How to draft arbitration clauses in your commercial contract?

Today I would like to share with you on how to draft arbitration clauses in your commercial contract. Arbitration clauses refer to contractual clauses through which the parties agree to submit their disputes arising from or in connection with their contract, including interpretation and implementation of the contact to be finally resolved by a specified arbitration center based on the arbitration rules of that arbitration center.

To draft arbitration clauses in the contract, first the parties should discuss and agree to submit their disputes to a specified commercial arbitration center. For example, the parties may agree to select National Commercial Arbitration Center (NCAC) of Cambodia or Singapore International Arbitration Center (SIAC) of Singapore as their dispute forum.

Secondly, the parties may go to website of their selected arbitration center to get the model clauses and adjust these model clauses based on their need in their contract. For example, I visited the website of NCAC of Cambodia, I found the Model Clause as follows:

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity, performance or termination, shall be referred to and finally resolved by arbitration administered by the National Commercial Arbitration Centre of the Kingdom of Cambodia in accordance with the Arbitration Rules of the National Commercial Arbitration Centre (NCAC Arbitration Rules) being in force at the time of commencement of arbitration, and by reference in this clause, the NCAC Arbitration Rules are deemed to be incorporated as part of this contract.

The seat of the arbitration shall be [Phnom Penh, Cambodia]*.

The Tribunal shall consist of ______________**arbitrator(s).

The language of the arbitration shall be ______________*.

Governing Law Clause

This contract is governed by the laws of ______________***.

* Parties should specify the seat of arbitration of their choice. If the parties wish to select an alternative seat to Cambodia, please replace “[Phnom Penh, Cambodia]” with the city and country of choice (e.g., “[City, Country]”).

** state an odd number

*** state the country or jurisdiction

Regarding the Model Clauses above, the parties need to agree to submit their dispute to be resolved by the NCAC according to the NCAC’s Arbitration Rules being in force at the time of commencement of arbitration. These arbitration rules are available on the website of the center. The parties need to select the location which is seat of arbitration (which should be convenient for all parties and arbitrators), the number of arbitrators which should be odd number (1 or 3 arbitrators), language of the arbitration (which should be the language mostly understood by parties and arbitrators), and governing laws of the contact (which should be laws understood by the arbitrators or otherwise based on the necessity or requirement of the disputes or cases.)

This article is not a legal advice or opinion.

Categories Employment and Labor Laws

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