Arbitration, as a method for resolving disputes, has proven to be a valuable and efficient alternative to lengthy court proceedings. The possibility of obtaining a resolution within a relatively short timeframe, compared to regular courts, is an attractive incentive for many parties involved in legal conflicts. However, the success of arbitration heavily depends on the precise and clear drafting of arbitration clauses in contracts or agreements that govern the parties’ relationships.
What are Pathological Arbitration Clauses?
A pathological arbitration clause refers to a provision or term in a contract or agreement that establishes the use of arbitration as a method for dispute resolution but, due to defective or problematic wording, ends up causing difficulties or obstacles in carrying out the arbitration process in an appropriate and effective manner. These clauses can be incoherent, ambiguous, or inapplicable, resulting in an inadequate arbitration process for efficiently resolving disputes between the parties.[compromissory]
Impact of Pathological Arbitration Clauses
Pathological arbitration clauses undermine the primary purpose of arbitration: the expeditious resolution of conflicts. Instead of providing an agile alternative to courts, inadequate wording unjustly discourages efforts to implement an alternative means of dispute resolution. The presence of obscure, imprecise, or erroneous clauses, such as the designation of non-existent arbitral institutions, leads to additional disputes concerning the validity of the clause and the arbitration process, unnecessarily prolonging the proceedings.
The Role of Specialized Arbitration Lawyers
To ensure the effectiveness and efficiency of arbitration, it is essential to seek the counsel of specialized arbitration lawyers for the drafting of arbitration clauses. These professionals can analyze the specific case and recommend the best agreement format for its implementation, tailored to the needs and peculiarities of each situation.
Clarity and precision in drafting arbitration clauses are fundamental to avoid potential misunderstandings and future disputes. Some common issues that may arise from deficient arbitration agreements include a lack of specificity in the rules and procedures, inappropriate selection of impartial and qualified arbitrators, and incompatibility with the prevailing legislation in the territory where the arbitration will take place.
In Conclusion, Arbitration is a valuable tool for dispute resolution, but its effectiveness hinges on well-drafted and clear arbitration clauses. Avoiding pathological clauses is crucial to ensure the expeditious and fair nature of the arbitration process. The guidance of experienced legal professionals is key to crafting robust and effective arbitration agreements that enable parties to resolve their disputes fairly, swiftly, and with full confidence in the process. By anticipating and carefully drafting arbitration clauses in contracts, parties can ensure they reap the benefits and agility that arbitration offers in resolving their disputes.
