2026 PAW: Avoiding Arbitration — Practical Off-Ramps and Risk-Hedging Tools

Held in one of the most elegant rooms of the Ministère de l’Europe et des Affaires étrangères, the in-house counsel event on the second day of the 10th Paris Arbitration Week (“PAW”) brought together corporate counsel from across the globe to discuss practical strategies for avoiding arbitration and managing disputes efficiently.

The session opened with welcome and introductory remarks from Anastasia Davis Bondarenko (Davis Disputes Advisory) and Alexandra Van der Meulen (Freshfields LLP), who emphasized the value of creating a dedicated forum for in-house counsel, the primary users of arbitration, to exchange experiences in a safe and inclusive environment. The discussion addressed, in particular, the use of alternative dispute resolution mechanisms, the drafting of dispute resolution clauses and internal policies, early dispute management and the role of in-house teams, the timing of engaging external counsel, and strategies to facilitate settlement.

I. ICSID’s Mission and the Opening of Its Paris Office

Before the roundtable discussion commenced, participants were presented with significant institutional news: the establishment of a new office of the International Centre for Settlement of Investment Disputes (“ICSID”) in Paris. This announcement was delivered by ICSID Secretary-General Martina Polasek.

In her remarks, Polasek highlighted ICSID’s central role in providing a reliable and impartial framework for resolving investor-State disputes. By reducing investment risk, ICSID contributes to predictability and fosters trust between investors and States, an essential condition for cross-border economic activity.

She noted that a significant proportion of ICSID cases involve European stakeholders: Western European investors account for a substantial share of claims, with French investors alone involved in approximately 70 cases. European States represent around 18% of ICSID’s caseload, reflecting both the scale of outbound investment from Europe and the continued relevance of international investment protection mechanisms for European businesses.

Paris has long been a key venue for ICSID proceedings. In the past year, approximately 35% of in-person hearings were held in the French capital, including at the World Bank facilities, the International Chamber of Commerce ("ICC”) Hearing Centre, and Paris Arbitration Centre by Delos Dispute Resolution (“Delos”). These activities are supported by longstanding partnerships with the ICC, Paris Bar, Delos, and the French Ministries of Justice and Foreign Affairs.

Against this backdrop, the establishment of ICSID’s Paris office marks a significant development. As ICSID’s first office in Europe, it formalizes and deepens existing institutional ties while bringing ICSID’s services closer to its European users.

The new office will serve several key functions: administering cases to the highest standards, expanding capacity-building and training initiatives, and strengthening engagement with governments, law firms, academic institutions, and other stakeholders across Europe. It will be hosted at the World Bank facilities, with the support of the French government.

Polasek concluded by reaffirming ICSID’s focus on three core priorities particularly relevant to in-house counsel: (i) maintaining excellence in case management while improving efficiency and reducing costs through innovation; (ii) expanding mediation and amicable dispute resolution mechanisms; and (iii) deepening engagement with stakeholders to enhance dispute prevention and resolution practices. Paris, she noted, sits at the center of these ambitions.

II. In-House Counsel Roundtable Discussion

The roundtable brought together a distinguished group of practitioners from across the arbitration ecosystem, including Martina Polasek (ICSID), Kate Bylinski (TotalEnergies), Gregory Travaini (Engie), Juliette Fortin (FTI Consulting), Elena Gutierrez (Independent Arbitrator), Alya Ladjimi (ICC), Tom Evans (Howden), and Max Thümmel (Bayer AG).

In accordance with the Chatham House Rules, no comments are attributed to individual speakers; the following reflects a synthesis of the key themes discussed.

Arbitration and Its Alternatives

Arbitration remains the preferred dispute resolution method for businesses, particularly in high-value disputes, due to its relative efficiency and enforceability. However, there is growing interest in alternative mechanisms such as mediation, which allows parties to reach settlements while avoiding the substantial costs of arbitration.

Expert determination was also discussed as a potential tool, though participants cautioned against its misuse, particularly where decisions are not final and binding, which may lead to jurisdictional challenges and duplication of proceedings. The importance of carefully drafted standard institutional clauses was emphasized to mitigate such risks.

