Abstract

GOMEZ DOMINGUEZ, Luis Alfonso. Causes and Consequences of Faulty Arbitration Clauses. Estud. Socio-Juríd [online]. 2007, vol.9, n.2, pp.111-141. ISSN 0124-0579.

Taking into account the link between arbitration clauses and the process of arbitration, this article first aims to analyse arbitration clauses, why these clauses are sometimes unconscionable and what are the consequences of such deficiencies. Companies have to consider that if the arbitration clause is drafted without a reasonable attention, this provision itself could be the cause of conflict. Furthermore, unconscionable, invalid and abusive clauses may lead to companies losing money and credibility. To determine the reasons that prompt faulty arbitration clauses a multi-case study was applied to the research. This approach was chosen owing to the fact that with regard to law it is not possible to find two identical cases. There may be similarities, but the reasons for making the deal and the intention of the parties, can vary significantly from one contract to another. During the research a particular comment was frequently encountered: "There is no perfect clause; it is impossible to find a perfect clause because every contract is executed according to different needs, circumstances and requirements." Once the research was concluded, it was found that faulty arbitration clauses can be prompted by drafting mistakes and limitations particular to the arbitration itself. The consequences may vary depending on the magnitude of the error.

Keywords : International commercial arbitration-arbitration clauses.

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