More and more businesses and corporate firms are diverting from litigation to arbitration, considering its numerous benefits such as:

Unlike litigation, arbitration does not wreck financial havoc on the client.

Although the rules and procedure are laid down by the arbitration authority of the nation, the proceedings are comparatively relaxed in an informal environment, without the scrutinizing public to observe.

There is no norm of confidentiality in litigation. In arbitration, confidentiality is one of the prominent feature why by=businesses and corporate firms are seeking it, since it helps the embarrassing details stay songs those involved and the rental tribunal.

To spare the parties unnecessary business stoppage and lost revenue, Some commercial disputes require immediate resolution Arbitration facilitates the flexibility with its fast track resolution system.

Drafting an accurate and effective arbitration clause is essentially important. There are a number of articles in a fundamental clause that are important for smooth arbitration processing. Make sure you mention all the following points:


Depending upon the jurisdiction in which the claim is being made, you will have to select the arbitration governing bodies. You should be well-informed about holw the arbitration works in the respective state. This aspects is even more significant when the claim is amd outside the nation. Properly define the scope of arbitrators like enforcing the law, judgement etc. Not defining this could turn your arbitration and litigation.


The following things should be considered while selecting the panel:

How big is your dispute? If its complex, select three arbitrators but bear in mind that as the number of arbitrators increase so does the cost and the associated complications of the scheduled hearings.

What special skills do you want in the arbitrators like proficiency in a specific language, knowledge etc?

Will you be able to narrow down an arbitral body on mutual consent or do you want to leave this decision on the state/national arbitration authority?


Specify the language in which you want to the arbitration to proceed. The translation of the documents is necessary and there is no exclusive language as long as both the parties are comfortable going with it.


Mention the time frame based upon how quickly you want the dispute to be heard and decided. Keep in mind that short time frames are not realistic. From selecting the arbitral tribunal to scheduling hearing on dates that work for everyone normally stretches the process to more than six months. Be pragmatic in setting the time frame.


Depending upon which location is convenient to both the parties, set out the location. Other important factors to keep into account while specifying the location is that local court must not interfere with the process and quality arbitrators cannot be found everywhere.


Set out an arbitral body to administer your arbitration. Each arbitral body will have their own set of rules, which will be different for different disputes and scheduling cost etc. .


There are several business to business class action that one can implement., Consider using a no action clause in the agreement.


Be careful while setting the confidentiality of your fillings, documents, testimony. Also clearly specify the nature of arbitration along with the solution in event of breach of privacy.

One has to be very cautious in devising an arbitration clause framework, since a minor mistake could become the source of all conflicts. Hence it would be in the best interests of the parties to seek help of a legal professional to assist them with outlining the agreement to facilitate smooth processing.

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