Arbitration clauses: do’s and don’ts

Be specific when drafting an arbitration clause, says Chan Leng Sun, SC, at Baker & McKenzie

Drafting a valid arbitration clause is not rocket science. Many arbitral institutions offer sample model clauses – short but effective clauses incorporating their rules – on their websites. However, problems arise when those negotiating the contract get adventurous.

This brief guide sets out five do’s and five don’ts for drafting arbitration clauses, assuming it is your chosen method for dispute resolution.

Do’s: (a) Do commit to arbitration: As everything springs from the parties’ agreement, your arbitration clause must commit parties to arbitration in imperative language. It can stipulate: “Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be determined by arbitration …”

Chan Leng Sun, SC, is the global head of international arbitration at Baker & McKenzie