“Split” or “hybrid” arbitration clauses enable one or more of the parties to an agreement to elect to address disputes using previously agreed dispute resolution mechanisms. For example, a typical split clause may permit the parties to choose to submit disputes to arbitration or to the courts of a specified jurisdiction. Parties’ preferences for dispute resolution mechanisms are highly fact-specific and therefore the ability to choose between different regimes in different circumstances is invaluable. Jurisdictions have taken a variety of approaches to the validity of split arbitration clauses—jurisdictions including England and Singapore have broadly accepted such clauses, whilst others, including Russia and France, have been less accommodating. This uneven international landscape creates practical problems when using split arbitration clauses, particularly relating to the enforcement of awards. As such, before relying on any split arbitration clause, parties must give careful consideration to the chosen governing law and seat of the arbitration as well as to the laws of the jurisdictions in which any counterparties have assets.
To read this complete article visit ARIA (subscription required).