law jurisdictions. 

Today, despite the traditional view in common law jurisdictions, tribunals are increasingly comfortable in guiding the parties towards considering settlement options. Procedural rules at some of the key arbitral institutions now reflect this change in perspective, and in 2023, the ICC Commission on Arbitration and ADR published guidance on the steps arbitrators can take to facilitate settlement. 

Relevant rules of key arbitral institutions

The rules of several institutions expressly permit the arbitrator to raise settlement during the arbitration. None of them, however, adopt mandatory language or dictate which techniques a tribunal should use to facilitate settlement efforts.

• ICC Arbitration Rules (2021): The ICC Rules empower the arbitrator to “[encourage] the parties to consider settlement of all or part of the dispute” (Appendix IV, (i)).
• ACICA Arbitration Rules (2021): The ACICA Rules provide that “[a]s soon as practicable after being constituted,” the tribunal must hold a preliminary meeting at which it must “raise for discussion with the parties the possibility of using other techniques to facilitate the settlement of the dispute,” including mediation (Rule 25.3).
• HKIAC Arbitration Rules (2024): The HKIAC Rules state expressly that the tribunal may suspend the arbitration where the parties wish to “pursue other means of settling their dispute” (Art 13.11).
• SIAC Arbitration Rules (2025): The SIAC Rules provide that at the first case management conference the tribunal may consult with the parties on “the potential for the settlement of all or part of the dispute, including through the adoption of amicable dispute resolution methods” such as mediation (Rule 32.4(a)). More generally, the SIAC Rules empower the tribunal “to make any necessary directions, including a suspension of proceedings, for the parties to adopt any amicable dispute resolution methods” (Rule 50.2(l)).

By contrast, the LCIA Arbitration Rules (2020) do not include any specific provision empowering the tribunal to play an active role in relation to settlement. 

Techniques for facilitating settlement in arbitration

There are various techniques available to a tribunal that wishes to accommodate or encourage settlement talks. Each of the five techniques summarized below has its own advantages and potential drawbacks. 

1. Using the first case management conference. The first case management conference is a useful opportunity to draw the parties’ attention to settlement considerations, and to develop a procedural timetable that accommodates appropriate case management techniques. It is for this reason that the ACICA Rules and the SIAC Rules refer specifically to the role a tribunal can play in that setting to facilitate settlement efforts. From the users’ perspective, some parties (particularly respondents) may not have a detailed understanding of their prospects at this early stage, and so may be unwilling to engage meaningfully with settlement proposals. On the other hand, the ICC Commission reports that some in-house counsel would be concerned that arbitrators who raise settlement issues later in the proceeding may lack neutrality (‘Facilitating Settlement in International Arbitration’ (2023), page 6). 
2. Scheduling mid-stream conferences. Subsequent procedural meetings provide an opportunity for the tribunal to confirm whether parties’ early positions have changed, and to offer guidance on the issues for determination in a way that causes parties to reassess their expectations. If done effectively, this type of mid-stream conference can cause parties to revisit the possibility of amicable resolution. For example, a so-called “Kaplan hearing,” developed by arbitrator Neil Kaplan, is one such form of mid-stream conference – held after the first round of written submissions, but before the merits hearing – at which the tribunal hears both sides open their cases and present skeleton arguments. This can help the tribunal to craft more focused procedural orders and the parties to give more focused submissions during the balance of the arbitration. 
3. Incorporating mediation into the arbitral process. The tribunal can include a window for mediation within the procedural timetable, ensuring that the parties will have a dedicated opportunity to explore amicable resolution at a moment when the dispute should be ripe for settlement. However, tribunals are generally reluctant to set down a mediation window unless both parties agree. If the timetable is to include a mediation window, then the tribunal and the parties should give consideration not just to the timing but also to the duration of that window, as well as the question of whether other procedural steps should be paused while mediation occurs. (Separate considerations arise which are beyond the scope of this article in cases where the neutral proposes to switch between arbitrator and mediator roles, in a procedure commonly known as “arb-med” or “med-arb.”) 
4. Giving preliminary views. Tribunals wishing to play a more active role in encouraging settlement can give their “preliminary views” to the parties. A preliminary assessment of the issues in dispute would be non-binding, and can help the parties to realistically assess their prospects. Given the importance of maintaining impartiality, the tribunal should only offer its preliminary views with the parties’ express consent. Best practices also include (a) giving preliminary views only after reviewing enough information to adequately understand the issues, (b) caveating that the views are preliminary and non-binding, and (c) giving views orally and without a transcript. 
5. Chairing settlement conferences. At their most involved, an arbitrator who has given preliminary views may be asked to chair a settlement conference between the parties. Any such conference should be subject to “settlement privilege,” which means the tribunal could not refer to or rely on those discussions when making an award (in the event the conference does not resolve the dispute). Again, this step should only be taken with the parties’ express consent, given that it carries the risk that a subsequent award could be challenged at the seat or in the context of enforcement proceedings. 

Conclusion

Looking ahead, we expect that some arbitral institutions will establish more detailed parameters related to settlement efforts during the proceeding. For now, several institutions have adopted rules that give tribunals a broad, non-mandatory discretion to encourage the parties to consider settlement. Even under those rules, however, party consent still sits at the heart of the relevant techniques. 

For arbitration to remain the preferred method for resolving cross-border business disputes, active case management by tribunals including in relation to settlement is essential. At the same time, concerns over arbitrator impartiality remain and tribunals must be sensitive to user expectations around, for example, communicating with any party on a one-on-one basis. 

* The co-authors are grateful to Samuel Gorman, graduate, for his assistance in relation to this article.