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A poorly worded provision and/or a poorly advised client may result in, among other things, invalidation of an arbitration clause resulting in litigation in local courts, a proceeding under an arbitration clause that gives one party an unfair advantage over the other party, dispute resolution procedures that are excessively expensive, or a client that is unhappy with his or her transactional lawyers.
Every transactional lawyer should take the time to consult an experienced arbitration lawyer before agreeing to a particular arbitration provision. James Zimmerman, Office Managing Partner for the Beijing office of the international law firm of Sheppard Mullin Richter & Hampton LLP, sets out his checklist of points to consider when drafting an arbitration agreement.
The overall lesson to learn is to exercise common sense and foresight in preparing an arbitration agreement; otherwise, the parties will end up disputing their dispute resolution procedures before they can resolve their underlying dispute.
James Zimmerman is the Office Managing Partner for the Beijing office of the international law firm of Sheppard Mullin Richter & Hampton LLP. He is a former chairman of the American Chamber of Commerce China, and was elected and served as the organisation’s Chairman for two terms (2007, 2008) and Vice Chairman for two terms (2005, 2006).
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