Reflections from SCC Arbitration Week 2025
THE AUTHOR:
Alexander Kozhedub, LL.M. Candidate at Stockholm University
Over recent years there has been an ongoing debate within the arbitration community regarding the settlement in commercial dispute resolution, its effect on procedural efficiency, and the role of the arbitrator (if any).
Despite the evident benefits of settlement, including savings in time and cost, and allowing the parties to maintain ultimate control over the case, settlement may be perceived as an alien ingredient in the arbitration process, taking place behind closed doors and without institutional or legislative support. Indeed, to the author’s knowledge, most national arbitration laws do not address arbitrators’ participation in facilitating settlement.
On 20 October 2025, the SCC Arbitration Institute (“SCC”) opened SCC Arbitration Week 2025 with a webinar to launch its latest report, “Settlements in cases administered under the SCC Rules” (“Report”). The Report explores current trends relating to settlement procedures in cases administered under the SCC Rules between 1 January 2021 and 31 December 2023. The launch of the Report was followed by a panel discussion on the broader question of settlements in arbitration, and featured Jake Lowther (SCC), Elke Umbeck (Heuking), Heidi Merikalla-Teir (Independent Arbitrator and Mediator), and Emma Munde (Wallin & Partners), moderated by Robin Oldenstam (Mannheimer Swartling and Chairperson of the SCC Board).
“Settlement is at the Heart of Arbitration”
Lowther, who co-authored the Report with Raoul J. Sievers and Joakim Raivio, opened the discussion by reference to the fact that the question of settlement lies at the heart of arbitration in Sweden and many EU jurisdictions, based on the applicable arbitration legislation.
Following the 2014 SCC Practice Note on the Costs of Arbitration in Settled Cases, the Report provides a detailed empirical analysis of settlement trends, examining the geography of the parties, industry sectors, factors influencing willingness to settle, and the impact of settlement on time and cost efficiency.
The Report is based on an analysis of 460 cases administered under the SCC Rules during the period, of which 74 cases (16.1%) were terminated through a confirmed settlement. The data indicates a consistent upward trend in the number of settled disputes, from 13.1% in 2021 to 19.2% and 16.2% in 2022 and 2023, respectively.
Lowther highlighted that while the amount in dispute, industry and contract type, the number of arbitrators and bifurcation (partial awards on separate jurisdictional and substantive issues) do not appear to be factors influencing the likelihood of reaching a settlement of the dispute. However, the stage of the proceedings, and the time of year, including proximity to Swedish national holidays appear to be more significant drivers.
The Report clearly demonstrates that 17.6% of cases were settled after the respondent’s answer to the request for arbitration and prior to the referral of the case to the Arbitral Tribunal, which is when the SCC Board decides on advance on costs to be paid by the parties (Art. 11(ix), 2023 SCC Arbitration Rules).
Another factor that accelerates the parties’ attempt to settle disputes is the exchange of the final round of written submissions (17.6%). This appears to be an appropriate juncture for the parties to reassess their positions, prospects of success, and the reasonableness of pursuing an often-costly hearing and incurring subsequent costs. As a result, 91.9% of the cases analysed in the Report were settled before the pre-hearing conference.
Accordingly, settlement benefits the parties by reducing their overall costs. Moreover, the earlier the parties settle, the greater the likelihood of a reduction in the arbitrators’ fees. However, it is well known that the arbitrator’s fee and the administrative fee constitute only a small portion of the overall costs of an arbitration.
Moreover, settlement on average drastically reduces the duration of the dispute. According to the Report, the average length of an arbitration under the SCC Arbitration Rules, from request for arbitration to final award, was reduced from 17.1 months to 8.8 months, i.e., by 48.5%. Settlement also significantly reduces the risk of award challenges.
It is noteworthy that when parties choose to resolve their disputes under the 2023 SCC Expedited Arbitration Rules, they are typically more inclined to proceed with arbitration than to pursue settlement. According to the SCC report, only 24.3% of all cases terminated following a confirmed settlement were administered under the SCC Expedited Rules. This may be due to the overall much shorter timeframes and lower costs.
A Comparative Perspective on Settlement
Following the presentation of the SCC report, Oldenstam invited panellists to discuss the particularities of settlement in their respective jurisdictions, including a comparison on how state courts and arbitral tribunals approach it.
The Swedish Perspective
Munde, recently returned from a stint as a co-opted judge at the Stockholm District Court and the Svea Court of Appeal, noted that Swedish state courts take a more proactive role in facilitating settlement, as required by the Swedish Code of Judicial Procedure (Chapter 42, Section 17).
In accordance with a recent survey, in cases from 2013 to 2017, the settlement rate in civil cases in Swedish state courts was between 20-51%, depending upon the methodology applied.
