CEDR Commission
on Settlement inInternational
Arbitration

Centre for Effective
Dispute Resolution
70 Fleet Street
LondonEC4Y 1EU+44 (0)20 7536 6000

Final Report,

www.cedr.com

November 2009

info@cedr.com

Contents
CEDR Commission on Settlement in International
Arbitration
Final Report of the Commission
Contents:

Page

1. Introduction

3

2. Objectives, Principles and Summary

4

3. CEDR Rules for the Facilitation of Settlement in International Arbitration

7

4. Recommendations of the CEDR Commission

7

a. Arbitrators

7b. Arbitral Institutions

9c. Parties and their counsel

11

5. New Developments
Appendix 1

CEDR Rules for the Facilitation of Settlement in International

12
13

Arbitration
Appendix 2

Safeguards for arbitrators who use private meetings with each18

party as a means of facilitating settlement

2

Appendix 3

The effect of offers to settle in arbitration

21

Appendix 4

Table of existing provisions on settlement in arbitration

23

Appendix 5

Members of the CEDR Commission

32

CEDR Commission on Settlement in International Arbitration

Introduction
1.

Introduction
1.1 International arbitration is the default choice of dispute resolution forum forcross-border commercial contracts, largely because it offers neutrality andawards that are enforceable around the world.
1.2 The international arbitration community is continuously working to
improve its product for the benefit of business users. Papers such as the
UNCITRAL Notes on Organising Arbitral Proceedings, the IBA Rules on
the Taking of Evidence in International Commercial Arbitration, the IBA
Guidelines on Conflicts of Interest in International Arbitration, and the ICC
Commission’s Techniques on Controlling Time and Cost in Arbitration are
all documents aimed at making international arbitration work better.
1.3 Although some of these papers refer to the role of the arbitral tribunal inencouraging settlement, at present, it is only in certain jurisdictions that
tribunals are pro-active in this regard. It is certainly very rare for tribunals
to recommend that the parties try using mediation during the course of
the arbitral proceedings. Indeed, whilst courts in Europe now generally
enforce multi-tier dispute resolution clauses and decline jurisdiction wherethese are not observed, arbitral tribunals tend to accept jurisdiction andproceed with the arbitration, even where one party has clearly breached an
obligation to mediate before commencing arbitral proceedings.
1.4 Some research1 suggests that settlement rates in arbitration are
significantly lower than they are in many national courts, particularly thosecourts where judges systematically promote early settlement and the useof ADR techniques such as mediation.
1.5 The CEDR Commission for Settlement in International Arbitration (theCommission) was formed to review the current practice regarding thepromotion of settlement by international arbitral tribunals and to come up
with recommendations to improve this aspect of the process for end-users.
A key premise of the Commission’s work, which is supported by studies of -Bucher, ASA Bulletin 1995, p. 568 estimates the settlement rate at approximately 50%;

1many authors agree with this assessment. The second survey conducted by Bühring-Uhle/
Kirchhoff/Scherer in Arbitration and Mediation in International Business (2nd edition 2006) (p.
112) delivered a settlement rate of 43% on average.

CEDR Commission on Settlement in International Arbitration3

Objectives, Principles & Summary
the attitudes of international business to dispute resolution2 is that parties
generally want their problems solved cost effectively and efficiently andthat this will often be best achieved through negotiated settlement.
1.6 Attached to this Report3 are the following documents:
1.6.1

CEDR Rules for the Facilitation of Settlement inInternational Arbitration (Appendix 1).

1.6.2

An appendix outlining safeguards for arbitrators who use private
meetings with each party as a means of facilitating settlement(Appendix 2).
‘

2.

1.6.3

An appendix on the Effect of Offers to Settle in Arbitration (Appendix 3).

1.6.4

A table showing provisions from legislation and the rules of arbitralinstitutions around the world concerning the arbitrators’ role in
the encouragement of settlement within arbitration proceedings.
This provides an indication of the current approach adopted by thedifferent arbitral institutions. (Appendix 4)

1.6.5

A list of the members of the CEDR Commission (Appendix 5).

Objectives, Principles and Summary
2.1 The purpose of the Recommendations set out in this Report is to provide
tools which can be used by all of the different participants in international
arbitration proceedings. These tools are all designed to increase theprospects of parties to the proceedings being able to settle their disputes
without the need to proceed through to the conclusion of arbitralproceedings.
2.2 The CEDR Commission has considered the different approaches currently
adopted for the encouragement of settlement within arbitration
proceedings. These include the use by arbitrators in China and in Hong Kongof mediation techniques. They also include the approach prevalent

2

See for example the PriceWaterhouseCoopers survey, International arbitration: Corporate Attitudes andPractice 2006
3

Please note that the contents of this report do not necessarily reflect the personal views of individual

members of the Commission

4

CEDR Commission on Settlement in International Arbitration

Objectives, Principles & Summaryin Germany and Switzerland where arbitrators are generally willing at
an early stage in the proceedings to provide the parties with anindication of their preliminary views on the issues in the case. This canencourage settlement discussions between the parties and provide
focus for those discussions.
2.3 By way of contrast, the typical common law approach is for arbitrators torefrain from engaging with the parties on the substantive issues for fearthat this may suggest that they have prejudged the case before hearing
all of the evidence and argument. However, the common law jurisdictions
do make use of other techniques to promote settlement such as “offers
to settle” which are described in more detail below and in Appendix 3. The
Commission has identified the techniques and approaches that it considers
being of most value and has included these within its Recommendations.
2.4 The Commission considers that the following three principles should
apply to international arbitration proceedings and these three principles
underpin the Recommendations:
2.4.1

An arbitral tribunal has a primary responsibility to produce anaward, which is binding and enforceable.

2.4.2

Unless otherwise agreed by the parties, the arbitral tribunal,
assisted by the arbitral institution where applicable, should
also take steps to assist the parties in achieving a negotiatedsettlement of part or all of their dispute.

2.4.3

In assisting the parties with settlement, the tribunal should not
act in such a way as would make its award susceptible to a
successful challenge. Specifically, the tribunal should not meetwith any of the Parties separately, or obtain information fromany Party which is not shared with the other Parties, unless suchpractices are acceptable in the courts of all jurisdictions whichmight have reason to consider the validity of the tribunal’s award
or unless the Parties explicitly consent to this approach and its
consequences.

2.5 The Commission recognises that by applying the third of these principles,
an arbitrator will be discouraged from engaging in a med-arb process,which involves meeting privately with each party as part of the mediation
phase. The Commission has concluded that whilst this form of med-arb has
been used successfully by some arbitrators, it carries significant risks to the

CEDR Commission on Settlement in International Arbitration5

Objectives, Principles & Summary
integrity of the arbitral process and hence to the enforceability of any arbitralaward in the event that settlement is not achieved in the mediation phase.
In addition, this form of med-arb may result in a mediation phase which isless effective than would be the case if the mediation were to be conductedby a third party mediator. Whilst currently the Commission does nottherefore specifically recommend a med-arb process, which involves private
meetings with the parties, it has considered safeguards that can be used inorder to minimise the risks involved with such an approach. These are set
out at Appendix 2 entitled “Safeguards for arbitrators who use private
meetings with each party as a means of facilitating settlement”.
2.6 The participants in the arbitral process to whom the Recommendations
are addressed are arbitrators, arbitral institutions and parties and theircounsel. The Recommendations are organised by reference to each ofthese categories.
2.7 In summary, the Recommendations are intended to achieve the following
purposes:
2.7.1

Remind all participants that arbitration proceedings may be usedin conjunction with other processes to achieve efficient and costeffective outcomes.

2.7.2

Encourage arbitrators to use appropriate techniques in the courseof their conduct of the arbitration to promote and encourage
settlement. An “appropriate” technique is one that will assist
the parties, will not lead to successful challenges to their role asarbitrators and will not jeopardise the enforceability of any award
that the tribunal may ultimately make.

