A Poor Arbitration Clause Can Create Problems Before Arbitration Even Begins

Businesses often include an arbitration clause near the end of a commercial contract and give it far less attention than the commercial terms. That can become expensive when a dispute actually arises.

A clear clause should establish how disputes will be referred to arbitration, the chosen institution or procedural rules, the seat of arbitration and the language of proceedings. Where transactions involve parties or assets in different countries, these choices can affect procedure, cost and eventual enforcement.

Working with arbitration lawyers in Dubai during contract drafting can therefore be as important as obtaining advice after a dispute develops. For cross-border transactions, parties may also need to consider whether proceedings will take place through an international arbitration centre and how the agreed framework fits the transaction.

The issue becomes particularly important in international commercial arbitration, where contracts may involve multiple jurisdictions, different governing laws and assets located outside the UAE.

This is one reason arbitration remains an important practice area for law firms in UAE advising businesses with international operations. The objective is not simply to include an arbitration clause, but to ensure that it works when tested.

AY Advocates advises businesses on arbitration and dispute resolution matters arising from commercial arrangements in the UAE and across borders.