CEDR Rules forthe Facilitationof Settlementin International
Arbitration

Centre for Effective
Dispute Resolution
70 Fleet StreetLondon
EC4Y 1EU+44 (0)20 7536 6060
www.cedr.com
adr@cedr.com

CEDR Rules for the Facilitation ofSettlement in International Arbitration
Introduction■

These CEDR Settlement Rules are designed to increase the prospects of Parties ininternational arbitration proceedings being able to settle their disputes without
the need to proceed through to the conclusion of those proceedings. The Rules
outline steps which Arbitral Tribunals are to take (and are not to take) with a viewto facilitating settlement by the Parties.

■

The CEDR Settlement Rules are designed to supplement the legal provisions andthe institutional or ad hoc rules according to which the Parties are conducting
their arbitration1. The Rules can be incorporated on an ad hoc basis by agreementof the Parties, as part of an institution’s rules, or within a contract clause requiring
arbitration.2■

These Rules were first introduced by The CEDR Commission on Settlement inInternational Arbitration whose report of November 2009 provides guidance andbackground information. 3

Sample wording for inclusion in a contract clause:“In the conduct of any arbitration under this [Agreement], the Arbitral Tribunal
shall apply the CEDR Rules for the Facilitation of Settlement in InternationalArbitration”.

1
CEDR would like to thank the International Bar Association for permission to adopt in these Rules some of theterminology from the IBA Rules on the Taking of Evidence in International Commercial Arbitration.
2
The following is sample wording for inclusion in a contract clause: “In the conduct of any arbitration under this [Agreement], the Arbitral Tribunal shall apply the CEDR Rules for the Facilitation of Settlement in International Arbitration”.
3
The full report is available at www.cedr.com.

2

CEDR Rules for the Facilitation of Settlement in International Arbitration

CEDR Rules for the Facilitation ofSettlement in International Arbitration
Article 1
Definitions
1.

“Arbitral Tribunal” means a sole arbitrator or a panel of arbitrators.

2.

“CEDR Settlement Rules” means the CEDR Rules for the Facilitation of
Settlement in International Arbitration.

3.

“First Procedural Conference” means the first conference between theArbitral Tribunal and the Parties (whether by meeting or otherwise) at which
the procedure for the conduct of the arbitration is discussed and established.

4.

“General Rules” mean the institutional or ad hoc rules according to which theParties are conducting their arbitration.

5.

“Mediation Window” means a period of time during an arbitration that is set
aside so that mediation can take place and during which there is no otherprocedural activity.

6.

“Party” means a party to the arbitration.

Article 2
Scope of Application
1.

Subject to Articles 2.2 and 2.3, whenever the Parties have agreed to apply
the CEDR Settlement Rules, the Rules shall govern the steps taken by theArbitral Tribunal to facilitate settlement of the Parties’ dispute.

2.

In case of conflict between any specific provision of the CEDR Settlement
Rules and any mandatory provision of law determined to be applicableto the case by the Arbitral Tribunal, the mandatory provision of law shallprevail. The Arbitral Tribunal shall apply the CEDR Settlement Rules in
the manner that it determines best in order to accomplish their purpose,
without contravention of the conflicting mandatory provision of law.

3.

In case of conflict between any provisions of the CEDR SettlementRules and the General Rules, the Arbitral Tribunal shall apply the CEDR
Settlement Rules in the manner that it determines best in order toaccomplish the purposes of both the General Rules and the CEDR
Settlement Rules, unless the Parties agree to the contrary.

4.

In the event of any dispute regarding the meaning of the CEDR
Settlement Rules, the Arbitral Tribunal shall interpret them according
to their purpose and in the manner most appropriate for the particular
arbitration.

5.

Insofar as the CEDR Settlement Rules and the General Rules are silent on
any matter concerning the facilitation of settlement and the Parties have

CEDR Rules for the Facilitation of Settlement in International Arbitration

3CEDR Rules for the Facilitation ofSettlement in International Arbitration
not agreed otherwise, the Arbitral Tribunal may facilitate settlement, as it
deems appropriate, in accordance with the general principles of the CEDR
Settlement Rules.

Article 3
General Principles
1.

In assisting the Parties with settlement, the Arbitral Tribunal shall notknowingly act in such a way as would make its award susceptible to a
successful challenge.

2.

Subject to Article 3(1), the Arbitral Tribunal will take proactive steps inaccordance with these CEDR Settlement Rules to assist the Parties toachieve a negotiated settlement of part or all of their dispute.

3.

The Parties agree that the Arbitral Tribunal’s facilitation of settlementin accordance with these Rules will not be asserted by any Party as
grounds for disqualifying the Arbitral Tribunal (or any member of it) or forchallenging any award rendered by the Arbitral Tribunal.

4.

Nothing said or done by any Party or its counsel in the course of any
settlement discussions, or in the course of any other steps taken by theArbitral Tribunal to facilitate settlement, shall be used against a Party inthe event that the arbitration resumes (save as regards the allocation ofcosts in accordance with Article 6 of these Rules).