6

2.7.3

Offer suggestions to arbitral institutions on how to design
processes which are intended to facilitate settlement and ways
to allow them to be more readily accessible to parties to arbitralproceedings.

2.7.4

Produce a list of principles which will give guidance whenarbitral institutions, tribunals or parties are considering the useof combined adjudication and settlement processes such as
Med-Arb, Arb-Med etc.

2.7.5

Offer guidance on the drafting of arbitration clauses which record
the agreement of the parties regarding the approach that thearbitral tribunals to take to facilitate settlement.

CEDR Commission on Settlement in International Arbitration

CEDR Rules & Recommendations
3.

CEDR Rules for the Facilitation of Settlement inInternational Arbitration Proceedings
3.1 In addition to its Recommendations, the Commission has prepared CEDR
Rules [See Appendix 1]. These Rules apply the Recommendations. They
are designed to be incorporated by agreement into the procedure to
be adopted in an arbitration. 4 This can be done either in a contractual
agreement to arbitrate embodied in a contract, or by inclusion by arbitralinstitutions in their rules of arbitration, or by way of a procedural agreement
made by the parties, possibly recorded in an order made by consent by anarbitral tribunal early in the proceedings.
3.2 By adopting the CEDR Rules, Parties will ensure that their arbitral tribunal
will facilitate settlement of their dispute and will also know how thatfacilitation will be undertaken.
3.3 The Recommendations in this Report are intended to be of use toarbitrators, arbitral institutions and Parties whether or not the Parties
choose to adopt the CEDR Rules.

4.

Recommendations
4.1 These Recommendations are not prescriptive. Many of the
Recommendations are already being implemented in some parts of
the world both by arbitral institutions and some arbitrators. One of theaims of the Recommendations is to identify techniques that have beenused successfully so that they can be adopted more widely.
Arbitrators
4.2 Steps that arbitrators can take within the context of most existing
arbitral rules include the following:
Enforce multi-tier dispute resolution clauses in accordance with theapplicable law if pre-arbitration phases have not been completed
in accordance with the clause. If the parties have agreed that they
will, for example, conduct a mediation before embarking on arbitration
proceedings, then this agreement should be enforced if the applicablelaw so provides. Not only does this respect the will of the parties

4

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.

CEDR Commission on Settlement in International Arbitration

7

Recommendations(assuming that they have not varied the agreement set out in themulti-tier clause), but it also provides the parties with an opportunity toengage in a settlement process before incurring significant costs in thearbitration proceedings. In general terms, enforcement of such clauses
will usually involve either staying the arbitral proceedings or declining
jurisdiction.
4.2.1

Remind the parties’ counsel that it is best practice for internal
party representatives to be present at the first procedural
conference. Arbitrators can remind the parties at that
conference that they can settle their dispute at any time. Directcommunication between the arbitral tribunal and the parties will
ensure that the parties themselves understand the options available
to them. This may be of particular benefit where the lawyers
representing the parties come from different legal traditions andmay have different expectations of the tribunal’s role regarding
settlement.

4.2.2

Where necessary, discuss with the parties and their counsel thedifferent ADR processes which might assist and discuss with themways in which such processes might be accommodated within
the arbitral process (for example by way of a “mediation window”
during the proceedings). This form of discussion may be particularly
useful where one or more of the parties or counsel is not familiar withmediation or other ADR processes, or where the parties come fromdifferent legal traditions.

4.2.3

Question the parties’ counsel and the parties themselves atappropriate junctures in the arbitral process regarding the statusof settlement discussions and the potential use of other forms of
ADR to assist. The use of mediation or other ADR processes may beappropriate at different stages of the arbitral process, and it can be
helpful for the parties’ counsel to be reminded of this as the processprogresses.

8

4.2.4

If both parties agree, provide an indication as to the tribunal’s
preliminary view on the merits of the case. This can be done indifferent ways. One approach is for the tribunal to set out the issues
in the case that it has identified and what the tribunal considers will
be required in terms of evidence from each party in order to prevailon the key issues.

4.2.5

If both parties agree, chair one or more settlement meetings

CEDR Commission on Settlement in International Arbitration

Recommendations
attended by internal representatives of the Parties (or otherpersons with authority to negotiate and settle) at which possible
terms of settlement are negotiated. The involvement of one ormore members of the tribunal or a neutral chairperson can improvethe chances of settlement discussions proving successful. Upon therequest of the parties, the members of the arbitral tribunal
or the chairperson may submit to the parties proposed terms ofsettlement. Arbitrators should not meet with the Parties separately
or obtain any information from one Party which is not shared withthe other Parties. The arbitrators must also avoid putting pressure on
the parties to settle.
4.2.6

Propose that the parties be at liberty to make offers to settle
during the arbitral proceedings with a view to settling the caseand protecting their position on legal costs. Where the Party towhom such an offer has been made has not accepted it and thatparty has not achieved a better result in the award, the arbitral
tribunal shall be at liberty to take this fact into account when
considering the allocation of the costs of the arbitration between
the Parties. A more detailed description of how offers to settle canoperate is set out at Appendix 3.

4.3 If, as a consequence of his or her involvement in the facilitation of
settlement, any arbitrator develops doubts as to his or her ability toremain impartial or independent in the future course of the arbitration
proceedings, that arbitrator should resign.
Arbitral institutions
4.4 Institutions administering arbitration proceedings can take various steps
to assist. Some of these can be taken within the context of existing rules
and procedures. Others would require a change to those rules and/or the
introduction of new services.
4.5 Arbitral institutions have a pivotal role to play for several reasons:
4.5.1

It is their rules that are incorporated into the parties’ contracts by
way of the arbitration agreement. These rules can be structured ina way which facilitates settlement discussions between the parties.

4.5.2

Arbitral institutions can inform the arbitrators that they appoint
as to the approach that those arbitrators should take to theencouragement and facilitation of settlement initiatives.
Case managers within the institution are often the first point of

4.5.3

CEDR Commission on Settlement in International Arbitration

9

Recommendations
contact for the parties once a decision to refer a dispute to arbitration
has been taken. They continue to be a contact point for the parties,
independent from the tribunal. At all stages they are in a position
to check with the parties the status of settlement negotiations
and, where appropriate, make suggestions to progress settlement
initiatives. In a similar way, they can communicate separately with thetribunal regarding the same matters.
4.5.4

Arbitral institutions are in a position to introduce new
approaches and products into the market.

4.6 Operating within their existing rules, institutions could take the following steps5:
4.6.1

Instruct case managers to initiate a discussion regarding
settlement with counsel representing the parties when theproceedings are commenced. This is likely to involve asking
whether the parties have already used ADR techniques anddiscussing with them whether it would be helpful to use suchtechniques immediately or at some later stage in the arbitralproceedings.

4.6.2

Provide information to counsel and the parties about ways offacilitating settlement negotiations. This is likely to be of particularvalue and importance for parties and lawyers from jurisdictions
where ADR techniques are less commonly used.

4.6.3

Where the institution either offers ADR services (such as
mediation), or is able to recommend an ADR institution thatprovides such services, this can be drawn to the attention of theparties.

4.6.4

Encourage arbitrators appointed by the institution to takethe steps identified above at paragraph [4.2] and select sole
arbitrators and chairmen for appointment who are likely to be
pro-active in this regard.

4.6.5

Support arbitrators who take such steps if queries areraised by the parties.

4.6.6

Provide training to arbitrators in how to give an early view on
the merits in order to encourage settlement, without making
themselves or their award vulnerable to a successful challenge.

It is acknowledged that a number of institutions already take these steps.

5

10

CEDR Commission on Settlement in International Arbitration

Recommendations
4.6.7

Provide training to all participants in the arbitration process onalternative dispute resolution techniques.

