In November 2009, CEDR published its new Settlement Rules. They are designed to increase the prospects of parties to international arbitration to settle their disputes and they outline steps for tribunals to take to facilitate this. The Rules supplement any chosen institutional Rules and require the agreement of the parties (either in the arbitration clause or at a later stage).
Significantly, they provide for an arbitral tribunal to:
- provide to the parties preliminary views on disputed issues and/or preliminary non-binding findings on law or fact on key issues in the arbitration.
- offer suggested settlement terms, chair settlement meetings and suspend the arbitration for a "Mediation Window"; and
- take into account in allocating costs of the arbitration a party's failure to accept a settlement offer equal to or better than the sum ultimately awarded or failure to participate properly in mediation efforts.
In practice, Mediation Windows should be considered carefully. Unlike a mediation conducted in parallel with the arbitration proceedings, they mandate a suspension of and therefore a delay in the arbitration process. Delay can be costly both in terms of Counsel's fees and out-of-pocket arbitral expenses and also in terms of accruing interest on the amount in dispute. Therefore these disadvantages should be balanced with the prospect of achieving settlement in this way.