The Arbitrator as Settlement Facilitator – Vol. 24 No. 4

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Author: Stefanie Pfisterer*

Published: June 2014


A. Background

In recent years, users of international commercial arbitration have become dissatisfied with arbitration as it has become more costly and time-consuming. Arbitrators, institutions and parties have begun to look for ways to streamline arbitral proceedings. One possible solution is to build in a settlement element in the sense that the arbitrator facilitates a settlement. The topic of the arbitrator as settlement facilitator deserves attention, first of all, because it goes to the core of arbitration: Should the arbitrator resolve a dispute by a binding decision or is he a problem-solver? The topic also touches upon delicate issues such as impartiality and due process. In addition, cultural differences between common and civil-law jurisdictions as to whether an arbitrator may facilitate settlement have long shaped the discussion.

This article focuses on the situation where an arbitrator facilitates a settlement within arbitral proceedings, i.e. where the same person who has been appointed as arbitrator conducts the settlement discussions, and he does so while the arbitral proceedings are pending. The article does not deal with settlement facilitated by a mediator or conciliator or with multi-tiered clauses which provide for arbitration after mediation (so-called “Med-Arb”).

B. Terminology

Before going into a detailed discussion, it is helpful to outline the differences between arbitration, mediation (and conciliation) and the concept of Med-Arb.

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*Dr. Stefanie Pfisterer, LL.M.; Attorney, Homburger AG, Zurich.