Phil is right; it's basically arbitration.

This is a very common phrase, historically, and Seth has pointed to its Mexican connection, but as your text shows it goes back further than that. It is a phrase fundamentally associated, in origin, with commercial courts and with the absence of professional lawyers. It was precisely associated with the consulados, where merchants sorted things out among themselves. So I feel that we want a translation, if possible, that expresses not just the meaning of the phrase but the ethos behind it.

"In other words, the decisions were not based upon legal norms, but upon commercial usages and the standard of conduct of good merchants.
This phrase, “verdad sabida y buena fe guardada,” expressed the idea of the aequitas mercatoria that was far more than a mere interpretative criterion to become a true source of law"
https://books.google.es/books?id=p2Us7gT3ua8C&pg=PA358&dq="v...

"como la institucion de los tribunales de comercio es juzgar iria verdad sabida y buena fe guardada»"
https://books.google.es/books?id=vLhFAAAAcAAJ&pg=PA12&dq="ve...

"A verdad sabida" doesn't exactly mean telling the truth; it means on the basis of the facts learned in the proceedings: "sabida" meaning "learned":

"la verdad sabida se entiende siendo la verdad hallada, y probada en el proceso, conforme a una ley de la Recopilación" (p. 452)
http://biblio.juridicas.unam.mx/libros/2/840/88.pdf

But the important subtext is the supposedly unvarnished truth uncomplicated by legal niceties like laws of evidence or cross-examination; in fact without legal guarantees at all:

"Últimamente como en el consulado solo se atiende á la verdad sabida y buena fe guardada, vale el dicho de los testigos sin citacion de la parte contraria"
https://books.google.es/books?id=jemblHU_W58C&pg=PA208&dq="v...

There is a certain naivety about this, the plain layman's attitude that these lawyers just muddy the waters and the facts are the facts, whereas of course in reality the truth is not so easily found. I feel that "plain facts" is a good way of capturing this unlawyerly attitude.

As for "buena fe guardada", it may seem almost perverse not to use "good faith", and I certainly think you could use it. But I like "fair dealing" here; it makes it a little clearer that the meaning of "buena fe guardada" in this phrase is really equity:

"La buena fe guardada se entiende, que se ha de guardar equidad en la justicia" (p. 452)
http://biblio.juridicas.unam.mx/libros/2/840/88.pdf

In other words it means that the parties deal fairly with each other and trust that the arbitrator will deal fairly with them. Fairness, again a naive, layperson's word, seem right to me. And a further advantage is that it echoes a well-known principle of contract law, that of "good faith and fair dealing":
http://www.huffingtonpost.com/brad-reid/good-faith-and-fair-...

I feel that "plain facts" and "fair dealing" are phrases that capture the outlook and self-image of the mercantile class, expressed in their arbitration system, quite well.