4.7 Additional steps which are likely to require changes to existing rules
or the introduction of new rules include the following:
Incorporate the CEDR Rules for the Facilitation of Settlement inInternational Arbitration into their rules of arbitration. This could
be done either for all cases, or as an option which the parties canselect.
4.7.1

Include a provision within the institution’s rules of arbitration
which provides that a tribunal can and will, with the writtenconsent of all parties, chair settlement meetings and/or provide a
provisional view on the merits with a view to facilitating
settlement discussions. This provision can also confirm that theparticipation in settlement meetings and the fact of providing aprovisional view on the merits given in accordance with the rules
shall not be the basis for a challenge to the tribunal or to its
arbitral award.

Parties and their counsel
4.8 Given that settlement is a voluntary process, the approach of the parties,
advised by their counsel, is of key importance. Rules of arbitration
regarding settlement and encouragement from tribunals and institutions
will be of significantly reduced effect if the parties are not willing toengage and work constructively.
4.9 Steps that parties and their counsel can take include the following:
4.9.1

11

Give careful consideration to the type of dispute resolution
process they want at the time of negotiating the dispute
resolution clause in their contract. If the parties agree that it may
be helpful to have the assistance of an arbitral institution and an
arbitral tribunal that are actively looking for ways to support themin settling the dispute, select the rules of an arbitral institution thatbehaves in this way. The parties may also consider using multitier dispute resolution clauses that provide for negotiation and/or
mediation before arbitration.

CEDR Commission on Settlement in International Arbitration

New Developments
4.9.2

Consider the use of ADR processes at the outset and throughout
the arbitral process and use such ADR processes alongside or in
conjunction with arbitration. It may be appropriate for mediation totake place during a pause in the arbitration (a “mediation window”)
or a mediation process can run on a parallel track with the arbitration
proceedings so that work on settlement can be undertaken without
delaying the arbitration.

4.9.3

Party representatives with authority to settle the dispute should
be pro- actively involved during the arbitration and be readyto engage directly with the arbitral tribunal and other neutrals(where appointed). This should reduce the risk that opportunities forsettlement are missed. It also enables the party to ensure that theapproach being taken by its legal counsel is consistent with its own
objectives and interests.

4.9.4

Parties and their counsel should be aware that if the counterparty to the dispute comes from a jurisdiction with a legal
system and tradition which is different to its own, the approachof that party to settlement negotiations and ADR processes may
also be very different. Getting the best result is likely to involve
obtaining an understanding of the traditions of the other side andbeing sensitive to those when proposing and participating in any
settlement process

4.9.5

Parties and their counsel should be ready to discuss the questionof settlement with the tribunal and/or the arbitral institution andconsider the possible use of ADR or other settlement techniques
at the outset of or later in the arbitration proceedings. One
technique that the parties may consider is requesting the tribunal
to give an early provisional view on the merits of the case so as tofacilitate the parties’ settlement discussions. An arbitrator may alsochair a meeting at which possible terms of settlement may benegotiated.

5.

New Developments
5.1 The CEDR Commission recognises that new approaches and practices aredeveloped from time to time. This report is therefore a work in progress andthe Commission welcomes input on any alternative approaches that might
be reflected in the next edition of this report. Please address any suchcomments to CEDR at arbitration@cedr.com

CEDR Commission on Settlement in International Arbitration

12

Appendix 1
Appendix 1

CEDR Rules for the Facilitation of Settlement in International
Arbitration
Introduction
These CEDR Settlement Rules are designed to increase the prospects ofParties to international arbitration proceedings being able to settle theirdisputes without the need to proceed through to the conclusion of those1.

proceedings. The Rules outline steps which Arbitral Tribunals are to take(and are not to take) with a view to facilitating settlement by the Parties.
The CEDR Settlement Rules are designed to supplement the legal provisions
and the institutional or ad hoc rules according to which the Parties are
conducting their arbitration6. The Rules can be incorporated on an ad hoc
basis by agreement of the Parties, as part of an institution’s rules, or within a2.

contract clause requiring arbitration7.
These Rules were first introduced by The CEDR Commission on Settlementin International Arbitration whose report of November 2009 provides
guidance and background information. 8

3.

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 the Arbitral
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
6

CEDR would like to thank the International Bar Association for permission to adopt in these Rules

some of the terminology from the IBA Rules on the Taking of Evidence in International Commercial
Arbitration.
7

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 Proceedings”.
8

13

The full report is available at www.cedr.com

CEDR Commission on Settlement in International Arbitration

Appendix 1
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 other procedural
activity
6. “Party” means a party to the arbitration

Article 2

Scope of Application

1. Subject to Articles 2.1 and 2.2, whenever the Parties have agreed to apply the
CEDR Settlement Rules, the Rules shall govern the steps taken by the Arbitral
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 applicable to the case by
the Arbitral Tribunal, the mandatory provision of law shall prevail. 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 Settlement Rules and theGeneral Rules, the Arbitral Tribunal shall apply the CEDR Settlement Rules in
the manner that it determines best in order to accomplish the purposes of boththe General Rules and the CEDR Settlement Rules, unless the Parties agree tothe 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. In so far as the CEDR Settlement Rules and the General Rules are silent on
any matter concerning the facilitation of settlement and the Parties have notagreed 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.

CEDR Commission on Settlement in International Arbitration

14

Appendix 1
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 settlement inaccordance with these Rules will not be asserted by any Party as grounds fordisqualifying the Arbitral Tribunal (or any member of it) or for challenging 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 the Arbitral
Tribunal to facilitate settlement, shall be used against a Party in the event thatthe arbitration resumes (save as regards the allocation of costs in accordancewith 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 credibility of any
witness on the basis of either the witness having been a party representative
during settlement discussions, or anything said by or about, or attributed to, thewitness during settlement discussions.

Article 4

Discussion at First Procedural Conference

1. 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:
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;

15

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Appendix 1
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 by
way 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
to facilitate 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 tofacilitate 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 prevail on
those issues ;1.2. provide all Parties with preliminary non-binding findings on law or facton 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 other Parties;

CEDR Commission on Settlement in International Arbitration

16

Appendix 1
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 6

Costs

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 account1.1. 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 the
Arbitral 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 the arbitration.
Article 7

Arbitrator impartiality and independence

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

END

17

CEDR Commission on Settlement in International Arbitration

Appendix 2
Appendix 2

Safeguards for arbitrators who use private meetings with each party as ameans of facilitating settlement.
1. The Report of the CEDR Commission states as follows at paragraphs 2.4.3 and 2.5:
1.1. “In assisting the parties with settlement, the tribunal should not act
in such a way as would make its award susceptible to a successful
challenge. Specifically, the tribunal should not meet with any of theParties separately, or obtain information from any Party which is notshared with the other Parties, unless such practices are acceptable inthe courts of all jurisdictions which might have reason to consider thevalidity of the tribunal’s award or unless the Parties explicitly consent tothis approach and its consequences.
1.2. The Commission recognises that by applying the third of theseprinciples, an arbitrator will be discouraged from engaging in a med-arb
process, which involves meeting privately with each party as part of themediation phase. The Commission has concluded that whilst this formof med-arb has been used successfully by some arbitrators, it carries
significant risks to the integrity of the arbitral process and hence to theenforceability of any arbitral award in the event that settlement is notachieved in the mediation phase. In addition, this form of med-arb may
result in a mediation phase which is less effective than would be thecase if the mediation were to be conducted by a third party mediator.
Whilst currently the Commission does not therefore specifically
recommend a med-arb process, which involves private meetings withthe parties, it has considered safeguards that can be used in order tominimise the risks involved with such an approach. These are set out
at Appendix 2 entitled “Safeguards for arbitrators who use private
meetings with each party as a means of facilitating settlement”.
2. In this context, the CEDR Commission recommends the following:
3. If it is proposed that an arbitrator should take on the role of mediator orconciliator and meet with the parties in private session (sometimes referred toas a caucus session) with a view to resuming his or her function as arbitrator if
the mediation or conciliation does not result in a settlement of the dispute, thefollowing issues should be addressed.
4. In conducting the mediation/conciliation, the arbitrator is likely to behave in a
way which is inconsistent with the behaviour expected of an arbitrator in most

