The content of arbitration agreement: Facultative elements as an instrument for exercising contractual freedom

Abstract

The content of an arbitration agreement is of great practical importance, given the effect its provisions may have on the rights and interests of the parties in the arbitration proceedings. Beside the mandatory elements, an arbitration agreement may include numerous facultative provisions, where parties express their contractual freedom, limited only by the imperative law and institutional arbitration rules. Even in cases when contractual provisions are contrary to the imperative law, in many states, the policy of maintaining arbitration agreement would result in ignoring the problematic provisions. The list of facultative elements of an arbitration agreement is practically limitless; among other elements, it may include: time limitations on the validity of an arbitration agreement; determinations referring to the composition of the arbitration tribunal; detailed rules pertaining to the procedure, decision-making processes and content of the arbitration award as well as its annulment; provisions on the choice of law; the right of third parties to intervene; joinder, consolidation and the authority of arbitration tribunal to decide as amiable compositeur or ex aequo et bono. The development of international commerce as well as arbitration legislature and practice, featuring transactions of ever-increasing complexity, have brought about the need to establish dispute resolution mechanisms modulated according to their specific characteristics. The customary practice of concluding arbitration agreements in the form of standardized and simple clauses is being challenged by the growing complexity of international trade. Therefore, not only should a modern arbitration agreement clearly demonstrate the parties' intent to submit a dispute to arbitration but it should also conform the arbitration procedure (as much as possible] to the content of the parties' relationship and the dispute that has emerged or may arise thereof.

Keywords

• arbitration
• arbitration agreement
• arbitration clause
• facultative elements