As Munde pointed out, the judge has the authority to raise the issue of settlement at any stage of proceedings, but it is most common during the preparatory meeting, when the judge may privately discuss the case with each party, identify the strengths and weaknesses of their legal arguments, and share their preliminary view on the case to facilitate settlement. This procedural method, known as the “Gothenburg model”, is designed to enhance the efficiency and accessibility of a dispute resolution procedure through active judicial engagement and clear communication.
The German Perspective
Umbeck observed that German state courts also have an obligation to foster settlement agreements (Section 278(1) of the Code of Civil Procedure). Likewise, under the Rules of the German Arbitration Institute, the arbitral tribunal shall, at every stage of the arbitration, seek to encourage an amicable settlement of the dispute or of individual disputed issues (Art. 26 DIS Rules).
However, in contrast to the Swedish approach, judges and arbitrators are reluctant to play a facilitating role in negotiating the terms of the settlement agreement. A tool to facilitate settlement agreements, often used in German state court proceedings, is the exchange of preliminary views at the outset of the proceedings. This tool is also used in national arbitration proceedings, if both parties wish so and explicitly agree to it. Umbeck explained that in fulfilling this task judges and arbitrators will structure the decisive issues of the case and evaluate the probable outcome of certain legal issues only to the extent this is possible without taking evidence. This assessment frequently prompts the parties to reconsider their procedural strategy and encourages a settlement, because the assessment of the preliminary views (maybe also expressed to limited legal issues) assist counsel in identifying the weaknesses and strength of each party’s position. A further benefit is that judges and arbitrators are forced to get familiar with the subject of the dispute early on which contributes to an effective dispute resolution.
The issue of impartiality is not perceived as problematic, given that judges and arbitrators are diligent and open to new evidence and arguments, which may result in a different outcome of the dispute. Judges and arbitrators will always make it very clear and emphasize that their view is of a preliminary nature only.
The Finnish Perspective
Merikalla-Teir noted that settlement procedures in Finland and Sweden are similar, and that parties from Northern Europe generally adopt a more pro-settlement attitude, prioritising business relationships and viewing settlement as a continuation of commercial dialogue. In particular, the SCC report indicates that the highest settlement rate is observed among parties from the UK (30%), Finland (26.3%), Norway (21.4%), and Denmark (14.3%).
Merikalla-Teir also observed that although court-assisted mediations have increased significantly in recent years, private mediations in business disputes are still not widely utilized. However, there are signs of a gradual shift toward more frequent use of mediation.
Regarding the arbitrators’ role in facilitating dispute settlement, Merikalla-Teir noted that while some institutional rules permit arbitrators to take steps to facilitate settlement with the parties’ agreement – and any such agreement constitutes a waiver of the right to challenge the arbitrator’s impartiality based on their involvement and knowledge gained during the process – settlement facilitation by arbitrators remains limited. Restrictions on ex parte communication and persistent concerns about impartiality, even in light of the waivers referred to earlier, leave arbitrators with a constrained toolkit and underscore the need for arbitration institutions to develop alternative methods to encourage settlement.
The SCC’s Role in Facilitating Settlement
Recognising the growing demand to facilitate effective dispute resolution, Lowther and Oldenstam referred to the SCC’s recent introduction of several significant procedural innovations.
- The 2023 SCC Rules for Express Dispute Assessment (“SCC Express”), combining elements of mediation and arbitration by appointing a neutral legal expert to provide a non-binding preliminary assessment of the case within three weeks, providing a basis for potential settlement between the parties.
- The 2025 revision of the SCC Mediation Rules to ensure cost predictability through fixed administrative and mediator fees, while maintaining the voluntary nature of mediation.
- The 2023 revision of the SCC Arbitration Rules, empowering the Arbitral Tribunal to terminate the arbitration by issuing either an award or an order (Art. 45(2)), which may reduce the time required to terminate the proceedings in case of settlement and increase control over the confidentiality of settlement terms.
Conclusion
The newly published Report and the subsequent discussion confirm the strategic and integral role of settlement in dispute resolution. Yet, the facilitation of settlement has arguably not been implemented in arbitration as effectively as in state courts across several jurisdictions, including Sweden, Finland, and Germany, nor has it served the parties’ interests to the same extent.
The objective limitations on the ability of arbitrators to promote settlement are now being mitigated by the efforts of arbitration institutions to increase transparency, and develop and promote alternatives such as mediation, or hybrid dispute resolution mechanisms, such as SCC Express. This empowers the parties, providing them with a clearer and more informed view of the prospects for dispute resolution and the agency to choose the right tool for the right dispute.
As a result, the increased attention paid to settlement in arbitration reflects the fact that it embodies the core purpose of the process: the efficient and balanced resolution of disputes.
ABOUT THE AUTHOR
Alexander Kozhedub is an LL.M. candidate in International Arbitration at Stockholm University and a dispute-resolution specialist with over three years of experience in litigation and cross border commercial arbitration.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
