Proper Legal Drafting of Arbitration Clauses

Abstract

Objective: This article analyses the main and necessary features on drafting an arbitration clause properly. Thus, the article identifies and debates the major points that shall be considered in drafting arbitration clauses, namely, ambiguity of drafting, scope of arbitration, institutional or ad hoc arbitration, international or domestic arbitration, choosing the place and seat of arbitration, choosing arbitrators, language of arbitration, and reconciliation before entering into arbitration. This article does not contest that we shall have a uniform or standard template for arbitration clauses. Rather, it only provides guidance for drafting a proper and legal arbitration clause. Theoretical framework: Arbitral disputes arise when there is a written arbitration clause that leads to arbitration instead of litigation. Such clauses shall be drafted properly and legally, where if such drafting is not proper and legal, the arbitration clause will not be applicable, and in consequence, it shall be considered null and void. Method: The method used in this research is practical legal research including statutory and comparative approaches. Results: The results of this study explain that the drafters of arbitration clauses shall be cautious and knowledgeable in their writing given the significance of the arbitration clause's terms. Conclusions: The conclusion of this study is that there is no universal arbitration clause that can be followed, but there are several critical provisions in an arbitration clause that can help parties to avoid spending time and money on the arbitration proceeding. Thus, arbitration clauses shall be drafted properly and carefully.