Arbitration Clause

A clause in a contract, committing the parties to resolve legal disputes about the contract by Arbitration, usually by application of the rules of one of a number of arbitration organizations such as the:

The exact language of the arbitration clause should usually be similar to specimen language available from each of the organizations – these are usually tailored to be broadly enforceable in most jurisdictions.

The choice of which arbitration rule to follow, or indeed whether to put arbitration under the rules of any of these bodies depends on the likely circumstances of the case. It is also important to determine what number of arbitrators should be specified, the place of any arbitration, if different from the place of the arbitration (or alternating) the seat of the arbitration and the language of arbitration. Arbitration clauses are almost always enforced by courts, unless the clause seeks to commit certain issues to arbitration which are in a particular jurisdiction regarded as a public policy matter, and therefore not arbitrable under applicable law. It is may also be wise to draft the dispute resolution clause as an escalation clause whose end-point is arbitration.

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