Arbitration, mediation and other alternatives to litigation are most frequently accessed by reference to a “future disputes” clause in a commercial contract. The following “Model” dispute resolution clauses, accompanied by short commentary, are intended to assist contracting parties in drafting alternative dispute resolution (ADR) clauses. Parties with questions regarding drafting an International Centre for Dispute Resolution® (ICDR®) clause should email ICDR at firstname.lastname@example.org or contact their regional ICDR or AAA® office for assistance (see ICDR contact details at end of document).
Several cautionary notes at the outset: Too often, discussion regarding the dispute resolution clause of the contract is left until the close of negotiation. Best practice is to consider the matter of problem solving and dispute resolution early in the negotiation, so providing a positive environment for further negotiation and avoiding the undue pressure of a closing deadline. In any case, each and every commercial relationship is unique. Contracting parties are well advised to seek appropriate guidance when drafting such clauses.
Model “Short Form” Arbitration Clause
The short form arbitration clause below will guide the parties through all the major aspects of international arbitration. Incorporating by reference a modern set of arbitral procedures which meet the expectations of the parties in international arbitration proceedings, the short form clause serves as an excellent starting point for the drafter, with additional language added only as necessary to either address particular needs of the contract or to emphasize certain powers of the tribunal.