Originally from Soft Law in International Arbitration, Second Edition

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I.  Introduction

1. The purpose of these Guidelines is to provide a succinct and accessible approach to the drafting of international arbitration clauses. Poorly drafted arbitration clauses may be unenforceable and often cause unnecessary cost and delay. By considering these Guidelines, contact drafters should be able to ensure that their arbitration clauses are effective and adapted to their needs.

2. The Guidelines are divided into five sections (in addition to this introduction). The first section offers basic guidelines on what to do and not to do. The second section addresses optional elements that should be considered when drafting arbitration clauses. The third section addresses multi-tier dispute resolution clauses providing for negotiation, mediation and arbitration. The fourth section discusses the drafting of arbitration clauses for multiparty contracts, and the fifth section considers the drafting of arbitration clauses in situations involving multipe, but related contracts.

II.  Basic Drafting Guidelines

Guideline I: The parties should decide between the institutional and ad hoc arbitration.

Comments:

3. The first choice facing parties drafting an arbitration clause is whether to opt for institutional or ad hoc arbitration.

4.  In institutional (or administered) arbitration, an arbitral institution provides assistance in running the arbitral proceedings in exchange for a fee. The institution can assist with practical matters such as organizing hearings and handling communications with and payments to the arbitrators. The institution can also provide services such as appointing an arbitrator if a party defaults, deciding a challenge against an arbitrator and scrutinizing the award.  The institution does not decide the merits of the parties' dispute, howerver. This is left entirely to the arbitrators.