What’s missing from your arbitration clause?
Many organizations include an arbitration clause
in their contracts to encourage faster, confidential, and more cost-effective dispute resolution. Unfortunately, these clauses are often left to the last minute during negotiations and copied from another contract or a precedent. If a dispute arises, the parties may end up fighting over the clause’s interpretation or be stuck with a less-than-ideal dispute resolution process (unless they can reach a new agreement).
MORE FOOD FOR THOUGHT
TALK TO OUR TEAM
Arbitration clause
Glenn Gibson
View bio
Supreme Court of Canada clarifies when arbitration may be used in an insolvency situation
Achieving clarity
in contracts and arbitration agreements
Arbitration
in Canada
GGibson@blg.com
T 416.367.7085
Senior Associate
PBoisvert@blg.com
T 514.395.3883
Partner
Philippe Boisvert
HMeighen@blg.com
T 416.367.6614
Partner
Hugh A. Meighen
TALK TO OUR TEAM
MORE FOOD FOR THOUGHT
View bio
View bio
Read now
Read now
Read now
To make your arbitration clause work for you, be sure to consider these seven items and consult with experienced arbitration counsel.
Adopt an arbitration clause in a contract or an arbitration submission agreement (post dispute) that will provide for an efficient, effective process. Be aware that trying to second guess every eventuality may create more delay, cost and complication than adopting a simpler arbitration agreement that refers to established institutional rules. Having your arbitration clause reviewed by experienced arbitration counsel will assist in achieving these goals.
Construction and engineering contracts
Shareholders’ agreements
Steps.
Do the parties wish to adopt a form of cooling
off period (for example, negotiation or mediation) prior to arbitration? Consider the implications of these steps, whether they’re mandatory or permissive, and the potential implications
if a party doesn’t participate.
Rules.
Should you adopt institutional or other arbitration rules that
will govern how
arbitration will proceed?
Place or seat.
The place or seat of the arbitration will usually dictate the law and process that applies to the arbitration clause and should be
chosen with care.
Language.
This is important in international contexts where the parties may use different languages, or in Canada where there is more than one official language.
Arbitrator.
Consider the number of arbitrators (one or three) and the appointment process, including under any applicable rules you may wish
to adopt.
Exclusions and scope.
Some types of disputes
are excluded by statute (think consumer protection and employment standards in some jurisdictions).
There may also be particular types of disputes that the parties wish to exclude (but first consider whether it may be problematic to do so).
Business acquisitions
Franchise agreements
Supply agreements
Licensing agreements
Common uses of arbitration clauses