IA Fundamentals | 5. International Arbitration Agreement (II)
As enterprises are increasingly engaged in international trade and investment, international arbitration is recognized as the preferred option in the face of cross-border disputes. However, international arbitration, which differs from domestic arbitration with complex procedures, often put parties unfamiliar with its rules at an inherent disadvantage. An effective arbitration agreement is essential to contracting parties. It provides jurisdiction for the tribunal and is a prerequisite for the recognition and enforcement of arbitration awards of international arbitration institutions across international territories. Although a clear and complete arbitration agreement itself may not guarantee the smooth progress of arbitration proceedings, an ineffective arbitration agreement that lacks essential elements or contains vagueness, will inevitably mean additional disputes, lengthy procedures, higher costs, and even an unenforceable award. This article will introduce the key points of drafting an arbitration agreement, starting from how to choose model arbitration clauses provided by institutions, and will also provide tips for drafting “tailored-made” arbitration clauses.