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The procedural pre-nup: How to leverage arbitration effectively for your business

Author(s): Andrew MacDougall, Kevin O’Brien

Sep 7, 2016

Understanding the risks and rewards of arbitration, and having the necessary insight to negotiate and evaluate arbitration clauses to the benefit of the organization, are vital tools for counsel to have at their disposal. Through an effectively drafted arbitration clause, counsel can maintain a higher degree of control over the dispute resolution process and ensure that the organization’s overarching interests are protected.

Consult this reference guide for an overview of the pros and cons of arbitration and to determine the key areas that an arbitration clause should address. For more detailed information and to access additional resources, visit Osler’s Brief the Board series.

Evaluate the Potential Risks and Rewards of Arbitration

Risks

  • Not necessarily less costly or expeditious
  • Result may be less predictable than a court ruling
  • Intervention by the courts is not totally excluded
  • Confidentiality not guaranteed

Rewards

  • Confidentiality can be protected
  • Control over process and decision-maker
  • Ability to customize
  • Possible efficiencies and cost savings

Understanding and Evaluating Arbitration Clauses

An arbitration clause should:

Select the decision-maker & establish jurisdiction

  • Choose a familiar jurisdiction and arbitrator

Protect confidentiality

  • Include a confidentiality agreement and address confidentiality over documents

Control appeal rights

  • Eliminate or limit appeal rights - consider whether appeals should be to a private arbitration panel or to the courts

Maintain status quo

  • Ensure parties continue to perform their obligations pending final resolution of the dispute

Set the appropriate scope for your arbitration clause

  • Ensure your clause reflects your intentions about which disputes will be arbitrated and which disputes will be litigated

 

Download PDF: Brief the Board: The Procedural Pre-nup

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