The Compromisory Clause In International Contracts

Legal Area: Corporate Law

In contracts in which the parties have domiciles in different countries, it is essential to submit any disputes that arise to arbitration.

Given the cost of international arbitration, it is advisable to agree it in contracts of a relevant amount. It is common that in the negotiation of these contracts this aspect of the contract is not given importance.

The clause of the agreement that subjects possible conflicts to arbitration (Arbitration Clause) is a critical aspect of the contract given that this clause regulates, among other matters:

  • Submit the contract to arbitration
  • The number of referees and their characteristics
  • The type of referee required
  • The place of conflict resolution.
  • The language in which the process is carried out
  • Applicable substantive law

Failure to agree on an appropriate arbitration clause can result in the weaker party being left truly helpless in a conflict.

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