CEDR Commission on Settlement in International Arbitration

18

Appendix 2international arbitration proceedings. For example, the mediator/conciliator is
likely to become privy to information regarding the motivations and interestsof the parties which would otherwise be privileged and/or confidential, and/or
which might separately influence an arbitrator’s judgment in considering theterms of an award.
5. If the parties have not consented to the mediator/conciliator resuming as
arbitrator, and have not waived any right to object arising out of his role asmediator/conciliator, the arbitrator and/or his award may therefore be subject
to challenge. Even where such consent is given, it may be argued that theconsent is not given on a fully informed basis if the parties are not aware of all
matters that have been discussed during private sessions. (Whether or not theParties’ consent is effective may vary also under different national laws) Further,
if parties are aware that if no settlement is achieved, the mediator may resume
as arbitrator, they may be less inclined to be open and frank in their discussions
with the mediator during the private meetings, thereby reducing the value ofsuch meetings and such a mediation effort.
6. If interest based mediation which involves private meetings is likely to be
helpful for the resolution of the dispute (as it often will be), it is recommended
that the tribunal explains the risks identified at paragraphs [4 and 5] above,and discusses with the parties the alternative approach of appointing
an independent third party mediator. The tribunal can then discuss andagree with the parties how to build the mediation process into the arbitralprocedure.
7. The CEDR Commission recognises that parties will on occasion be willingto accept the risks identified at paragraphs [4 and 5] above and will want anarbitrator to engage in interest based mediation using private meetings. In
such circumstances, it is recommended that the following steps be taken so as
to minimise the risks.
7.1. The parties’ consent to the mediator/conciliator resuming as arbitrator
should include consent as to the way in which the arbitrator is to deal
with information learned in confidence by the arbitrator during themediation/conciliation. This may require the arbitrator to disclose any
such information to all parties and provide them with an opportunity tocomment on it. Alternatively, it may provide that the arbitrator should
disregard any confidential information that may have been disclosed during
private meetings, and that he or she should be under no duty to disclose it.
7.2. Wherever the parties’ consent is required, that consent should be

19

CEDR Commission on Settlement in International Arbitration

Appendix 2
recorded in writing.
7.3. The parties should give their consent in writing before the mediation/
conciliation phase. Where parties wish to adopt a more robust protection
against the risks inherent in the arbitrator acting as mediator, they should
insert a requirement that consent is also required after the mediation/
conciliation has concluded and prior to the mediator/conciliator resumingin the role of arbitrator. The consent given after the mediation/conciliation
phase is particularly important because it is given in the knowledge ofdevelopments during the mediation. Consent which is given at an earlier
stage (for example in a dispute resolution clause, or by reference to thearbitral rules of an institution) may be less effective. In addition, knowingthat it can withhold consent, may encourage a party to be more open
during the mediation/conciliation phase.
7.4. The consent should include a statement that the parties agree to thearbitrator meeting with each privately during the mediation/conciliation
phase and either that [the arbitrator is under no obligation to disclose
information obtained in confidence but should disregard it for the purposesof an arbitration award] or that [the arbitrator is under a duty to disclose
any information obtained relevant to a potential arbitration award so thatthe other party may comment].
7.5. The consent should include a statement that the parties will not at
any later time use the fact that the arbitrator has acted as a mediator/
conciliator as a basis for challenging the arbitrator or any award which thearbitrator may make (either alone or as part of a tribunal).
7.6. If as a consequence of his or her involvement in the mediation/
conciliation phase, any arbitrator develops doubts as to his or her ability
to remain impartial or independent in the future course of the arbitration
proceedings, that arbitrator should resign.
8. As is noted in paragraph 2.4.3 of the CEDR Commission’s Report, the risks
which these safeguards are designed to minimise may not arise where thearbitration takes place (and any steps to challenge or enforcement the award
will take place) in jurisdictions where the courts consider it to be a common
and accepted practice for arbitrators to engage in interest based mediation
involving private meetings with the parties. The Commission does not in
any way discourage such practice in those jurisdictions, and welcomes thesharing of experience arising from such practice or from use of the safeguards
outlined above.

CEDR Commission on Settlement in International Arbitration

20

Appendix 3
Appendix 3

The effect of Offers to Settle in Arbitration
Certain common law jurisdictions use Offers to Settle as a means ofencouraging settlement. Offers to Settle encourage settlement because:(a) parties are encouraged to make reasonable offers to settle because they canthereby reduce their exposure to costs in the arbitration; and(b) a party receiving an offer is encouraged to consider the offer seriously, since itwould be at risk of paying more in costs at the end of the arbitration if the offer isrejected and the party does not achieve a better outcome in the award.
Set out below is a procedure which can be incorporated into the procedural rules
in an arbitration in order to enable parties to make Offers to Settle which havethese costs consequences. Alternatively, it can simply be agreed that an arbitral
tribunal may take into consideration any offers to settle that have been made when
considering the allocation of costs of the arbitration between the parties.
1. At any time after an arbitration has been commenced, a party may makean offer to settle the dispute to the other party expressed to be (an “Offer toSettle”).
2. In order to have the costs consequences which are described at paragraph [6]below, an Offer to Settle must include the following:
2.1. a description of all of the terms of settlement which are proposed by
the party making the Offer to Settle to dispose of the claim and any
counterclaim, including terms regarding the payment of interest;
2.2. the date by which the Offer to Settle is to be accepted, which date should
be at least 21 days from the date the offer is communicated;
2.3. confirmation that the party making the Offer to Settle will pay thereasonable legal costs of the other party or parties to whom the offer
is made (including the fees and expenses of the arbitral tribunal and,if applicable, the arbitral institution) up to the time of acceptance of
the Offer to Settle.
3. Neither the fact that an Offer to Settle has been made, or the terms of theOffer to Settle shall be communicated to the arbitral tribunal other than in

CEDR Commission on Settlement in International Arbitration

21

Appendix 3
the circumstances described in paragraph [5] below.
4. If an Offer to Settle is accepted within the time stipulated for acceptance, then thedispute shall be settled on the terms set out there in. The parties may choose
to ask the arbitral tribunal to embody the terms of settlement in a consent
award.
5. If the Offer to Settle is not accepted within the time stipulated for acceptance, andthe arbitration proceeds to a final award, then if the party that made the Offer toSettle considers that the outcome in the final award is better for them than thatoffered by way of settlement in the Offer to Settle, it may choose to provide thearbitral tribunal with a copy of the Offer to Settle and ask that it be taken into
consideration in the exercise of the tribunal’s discretion regarding the allocation of
the costs of the arbitration.
6. Where a tribunal has been provided with an Offer to Settle in the circumstances
described in paragraph [5], it shall decide whether or not the terms of its final
award are more or less favourable to the party that made the Offer to Settle(excluding the issue of costs). If the tribunal concludes that (1) the terms of the
final award are more favourable, (2) that the offer was genuine and (3) that the
party making the offer was able at the time it made the offer to fulfil the termsof the offer, then the tribunal shall exercise its discretion in respect of allocationof the costs of the arbitration so as to provide that all or part of the costs of thearbitration (including all of the reasonable legal costs of the parties and the feesand expenses of the tribunal and, where applicable, the arbitral institution), shallbe payable by the party that declined the offer from the date that the offer
expired onwards.
7. A party may make more than one Offer to Settle.

