Arbitration Settlement Agreement Template for England and Wales
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What is a Arbitration Settlement Agreement?
An Arbitration Settlement Agreement in England and Wales is a binding contract that resolves a dispute referred to arbitration without a contested award. Under Arbitration Act 1996, s.51, parties can ask the tribunal to embody the settlement in a consent award, which is enforceable as a court judgment under s.66 and in over 170 countries under the New York Convention. The agreement should contain clear release wording, confidentiality provisions, and full details of the consideration provided.
Frequently Asked Questions
What is an Arbitration Settlement Agreement?
An Arbitration Settlement Agreement is a binding contract reached between parties during or after arbitral proceedings that resolves the dispute without a contested award. Under Arbitration Act 1996, s.51, the parties can ask the tribunal to record the agreed terms as a consent award, which gives the settlement the same enforcement status as a contested arbitral award and can be enforced as a court judgment.
What are the advantages of recording a settlement as a consent award?
A consent award under Arbitration Act 1996, s.51, has a significant practical advantage: it can be enforced in England and Wales as a court judgment under s.66, and internationally under the New York Convention across over 170 countries. A private settlement agreement, by contrast, must be sued upon as a contract if the other party does not comply, which requires fresh proceedings and is more time-consuming.
What must an arbitration settlement agreement include to be binding?
The agreement must identify the parties and the arbitral proceedings being settled, set out the terms in clear and unambiguous language, confirm what consideration is passing (payment, return of goods, mutual releases), and include full and final release wording that extinguishes all claims arising from the original dispute. Both parties must sign it and the agreement should be dated.
Can a settlement agreement in arbitration waive all future claims?
A well-drafted agreement can extinguish all claims arising from the specific dispute. However, it cannot waive rights that have not yet arisen (for example, personal injury claims that manifest after the settlement), and it cannot waive statutory employment rights unless the correct statutory procedure (COT3 or Equality Act s.147) is followed. The release wording should be precisely tailored to the facts.
Do employment settlement agreements in arbitration need ACAS involvement?
Yes, where the settlement includes a waiver of statutory employment claims. A waiver of statutory rights (such as unfair dismissal, discrimination, or whistleblowing detriment) is only effective if it is recorded either in a COT3 settlement through ACAS, or in a qualifying settlement agreement under the Employment Rights Act 1996 where the employee has received independent legal advice.
Can an arbitration settlement agreement be kept confidential?
Yes. Unlike court settlements, which may become public through court records, an arbitration settlement agreement can include strong confidentiality provisions covering the existence of the dispute, the terms of settlement, and any consent award. All parties and their legal representatives should sign up to the confidentiality obligations. The arbitral tribunal's confidentiality duties under common law also protect the process.
What happens if one party fails to comply with the settlement agreement?
If the settlement was recorded as a consent award, the aggrieved party can apply to the High Court under Arbitration Act 1996, s.66 for leave to enforce it as a judgment. If it was not recorded as an award, the aggrieved party must issue court proceedings for breach of contract. Either way, the full range of court enforcement methods (charging orders, third-party debt orders, writs of control) then becomes available.
Should the settlement agreement include a Tomlin Order?
A Tomlin Order is used to stay court proceedings on agreed terms, not to record an arbitral settlement. For arbitral settlements, the equivalent mechanism is the consent award under Arbitration Act 1996, s.51. If the dispute was also the subject of parallel court proceedings, the parties can seek a consent order staying or dismissing the court claim while the arbitral consent award covers the substantive terms.
About the Arbitration Settlement Agreement
An Arbitration Settlement Agreement is a legally binding contract that formalizes the resolution terms reached between parties following arbitration proceedings in the United States. This document serves as the final step in the alternative dispute resolution process, converting verbal agreements or arbitration awards into enforceable written commitments. Under the Federal Arbitration Act and state arbitration laws, these agreements provide the legal framework to conclude disputes outside traditional litigation while maintaining full enforceability in federal and state courts.
When do you need this document?
You need an Arbitration Settlement Agreement when parties have successfully resolved their dispute through arbitration proceedings and wish to formalize their settlement terms. This typically occurs after an arbitrator has issued an award, or when parties reach a mutual agreement during the arbitration process. The document is essential in commercial disputes, employment conflicts, consumer matters, and contractual disagreements where parties have chosen arbitration over traditional litigation. It becomes particularly important when settlement involves complex payment schedules, ongoing obligations, or specific performance requirements that need detailed documentation.
Key legal considerations
Several critical legal elements must be addressed in your Arbitration Settlement Agreement. The release provisions require careful drafting to specify which claims are being waived and the scope of mutual releases between parties. Payment terms must include specific amounts, schedules, and consequences for non-compliance, while confidentiality clauses should balance transparency needs with privacy protections. Enforcement mechanisms are crucial, including provisions for court confirmation of the agreement and procedures for addressing potential breaches. The agreement should clearly reference the underlying arbitration proceedings and incorporate relevant portions of any arbitration award. Additionally, consider including dispute resolution procedures for issues arising from the settlement agreement itself.
Legal requirements in United States
Under the Federal Arbitration Act, your settlement agreement must meet specific requirements to ensure enforceability across state lines and in federal courts. The document must clearly identify all parties, include consideration for the settlement terms, and comply with state contract law requirements for formation and execution. State-specific arbitration laws may impose additional requirements, particularly regarding notice periods, disclosure obligations, and procedural compliance. The agreement should reference compliance with relevant Civil Procedure Rules if court enforcement becomes necessary. Proper execution requires signatures from all parties and their legal representatives, with notarization often recommended for added authenticity. The settlement terms must be lawful and not violate public policy, while any ongoing obligations should include specific performance standards and timeline requirements.
GOVERNING LAW
Applicable law
This Arbitration Settlement Agreement is drafted to comply with England and Wales law. Key legislation includes:
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