Arbitration, as the name suggest, is to arbitrate a dispute or disagreement between two parties. An arbitration agreement is nothing but a legal contract to arbitrate a legal disagreement between two parties with an alternative of jury or trial. This kind of written agreement is generally documented by the lawyers stipulating the laws and conditions which both the parties have to abide by.
This legal contract document helps to find a solution for the dispute outside the courtroom. This alternative legal dispute resolution is flexible, convenient and effective in nature. In order to make this non-judicial process more effective and fruitful, the agreement document has to be framed authentically and with utmost precision. Certain factors have to be followed while formulating an arbitration agreement. They are as follows.
- A well formulated document need not be much effusive and prolix in nature. It should be simple and composed with specific wordings and provisions for detailing the clauses effectively.
- In order to make the arbitration agreement valid and authentic, it is essential to establish the credentials of the parties involved. Hence, initial specification of the names of both the parties is must. The name of the arbitrator has to be stated as well so that both the parties have the knowledge about the concern person.
- It has to be noted on the arbitration agreement document that any disagreement arising out of an agreement between the parties involved shall be submitted to the arbitration. This kind of a statement dictates the importance and essentiality of the contract paperwork.
- Ensure not to leave any details that are necessary in support of the agreement. This is because suppression of any information deliberately might lead to the termination of the agreement or can be subjected to further legal implications.
- It is essential to draft the document identifying the applicable rules and law as per the nation’s jurisdiction. Even, it is also essential to designate the location of the arbitration proceedings.
Arbitration has turned out to be a viable alternate to the litigation owing to the fact that it is less time consuming than a lawsuit and cost-saving. However, this arbitration agreement document is of two types- binding and non-binding. Binding agreement document signifies that the arbitration process would be supervised and performed under legal advocacy whereas the parties involved in non binding agreement can opt for filing a lawsuit if the arbitration process seems unsatisfactory.