22

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Appendix 4 Table of existing Provisions on settlement in arbitration
N.B.: The translations are not official translations.

Provisions(including
websites) €Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Australia
New South Wales
Commercial
Arbitration Act(1984, amended in2005)
http://www.austlii.

Section 27 (1):Parties to an arbitration agreement

Section 27 (2):Where:(a) an arbitrator or umpire acts as amediator, conciliator or intermediary [...] and(b) that action fails to produce a settlementof the dispute acceptable to the parties tothe dispute,no objection shall be taken to the conduct
by the arbitrator or umpire of thesubsequent arbitration proceedings solely
on the ground that the arbitrator or umpire
had previously taken that action in relation
to the dispute.

edu.au/au/legis/ns
w/consol_act/caa19
84219/The Commercial
Arbitration Acts ofQueensland (1990),
Western Australian
Territory (1985),
Tasmania (1986),
Australian Capital
Territory (1986) andNorthern Australian
Territory (1985)
contain identicalprovisions.
Bangladesh
Arbitration Act(2001)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/B
angladesh/(a) may seek settlement of a dispute
between them by mediation, conciliation orsimilar means, or(b) may authorise the arbitrator or umpire toact as a mediator, conciliator or other nonarbitral intermediary between them [...]
whether before or after proceeding toarbitration, and whether or not continuingwith the arbitration.
Section 27 (5):The time appointed [...] for doing any act ortaking any proceeding in or in relation to anarbitration is not affected by any action
taken by an arbitrator or umpire [withregard to settlement attempts].

Disclosure of information obtained insettlement negotiations

Section 22 (1):It shall not be incompatible with anarbitration agreement for an arbitral
tribunal to encourage settlement of the
dispute otherwise than by arbitration and,with the agreement of all the parties, thearbitral tribunal may use mediation,
conciliation or any other procedures at any
time during the arbitral proceedings toencourage settlement.

Recording of the settlement agreement

Section 22 (2):If, during arbitral proceedings, the parties
settle the dispute, the arbitral tribunal
shall, if requested by the parties, record
the settlement in the form of an arbitralaward on agreed terms.

23

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CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €BelarusInternational
Arbitration Court
Law (1999) http://
www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/B
elarus/Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Article 31:
The arbitral tribunal shall take necessary
measures for an amicable settlement of adispute on the whole or its separate issues
at any stage of the proceedings.
If a settlement agreement is reached thearbitral tribunal in particular shall apply
the provisions of Article 16 of these Rules.

Article 18:
By mutual consent the parties may choose
a conciliator as a sole arbitrator for
settlement of the dispute in the arbitralproceedings after the termination of theconciliation proceedings.
Unless it is agreed upon by the parties, theconciliator may not act as an arbitrator aswell as a representative or counsel of either
party or a witness in any future proceedingin respect of the dispute. [...]

Article 18 (cont.):[...] The parties are deprived of a right tomake reference to any statement which
has been made during the conciliation
proceedings by the conciliator, or by theother party, or by another participant of
the conciliation, in a future arbitralproceeding.

Article 16:[...] The agreement shall be signed by theparties or their duly authorized
representatives as well as by the conciliator.
The identity of the conciliator’s signature iscertified by the signature of the Executive
Secretary and by the seal of theInternational Arbitration Court. The
conciliative proceedings are deemed to beterminated after signing the settlementagreement.
On the basis of the settlement agreement
the conciliator should draw up an award of
the Arbitration Court.

24

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CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €BermudaInternational
Conciliation andArbitration Act(1993)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/B
ermudaArbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Section 14:(1) No person who has served as conciliator
may be appointed as an arbitrator for, or
take part in, any arbitral or judicial
proceedings in the same dispute unless all
parties agree in writing to suchparticipation or the rules agreed for
conciliation or arbitration so provide.
(2) Where the parties have agreed in

Section 10:(1) Unless otherwise agreed in writing by
the parties, it shall be an implied term of
the written agreement to conciliate thatthe parties undertake not to rely on or
introduce as evidence in any arbitral or
judicial proceedings in any jurisdiction,
whether or not such proceedings relate to
the dispute that is the subject of theconciliation proceedings –Section 20:
If the parties to an arbitration agreement
reach agreement by means of conciliationor otherwise in settlement of their disputeand enter into an agreement in writing
containing the terms of settlement (the“settlement agreement”) the settlementagreement shall, for the purposes of its
enforcement in Bermuda, be treated as anaward on an arbitration agreement andmay, by leave of the Court, be enforced in
the same manner as a judgment or order tothe same effect and, where leave is so given,judgment may be entered in terms of theagreement, pursuant to section 48.

writing that a person appointed as aconciliator shall act as an arbitrator, in theevent of the conciliation proceedings failingto produce a settlement acceptable to theparties no objection shall be taken to theappointment of such person as anarbitrator, or to his conduct of thearbitration proceedings or to any award,
solely on the ground that he had acted
previously as a conciliator in connection
with some or all of the matters referred toarbitration; but if such person declines toact as an arbitrator, any other person
appointed as an arbitrator shall not be
required first to act as a conciliator unlessthe parties have otherwise agreed inwriting.

(a) views expressed or suggestions made by
any party in respect of possible settlementof the dispute;(b) admissions made by any party in thecourse of the conciliation proceedings;(c) proposals made by the conciliator;(d) the fact that the other party had
indicated willingness to accept all, or part, ofa proposal for settlement made by the otherparty, or by the conciliator.
(2) Without limiting the obligations createdby subsection (1), evidence of anything said
or of any admission made in relation to any
or all of the matters referred to in
subsection (1)(a) to (d) (inclusive) is notadmissible in evidence in any arbitration
conducted pursuant to Part III or judicial
proceeding in Bermuda, and disclosure ofany such evidence shall not be compelled inany civil action in Bermuda in which,pursuant to the law, testimony may becompelled to be given.
(3) Where evidence is offered incontravention of this section, the arbitration
tribunal or the Court shall make any orderwhich it considers to be appropriate to deal
with the matter, including, without
limitation, orders restricting the
introduction of evidence, or dismissing thecase without prejudice.

25

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including

websites) €CambodiaCommercial
Arbitration Law(2006)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/C
ambodia/

CanadaAlberta Arbitration
Act (1991, as
amended in 2007)
http://www.canlii.oArbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Article 38 (1):Upon request by both parties, prior tocommencement of formal arbitration
proceedings, the arbitral tribunal may
confer with the parties for the purpose of
exploring whether the possibility exists of avoluntary settlement of the parties' dispute:
If the parties determine that it does, thearbitral tribunal shall assist the parties inany manner it deems appropriate.

Section 35 (1):The members of an arbitral tribunal may, if
the parties consent, use mediation,
conciliation or similar techniques during thearbitration to encourage settlement of thematters in dispute.

Recording of the settlement agreement

Article 38 (2):If the parties settle the dispute prior tocommencement of the formal arbitralproceedings, or in the course thereof, thearbitral tribunal shall terminate theproceedings and, if requested by theparties, may record the settlement in theform of an arbitral award on agreed terms.

Section 35 (2):After the members of an arbitral tribunal
use a technique referred to in subsection(1), they may resume their roles asarbitrators without disqualification.

Section 36:
If the parties settle the matters in disputeduring arbitration, the arbitral tribunal
shall terminate the arbitration and shallrecord the settlement in the form of anaward.

rg/ab/laws/sta/a43/20070312/whole.
html
CanadaBritish Columbia
International
Commercial
Arbitration Act (asamended in 1988)
http://www.kluwer

Section 30 (1):
It is not incompatible with an arbitrationagreement for an arbitral tribunal toencourage settlement of the dispute and,with the agreement of the parties, thearbitral tribunal may use mediation,
conciliation or other procedures at any
time during the arbitral proceedings toencourage settlement.

