Wanganui District Council remains upbeat a resolution will be reached in its multimillion-dollar claim against international engineering firm MWH Global.
The council is suing MWH Global, the company that designed the city's wastewater treatment plant, citing shortcomings in the concept and final design of the Airport Rd facility.
The council has decided it has to replace the plant at a currently estimated cost of $38 million.
The exact amount the council is seeking in compensation has not been publicised, but earlier the council was considering claims of up to $10 million.
The first mediation took place in Wellington on October 15-16 before an independent arbitrator and was ordered by Justice Denis Clifford.
A judicial decision, released in June, initially had the case going to trial, but at a pre-trial conference, MWH applied for the trial to be postponed.
Justice Clifford decided to postpone a trial but, more importantly, ordered MWH to enter into mediation with the council. He also said MWH must make a bona fide effort at mediation with the council.
Wanganui deputy-Mayor Hamish McDouall is leading the council's legal review team and said he remained confident the matter would be resolved.
Mr McDouall said he was limited in what he could say publicly, "but I can say negotiations are ongoing and we're still very much in the process".
The council's legal team met with MWH in Wellington over two days last month, but no final resolution was reached.
"There's an expectation a resolution will be reached. We've got some solid points we're putting across and I think that's the key," he said.
No date had been set for a further meeting and, at the moment, lawyers for both parties were corresponding.
"It may mean that we don't need to go back to face-to-face mediation," Mr McDouall said.
He said the council was still expecting a decent settlement but the amount of money would remain confidential.
"Generally, in any settlement in these situations, there's no admission of liability, and the figure is kept confidential. Unfortunately, any mediation is usually like that, where the sum involved is never revealed, and that's the reality," Mr McDouall said.
If mediation did not bring about a settlement, it would go to court, and Mr McDouall said a court date may not be available until later next year.
He said that MWH would need to consider its reputation and the council would have to consider the impact that a drawn-out legal case could have on the community.