Model arbitration clause
An arbitration clause determines in advance where and under which rules disputes arising from a contract will be resolved.
Why the clause matters
Without an arbitration clause, referring a dispute to arbitration after a conflict has arisen is more difficult. A proper clause reduces the risk of disputes over jurisdiction and procedure.
Institution
The parties choose in advance who will administer the proceedings.
Seat of arbitration
The seat connects the procedure to the selected jurisdiction.
Rules
The Rules become part of the contractual procedural framework.
Reduced uncertainty
The parties understand the language, number of arbitrators and notice arrangements.
Model wording
The wording below is a basic arbitration clause. Before inserting it into a contract, it should be adapted to the specific transaction, applicable law, language of the proceedings and number of arbitrators.
What can be configured
For international contracts, the clause is often expanded to avoid procedural questions in advance.
Number of arbitrators
A sole arbitrator for less complex disputes or three arbitrators for larger and more complex cases.
Language of proceedings
Russian, English, Lithuanian or another language agreed by the parties.
Applicable law
The law governing the contract and the parties’ claims.
Notices
Electronic communication, party addresses and procedural channels.
Typical mistakes
An incorrect clause may lead to a dispute over jurisdiction or make it difficult to commence proceedings effectively.
Inaccurate institution name
The name should make it possible to identify the chosen arbitration institution.
Seat not specified
The seat of arbitration is a key procedural element.
Unclear language
The parties may later disagree about the language of documents and hearings.
Conflicting dispute clauses
A contract should not send the same dispute simultaneously to arbitration and to a state court.