Does your Arbitration Agreement Bind you to Arbitrate?

Posted by Awatif Mohammad Shoqi Advocates & Legal Consultancy on October 27th, 2021

We regularly find that agreements are progressively setting out elective approaches to moving toward alternative dispute resolution. Such arbitration agreements or clauses in any contract refers to parties’ ability to enter into arbitration in event there is a dispute and it also refers to the prerequisites to be followed by the parties prior to entering into any arbitration. Nevertheless, Arbitration Lawyers of Dubai believes that there can be certain times where arbitration agreements or clauses are not drafted appropriately thereby challenging the very right of parties to arbitrate even if there is an arbitration agreement. Now and then, it is possible for a party, who probably won’t wish to come along with the dispute resolution in the way received by the claiming party, to exploit either weak drafting of the arbitration clause or the inability to follow the necessities of the agreement, with an intention to frustrate the idea of dispute resolution approached by the claiming party.

When drafting an arbitration provision, it is imperative to ensure that the conditions are basic and clear so as to maintain a strategic distance from vulnerability and disagreements regarding their semantics and impact. This is the initial step to guaranteeing the time and cost-viability of an expected arbitration as it will limit the danger of potential differences with respect to the purview of the council or the way toward naming the arbitrators. At the very beginning of drafting the arbitration proviso, it must be express that the parties wish to have their debates settled by means of arbitration and to postpone the first locale of the courts. On the off chance that this expectation can’t be surmised, it implies that the ‘medium’ utilized has missed its objective.

It is imperative for an arbitration agreement to meet specific prerequisites in order to prevent the arbitration process to be flawed and be subjected to the court intervention and causing further delay. Legal Consultants of Dubai believe that there are most common defects which are generally found in faulted arbitration, however such flaws can be removed by adhering to simple measures as below:

• Primarily thing you must consider is whether your need to enter into arbitration to resolve your disputes. As if it is done correctly, arbitration can be quicker and more affordable than litigation in some jurisdictions.
• In the event that you opt to arbitrate, you have to choose the “scope” of the understanding, i.e., what debates do you need secured? In the event that you need “everything” to be parleyed, at that point you have to utilize the broadest language conceivable to guarantee all questions emerging under or identified with the understanding are mediated.
• Another significant concern is that all prerequisites in the arbitration shall be carefully written such as the arbitration institute, seat and place of arbitration, number of arbitrators, language of arbitration, time frame of arbitration and governing law.
• Lastly, some arbitration agreements entail clauses for amicable settlement before the matter is registered before any specific arbitration institute. It is imperative for the parties to adhere to such proviso to prevent frustration of the whole arbitration.