After making sure that the parties had agreed to resolve their legal disputes through arbitration, and that you make sure that the parties agreed the seat of arbitration, upon which the Courts will have jurisdiction regarding the validity of the arbitration clause and the award or awards.

Then you have to choose whether to have an institution administering the arbitration or ad hoc and be administered by the parties in conjunction with the arbitral tribunal.

My point of view is that in order to avoid headaches choose an arbitral institution for the administration of your arbitration. The selection of the institution will cause your clients expenses in the future, so you have to make sure which arbitral institution is more apt to the needs of your clients.

If you are new to arbitration and you are litigating a case and you find that the parties choose an arbitral institution, be aware to determine the cost of the possible dispute, since the expenses of the institution and the arbitral tribunal must be determined, make clear to your clients, that such costs are not part of your fees, or you will end up being on the wrong side of the table.

But, the question is which arbitral institution is best? And how many are there? Well, there are quite plenty, so the selection becomes cumbersome, make sure to select an institution that has been around quite some time, and also that is backed up by people expert in arbitration. That is the staff is knowledgeable to arbitration. 

Also, the selection becomes important with the language of your dispute, since the institution needs to be able to handle the many issues between the parties and with the arbitral tribunal that occur during an arbitration, which means the institution needs to speak the language of the parties. Otherwise the administration of the case will be prong to misunderstandings. 

The selection of the institution also has an impact on the costs of the arbitration, depending on which institution you select it is the amount of money you will pay and the currency upon which the services will be charged. It is not the same to pay in British pounds, that in Euros, nor American Dollars, nor Canadian dollars, or Argentinian Pesos, or Mexican Pesos. Thus, the selection of the institution becomes important moneywise oriented.

When I say there are plenty of arbitral institutions out there believe me, they are. A point to take into account is that despite being established in a given geographical place, any arbitral institution is equipped to administer international commercial arbitrations.

And, let say that you don’t know where to start with the drafting of your first arbitral clause, well, the arbitral institutions make this journey a lot easier, since in their web and in their rules of arbitration they give you examples of arbitration clauses that you can use in your contracts.

So, there you go, when drafting an arbitration clause you have two options, one that is Institutional which will be administered by an arbitral institution, or the other ad hoc, which will be administered by the parties, the judge acting in support of the arbitration, and when the designation of an arbitral tribunal is made, well the arbitral tribunal.

If you want to be on the safe side and you want to include an arbitral clause into your contracts the safest bet is to designate an Arbitral Institution and their rules, you will eliminate quite a lot of headaches to your clients in the future.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s