The dos and dont's of arbitration clauses

Abstract: In the world of dispute resolution, arbitration has throughout history been an increasingly popular alternative to the litigation process. The major features of arbitration provide contracting parties with many advantages such as discreetness, efficiency and lower costs; making it preferable in a various number of branches and industries where such features are crucial. Furthermore, the arbitration process offer contracting parties’ greater flexibility as to the composition of the deciding tribunal for their conflict, allowing the possibility to ensure the competence needed or desired in order to efficiently solve the dispute at hand. The flexibility and adaptive nature of international arbitration, hovering over national regulations without explicitly being bound by the laws or regulations of the places directly related to the contracting parties, has raised the demands for arbitration institutions, rules and frameworks providing global guidance and support for parties wishing to use international arbitration. The UNCITRAL Model Law example clause, originated in 1985 has been, and still must be considered to be, the basis for an endless number of arbitration clauses and agreements; providing a number of essential aspects contracting parties need to consider in order to make their arbitration agreement valid and efficient. Throughout the years, principles deriving from the clause, books, judicial articles and journals, failed and successful agreements and case law have provided parties with guidance as to how to adapt the clause to their need. However, after 25 years of usage, it the time has come to take a more critical look at the example clause, in order to ascertain whether or not it, and the rules that accompanies it, are in need of an update. This thesis breaks up the different aspects of the example clause, takes a closer look on the current developments and takes into account considerations that should be made by contracting parties when assessing them. Furthermore, this thesis recognizes a number of aspects not included in the example clause in order to evaluate their importance, relevance to the agreement and the potential ramifications of parties’ negligence to address them when constructing their arbitration clause or agreement. This thesis also focuses on the closely related aspect of the separability of the arbitration agreement. The widely discussed doctrines of separability and the principle of Kompetenz-Kompetenz must be considered to have had a large impact on the arbitral procedure and the abilities and limits of arbitrators versus the national courts. This thesis addresses the evolution of the doctrines, focusing on the most recent developments from a global view and their implications on reviews of arbitration agreement.