Disadvantages Of Arbitration Agreement

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In general, the arbitration agreement provides the basis for arbitration. It is defined as an agreement to submit present or future disputes to arbitration. This generic concept comprises two basic types: a) A clause in a contract, by which the parties to a contract undertake to submit to arbitration the disputes that may arise in relation to that contract (arbitration clause); or b) An agreement by which the parties to a dispute that has already arisen submit the dispute to arbitration (submission agreement). By entering into an arbitration agreement, the parties commit to submit certain matters to the arbitrators’ decision rather than have them resolved by law courts. Objectives 4 Dispute Settlement Thus, the parties: a) Waive their right…show more content…
Given the great number and variety of arbitral institutions, it is necessary to analyze the provisions contained in their rules, the manner in which arbitrators are selected and costs. In order to avoid confusion in the identification of the institution or misinterpretations concerning the scope of the agreement, it is recommendable to adopt the model clauses commonly used by the institution. In ad hoc arbitration, it is essential that the arbitration agreement contain the manner in which arbitrators are to be appointed. One possible –and advisable– way is to designate in the agreement an appointing authority to prevent the arbitration from being delayed or frustrated by the lack of cooperation of one of the parties to designate the arbitrators. In institutional arbitration, even though the rules contain provisions on this issue, the parties are generally authorized to agree on a different manner of appointing arbitrators. It is also important to expressly agree on the number of arbitrators who will participate in the arbitral tribunal. In institutional arbitrations, this is normally provided in the rules, although with a suppletive nature. The parties may also agree on special requirements to appoint arbitrators, such as profession, nationality, etc. This provision helps to assure the appointment of arbitrators with the qualifications desired by the parties. In choosing institutional arbitration, the parties also submit to the rules of the institution. However, they may want to incorporate some specific procedural rules that are not contained in the rules, or modify some of the regulatory ones. Before doing so, they should consult with the institution. In ad hoc arbitration, where the parties must agree on the rules of procedure, the UNCITRAL Arbitration Rules are a good option. If the parties are particularly interested in

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