Arbitration is the process of settling legal disputes between two parties without going to court. It is often used in commercial disputes, labour disputes, and consumer disputes. In an arbitration agreement, the parties agree to submit their dispute to an arbitrator, who will make a final and binding decision.
In this article, we will discuss the provisions that should be included in an arbitration agreement.
1. Scope of the Agreement
The arbitration agreement should clearly define the types of disputes that will be subject to arbitration. This includes any claims arising from a contract, tort, or statutory violation.
2. Number of Arbitrators
Next, the agreement should specify the number of arbitrators that will hear the dispute. This will typically be one or three arbitrators. If three arbitrators are chosen, the parties will each select one arbitrator and the two selected arbitrators will select the third arbitrator.
3. Rules of Arbitration
The arbitration agreement should also specify the rules that will govern the arbitration. There are many different organizations that provide arbitration rules, such as the American Arbitration Association and JAMS. The agreement should specify which set of rules will be used.
4. Place of Arbitration
The agreement should specify the location of the arbitration. This can be important because it can affect the cost and convenience of the arbitration.
5. Language of Arbitration
The arbitration agreement should specify the language that will be used during the arbitration. This can be important if one of the parties is not comfortable with the language of the arbitration.
The agreement should also address the confidentiality of the arbitration proceedings. This can be important if the parties do not want the details of the dispute to become public.
The agreement should specify what type of discovery will be allowed during the arbitration process. This can include document production, witness depositions, and interrogatories.
Finally, the agreement should specify how the award will be made. The arbitrator will typically issue a written decision, which will be final and binding on the parties.
In summary, an arbitration agreement is an important tool for resolving disputes outside of court. When drafting an arbitration agreement, it is important to consider the scope of the agreement, the number of arbitrators, the rules of arbitration, the place of arbitration, the language of arbitration, confidentiality, discovery, and the award. By including these provisions, the parties can ensure that their disputes are resolved in a fair and efficient manner.