Dispute Resolution with Arbitration Part 4
Arbitration vs. Settlement
The main difference between arbitration and dispute settlement lies in the latter concludes the dispute among parties with an agreement but not with a decision from a third party.
In dispute settlement, parties are still able to reach an agreement and very likely that they would like to preserve their commercial relationship. The agreement cannot be enforced as an award of the arbitral tribunal and usually, it does not circulate according to the New York Convention unless parties have included it in an award by consensus. This type of award is debated in doctrine since it lacks arbitrators’ decision. In this way, it is possible to circulate the award under the New York Convention and benefit from all the advantages that this convention offers, i.e. recognition and enforcement.
Dispute settlement can be conducted by parties alone or in the process a third party can be involved as a mediator or conciliator. It has to help or facilitate parties to settle. The third-party could help parties proposing solutions for their consideration.
Sometimes trying to settle through mediation or negotiation is a compulsory step to take to access to litigation, both in the court of arbitration. In this case, parties are not requested to reach an agreement but only to attempt. If parties failed to settle the dispute, this will be decided, according to what they will agree by a court or an arbitral tribunal.