Section 30 (2):If, during arbitral proceedings, the parties
settle the dispute, the arbitral tribunal mustterminate the proceedings and, if
requested by the parties and not objected
to by the arbitral tribunal, record thesettlement in the form of an arbitral award
on agreed terms.

Section 35:
The members of an arbitral tribunal shallnot conduct any part of the arbitration as amediation or conciliation process or othersimilar process that might compromise orappear to compromise the arbitral
tribunal's ability to decide the dispute
impartially.

Section 36:
If the parties settle the dispute during
arbitration, the arbitral tribunal shallterminate the arbitration and, if a party sorequests, may record the settlement in theform of an award.

arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/C
anada/
CanadaOntario Arbitration
Act 1991
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/C
anada/

26

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €Costa Rica Law on
Alternative
Resolution of
Disputes andPromotion of
Freedom from Social
Unrest (2000) http://
www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/C
ostaRica/

Arbitrator's promotion of andinvolvement in settlement efforts
Article 6:
At any stage of the judicial proceedings, thecourt may propose a conciliation hearing.
The mediator shall be a trial judge or an
arbitrating judge. The Supreme Court ofJustice shall appoint arbitrating judges as
required and determine their powers andresponsibilities.
(N.B.: This provision refers to court-annexed
conciliation; the Act does not contain acorresponding provision for arbitralproceedings.)
Article 13:
The duties of the arbitrator or mediator areto:a) Remain impartial to all interested parties.
[...]c) Inform the parties as to the mediation orconciliation procedure, as well as the legal
implications of the conciliation settlements.
d) Maintain confidentiality regarding theactions of the parties during mediation orconciliation proceedings and preparatory
acts for the conciliation settlement. [...]

Settlement facilitator's involvement in
subsequent arbitration proceedings
Article 16:
Unless the parties reach an agreement tothe contrary, the extrajudicial mediator orconciliator shall be disqualified fromparticipating as a neutral third party in any
subsequent judicial or arbitral proceedings
related to the dispute.

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Article 14:
Preparatory activities, conversations, andpartial covenants to the conciliation
settlement are strictly confidential. The
mediator or conciliator shall not disclose thecontent of discussions or partial settlements
between the parties. This means that themediator or conciliator has the right toprofessional secrets.
The parties may not relieve the mediator orconciliator of such obligation, and thetestimony or confession of the parties ormediators regarding what occurred or was
expressed in the mediation or conciliation
hearing or hearings, shall not have value as
evidence, except in the case of civil or
criminal procedures in which the possible
liability of the mediator or arbitrator has
been disputed, or when the purpose is toclarify or interpret the scope of theconciliation settlement that has beenreached through such hearings.
If a conciliation settlement is reached and its
effectiveness or validity is judicially disputed,
the mediator or conciliator shall beconsidered a witness privileged to thecontent of the settlement and the process
leading to such settlement.

Article 12:
Settlements adopted through a judicial or
extrajudicial mediation or conciliation
proceedings shall comply with thefollowing requirements:

27a) Names and personal information of theparties.
b) Clear statement of the object and scopeof the dispute.
c) Names of mediators, arbitrators and, if
applicable, the institution which employsthem.
d) Specific mention of the agreements
reached.
e) In the event of judicial or administrative
proceedings that are in progress or pending,an express indication of the institution thatis hearing the case, file number, current
status, and the willingness of the parties tofully or partially conclude such proceedings.
f) The arbitrator or mediator shall record in
the document that the parties have been
informed of the rights involved and beenadvised that the settlement might notsatisfy all their interests. The document shallalso establish that the parties have beenadvised as to their right to consult with anattorney on the content of the settlement
prior to signing.
g) Signatures of all interested parties, as well
as of the mediator or conciliator.
h) Exact address where the parties shall be
notified.
Article 63 (1):If, prior to announcing the arbitral award,
the parties decide to resort to mediation,
conciliation, or any other process of dispute
resolution, the tribunal shall issue an orderto suspend the proceedings. If themediation, conciliation, or other process ofdispute resolution results in a total or partial
settlement, the tribunal shall record it as anarbitral award in the terms agreed-upon by
the parties. If this does not lead to asettlement, the parties will present thetribunal with evidence of having madeattempts to resolve the dispute throughother means in order to issue an order tocontinue the proceedings.

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €Croatia Law on
Conciliation (2003)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/Cr
oatia/

Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Article 16:
1. During a court, administrative or otherproceedings a body conducting theseproceedings may, in the disputes fallingunder Article 1 of this Law, recommend theparties to initiate conciliation in accordancewith the provisions of this Law.
2. If the parties agree on conciliation
proceedings, the body conducting theproceedings falling under paragraph 1 of this
Article shall, after consultations with theparties, set a period of time in which theundertaking of further actions in those
proceedings shall be suspended, which time
may not exceed 60 days. This period of time
may be extended only upon a joint proposalof all parties to the dispute.
3. If during the period of time determined inparagraph 2 of this Article a settlement is
not reached, the body conducting theproceedings shall continue the proceedings.
The proceedings may be suspended again
for an attempt to reach settlement only
upon a joint proposal of all parties to thedispute.

Article 13:
1. The conciliator shall not act as anarbitrator in respect of a dispute that was oris the subject of the conciliation
proceedings or in respect of another disputethat has arisen from the same legal
relationship or any related legal relationship.
2. A lawyer who has acted as conciliatorshall not represent any of the parties in
disputes indicated in paragraph 1 of this
Article.

Article 12:
1. Parties to conciliation proceedings, the conciliator or any third person participating in theproceedings, including the staff of the organization for conciliation, shall not rely on or
introduce as evidence in any legal proceedings, including judicial, arbitral or otherproceedings, any of the following:a) An invitation by a party to engage in conciliation proceedings or the fact that a party
was willing to participate in conciliation proceedingsb) Views expressed or suggestions made by a party to the conciliation in respect of a
possible settlement of the dispute;c) Statements or admissions made by a party in the course of the conciliation
proceedings, except if such statements and admissions are part of the settlementagreement which has been reached;d) Proposals made by the conciliator in the conciliation proceedings;e) The fact that a party to the conciliation had indicated its willingness to accept a
proposal for settlement made by the conciliator;f) A document prepared solely for purposes of the conciliation proceedings, or adocument which the parties have agreed shall not to be used in any other proceedings.
2. Paragraph 1 of this Article applies irrespective of the form of the information or evidence
referred to therein.
3. The evidence referred to in paragraph 1 shall not be admissible and the circumstancesreferred to in paragraph 1 shall be disregarded in any court, arbitration or other proceedings
dealing with the same or a different dispute. If such information is offered as evidence, thebody conducting the proceedings shall reject such proposal as inadmissible. If a participant
in such other proceedings submits a document or gives a statement in contravention ofparagraph 1, the body conducting those proceedings shall not use the contents of theinformation thus disclosed in the deliberation on the decision.
4. In any case, a person acting in contravention of paragraph 1 of this Article shall be liable
for the damages incurred, and may be punished for the abuse of procedural rights, if a body
conducting the proceedings has such authority.
5. The provisions of paragraphs 1 to 4 of this Article do not relate to the evidence andinformation necessary under the law to implement or enforce the settlement agreement
which has been reached.
6. Except for the situations listed in paragraph 1 of this Article, evidence and statements
which would otherwise be admissible in some other proceedings shall not become
inadmissible as a consequence of having been used in a conciliation.
7. If a party has relied in the conciliation proceedings on a statement or evidence thatmight have been refused in the other proceedings, the fact that such a statement wasgiven or evidence used for the purposes of conciliation does not in itself infer consent to theuse of such statement or evidence in other proceedings.

