Drafting Effective Arbitration Agreements – Lessons Learned and Pitfalls to Avoid

From Willkie Farr & Gallagher LLP, Duncan Speller, Elliott Couper, and Jack Davies offer terrific advice for drafting effective arbitration agreements. Effective arbitration agreements with class action waivers are the best defense against class action lawsuits alleging workers were misclassified as independent contractors. Among other guidance, Duncan, Elliot and Jack outline key parts of an arbitration agreement.

An arbitration agreement should include the following elements:

1. Intention to arbitrate: An arbitration agreement should clearly and unambiguously specify the parties’ intention to refer disputes to arbitration, e.g., “All disputes shall be submitted to arbitration …”

2. Scope: An arbitration agreement should clearly and unambiguously define the scope of the disputes that must be submitted to arbitration, e.g., “All disputes arising out of or in connection with the present contract …”

3. Seat: An arbitration agreement should specify the seat of the arbitration and will preferably do so using the word “seat,” e.g., “The seat of arbitration shall be London, England.”

4. Governing law: An arbitration agreement should specify the law applicable to it, e.g., “The law governing this arbitration agreement shall be that of England and Wales.”

5. Appointment of tribunal: An arbitration agreement should specify the number of arbitrators on the tribunal and the applicable mechanism for their appointment, e.g., “Any arbitration shall be settled by three arbitrators who are to be appointed in accordance with the ICC Rules, except that the two arbitrators appointed by the parties shall designate a third arbitrator who shall act as the presiding arbitrator.”

6. Language: An arbitration agreement should specify the language that any arbitration should be conducted in, e.g., “The language of the arbitration shall be English.”

7. Institution: If the parties have agreed to an arbitral institution, it should be specified (using its correct name) in the arbitration agreement, e.g., “All disputes shall be submitted to arbitration administered by the London Court of International Arbitration (LCIA) in accordance with the LCIA Rules.”

For more, read the full article at Drafting Effective Arbitration Agreements – Lessons Learned and Pitfalls to Avoid

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