LEGAL VIEWPOINT: Arbitration clauses by Dr AbdelGadir Warsama Ghalib, Legal Counsel, Bahrain

Dr AbdelGadir Warsama Ghalib, Legal Counsel, Bahrain

There is clear tendency to resort to arbitration for resolution of disputes. If any. Arbitration, is an established alternative dispute resolutions (ADRs) and there is a law to legalize, regulate and govern arbitration in Bahrain. Moreover, arbitration has got its own merits and due to this many disputes are now settled through arbitration within very short span of time.

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To achieve better-end results, it is important to include clear arbitration clauses in contracts. Such clear arbitration clauses will be beneficial to both parties, particularly, when there is future dispute for any reason between the parties. Resort to arbitration, as mentioned, is increasing and this culture is spreading every day. However, it has been noticed that, in many contracts, there is one-line clause that provides (in case of any dispute not settled amicably, the matter shall be referred to arbitration), this is an unfinished example we see even in many big contracts. Even though, there is clear reference to arbitration in the mentioned clause, however, for sure, this is not enough and rather could be problematic.

The arbitration clause, to make things easy for the parties and or the arbitrator, shall be more constructive and give more details expressing the intention of the contracting parties. As a rule, arbitration is the will and clear intention of the contracting parties who opt to arbitration for the settlement of their disputes. Based on this, the arbitration clause, shall proceed on to give the intention of the parties in many things including, the applicable law they prefer to apply regarding their dispute, the location of the arbitration, the language of the arbitration, the costs including the arbitrators fees, the duration for the arbitration.. , etc..

Of course, most of such details are included and settled if the arbitration will be processed through an arbitration center. In other words, reference to institutional arbitration will cover all details and the parties will abide and follow the law or regulation and procedures of the concerned arbitration center. Based on this, the arbitration clause, shall expressly state that the arbitration shall be through the arbitration center, if they prefer institutional arbitration.

I believe that such matters, even minor, they shall be highlighted to draw the attention of parties. This will help in smooth functioning and development of arbitration as a strong vehicle for fast justice.