As businesses expand globally, disputes between companies and individuals arise more frequently. To avoid lengthy and costly litigation, companies are increasingly using arbitration to resolve disputes. However, a poorly written arbitration agreement can result in an ineffective or unenforceable agreement. In this article, we will provide a guide to ensure a properly drafted law of arbitration agreement.
Firstly, it is important to understand the basics of arbitration. An arbitration clause is a provision in a contract that requires the parties to submit disputes to a third-party arbitrator. The arbitrator will hear evidence and render a final and binding decision. The parties agree to abide by the arbitrator`s decision, and the decision is typically not subject to appeal. Arbitration can be a faster and more cost-effective way of resolving disputes than traditional litigation.
One of the most important elements of a properly drafted arbitration agreement is specificity. The agreement should clearly identify the parties, the scope of the disputes covered, and the rules governing the arbitration. The agreement should also specify the location of the arbitration, the language of the proceedings, and the number of arbitrators.
The law governing the arbitration agreement should also be specified. In international arbitration, parties can choose the governing law of the arbitration agreement. A well-drafted agreement should also specify the law governing the substance of the dispute.
Another important element is the arbitrator`s jurisdiction. The agreement should clearly outline the arbitrator`s authority to make decisions and the limits of the parties` ability to challenge the arbitrator`s decision. It is also important to specify the procedure for appointing the arbitrator in the event of a dispute, including whether the parties will select the arbitrator or use an independent appointing authority.
Finally, a well-drafted arbitration agreement should include provisions for confidentiality and the preservation of evidence. The agreement should specify who can access the arbitration proceedings and whether or not the parties can use any resulting information in future legal proceedings.
In conclusion, arbitration is an effective way to resolve disputes between businesses and individuals. A properly drafted arbitration agreement is essential to ensure that the agreement is enforceable and that the parties get the benefit of an efficient and cost-effective dispute resolution process. Therefore, parties should be careful and work with an experienced attorney to ensure that their arbitration agreements meet the required standards of specificity, jurisdiction, and confidentiality.