5.

The Arbitral Tribunal shall not take into account for the purpose of making
an award, any substantive matters discussed in settlement meetings orcommunications, unless such matter has already been introduced in thearbitration. Further, the Arbitral Tribunal shall not judge the credibilityof any witness on the basis of either the witness having been a party
representative during settlement discussions, or anything said by orabout, or attributed to, the witness during settlement discussions.

Article 4Discussion at First Procedural Conference

41.

The Arbitral Tribunal shall invite the Parties themselves (represented by amember of their management or in-house legal function) to participate in
the First Procedural Conference (or such other early hearing or discussion
as is used to establish the procedure for the arbitration). The Parties shallbe encouraged to speak directly with the Arbitral Tribunal during the First
Procedural Conference on matters relating to settlement.

2.

At the First Procedural Conference, the Arbitral Tribunal shall:

CEDR Rules for the Facilitation of Settlement in International Arbitration

CEDR Rules for the Facilitation ofSettlement in International Arbitration
2.1.

ensure that the Parties understand that they can settle their dispute orpart of their dispute at any time;

2.2.

ensure that the Parties are aware of the different dispute resolution
processes (such as mediation) which, in the opinion of the Arbitral
Tribunal, might assist the Parties in settling their dispute;

2.3.

where appropriate, discuss with the Parties how other dispute resolution
processes used to facilitate settlement might be accommodated at an
appropriate time within the procedure for the arbitration (for example byway of a Mediation Window);

2.4.

discuss and agree with the Parties the steps that the Arbitral Tribunal will
be taking in accordance with Article 5 of the CEDR Settlement Rules tofacilitate settlement;

2.5.

discuss and agree with the Parties whether the Arbitral Tribunal, whenallocating the costs of the arbitration between the Parties, is to take into
account offers to settle in the manner described in Article 6 below; and2.6.

discuss and agree with the Parties the points during the course of thearbitration when the topic of settlement will be discussed again between
the Parties and the Arbitral Tribunal.

Article 5
Facilitation of Settlement by Arbitral Tribunal
1.

Unless otherwise agreed by the Parties in writing, the Arbitral Tribunal
may, if it considers it helpful to do so, take one or more of the following
steps to facilitate a settlement of part or all of the Parties’ dispute:

1.1.

provide all Parties with the Arbitral Tribunal’s preliminary views on theissues in dispute in the arbitration and what the Arbitral Tribunal considers
will be necessary in terms of evidence from each Party in order to prevailon those issues;

1.2.

provide all Parties with preliminary non-binding findings on law or fact on
key issues in the arbitration;

1.3.

where requested by the Parties in writing, offer suggested terms ofsettlement as a basis for further negotiation;

1.4.

where requested by the Parties in writing, chair one or more settlement
meetings attended by representatives of the Parties at which possible
terms of settlement may be negotiated.

2.

The Arbitral Tribunal shall not:2.1.

meet with any Party without all other Parties being present; or

2.2.

obtain information from any Party which is not shared with the otherParties.
CEDR Rules for the Facilitation of Settlement in International Arbitration

5CEDR Rules for the Facilitation ofCEDR Rules for the Facilitation ofSettlement in International Arbitration
Settlement in International Arbitration
3.

The Arbitral Tribunal shall:

3.1.

insert a Mediation Window in the arbitral proceedings when requested
to do so by all Parties in order to enable settlement discussions, throughmediation or otherwise, to take place;

3.2.

adjourn the arbitral proceedings for a specified period so as toenable mediation to take place when requested to do so by a Party incircumstances where the contract in dispute contains a mandatory
mediation provision which requires the Parties to mediate any relevant
dispute, and the Parties have failed to do so before the time the issue israised in the arbitration (provided that such failure was not due to theaction or inaction of the Party requesting the adjournment).

Article 6Costs
1.

When considering the allocation between the Parties of the costs of thearbitration, (including the Parties’ own legal and other costs) the Arbitral
Tribunal may take into account:

1.1.

any offer to settle that has been made by a Party where the Party to whomsuch an offer has been made has not done better in the award of theArbitral Tribunal than the terms of the offer to settle;

1.2.

any unreasonable refusal by a Party to make use of a Mediation Window;
or

1.3.

any failure by a Party to comply with a requirement to mediate or
negotiate in the contract between the Parties which is the subject of thearbitration.

Article 7Arbitrator impartiality and independence
1.

6If, as a consequence of his or her involvement in the facilitation ofsettlement, any arbitrator develops doubts as to his or her ability toremain impartial or independent in the future course of the arbitration
proceedings, that arbitrator shall resign.

CEDR Rules for the Facilitation of Settlement in International Arbitration

For more information or to make an enquiry pleasecontact us using the below:+44 (0)20 7536 6060
adr@cedr.com
Centre for Effective
Dispute Resolution
70 Fleet StreetLondon
EC4Y 1EU+44 (0)20 7536 6060
www.cedr.com
adr@cedr.com