The arbitration proceeding may be discontinued by agreement of the parties. Proceedings may also be discontinued if the parties fail to act or pay the requested advances on costs.
Settlement and Discontinuance
At any time before the award is rendered, the parties may jointly request that the Tribunal discontinue the proceeding if they settle the dispute or for any other reason (Article 49
of the Arbitration (Additional Facility) Rules). The Tribunal (or the Secretary-General if the Tribunal is not yet constituted) can issue an order taking note of the discontinuance of the proceeding (Article 49(1)
of the Arbitration (Additional Facility) Rules). Alternatively, the parties can ask the Tribunal to render an award embodying the settlement agreement (Article 49(2)
of the Arbitration (Additional Facility) Rules). If so, the full and signed text of their settlement agreement must be filed with the request.
Discontinuance at Request of a Party
If one party requests the discontinuance of the proceeding, the other party will be invited to state whether it agrees with the discontinuance (Article 50
of the Arbitration (Additional Facility) Rules). If that party objects, the proceeding will continue. However, if that party agrees or does not object within the fixed time limit, the party will be presumed to have consented to the discontinuance. Accordingly, the Tribunal or the Secretary-General will issue an order taking note of the discontinuance of the proceeding.
Discontinuance for Failure of Parties to Act
The proceeding is discontinued when the parties fail to take any steps during six consecutive months or other period that the parties, with the approval of the Tribunal, agree (Article 51
of the Arbitration (Additional Facility) Rules). Usually, the parties are given notice approximately one month before the expiration of the six-month period. The notice allows the parties to act if they wish to avoid the discontinuance. If the parties take no action to continue the proceedings, the Tribunal or the Secretary-General may issue an order of discontinuance.
This rule does not apply if a stay of the proceeding is agreed.
Discontinuance for Lack of Payment of Required Advances
Both parties are responsible for paying the advances to meet the costs of the proceeding, unless the parties agree, or the Tribunal decides, otherwise (Administrative and Financial Regulation 14(3)(d)). Failure to do so may lead to the discontinuance of the proceeding.
If the amounts requested are not paid in full within 30 days, the Secretary-General informs both parties of the default and gives either of them an opportunity to make the outstanding payment.
If any part of the required payment remains outstanding 15 days after notice of default is given, the Secretary-General may ask that the Tribunal stay the proceeding.
If any proceeding is stayed for non-payment for a consecutive period in excess of six months, the Secretary-General may ask that the Tribunal discontinue the proceeding ( Administrative and Financial Regulation 14(3)(d)).
The Tribunal’s decision to discontinue the proceeding will take the form of an order.
Effect of the Discontinuance
An order taking note of the discontinuance of the proceeding does not dispose of any of the claims raised by the parties. The claims can therefore be raised again in subsequent proceedings.
Unlike the order, an award embodying the parties’ settlement agreement pursuant to Article 49(2) of the Arbitration (Additional Facility) Rules is an award under Article 52 of the Rules for the purposes of recognition and enforcement.