10 Jul 2007
Launch of CEDR Commission on Settlement in International Arbitration
The first meeting of the CEDR Commission on Settlement in International Arbitration, with over 25 international jurisdictions represented, is taking place in London today. The Commission has been launched to investigate approaches to settlement within the framework of international arbitration and is co-chaired by Lord Woolf of Barnes (former Lord Chief Justice of England and Wales) and Prof. Gabrielle Kaufmann Kohler (partner of Schellenberg Wittmer).
International arbitration is seen as the default method for resolving disputes around cross-border commercial contracts but is attracting increasing amounts of criticism worldwide for being slow and expensive, with settlement rates reputed to be significantly lower than they are in most state commercial court proceedings.
The CEDR Commission will investigate the different approaches currently taken to promote settlement in international arbitration and make recommendations as to how arbitral institutions and tribunals might give parties greater assistance in finding ways to settle their disputes earlier and more cost effectively.
At the inaugural meeting today, leading international arbitrators, mediators, academics and counsel from different jurisdictions will launch the Commission. They will be supported by a select group of rapporteurs who will be responsible for research, drafting the early discussion paper and the final report. The Commission will meet again during 2007 and early 2008 to produce a 'White Paper' for publication to be launched at an international conference to be held in 2008.
The first meeting has been kindly hosted by Herbert Smith, London.
About the current Arbitration climate
International arbitration tends to be the default method for resolving problems in cross-border commercial contracts but it is attracting increasing amounts of criticism worldwide for being slow and expensive.
The international arbitration community is aware of the criticisms and is concerned to improve the product. Papers such as the UNCITRAL Notes on Organising Arbitral Proceedings, the IBA Rules on the Taking of Evidence in International Commercial Arbitration and Guidelines on Conflicts of Interest in International Arbitration are all documents aimed at making international arbitration work better.
Although some of these papers refer to the role of the tribunal in encouraging settlement, at present the approach to this taken by tribunals varies very significantly from jurisdiction to jurisdiction. In all jurisdictions it is rare for arbitral tribunals to recommend that the parties try using formal mediation.
Whilst many courts in Europe now generally enforce ADR clauses and decline jurisdiction where these are not observed, arbitral tribunals tend to find reasons to accept jurisdiction and proceed with the arbitration, even where one party may have breached an obligation to mediate before commencing arbitral proceedings.
Settlement rates in international arbitration are reputed to be significantly lower than they are in most state commercial court proceedings, where, in many jurisdictions, the judges now use a variety of tools to promote early settlement.