The Choice Between Forum Selection, Mediation and Arbitration Clauses: European Perspectives – Vol. 20 No. 1

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Author: Otto Sandrock*

Published: April 2010

Choice of Forum/Place of Proceedings
Standard and Model Arbitration Clauses



Before parties enter into international contracts, attorneys often advise them on the procedural forum in which disputes eventually arising between them could best be resolved.

A. Several Options

In that respect, several options are open to the parties. Their counsel, if aware of them, may advise their clients to insert into their contracts a forum selection clause — requiring eventual disputes between the parties to be referred to the national state court of a specific state, be it the home state of one of the parties or a third state that is neutral with regard to each of the parties. Another option would be to include in the contract a mediation clause whereby an eventual dispute between the parties would have to be submitted to a panel of mediators, sitting, again, either in the home state of one of the parties or in a third, “neutral” state. A further recommendation might be to draft an arbitration clause, with an arbitral tribunal domiciled in one of the states just indicated. Finally, a combination of two or three of these options — by way, for example, of a “pre-arb,” “med-arb,” “escalation” — or other clause of that kind — might be appropriate. All these alternatives are possible, of course, only if the client either has the power to impose upon its contractual partner the forum it prefers or if its contractual partner is at least open to negotiations on theses issues, to persuade its counterpart to accept the solution it prefers.

In the following, these options will be examined in order to elucidate the way European lawyers, notably those from the European continent, view these problems, which is certainly in a manner different from their American counterparts.

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*Emeritus of the Law School of the University of Muenster; attorney in Duesseldorf; of counsel at Orrick Hoelters & Elsing, Duesseldorf. The views expressed in this article are those of the author alone and should not be understood as reflecting the views of Orrick Hoelters & Elsing.