Small wording, large consequences
An international arbitration clause usually names the rules or institution, the seat of the arbitration, and the language of the proceedings. Clauses go wrong in recognizable ways: naming an institution that does not exist, mixing up two institutions, or allowing either court or arbitration in language that lets each side pick. These are sometimes called pathological clauses, and they invite a preliminary fight before the dispute itself is heard. Model clauses published by the major institutions are a sensible starting point because their wording has been tested in practice. The law governing the arbitration agreement can differ from the law governing the rest of the contract, and leaving that question unaddressed has produced its own disputes.
Steps before arbitration and carve-outs
Many contracts require negotiation or mediation before arbitration can begin. Those steps can be useful, but vague wording invites argument about whether they were completed, so it helps to define when each step starts and when it counts as finished. Parties often want the ability to go to court for urgent measures, such as freezing assets or protecting confidential information, and the clause can preserve that. The number of arbitrators and the way they are chosen affect cost and timing. In deals involving several contracts, the clauses should be consistent so related disputes can be heard together rather than in competing forums.
Reviewing the clause before you sign
When we review an international arbitration clause, we look at where the other party's assets are, because an award may need to be enforced there, and at whether that country recognizes foreign awards. We consider whether the chosen seat has courts that support arbitration and how confidentiality will be handled. If one side is a state entity, immunity and enforcement questions come up and are worth addressing in the drafting. The aim is a clause that is short, clear, and workable for the kind of dispute your contract is most likely to produce. If the other side insists on its own form, we explain which changes matter and which can be let go.
