Facilitating Settlement – The Changing Role Of The Arbitrator

pablo-garcia-saldana-94058One of the most valuable aspects of the GPC is the rich amount of data it accumulates. A recently published article in the Fordham International Law Journal analyses the data of the 2016 GPCs in terms of the parties’ interest in collaborative dispute resolution methods within adversarial proceedings. Klaus Peter Berger and J. Ole Jensen suggest the facilitation of settlement between the parties within arbitral proceedings as an important means of maintaining and increasing the attractiveness of international arbitration.

A long time coming

For more than 50 years, there has been a debate whether it is appropriate for international arbitrators to facilitate settlement. It has unfolded between those who believe in settlement facilitation as an efficient means to end the parties’ dispute and those who consider such activities incompatible with the arbitrator’s judicial role as a “private judge”.

Up to now, this discussion has remained deeply rooted in domestic conceptions of what an arbitrator’s role should and should not be. In their article, the authors argue that it is past time to throw these culturally shaped beliefs overboard. In the interest of the much-debated quest for increased efficiency in the arbitral process, international arbitrators should realize and appreciate that settlement facilitation is not incompatible with their mandate and can be a highly useful tool to resolve the parties’ dispute in a time- and cost-efficient manner.

At a crossroads

Indeed, the recent tectonic shift in the dispute resolution landscape towards more collaborative methods of ADR – as impressively indicated by the GPC – suggests that now the time has come to embrace settlement facilitation as an important tool in any arbitrator’s procedural arsenal.

The growing interest in resolving disputes amicably puts international arbitrators at a crossroads. Either provide what the parties require and offer settlement facilitation within the limits of the parties’ legitimate expectations and due process rights – or lose them to competitive alternatives such as mediation, conciliation and similar collaborative methods of ADR. While it is true that, first and foremost, it is the arbitrator’s mandate to decide the parties’ dispute, that mandate is not limited to decision-making.

Rather, settlement facilitation has become a genuine additional part of the modern arbitrator’s mandate. In line with that change, most arbitrators have overcome the common law/civil law divide. They facilitate settlement where the parties and the case so require – regardless of their cultural background and legal upbringing. This is reflected in the CEDR Rules for the Facilitation of Settlement in International Arbitration which, it is hoped, will grow to become the “IBA Rules of Evidence” for settlement facilitation by international arbitrators.

Shifting focus

It is also reflected in a show of hands at the Fordham International Arbitration and Mediation Conference 2016, which has indicated that a surprising number of common law practitioners do see a role for international arbitrators in the facilitation of settlement in international arbitration proceedings.

To further this understanding of the arbitrator’s mandate, the article dispenses with a common misunderstanding: settlement facilitation by international arbitrators is neither mediation nor conciliation. It is a sui generis process of helping the parties to better understand their case, and eventually to settle their dispute. That process happens entirely within the arbitration proceedings without the process being changed into something else.

As their due process rights are thus in full force, the parties’ informed consent to any form of settlement facilitation is key. The article offers tried and tested tools that allow international arbitrators to facilitate settlement without overstepping their mandate or risking a challenge by the parties.

The full article entitled ‘The Arbitrator’s Mandate To Facilitate Settlement’ by Klaus Peter Berger and J. Ole Jensen is available to download here.



Categories: ADR, arbitration, mediation

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