28

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CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €Hong Kong
Arbitration
Ordinance (1997)
http://www.legislat
ion.gov.hk/eng/home.htm(Bilingual Laws
Information System;
the Arbitration
Ordinance is to befound inchapter 341) http://
www.kluwer
arbitration.com/arb

Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Section 2B (1):
If all parties to a reference consent inwriting, and for so long as no party
withdraws in writing his consent, an
arbitrator or umpire may act as aconciliator.

Section 2A (2):Where an arbitration agreement provides
for the appointment of a conciliator andfurther provides that the person so
appointed shall act as an arbitrator in theevent of the conciliation proceedings failingto produce a settlement acceptable to theparties –Section 2B (2):An arbitrator or umpire acting as
conciliator –Section 2C:
If the parties to an arbitration agreement
reach agreement in settlement of theirdispute and enter into an agreement inwriting containing the terms of settlement(the “settlement agreement”) the
settlement agreement shall, for the
purposes of its enforcement, be treated as
an award on an arbitration agreement andmay, by leave of the Court or a judge
thereof, be enforced in the same manner as
a judgment or order to the same effect and,
where leave is so given, judgment may beentered in terms of the agreement.

(a) no objection shall be taken to theappointment of such person as anarbitrator, or to his conduct of thearbitration proceedings, solely on the
ground that he had acted previously as aconciliator in connection with some or allof the matters referred to arbitration;(b) if such person declines to act as an

itration/arb/legislat
ion/NationalLaws/H
ongKong/

arbitrator any other person appointed as anarbitrator shall not be required first to act asa conciliator unless a contrary intention
appears in the arbitration agreement.

(a) may communicate with the parties tothe reference collectively or separately;(b) shall treat information obtained by himfrom a party to the reference asconfidential, unless that party otherwise
agrees or unless subsection (3) applies.
Section 2B (3):Where confidential information is obtainedby an arbitrator or umpire from a party to
the reference during conciliation
proceedings and those proceedings
terminate without the parties reaching
agreement in settlement of their dispute,the arbitrator or umpire shall, before
resuming the arbitration proceedings,
disclose to all other parties to the reference
as much of that information as he considers
is material to the arbitration proceedings.

Section 2B (4):
No objection shall be taken to the conductof arbitration proceedings by an arbitrator or
umpire solely on the ground that he had
acted previously as a conciliator inaccordance with this section.

India Arbitration andConciliation Act(1996)
http://www.commonlii.org/in/legis/nu
m_act/aaca1996265/
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/In
dia/

Section 30 (1):
It is not incompatible with an arbitrationagreement for an arbitral tribunal toencourage settlement of the dispute and,with the agreement of the parties; thearbitral tribunal may use mediation,
conciliation or other procedures at any
time during the arbitral proceedings toencourage settlement.

Section 80:
Unless otherwise agreed by the parties, –a) the conciliator shall not act as anarbitrator or as a representative or counselof a party in any arbitral or judicial
proceeding in respect of a dispute that is
the subject of the conciliation proceedings;b) the conciliator shall not be presented by
the parties as a witness in any arbitral or
judicial proceedings.

Section 81:
The parties shall not rely on or introduce asevidence in arbitral or judicial proceedings,
whether or not such proceedings relate to
the dispute that is the subject of theconciliation proceedings, –a) views expressed or suggestions made by
the other party in respect of a possible
settlement of the dispute;(b) admissions made by the other party inthe course, of the conciliation proceedings;

Section 30 (2):If, during arbitral proceedings, the parties
settle the dispute, the arbitral tribunal shallterminate the proceedings and, if
requested by the parties and not objected
to by the arbitral tribunal, record thesettlement in the form of an arbitral award
on agreed terms.

(c) proposals made by the conciliator;(d) the fact that the other party had
indicated his willingness to accept a
proposal for settlement made by theconciliator.

29

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €Japan Arbitration
Law (2003) http://
www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/J
apan
Netherlands
Arbitration Act(1986, as amended
in 2004)
http://www.kluwer

Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Article 38 (4):An arbitral tribunal or one or more
arbitrators designated by it may attempt tosettle the civil dispute subject to the arbitralproceedings, if consented to by the parties.

Recording of the settlement agreement

Article 38 (1):If, during arbitral proceedings, the parties
settle the civil dispute subject to thearbitral proceedings and the parties sorequest, the arbitral tribunal may make aruling on agreed terms.

Article 1043:
At any stage of the proceedings the arbitral
tribunal may order the parties to appear inperson for the purpose of providing
information or attempting to arrive at asettlement.

arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/N
etherlands/
Singapore
Arbitration Act (asamended in 2002)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/Si
ngapore/Section 17 (1):
If all parties to any arbitral proceedings
consent in writing and for so long as noparty has withdrawn his consent in writing,an arbitrator or umpire may act as aconciliator.

Section 16 (3):Where an arbitration agreement provides
for the appointment of a conciliator andfurther provides that the person so
appointed shall act as an arbitrator in theevent of the conciliation proceedings
failing to produce a settlement acceptable
to the parties –(a) no objection shall be taken to theappointment of such person as anarbitrator, or to his conduct of the arbitralproceedings, solely on the ground that hehad acted previously as a conciliator inconnection with some or all of the mattersreferred to arbitration;(b) if such person declines to act as anarbitrator, any other person appointed as
an arbitrator shall not be required first toact as a conciliator unless a contrary
intention appears in the arbitrationagreement.
Section 17 (4):
No objection shall be taken to the conductof arbitral proceedings by a person solely
on the ground that that person had acted
previously as a conciliator in accordancewith this section.

Section 17 (2):An arbitrator or umpire acting as
conciliator –(a) may communicate with the parties tothe arbitral proceedings collectively or
separately; and(b) shall treat information obtained by himfrom a party to the arbitral proceedings asconfidential, unless that party otherwise
agrees or unless subsection (3) applies.
Section 17 (3):Where confidential information is obtainedby an arbitrator or umpire from a party to
the arbitral proceedings during conciliation
proceedings and those proceedings
terminate without the parties reaching
agreement in settlement of their dispute,the arbitrator or umpire shall before
resuming the arbitral proceedings disclose
to all other parties to the arbitralproceedings as much of that information as
he considers material to the arbitralproceedings

30

Section 18:
If the parties to an arbitration agreement
reach agreement in settlement of theirdispute and the arbitral tribunal has
recorded the terms of settlement in theform of an arbitral award on agreed termsin accordance with Article 30 of the Model
Law, the award (a) shall be treated as anaward on an arbitration agreement; and (b)may, by leave of the High Court or a Judge
thereof, be enforced in the same manner as
a judgment or order to the same effect, andwhere leave is so given, judgment may beentered in terms of the award.

CEDR Commission on Settlement in International Arbitration

CEDR Commission on Settlement in International Arbitration - Rules and Recommendations
Provisions(including
websites) €Uganda Arbitration
and Conciliation Act(2000)
http://www.kluwer
arbitration.com/arb
itration/arb/legislat
ion/NationalLaws/U
ganda/

Arbitrator's promotion of andinvolvement in settlement efforts

Settlement facilitator's involvement in
subsequent arbitration proceedings

Disclosure of information obtained insettlement negotiations

Recording of the settlement agreement

Section 66:(1) The conciliator shall not act as anarbitrator or as a representative or counselof a party in any arbitral or judicial
proceeding in respect of a dispute that is
the subject of the conciliation proceedings.
(2) The conciliator shall not be presented

Section 67:
The parties shall not rely on or introduce asevidence in arbitral or judicial proceedings,
whether or not such proceedings relate to
the dispute that is the subject of theconciliation proceedings –(a) views expressed or suggestions made by
the other party in respect of a possible
settlement of the dispute;

Section 31 (1):If, during arbitral proceedings, the parties
settle the dispute, the arbitral tribunal shallterminate the proceedings and, if
requested by the parties record thesettlement in the form of an arbitral award
on agreed terms.

by the parties as a witness in any arbitralor judicial proceedings.

