Types of Arbitration Agreement

The agreement to arbitrate is the foundation stone of international arbitration.

It records the consent of the parties to submit to arbitration, which remains the essential basis of a voluntary international arbitration system.

There are two basic types of arbitration agreement:
the arbitration clause and the submission agreement.

An arbitration clause deals with disputes that may arise in the future, It is usually contained in the principal contract to submit coming disputes to arbitration.

Most international commercial arbitrations occur under an arbitration clause in a commercial contract.

These clauses are often ‘midnight clauses’—the last ones to be considered in contract negotiations.

By contrast, a submission agreement deals with an existing dispute that has already arisen— so it can be tailored to fit precisely the circumstances of the case.

In addition to indicating the place of arbitration and the substantive law, it generally names the arbitrators, sets out the matters in dispute, and even provides for the exchange of written submissions and other procedural issues.