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Arbitration Clause Drafting

Why is a tailored arbitration clause important?

A boilerplate clause may not fit your specific deal. A tailored clause ensures the procedure (institution, language, seat) matches the contract's value and complexity, preventing "pathological" clauses that lead to costly jurisdictional battles later.

Institutional vs. Ad Hoc arbitration: Which is better?

Institutional arbitration (e.g., ICC, LCIA) offers administrative support and quality control but costs more. Ad Hoc is flexible and cheaper but requires parties to manage logistics themselves. We help you choose based on your project's needs.

How do we choose the seat of arbitration?

The seat determines the procedural law and the courts that supervise the arbitration. Choosing an arbitration-friendly seat (like London or Paris) is crucial to ensure the award is enforceable and not easily annulled by local courts.

Can we include mediation before arbitration?

Yes, these are called "multi-tier" clauses. They require parties to attempt negotiation or mediation within a set timeframe before commencing arbitration. This can resolve disputes faster and cheaper, preserving business relationships.

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Drafting an arbitration clause is one of the most critical aspects of contract law, often overlooked. Lawyers call it the "Midnight Clause" because it is frequently written hastily at the end of negotiations. Yet, these few sentences determine where and how a dispute over a multi-million dollar contract will be resolved. A poorly drafted ("pathological") arbitration clause can lead to delayed disputes or even a refusal of jurisdiction by the arbitral institution. This service involves preparing a clause that is enforceable, cost-effective, and tailored to the specific transaction. Experts select the optimal arbitration institution (ICC, LCIA, GIAC), seat, and language.

What Does Arbitration Clause Service Cover?

Legal.ge specialists create tailor-made solutions:

  • Institutional vs. Ad Hoc Arbitration: Choosing between a permanent institution and a temporary tribunal created by parties.
  • Seat and Language: Selecting the seat of arbitration, which determines procedural law and annulment mechanisms.
  • Number of Arbitrators: Deciding on 1 or 3 arbitrators to optimize costs.
  • Multi-tier Clauses: Adding mandatory negotiation or mediation steps before arbitration.
  • Expedited Procedure: Specifying fast-track rules for smaller disputes.

Real-World Scenarios Where You Need This Service

Clauses are critical in international contracts:

  • Investment: A foreign investor enters Georgia and avoids local courts, preferring London arbitration (LCIA).
  • Construction Contract (FIDIC): Construction disputes are technical and better handled by expert arbitrators than judges.
  • M&A Deal: Confidentiality is crucial in buying/selling a company, which arbitration ensures.

Georgian Legal Framework and Regulations

The field is regulated by the Law of Georgia on Arbitration, based on the UNCITRAL Model Law. The law requires the arbitration agreement to be in writing. Georgia is also a party to the 1958 New York Convention, meaning Georgian arbitration awards are enforceable in 170+ countries and vice versa.

Service Process Step-by-Step

Drafting involves:

  1. Risk Analysis: What types of disputes are expected?
  2. Budgeting: Can the client afford expensive ICC arbitration?
  3. Drafting: Writing the clause text (often in English).
  4. Negotiation: Agreeing on the seat with the counterparty.

Why Choose Legal.ge?

A wrong word in an arbitration clause can cost millions. Legal.ge gives you access to experts who understand the nuances of international arbitration and help you avoid "pathological" clauses.

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Specialists for this service

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