ISDA Adopts Model Arbitration Clauses for Use with ISDA Master Agreements

October 23, 2013

Following extensive consultation with its members, in September 2013 the International Swaps and Derivatives Association (“ISDA”) published seven model international arbitration clauses (the “Model Arbitration Clauses”) for optional use with swaps and derivatives contracts using ISDA’s 2002 Master Agreement and 1992 Master Agreement (Multicurrency-Cross Border)(each a “Master Agreement”). The Model Arbitration Clauses can be found in the 2013 ISDA Arbitration Guide (the “Arbitration Guide”) which supplements and amends the corresponding guidance in the ISDA User’s Guides.

ISDA’s decision to provide optional arbitration clauses for use with the Master Agreement, alongside historically popular English and New York court jurisdiction clauses, reflects the increasing importance of emerging markets in international finance as well as the advantages that arbitration can offer. This OnPoint reviews the Model Arbitration Clauses. The potential advantages of arbitration in resolving international financial disputes, including those arising out of the Master Agreements, are discussed in more detail in Dechert’s Financial Transactions and Arbitration.

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