Business dispute resolution: taking arbitration clause seriously

Abstract

Dispute resolution through arbitration is the chosen method for businesses, however, it has often been experienced that due to a poorly drafted arbitration clause in the main contract or in a separate contract, there is no effective arbitration between the parties and there is a new dispute regarding the existence of the arbitration clause, which has to be resolved at the preliminary stage so as to enable the parties to take part in arbitration proceedings or go ahead with litigation in the public courts. The possibility of a decision regarding the interpretation of arbitration clause be appealed in a higher court depends on the nature of parties and the amount at stake. Litigious parties, not willing to budge even a little, have no qualms in fighting it out till the highest court. And, in this process the original dispute takes a back seat. The paper examines some of the interesting disputes regarding the arbitration clause, which were decided by courts, and could have easily been avoided had the parties been cautious at the time of entering into the contract. The paper also provides suggestions for some common and avoidable problems to help businesses save time, effort and money which otherwise get wasted in getting the dispute resolution clause interpreted in the courts.