Provisions of law critical for litigation and arbitration practice
This time, NGL Legal’s Dispute Resolution Team outlines the Polish perspective on what to keep in mind when deciding to include an arbitration clause in a contract.
Under an arbitration clause the parties agree that, as a rule, their potential disputes will be resolved by an arbitration tribunal, and not by a state court. The arbitration clause is, therefore, critical if a conflict arises between the contracting parties. Should this clause be drafted incorrectly, serious doubts as to its validity make it particularly difficult to decide whether the dispute should be assigned to arbitration or to litigation. These ambiguities are time and cost-consuming for clients, and, in practice, they can sometimes prevent the party from winning the case as to its merits.
Therefore, we indicate what elements are necessary for such a clause to be effective, give examples of additional provisos, and point out what should not be included in the arbitration clause, as well as provide our practical recommendations.
We hope that this brochure will be helpful to get an idea on how an arbitration clause should be drafted.