Q&As

Can a dispute resolution clause in a B2B contract provide an option for one or both parties to elect to refer a dispute under the contract to either arbitration or litigation?

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Published on LexisPSL on 29/11/2016

The following Arbitration Q&A provides comprehensive and up to date legal information covering:

  • Can a dispute resolution clause in a B2B contract provide an option for one or both parties to elect to refer a dispute under the contract to either arbitration or litigation?
  • Unilateral option clauses
  • Position in England

Contracts often contain dispute resolution clauses which provide an alternative to a straightforward agreement to resolve any disputes that arise by litigation or arbitration. Parties have several options open to them, eg:

  1. mediation clauses

  2. multi-tier clauses

  3. hybrid clauses, and

  4. carve-out clauses

For more information on these options, see Practice Note: Types of dispute resolution clauses—ADR, multi-tier, hybrid and carve-out clauses.

Unilateral option clauses

It is possible for parties to a commercial contract to agree to include a clause that gives the parties the choice of referring a dispute to arbitration or legal action through the courts. The parties may agree that the election of arbitration or court proceedings by one party precludes the other party from commencing action in the alternative forum. These clauses are known as ‘un

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