In Arbitration Agreements, Critical Provisions Are Often Overlooked
In negotiating commercial agreements, parties often choose to have any dispute arising out of or relating to the agreement or the transaction resolved by arbitration. Many sophisticated clients, and their lawyers, believe that arbitration is a preferred method of dispute resolution because it is generally perceived to be faster and less formal, and therefore also less expensive, than other forms of litigation. While the decision to arbitrate often makes sense, what is frequently not given adequate attention is the appropriateness to include specific details to help tailor the arbitration remedy in effective and important ways. Topics such as the selection of arbitrators, discovery rights, if any, the nature of the hearing and time limits, just to name a few, are critical matters to address. This article highlights the terms that one should consider addressing at the time the arbitration agreement itself is negotiated, rather than once a dispute arises.