Compulsory Arbitration Clauses in Domestic and International Consumer Contracts
King’s Law Journal, Vol. 19, No. 2, pp. 335-355, 2008
33 Pages Posted: 24 Mar 2010
Date Written: 2008
This paper examines the UK Unfair Terms in Consumer Contracts Regulations (UTCCR)'s prohibition on clauses in consumer contracts that mandate dispute settlement in an arbitration tribunal as potentially unfair and oppressive as against consumers because it denies their right to civil adjudication. The understanding of UTCCR's unfairness as developed by the UK House of Lords is not necessarily applicable to arbitration clauses because of the lower cost of such proceedings and the availability of legal aid, even in the international context. International arbitration decisions may also be reviewed for procedural irregularities under the New York Convention. Various European court decisions are reviewed where compulsory arbitration clauses in consumer contracts were evaluated for fairness to conclude that courts should be more receptive to such terms because of procedural advantages that they may accord to consumers.
Keywords: Consumer Contract, Unfair Contract Terms, International Arbitration, Compulsory Arbitration Clauses
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