Settlement talks are underway in the action being taken by investment firm Aurelius Capital against AIB's scheme to buy back subordinated debt from bondholders at a substantial discount.
Aurelius was challenging an order made by the High Court in April.
The Subordinated Liabilities Order - or SLO - allowed the terms of certain subordinated bonds to be changed in advance of the buy-back.
Aurelius claimed the Government was using the legislation to coerce bondholders into disposing of their holdings for derisory sums of money.
Aurelius finished its case today and the Government was due to begin its defence of the action.
But talks between the two sides have been ongoing all afternoon and will resume again in the morning.
