The Four “Cs” Of Drafting An Effective Arbitration Clause

In commercial contract negotiations, arbitration clauses are often an afterthought thrown into the mix during the 11th hour and receiving little attention – until the time when a dispute arises. “At that point,” write K&L Gates attorneys Lauren Garraux and Thomas E. Birsic, “the parties are frequently confronted with a plethora of complications, unresolved issues and unattractive options that could have been avoided with greater forethought.” In this Today’s General Counsel, the writers break down that recommended forethought into four issues they say should be carefully considered at the drafting stage. “There is no perfect arbitration clause, and there is no way to anticipate every potential issue that may present itself when a dispute between contracting parties arises,” they write. “That said, a well-drafted arbitration clause may prevent a costly detour through the courts or an arbitration proceeding that does not mirror a party’s expectations.”