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Introduction. Effective case management can increase the likelihood of settlement during an arbitration. Although arbitration is a rights-based process, arbitral tribunals and counsel retain considerable flexibility to design procedures that encourage early resolution. Thoughtful structuring of the case can prompt the parties to reassess their legal positions, narrow the issues, and identify opportunities for agreement before the dispute becomes fully entrenched. While the arbitral tribunal ultimately controls the procedure, in-house counsel can ensure that external counsel approach case management with an eye toward promoting early settlement.
Identify and isolate discrete questions. Parties can identify and isolate discrete questions of law or fact that may be determinative of the dispute or of specific components of it. The removal of discrete questions will lead the parties to focus on what truly drives the outcome of the dispute, which in turn encourages settlement discussions. This approach reduces the overall scope of the arbitration, lowers cost, and increases the likelihood of a negotiated resolution.
Staged procedures and bifurcation. Another effective way to narrow the dispute is through staged procedures. The arbitral tribunal may, for example, direct the parties to exchange targeted submissions, hold focused procedural conferences, or conduct short hearings on discrete issues of law or fact. These discrete steps allow the parties to test the strength of their positions without incurring the full cost of a merits hearing. In‑house counsel should discuss these options with external counsel so they can be proposed to the arbitral tribunal where appropriate.
Bifurcation and staged procedures are related but serve different purposes. Bifurcation divides the arbitration into separate phases so that a specific issue can be decided in advance of the others through a partial award. The most common example is separating liability from damages, but bifurcation can also address jurisdiction, limitation periods, or other discrete legal questions. The arbitral tribunal issues a partial award on the preliminary issue before the arbitration proceeds, and that partial award may resolve the dispute entirely or significantly narrow what remains.
A staged procedure, by contrast, does not require the arbitral tribunal to decide anything before moving forward. Instead, the arbitration is organized into sequential steps that focus the parties on particular issues, such as targeted submissions, limited evidence, or short hearings. The key distinction is that bifurcation introduces a decision point between phases, whereas a staged procedure does not.
A bifurcated proceeding requires the consent of both parties and the arbitral tribunal. Arbitration rules and applicable arbitration statutes generally give the arbitral tribunal discretion to determine the procedure, including whether issues should be heard in phases. Even when the parties jointly request bifurcation, the arbitral tribunal must be satisfied that it will promote procedural efficiency, will not prejudice either party, and that the issues proposed for separate determination are suitable for early resolution.
Managing the evidentiary process. Arbitral tribunals can also encourage settlement by managing the evidentiary process. Requiring early disclosure of key documents, limiting the scope of witness statements, or directing the parties to prepare joint expert reports can reduce uncertainty and identify areas of agreement. When the factual record becomes more transparent, parties often find it easier to evaluate settlement options.
Case management conferences. Case management conferences provide an important opportunity to facilitate settlement. These informal discussions allow the arbitral tribunal to explore whether the parties are open to negotiation, whether mediation or another settlement process might be appropriate. While arbitral tribunals must remain neutral, an arbitrator can signal the benefits of settlement and encourage the parties to consider settlement discussions without compromising their independence and impartiality.
Identifying off-ramps early. The arbitral tribunal’s approach to scheduling at case management conferences can significantly influence settlement dynamics. The first scheduling order typically sets the full procedural roadmap, making it essential for in‑house counsel to be precise in establishing timelines and identifying potential off‑ramps for early resolution. The best practice is to work with opposing counsel to agree on a proposed schedule before presenting it to the arbitral tribunal. A well‑designed timetable creates space for constructive dialogue and gives the parties opportunities to explore settlement at moments when it is most likely to succeed.