Originally from State of Arbitration

Preview Page

I. INTRODUCTION

This essay addresses the exercise of discretion by an arbitral tribunal when determining whether to issue a requested consent award.   Parties have the right to agree to terminate their arbitration.  However, the arbitral tribunal has discretion to grant the parties’ request to convert a settlement into an enforceable arbitral award that may be judicially recognized.  This can be viewed as an arbitral intersection between party control and arbitrator discretion in performing its role in the administration of justice.  An arbitral institution may also have an interest in ensuring the integrity and enforceability of any award issued under its administration of an arbitration.  Some recent cases have highlighted potential issues that may arise when arbitrators render consent awards. Striking the balance between ensuring the integrity and enforceability of the award and respecting party autonomy can create a challenge for arbitrators.

The parties’ agreement to settle their dispute without a final adjudication, provides the most efficient and effective resolution of the dispute if the parties timely and fully comply with the terms of the agreed settlement. Settlements are favored and arbitrators are encouraged to suggest, or may even be mandated to actively promote, settlement of all or some of the disputed issues.  Settlement and withdrawal of a dispute after commencing arbitration occurs relatively frequently. Although statistics vary and detailed information is not widely available, it appears that roughly one-third of all commenced arbitrations end by the parties withdrawing, dismissing, or settling the dispute.