Drafting Arbitration Clauses in International Agreements - a Guide for European Lawyers

Abstract

Increasingly, in Europe, the parties to international commercial agreements are specifying arbitration as the primary means of dispute resolution. The main reason for that it seems, is the perception that the high costs involved in the traditional national court dispute resolution processes, can be avoided where arbitration is chosen as the means of resolving disputes under the agreement. Secondly, it is felt that the matter can be decided informally and quickly by experts as opposed to a judge in a national court who may, or may not be an expert in the field of the issues concerned. Whilst there are some merits in this kind of thinking, it is becoming increasingly apparent to parties to such agreements, especially in the new European Union states where alternative dispute resolution methods have not been widely practiced in the past, that careful and skillful drafting of the arbitration clause are crucial to the avoidance of some serious problems concerning its effectiveness.

In that regard, this paper intends to provide a background summary and a checklist for drafters to assist them in the construction of the desirable and effective contents of arbitration clauses in agreements that primarily concern international commerce.