The Arbitration Clause: Small Provision, Significant Consequences

Commercial Arbitration

The Arbitration Clause: Small Provision, Significant Consequences

A few lines in a commercial contract can determine how, where, and before whom future disputes are resolved.

Commercial Arbitration

More Than a Contractual Formality

An arbitration clause is an agreement to submit specified disputes to arbitration rather than ordinary court litigation. Under Jordanian law, a valid arbitration agreement can prevent a court from hearing a covered dispute when the defendant raises the objection before addressing its merits.

Commercial Arbitration

What Are You Actually Agreeing To?

An arbitration clause can determine the seat of arbitration, the applicable procedural rules, the number of arbitrators, and the language of proceedings. These choices affect procedure, costs, and how the resulting award may be challenged.

Commercial Arbitration

Ambiguity Can Create Additional Disputes

Unclear wording about the scope of arbitration, the arbitral institution, or the method of appointing arbitrators can generate preliminary disputes before the underlying commercial disagreement is even addressed.

Commercial Arbitration

Negotiate Before the Dispute Arises

An effective arbitration clause should clearly define the disputes covered, the seat of arbitration, applicable rules, and the appointment of arbitrators.

The right time to address these questions is before signing, not after a dispute begins.