One of the most useful assets in the classic board game Monopoly is the famous get out of jail free card. A player who finds themselves in jail can utilize it to ‘free’ themselves, almost immediately, but more importantly without paying a monetary penalty.
But what has Monopoly got to do with Brexit or arbitration? Whilst the similarities may not be immediately obvious, for commercial agreements made after 11:00 pm on 31 December 2020, jurisdiction clauses that specify arbitration are in many ways a legal get out of jail free card.
Continue reading “Arbitration: the Brexit get out of jail free card?”
By Oliver Kent
Picture this. You are a Director at a substantial widget manufacturing company. One of your key materials suppliers, with whom you’ve had a relationship for many years, is causing you grief. There have been a number of complaints from customers in recent times about a decline in widget quality, which appear to be the fault of your supplier. However, you’re behind on your payments to the supplier and they are starting to threaten supply, with disastrous effects for the company. A dispute is brewing.
You have been involved with litigation before and have experience of court proceedings. However, when you check with your legal team about next steps, you learn that your agreement with the supplier contains a clause which appears to indicate that all disputes must be referred to arbitration. The clause is perhaps not drafted with the certainty it should and could have been, and it is not clear the extent to which it is enforceable. The issue usually is framed on the basis of whether there is a valid and enforceable agreement to refer disputes to arbitration.
There are also commercial considerations that may be relevant. Is it preferable to litigate in the domestic courts or arbitrate? This may be a commercial call, just as much as a legal one. This blog shares some of the practical considerations around these issues.
Continue reading “Jurisdictional challenges and arbitration clauses – that old chestnut! – The UK perspective”