Drafting Policies and Dispute Resolution Clauses

Audience participation revealed differing internal approaches to dispute resolution. One participant described a company policy linking recourse to arbitration to both the level of trust in the rule of law in the relevant jurisdiction and the value of the contract. While generally viewed positively, panelists stressed the need for flexibility: rigid policies, such as fixed internal rules on when to include arbitration clauses or go to litigation, may fail to account for the nuances of individual cases and negotiation dynamics.

The discussion also underscored the importance of relying on tested and familiar dispute resolution mechanisms to minimize procedural uncertainty, including the use of standard clauses, established arbitral seats, and reputable institutions, rather than experimenting with overly bespoke or imaginative drafting, which may be easily challenged, risk being ineffective, and ultimately prove costly.

Early Involvement and Dispute Prevention

A recurring theme was the importance of early involvement by in-house counsel, ideally before a dispute formally arises. Proactive engagement can help identify solutions at an early stage and preserve commercial relationships by reducing escalation.

Participants emphasized that dispute resolution should be approached constructively, with in-house teams taking the lead initially and involving external counsel when necessary. Coordination with commercial stakeholders is critical, particularly in balancing legal strategy with business considerations.

Multi-tier dispute resolution clauses, providing for negotiation and mediation before arbitration, were widely endorsed as effective tools for facilitating early settlement. However, it was acknowledged that in certain high-conflict situations, pre-arbitration dispute settlement efforts may not be viable.

When to Engage External Counsel

Views differed on the timing of engaging external counsel. Some participants suggested that, where communication with the counterparty remains constructive, in-house teams may prefer to handle matters internally at first, particularly to retain control over the commercial relationship and explore early resolution before escalating the dispute. However, once communication with the counterparty becomes strained or breaks down, the involvement of external counsel was seen as helpful in providing strategic clarity and structuring the approach to the dispute.

At the same time, it was noted that involving external counsel too late may limit strategic options, and early input can sometimes be beneficial.

Approaching Settlement

Pragmatism was identified as a key factor in successful settlements. Unrealistic claims or complete denial of liability can hinder negotiations. Parties must carefully assess the uncertainties inherent in arbitration, including the outcome, enforceability of awards, legal costs, and opportunity costs.

Quantifying these risks in financial terms can support more informed decision-making and strengthen negotiating positions. External counsel can play a valuable role in providing objective, external perspectives.

Investor-State Context and Political Sensitivities

Disputes involving States or State-owned entities present additional challenges due to political considerations. While settlement may be more complex, participants noted that frameworks such as ICSID are specifically designed to facilitate resolution, including through mediation. Examples were shared of successful settlements achieved even before formal mediation processes were fully underway.

Role of Arbitrators in Facilitating Settlement

The discussion also addressed whether arbitrators should act as mediators. The consensus was that combining these roles is generally inappropriate, as it may raise concerns about impartiality.

However, procedural mechanisms such as mid-proceeding conferences, particularly after initial submissions but before document production, can create valuable opportunities for parties to reassess their positions, narrow issues, or pursue settlement. At this stage, costs remain manageable, and procedural efficiencies can still be achieved.

Arbitrators can facilitate dialogue but should not actively propose solutions, which remains the role of mediators.

Overcoming Negotiation Deadlocks

Finally, the panel considered situations where parties are not yet ready to engage constructively in settlement discussions. One potential approach discussed was the issuance of a partial award on liability, which may prompt parties to adopt a more pragmatic approach in subsequent discussions on quantum and potentially lead to settlement.

Conclusion

The 2026 PAW in-house counsel event highlighted a clear trend: while arbitration remains a cornerstone of international dispute resolution, there is increasing emphasis on prevention, early intervention, and alternative mechanisms. For in-house counsel, the challenge lies not only in managing disputes effectively but also in designing strategies and frameworks that minimize the need for arbitration altogether.

The discussions reinforced the importance of flexibility, pragmatism, and early engagement, both internally and with counterparties, as essential tools in navigating today’s complex dispute landscape.

This post is part of Kluwer Arbitration Blog’s coverage of Paris Arbitration Week 2026.