International Arbitration Law - Essay Example

Download file to see previous pages In normal circumstances, arbitration arises when the parties to a contract have agreed to arbitrate. Either the parties have included arbitration in the agreement as an arbitration clause or decide to adjudicate after the dispute has arisen. In both the cases, arbitration will be available to the parties to the contract to resolve a dispute. However, there are some clauses which give rise to arbitration as an alternative dispute resolution method to the parties without the fact that they have agreed to arbitrate or not. In an international arbitration clause, the primary element is international and the secondary elements form the basis of arbitration. In international contracts, it is of utmost importance that there are provisions in the contract that determine the forum, selection of law, arbitrators, seat and place of arbitration, and etcetera. According to Born (2005)2 these provisions can assume the form of arbitration agreement or forum selection agreement (p.2). These agreements are followed by the choice-of-law clause which determines the choice of the parties for the substantive law that will be applied during adjudication (Ibid, 2005). The law stipulates that the arbitration agreement should give due reference to the mandatory clauses without which the matter will become uncertain and requires intervention by the civil courts having jurisdiction3. At the same time, there are non-mandatory clauses which are left at the discretion of the parties to decide. Therefore, the arbitration agreement that comprises of mandatory clauses are enforceable in law without further evaluation or decision making by the courts. The non-mandatory clauses can be adopted (1) by the parties to the contract per se or (2) they can follow their own terms and conditions or (3) adopt the rules of their respective association like UNCITRAL, International Chamber of Commerce and London Court of International Arbitration (LCIA). The mandatory clauses include the following checklist which is not exhaustive in nature: seat and place of the arbitration tribunal, providing the general means of fulfilling the non-mandatory clauses, ensuring separability of the arbitration agreement, post-death of party situation, time of initiation of the arbitration proceedings, number of arbitrators and details about arbitration tribunal, procedure of arbitrators’ appointment, chairman or umpire, revocation of authority, jurisdiction, consolidation, representation, general powers, powers of civil courts, preliminary point of law, awards, remedies, interest, time periods and appeal. These clauses as mentioned in the Arbitration Act 1996 cannot be overridden by the contrary agreement agreed by the parties. However, the non-mandatory clauses of the Arbitration Act 1996 are allowed to be changed by the parties with mutual consent and in the absence of such agreement, the clauses will become applicable automatically4. In practice, there are two types of arbitration clauses which are commonly used by parties, namely: (1) Informal Clause and (2) Sample Clause. The informal clause is one which does not use the formal language of the law. For instance, the clause “arbitration in London - English law to apply” is an informal arbitration clause as it does not use the standard legal language5. Nevertheless, the ...Download file to see next pagesRead More