Prima Facie Decisions on Jurisdiction - (SAR) 2000 -2

Author(s):

Annette Magnusson

Page Count:

14 pages

Media Description:

1 PDF Version from "Stockholm Arbitration Reporter"

Published:

December, 2011

Practice Areas:

Author Detail:

Annette Magnusson Assistant Secretary General of the Arbitration Institute of the Stockholm

Chamber of Commerce

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Preview Page SAR 2000 - 2

I. INTRODUCTION

A frequent problem in international commercial arbitration is poorly

drafted arbitration clauses; many parties simply do not pay enough

attention to the importance of a properly drafted clause. This can prove

costly. Where a clause is ambiguous, or even incomprehensible, the

arbitral tribunal may have to devote a substantial amount of time in

deciding on its own competence, which will increase the time spent on the

case and the costs of the arbitration. A party wishing to start an arbitration

proceeding with a contract containing an ambiguous clause may have to

file requests for arbitration at a number of different venues, possibly in

several jurisdictions, before an arbitral tribunal, or a public court of law,

finally finds itself competent to resolve the dispute.

It seems that a surprisingly large number of arbitration clauses

aiming at arbitration under the Rules of the Arbitration Institute of the

Stockholm Chamber of Commerce does not make use of the SCC model

clause. Other international arbitration institutions have made the same

observation regarding their model clauses. The reason is hardly that the

parties prefer the clause to be drafted in any other fashion than the model.

A more likely reason is that the model clause is not readily available when

the dispute settlement part of the contract is negotiated, and the matter is

seldom considered important enough to spend the time needed to find a

model clause or consulting an expert. This, in turn, goes back to the fact

that parties seldom expect the arbitration clause ever to be applied in