How to test your international arbitration clause before it's too late

The arbitration clause is the most important provision in any international contract, yet it is frequently the most neglected. Many businesses realize the importance of their arbitration clause only when a dispute arises—and by then, it is often too late to change it.

Here's how to test your arbitration clause before a dispute arises:

Step 1: Review the Clause Language

Is your arbitration clause clear and enforceable? Does it specify the arbitral institution, the place of arbitration, the language of the arbitration, and the governing law? Vague clauses can lead to jurisdictional disputes and delays.

Step 2: Consider the Potential Disputes

What types of disputes might arise under your contract? Is your arbitration clause broad enough to cover them? Are there any disputes that you would prefer to resolve through litigation or mediation?

Step 3: Assess the Arbitral Institution

Does the arbitral institution have experience with your industry or the type of dispute that might arise? What are the costs and timelines associated with arbitration under that institution's rules?

Step 4: Consider the Enforceability

Will an arbitral award be enforceable in the jurisdictions where you do business? Does your arbitration clause comply with the New York Convention and other applicable treaties?

Step 5: Seek Expert Advice

International arbitration is a specialized area of law. It is advisable to seek advice from a lawyer with experience in international arbitration before finalizing your arbitration clause.

At Triage Law, we help clients draft and review arbitration clauses that are clear, enforceable, and aligned with their commercial objectives. We believe that a well-drafted arbitration clause is one of the best investments a business can make.