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interesting_arbitration_articles

Interesting Arbitration Articles (and our commentary)

Drafting

SinsDescription (our wording)
EquivocationFailure to agree to arbitrate and instead reserving some rights for litigation thereby ensuring a dispute about what disputes are arbitral and what are not
InattentionFailure to ensure that the arbitration is enforceable in the most likely state in which enforcement may be required
OmissionFailure to specify how the arbitrator is to be appointed or which rules of appointment (if any) are applicable to the dispute.
Over SpecificationToo much detail on who and how to arbitrate1)
Unrealistic ExpectationsTime limits are often unreasonable 2)
Litigation EnvyLitigation Rules are specified as being required to be followed 3)
OverreachingThis is where one party specifies all the rules which are to operate in the arbitration to its favour.
In Australia, as elsewhere in the world, such a clause and the ensuing arbitration is unlikely to be enforceable as it would not satisfy the requirement of being “fair”
  • He also cites ten essential provisions as being:
ProvisionOur View4)
the agreement to arbitrate Critical
what disputes will be arbitrated
(broad or narrow clause)
Important, a broad approach is preferable - otherwise a dispute can ensue about the scope of the agreement to arbitrate.
the rules that will govern the arbitration Less important, the rules can be resolved as you proceed with the arbitration (subject to having a good arbitrator).
the institution, if any, that will administer the arbitration Less important, it is only relevant in so far as it assists the parties to locate a good arbitrator.
the place of arbitration Less important, we tend to find that far more important is the choice of the arbitrator.
We determine disputes worldwide without difficulty using telecommunications.
Please note that there is one important exception to this view. That exception is that without agreement as to the applicable law the law of the place of the arbitration applies to determine the substantive rights between the parties.
in an international agreement, the language of the arbitration Less important, English is a common language and to be preferred unless this question is not relevant.
the applicable law 5) Important, but can be determined using common law rules.
the procedural law that will apply to the arbitration Irrelevant, far more important is the choice of the arbitrator.
the number of arbitrators and how they will be chosen Irrelevant, unless there is a tactical advantage for the parties.
eg. in some rules for a three arbitrator panels the parties each nominate an arbitrator. Those arbitrators then agree who is to be the third arbitrator.
an agreement that judgment may be entered on the award Not important in Australia unless it is said that the arbitration is not enforceable - in which case there is no agreement to arbitrate

Arbitration Guide

1) This can be a large problem as often one party may use such provisions to delay or obstruct the arbitral process.
2) This can be fixed in many cases at the preliminary conference when such timetables can be reset and or the assistance of the Court sought
3) A common misconception is that the litigation rules are without value. That is incorrect. Many Court rules can be useful. For instance, it is important to know what is in dispute. That can be done using pleadings or otherwise but it must be done.
4) based on Australia Law
5) if not provided elsewhere in the agreement

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