Originally from Chamber of Arbitration of Milan Rules: A Commentary

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ARTICLE 29 – SETTLEMENT AND WITHDRAWAL

The parties or their counsel shall inform the Secretariat that they withdraw their claims in the event of a settlement or on other grounds, thereby relieving the Arbitral Tribunal of the obligation to render an award.

1. The rationale of the provision and its position in the context of the Arbitration Rules.

1.1. The present provision is inserted at the very end of part IV of the Arbitration Rules, which is aimed at governing “the Proceedings”. The choice of this position, which comes just before the beginning of part V concerning “the Arbitral Award”, is particularly appropriate as it ideally close indeed the phase of the proceedings and prevents, if the circumstances occur, the entrance into the phase of the deliberation of the award. More precisely, the aim of article 29 is exactly to avoid the entering into the further stage of the rendering of the award and is clearly inspired by a principle of economy.

The rationale of this provision is based on the assumption of a factual situation with important juridical implications regarding the developments of the arbitration. Irrespective of the reasons leading the parties to withdraw their claims, what is taken as the sole justification by the Arbitration Rules is that they have resolved to put an end to their arbitration procedure. 

The arbitration will not be suspended by the Secretariat, as it would be in case the parties fail or refuse to lodge the requested advances, pursuant to article 38 § 2 of the Arbitration Rules.

In fact, this is a completely different situation whereas, article 38 § 2, applies in situations where the parties would not provide their impulsion to the arbitration even though the dispute is still pending. Conversely, article 29 concern a situation where the parties, without and/or beyond te activity carried out by the Arbitral Tribunal, have settled the dispute or have for any other reasons deemed more appropriate to withdraw their claims.1 If this is the case, the goal of the procedure is reached anyway and the main concern of the Arbitration Rules is to grant a proper relief to the Arbitration Tribunal as to the obligation to render the award.