International arbitration agreements are an essential aspect of global business as they provide a reliable means of resolving disputes without the need for lengthy and costly litigation. Mastering the drafting of these agreements requires a deep understanding of international arbitration law and practice.
Drafting an international arbitration agreement requires careful consideration of the key provisions that are necessary to protect the parties` interests. The following are some essential elements that must be included in an international arbitration agreement:
1. Agreement to Arbitrate – The first provision that must be included in an international arbitration agreement is the parties` agreement to submit all disputes arising out of or relating to the contract to arbitration. This provision provides the basis for the arbitration agreement.
2. Rules of Arbitration – The parties must also agree on the rules that will govern the arbitration proceedings. This could be the rules of a specific arbitration institution or a set of ad hoc arbitration rules. The rules should specify the procedural steps that will be followed in the arbitration, including the appointment of arbitrators, the place of arbitration, and the language of the arbitration.
3. Composition of the Arbitral Tribunal – The parties must also agree on the composition of the arbitral tribunal. This will involve specifying the number of arbitrators, the qualifications required of the arbitrators, and the method of appointing the arbitrators.
4. Governing Law – The parties must agree on the governing law that will apply to the arbitration agreement. This law will govern the validity, interpretation, and enforcement of the arbitration agreement.
5. Confidentiality – Confidentiality is an essential element of an international arbitration agreement. The parties should agree on the extent to which the proceedings and any award issued will be kept confidential.
6. Finality of the Award – The parties must agree that the award issued by the arbitral tribunal will be final and binding on both parties. This provision is critical as it ensures that the parties will abide by the decision of the arbitral tribunal.
In conclusion, drafting an international arbitration agreement requires an understanding of international arbitration law and practice. The agreement should include essential provisions such as agreement to arbitrate, rules of arbitration, composition of the arbitral tribunal, governing law, confidentiality, and finality of the award. A well-drafted arbitration agreement can help to avoid lengthy and costly litigation and ensure that the parties` interests are protected.