(b) admissions made by the other party inthe course of the conciliation proceedings;(c) proposals made by the conciliator;(d) the fact that the other party had
indicated his or her willingness to accept a
proposal for settlement made by theconciliator.

31

CEDR Commission on Settlement in International Arbitration

Appendix 5
Appendix 5

Arbitration Commission Members
CEDR would like to thank all those individuals and organisations that have given
so freely of their time to assist the Commission in its work so far.

Co-Chairs:

Lord Woolf and Prof. Gabrielle Kaufmann-Kohler

Commission Director: Professor Karl Mackie
Rapporteurs:First name
SurnameEileenChristian
Danny
Chris

CarrollDuve
McFaddenNewmark

Firm

CEDR
Freshfields Bruckhaus Deringer
CEDR
Spenser Underhill Newmark

CountryUK
Germany
UK
UK

Organisations Consulted
Abu Dhabi Chamber Of Commerce & Industry
ACB Conflict Management For Commerce And Industry
ADR Institute Of Canada Inc
AIDA Reinsurance And Insurance Arbitration Service
Arbitration Association Of The Republic Of China
Arbitration Centre Of Mexico
Arbitration Court Attached To The HCCI
Arbitration Foundation Of Southern Africa (AFSA)
Arbitration Institute Of The Central Chamber, Finland
Arbitrators' And Mediators' Institute Of New Zealand Inc
Australian Centre For International Commercial Arbitration
Brussels Chamber Of Commerce And Industry
Cairo Regional Centre For International Commercial Arbitration
Centre For Commercial Arbitration Chamber Of Commerce And Industry Of Geneva
Chamber Of National & International Arbitration Of Milan
Chartered Institute of Arbitrators
China International Economic & Trade Arbitration
Conciliation And Arbitration Centre Of Panama
Court Of Arbitration At Polish Chamber Of Commerce
Court Of Arbitration For Sport Lausanne
Court Of International Commercial Arbitration Russian Chamber Of Commerce and Industry

Danish Chamber Of Commerce Arbitration
German Institution Of Arbitration (DIS)
Hong Kong International Arbitration Centre

32

CEDR Commission on Settlement in International Arbitration

Appendix 5
ICC Dispute Resolution Services International Chamber Of Commerce
ICSID
Indonesia National Board of Arbitration (BANI)
Institute For Trans-national Arbitration
Institute Of Arbitrators & Mediators Of Australia
International Centre For Dispute Resolution (ICDR)International Council For Commercial Arbitration
Japan Commercial Arbitration Association (JCAA)
JAMS
Korean Commercial Arbitration Board (KCAB)
Kuala Lumpur Regional Centre For Arbitration
LEADR
London Court of International Arbitration
Netherlands Arbitration Institute
Paris Mediation And Arbitration Centre
Santiago Chamber Of Commerce Arbitration
Singapore International Arbitration Centre (SIAC)
Spanish Court Of Arbitration
Swiss Arbitration Association
Thai Arbitration Institute (TAI)
UNCITRALWorld Intellectual Property Organisation

List of Individual Members of Commission:
First name
SurnameOrganisation

33

HP

Abdurrasyid

Indonesia National
Board of Arbitration

Cecil
Essam

AbrahamAl Tamimi

Shearn Delamore & Co
Al Tamini & Co

Henry

Alvarez

Fasken Martineau Dumoulin LLP

Mark

Baker

Fulbright Jaworski

Giorgio
MichaelBerniniBlacker

Baker & McKenzie
AMEC

Karl-Heinz
Prof. Lawrence

Bockstiegel
Boo

Bergisch-Gladbach
Singapore Int Arb Centre

Phillip
Peter
Francois
Bernardo
RobertDiane
Yves

CapperLovells
Cassidy
Pinsent Masons
Chamagne
ABB
CremadesB Cremades y Asociados
DavidsonJAMS
De Saint Victor ABB Asea Brown Boveri ltd
Derains
Derains & Associes

CEDR Commission on Settlement in International Arbitration

Country
Indonesia
Kuala Lumpur
Dubai
CanadaHouston U.S.A
Italy
UK
Germany
Singapore
UK
UK
Switzerland
Spain
USA
Switzerland
FranceAppendix 5

35

Jan

Eijsbouts

Akzo Nobel

Dr Ahmed

El Kosheri

Kosheri, Rashed & Riad

Andrew
Hans Peter
Emmanuel

Foyle
Frick
Gaillard

1 Essex Court
UK
NestleSwitzerland
International Arbitration InstituteFranceMark

Galloway

Skanska

JudithDr GavanGill
Griffith QC

Allen & Overy
Owen Dixon Chambers

UK

Sally
Carla
Paula
MartinBruce
MichaelHarpoleHerronHodgesHunterHunter
Hwang

Sally Harpole & Co
Shell
Herbert Smith
Essex Court Chambers
Arbitrator
Arbitrator

Hong Kong
USA
UK
UK
USA

Yu

Jianlong

CIETAC

GraemeMichaelPierreThomasAlexander

Johnston
Jones
KarrerKoch
Komarov

Toby
Barry
JulianLandauLeon
Lew QC

Herbert Smith
Weil Gotshal & Manges
Pestalozzi Lachenal Patry
Ciba Specialty Chemicals Ltd
International Commercial
Arbitration Court Moscow
Essex Court Chambers
Torys LLP
20 Essex Street

Nigel

Li

The Chinese Arbitration
Association (Taiwan)

Cao
AnnetteAndrew

Ligun
Magnusson
Manning Cox

CIETEC
Mannheimer Swartling
Wragge & Co

ArthurMichaelLoukasMarriot
McIlrath
Mistelis

Michael
Karyl

Moser
Nairn

LeBoeuf Lamb Greene & MacRae UKGE
Italy
School of International
GreeceArbitration, Queen Mary's(London base)
O'Melveny & Myers
Hong Kong
Skadden Arps
UK

Jean Claude
JackieBrigidNajar
Nolan-Haley
O’Neill

General Electric
Fordham Law School
O2

Dr Colin

Ong

Arbitration Association of Brunei

CEDR Commission on Settlement in International Arbitration

Netherlands
Egypt

UK

Australia

Singapore
China
China
UK
Switzerland
Switzerland
RussiaUK
CanadaUK
TaiwanChina
SwedenUK

FranceUSA
UK
BruneiAppendix 536

Masaharu

Onuki

Director Japan Commercial
Arbitration Association

WolfgangPeter

Python Schifferli Peter& Partners

KhawarHilmarSerle Court
Attorney at Federal High Court

UK
Germany

Alan
JurgenDavid

Qureshi QC
RaeschkeKessler
Rau
Reul
RivkinUniversity of Texas
BMW
Debevoise & Plimpton LLP

USAGermany

Klaus
Akira
MichaelPatrickRolandDavid
JingzhouJoe
Christopher

Sachs
Sawai
Schneider
Schriber
Schroeder
Su
Tao
TiradoTo

CMS Hasche Sigle
Toyama University
LaliveDu pont de Nemours
General Electric

GermanyJapan
Switzerland
Switzerland
USA
TaiwanBeijing
UK
Hong Kong

Pierre-Yves
Wolfgang

Tschanz
Von Kumberg

ThomasMatthew
MarkusPhilipWalde
Weiniger
Wirth
Yang

StephenYork

DLA
Baker Botts
Hong Kong International
Arbitration Centre
Tavernier Tschanz
Northrop Grumman
OGEL
Herbert Smith
Homburger
Hong Kong International
Arbitration Centre
Kilpatrick Stockton

CEDR Commission on Settlement in International Arbitration

Japan
Switzerland

U.S.A

Switzerland
Canada(Swiss base)
UK
Switzerland
Hong Kong
UK