An effective, well-drafted arbitration clause (or arbitration agreement) provides parties with a contractual mechanism through which they can enforce their legal rights. Therefore, it is an essential part of any contract pursuant to which the parties have agreed to resolve their disputes by arbitration.
Arbitration clauses need to be properly drafted to be valid, effective and enforceable. Poorly drafted arbitration clauses may be challenged at the stages of initiating arbitration or enforcing arbitral awards, and defective or "pathological" arbitration clauses may even deprive the parties of access to arbitration.
In Part 4 of this Legal Update, we:
- outline the requirements for drafting a valid and effective arbitration agreement in the Kingdom of Saudi Arabia ("KSA"); and
- provide practical tips to avoid common drafting errors.
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This article is available in Arabic.