Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)

Research Article: 2025 Vol: 31 Issue: 2

Validity of Asymmetrical Clauses in Arbitration Agreements

Abstract

Arbitration offers a flexible and expedited mechanism for the settlement of disputes between the parties. In order to initiate the arbitration proceedings a valid arbitration agreement between the parties is required. In some types of contracts, such as financing, the parties prefer to enter asymmetrical or hybrid arbitration clauses that allow one party to choose between arbitration and/or litigation, while the other party is confined to a single option for dispute settlement. The asymmetric arbitration clauses provide one party greater advantage in lieu of certain concessions to the other party, which may lead to unequal treatment between the parties. The study concludes that each jurisdiction has treated asymmetric clauses in a different manner with conflicting decisions; however, in the majority of jurisdictions have enforced the asymmetrical arbitration clauses as valid, considering that such dispute resolution clauses suit the parties’ situations and the nature of the contract. The research recommends that asymmetric arbitration clauses must be drafted carefully by limiting the jurisdictions under which the party in benefit of the asymmetric arbitration clause may bring the claims, instead of giving unlimited jurisdiction..

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