I. INTRODUCTION

 

A. Background

 

In recent years, users of international commercial arbitration have become

dissatisfied with arbitration as it has become more costly and time-consuming.1

Arbitrators, institutions and parties have begun to look for ways to streamline

arbitral proceedings. One possible solution is to build in a settlement element in

the sense that the arbitrator facilitates a settlement. The topic of the arbitrator as

settlement facilitator deserves attention, first of all, because it goes to the core of

arbitration: Should the arbitrator resolve a dispute by a binding decision or is he a

problem-solver? The topic also touches upon delicate issues such as impartiality

and due process. In addition, cultural differences between common and civil-law

jurisdictions as to whether an arbitrator may facilitate settlement have long shaped

the discussion.

 

This article focuses on the situation where an arbitrator facilitates a settlement

within arbitral proceedings, i.e. where the same person who has been appointed as

arbitrator conducts the settlement discussions, and he does so while the arbitral

proceedings are pending. The article does not deal with settlement facilitated by a

mediator or conciliator or with multi-tiered clauses which provide for arbitration

after mediation (so-called “Med-Arb”).2

 

B. Terminology

 

Before going into a detailed discussion, it is helpful to outline the differences

between arbitration, mediation (and conciliation) and the concept of Med-Arb.3