Arbitration clauses: points of attention

All arbitration institutes provide for a model arbitration clause, which you are recommended to include in your agreement if you choose that institute. If you want to avoid any hassle surrounding the validity, enforceability and meaning of your clause, insert such a model clause. This blog post discusses a few optional choices that are often provided with such model clause.

All model arbitration clauses provide for some options. Normally, it is advisable to include them:

  1. You should agree on a place of arbitration. Although the arbitration rules will provide for a solution, identifying a venue improves the enforceability of an arbitral award. Although the arbitral proceedings would normally be held in the chosen city, this is not a must (the parties may always agree on other places). You should know that all arbitral institutes will allow you to compromise on any place of arbitration.
  2. You may agree on the number of arbiters that the tribunal should consist of. Many arbitration laws require that this must be an odd number (one or three).
  3. Be aware that in the absence of a choice of law clause the arbitral tribunal may sometimes be entitled to “decide ex aequo et bono“. This depends on the applicable arbitration law, which is that of the jurisdiction of the place of arbitration. Since virtually all arbitration laws are highly flexible, there is no need to explicitly stipulate that another arbitration law applies. Parties might, however, desire to determine that the arbitral tribunal “shall decide in accordance with the rules of law” or “as amiable compositeurs“.
  4. You may want to provide a customised mechanism for appointment of the arbitral tribunal. Each arbitration institute has its own rules, but all institutes require that the arbitral tribunal is independent from both parties (even though the parties might have nominated their own ‘representatives’ on the tribunal).
  5. Most arbitration institutes provide for adequate access to summary proceedings and provisional measures. If not, the applicable arbitration law will probably allow for it. Nevertheless, you might exceptionally want to say something about such a possibility.

In most jurisdictions (i.e. the place of arbitration is relevant here!) you are to a large extent free to deviate from the proposed text in any respect you find helpful or useful.

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