Validity and Interpretation of Pathological Arbitration Clauses - WAMR - 2019 Vol. 13, No. 3
* Ph. D candidate in International Law, University of Szeged, Faculty of Law and Political Sciences; Ph.D candidate in International Private Law, Baskent University, Institute of Social Science; LL.M in Public Law, Hacettepe University; LL.M in Information Technology Law, Hacettepe University; Bachlor of Law, Çankaya University (Turkey).
Originally from World Arbitration and Mediation Review (WAMR)
To have a valid arbitration agreement the mutual intention of the parties is not enough; such intention should also be clearly expressed. Some arbitration agreements do not reflect the clear intention of the parties, or they contain defective elements. There are several reasons for these defects, such as: (i) they may be drafted by persons with little or no experience in arbitration, (ii) they may be drafted in haste when all the commercial points of the contract are almost complete, (iii) the drafter may be absent-minded or (iv) they may just be negligent cut-and-paste jobs; and any such defects may give rise to uncertainty.
In literature, defective agreements that do not clearly state required elements or that add contradictory or ambiguous optional language are called “pathological clauses.” The expression “pathological clauses” was first used by Frederic Eisemann, to identify arbitration agreements and arbitration clauses that contain defects or mistakes liable to prevent the smooth progress of an arbitration. Such clauses can be a source of conflict for the entire duration of the dispute, from the enforcement stage to the annulment of the decision.
Arbitration clauses can be pathological for various reasons; such as, (i) the reference to an arbitration institution may be inaccurate (ii) more than one institution may be specified in the clause, (iii) the arbitration may appear as an option to state courts, (iv) the language of the clause may be permissive, (v) the clause may be incomplete, (vi) the clause may require the intervention of third parties who refuse to participate or (vii) the clause may refer to arbitrators who are no longer alive. Such defective clauses may create difficulties in the initiation of the arbitration; but they are not necessarily null, void or ineffective and they may not prevent the procedure from proceeding. In practice, pathological arbitration clauses are interpreted in a pro-arbitration approach to value the parties’ intention to arbitrate rather than to litigate.