Can it help overcome the settlement dilemma in cross-cultural arbitration cases?
Often the parties of an arbitration dispute may be interested in reaching a settlement. While the Common law approach to the role of the arbitral tribunal does not allow the arbitrators to engage in the facilitation of settlements, in the Civil law world, above all in Germany, arbitrators often assist the parties in finding an amicable solution. In Germany, civil law procedure laws and the Rules of the German Arbitration Institution (DIS) even establish a duty of tribunals to promote a settlement. In other words: The approaches to settlements in arbitration in the two legal worlds are juxtaposed. This creates problems in cross-cultural arbitration matters. While the new Arb-Med-Arb Protocol of the Singapore International Arbitration Centre cannot eliminate this dilemma, it may help ameliorate it.
Common law trained practitioners and their counterparts originating from civil law jurisdictions have very different approaches towards dispute resolution before state courts and in arbitration. When these different approaches are compared in the international arbitration community, often the different ways of taking evidence and the also very different understanding of the role of the tribunal and of Counsel in the dispute resolution process are being highlighted and discussed. Yet there is another issue where the common practice in the two systems is juxtaposed: Should the dispute resolution process allow, facilitate or even encourage a settlement of the dispute? In the common law world, the answer has traditionally been negative, while, in the civil aw hemisphere, there is, at least, no such harsh opposition, but rather, in some jurisdictions, above all in the German one, a very settlement friendly environment. While this has been described as “the German problem“, others, earlier on, have praised it as “the German advantage“
A number of important efforts towards compromise have been made with reference to some of the confronting approaches of the civil law and the common law arbitration practices. These initiatives have, like in the case of the taking of evidence, achieved some success in the sense of a convergence of the systems. On the issue of arbitration tribunals facilitating a settlement, however, the respective positions seem to be completely irreconcilable.
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