The present research investigates the effects of social categorization on the intervention behavior of third parties who engage in the hybrid dispute resolution procedure of mediation-arbitration (Ross & Conlon, 2000). Specifically, it was predicted that an affiliation to a disputant leads third parties to favor the affiliated ingroup disputant over an unaffiliated outgroup disputant. Two studies support these predictions by demonstrating that unilaterally affiliated third parties engage in ingroup favoritism during arbitration, whereas non-affiliated third-parties (Study 1 & 2) and third parties affiliated to both disputants (Study 2) imposed balanced settlements. In addition to this, both studies identify third parties’ decision control, inherent to the two phases of mediation-arbitration as a relevant moderating variable for the emergence of this effect.