Beyond 'Changing Hats': The Case for Mediated Carveouts in International Arbitration

For at least two decades, international arbitration has wrestled with a persistent design question: how to capture the efficiency and flexibility of mediation without compromising the procedural integrity of adjudication. The most familiar answer has been the family of mixed-mode processes—med-arb, arb-medarb and their variants—where a neutral may facilitate settlement and, if needed, render a binding decision.

That approach has generated a sustained debate. Critics have pointed to the structural tension in “changing hats”: the risk that confidential information disclosed in mediation may influence a later arbitral decision, the potential chilling effect on party candor and broader concerns about due process and perceived neutrality. Scholars such as Tom Stipanowich have framed the issue not merely as an ethical problem, but as a design challenge, noting the absence of clear procedural models for what happens when one component of a mixed-mode process fails.

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