Aceris Law LLC’s Recommended Fast-Track Arbitration Clauses
For many contracts, the use of a major arbitration institution’s model international arbitration clause is sufficient to ensure a smoothly-functioning and flexible arbitral proceeding, and below you will find model clauses for the world’s major international arbitration institutions. Such model clauses are generally intended for “full-scale” international arbitrations, however, and they may not be appropriate for all disputes.
For nearly all international commercial contracts concerning goods or services with a value of less than USD 500,000, for instance, Dugué & Kirtley strongly recommends consideration of a clause calling for “fast-track arbitration,” which provide for accelerated arbitration proceedings under special rules which reduce costs to a minimum. For small- and mid-sized contracts involving European companies, we recommend considering the use of one of the two following fast-track arbitration clauses, which are based on model clauses suggested by the Swiss Chambers’ Arbitration Institution and the Stockholm Chamber of Commerce.
For small- to medium-sized contracts, which are in some way related to Europe, we recommend the following clause providing for expedited arbitration proceedings:
Any dispute, controversy, or claim arising out of, or in relation to, this contract, including the validity, invalidity, breach, or termination thereof, shall be resolved by arbitration in accordance with the Expedited Procedure of the Swiss Rules of International Arbitration of the Swiss Chambers’ Arbitration Institution in force on the date on which the Notice of Arbitration is submitted in accordance with these Rules. The number of arbitrators shall be one. The seat of the arbitration shall be [London/Paris/Geneva/Stockholm]. The arbitral proceedings shall be conducted in [select language]. This contract shall be governed by the laws of [name law].
For slightly larger disputes, we recommend also considering the following arbitration clause providing for expedited dispute resolution under the SCC’s expedited arbitration rules, which are clear and well-drafted:
Any dispute, controversy or claim arising out of or in connection with this contract, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance with the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce. The seat of arbitration shall be [London/Paris/Geneva/Stockholm]. The language to be used in the arbitral proceedings shall be [select]. This contract shall be governed by the laws of [name law].
The ICC, which invented modern international arbitration in the form that exists today, currently lacks fast-track arbitration rules, which is unfortunate. As many of the best and brightest minds in international arbitration play an active role in the ICC’s continual development, which is necessary to reflect changing business and economic realities, such rules will undoubtedly be issued. For potential disputes worth in excess of approximately USD 500,000, we would recommend a standard model arbitration clause, typically calling for ICC arbitration, but with only one arbitrator envisioned in the event of a dispute to minimize arbitral fees. Only for potential disputes worth over approximately USD 5 million, are we convinced that the standard clause providing for full-service arbitration by a three member arbitral tribunal is justified.
Cost is not everything, and one of the many beauties of international arbitration is its ability to cater to highly-individualized needs, for instance by including a clause calling for a sole arbitrator who is a recognized expert in space law to resolve any dispute concerning a contract for the launch of a satellite. Other examples of custom arbitration agreements include multi-tiered arbitration clauses to ensure that all other options have been exhausted prior to arbitration, an arbitration agreement designed to prevent class action arbitrations (recently called into question in U.S. jurisprudence), or an arbitration clause for a contract with a State, which should almost always provide for the waiver of the State’s sovereign immunity.
Should you desire a tailor-made arbitration agreement, crafted by a lawyer specializing in international arbitration, please do not hesitate to contact Dugué & Kirtley’s International Arbitration Network.
– William Kirtley, Partner, Aceris Law LLC