How to reduce the risk of disputes with an arbitration clause?
Conflicts in business are almost an everyday occurrence. Even the best-planned cooperation can run into problems. So how do you protect yourself from lengthy, costly disputes in court? The answer is an arbitration clause – an effective and practical solution for your business.
What is an arbitration clause and why is it worth having one?
An arbitration clause is a provision in a contract that specifies that any disputes will be resolved by arbitration and not by a court of law. What does this mean for you?
- Faster resolution – Arbitration usually takes much less time than a standard court process. Instead of waiting months for a hearing, you can have your dispute resolved in a matter of weeks.
- Discretion – Proceedings are held behind closed doors, allowing you to maintain confidentiality and protect your company’s reputation.
- Greater control – You can choose the arbitrators and the rules of the proceedings, giving you greater flexibility.
Lower costs – In the long run, arbitration can be more cost-effective than traditional litigation, especially for international disputes.
Additionally, an arbitral award has the force of law and can be enforced under domestic and international laws, such as the 1958 New York Convention. It allows you to enforce your rights in more than 160 countries.
Why register a clause with ARBI3?
Registering an arbitration clause with an institution such as ARBI3 brings additional benefits:
- Lower costs – By registering, you can benefit from preferential arbitration rates in the event of a dispute.
- Faster procedure – The arbitration process starts almost immediately, without unnecessary formalities.
- Trust and transparency – The other party sees that the rules are clearly defined and in line with international standards.
It is worth noting that ARBI3 operates on the basis of rules that are in line with international standards, making arbitration universal and more predictable.
How do you add an arbitration clause to your contract? Step by step
- Consult our expert – Our expert will help you draft a clause tailored to your needs and in compliance with the applicable regulations.
- Choose the form of arbitration – Decide whether you prefer institutional arbitration, such as at ARBI3, or ad hoc arbitration, organised specifically for a particular dispute.
- Add a clause to your contract – You can use the ready-made templates available at ARBI3 or create your own clause in consultation with our lawyer.
- Register a clause – Registering with ARBI3 is quick and comes with a number of benefits, such as preferential rates or simplified procedures.
How does an arbitration clause enhance business security?
With an arbitration clause, you can avoid many of the problems associated with traditional litigation:
- Less stress – Precise arbitration rules eliminate uncertainty in the event of a conflict.
- Greater trust – Clearly defined rules build solid relationships with business partners.
- Protection of interests – By reducing unnecessary paperwork, you avoid unnecessary costs and wasted time.
Example from life
A manufacturing company had entered into a contract with a component supplier, but a dispute over delivery dates threatened the collaboration. Thanks to a written arbitration clause, both parties quickly resolved the conflict, avoiding a costly lawsuit. As a result, the companies not only maintained the contract, but also retained the trust of their customers.
Potential limitations of arbitration
Arbitration is not the ideal solution for every type of dispute. The following points are worth bearing in mind:
- No possibility of appeal – An arbitral award is final, which means that it cannot be appealed.
- Initial costs – In some cases, the initial fees may be higher than in ordinary courts.
- Obligation of precise provision – The arbitration clause must be carefully drafted to avoid problems of interpretation.
Act now!
Don’t wait for problems to arise. Add an arbitration clause to your contracts today and protect your interests. If you need support, contact our expert at:
Protect your business and enjoy peace of mind with professional arbitration solutions!
