Most commercial contracts require, or at least encourage, the parties to negotiate before starting arbitration. Too often this step is treated as a formality. Used properly, it can save months of time and significant cost.
Start with an honest assessment of your position. Before meeting the other side, understand the strengths and weaknesses of your case, the likely cost and timeline of arbitration, and the realistic range of outcomes. A clear view of your best alternative to a negotiated settlement makes it easier to recognise a good offer.
Involve the right people. Negotiations work best when the people at the table have authority to settle and are not personally invested in the history of the dispute. Senior executives who were not directly involved often find settlement easier.
Use without-prejudice communications. Settlement discussions marked without prejudice generally cannot be used in later proceedings, allowing parties to explore compromise freely.
Consider a neutral. If direct negotiation stalls, a mediator can often help the parties move beyond fixed positions. Under the Mediation Act, 2023, a mediated settlement agreement is enforceable like a court decree.
Finally, document any settlement properly. If arbitration has already started, ask the tribunal to record the settlement as an award on agreed terms so it can be enforced directly.