It is common to encounter pre-arbitral requirements in international arbitration agreements. Compliance with these procedural requirements, included in multi-tiered dispute resolution clauses, is typically a prerequisite to the commencement of arbitration proceedings.
The underlying intent of these requirements is to ensure that parties in dispute make genuine efforts to amicably resolve their issues before resorting to expensive legal proceedings. By mandating this preliminary step, the aspiration is to foster more amicable resolutions.
The most common pre-arbitral procedural requirements are negotiation, mediation or consultation. Resort to a dispute board is also required in many construction contracts.
For instance, in order to require mediation under the ICC Mediation Rules before initiating arbitration, the International Chamber of Commerce recommends the following provision, which may be inserted directly into a commercial contract:
In the event of any dispute arising out of or in connection with the present contract, the parties shall first refer the dispute to proceedings under the ICC Mediation Rules. If the dispute has not been settled pursuant to the said Rules within 45 days following the filing of a Request for Mediation or within such other period as the parties may agree in writing, such dispute shall thereafter be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.
While it is generally prudent to comply with pre-arbitral requirements, in practice, parties often do not do so. Courts have taken different approaches in determining whether pre-arbitral requirements are mandatory.
Pre-Arbitral Requirements: Mandatory or Not?
The main problems regarding pre-arbitral requirements arise from the interpretation of the clause that defines them. The understanding under many laws is that if there is no use of clear language, procedural requirements may be understood as being merely aspirational and non-binding.
The wording of the clauses defining pre-arbitral requirements is a basis for questioning mandatory compliance. Courts have unsurprisingly held that words used in such clauses are essential. The use of the word “shall” is more likely to be understood as binding than different wording, such as “may” or “can”.
Furthermore, including a timeframe for the intended pre-arbitral requirement will increase the likelihood of it being considered binding, as held in ICC Case 9812. Hence, when drafting a contract, parties should be careful not to leave the provision open for interpretation, using general phrases such as to “negotiate in good faith” with no mandatory time limits.
If the parties agree on mediation as a pre-arbitral requirement, they should name the intended institution or mediator. By doing so, the provision will more likely be considered mandatory, and it will also facilitate the selection of the mediator should a dispute arise.
The Character of Pre-Arbitral Requirements
In the context of the characterization of pre-arbitral requirements, courts have issued diverse rulings, finding that pre-arbitral requirements are either an issue of a “jurisdictional” nature, an issue of “admissibility”, or an issue of a “procedural” nature. This renders uncertain the effects of non-compliance with pre-arbitral requirements.
The position of English law on this matter seems to be settled: whether there is compliance with pre-arbitration procedures pertains to admissibility. This stance is evident from recent English High Court judgments, such as NWA & Anor v NVF & Anor  EWHC 2666 (Comm). Other jurisdictions, however, hold divergent views on this matter.
Regardless, the parties’ intention is likely to be considered when deciding whether pre-arbitral requirements are mandatory. If it is evident from the parties’ intention that there will not be any authority constituted before the conditions are fulfilled, requirements may be seen as “jurisdictional”. Otherwise, it is more likely that they would be considered an issue of “admissibility”.
The uncertainty in the characterization of the mandatory nature of pre-arbitral requirements impacts the consequences of non-compliance, which may lead to a sanction, a stay of the proceedings, or the dismissal of a claim. If the pre-arbitral requirements are found to be jurisdictional in nature, however, non-respect of pre-arbitral requirements may also call into question the enforceability of an arbitral award that is eventually rendered.
The mandatory nature of pre-arbitral requirements hinges largely on the precise wording of the clause, the intent of the parties, and the jurisdiction in question. As such, parties must draft with clarity, fully aware of the implications of their chosen phrasing. In doing so, they ensure not only the validity of their agreements but also set a clear path forward for any potential dispute resolution.
 D. Caron, S. Schill, A. Cohen Smutny, E. Triantafilou, Practising Virtue Inside International Arbitration, Chapter 14, G. Born, M. Šćekić, Pre-Arbitration Procedural Requirements ‘A Dismal Swamp’, (Oxford University Press, 2015), p. 227.
 G. Born, International Commercial Arbitration (3rd ed., 2021), Chapter 5, p. 916.
 D. Jiménez Figueres, Multi-Tiered Dispute Resolution Clauses in ICC Arbitration (2003), p. 3.
 D. Caron, S. Schill, A. Cohen Smutny, E. Triantafilou, Practising Virtue Inside International Arbitration, Chapter 14, G. Born, M. Šćekić, Pre-Arbitration Procedural Requirements ‘A Dismal Swamp’, (Oxford University Press, 2015), p. 238.
 G. Born, International Commercial Arbitration (3rd ed., 2021), Chapter 5, p. 919
 D. Caron, S. Schill, A. Cohen Smutny, E. Triantafilou, Practising Virtue Inside International Arbitration, Chapter 14, G. Born, M. Šćekić, Pre-Arbitration Procedural Requirements ‘A Dismal Swamp’, (Oxford University Press, 2015), p. 243.
 D. Caron, S. Schill, A. Cohen Smutny, E. Triantafilou, Practising Virtue Inside International Arbitration, Chapter 14, G. Born, M. Šćekić, Pre-Arbitration Procedural Requirements ‘A Dismal Swamp’, (Oxford University Press, 2015), p. 246.