In practice, once a party is aggrieved by breach of contract, the first remedy is to prepare a rush to court. This works, only some times. Other times, it only cmpounds frustrations. A good example is by the consequences of an Arbitration Clause in an agreement, (ensure there is an agreement for arrangements and settements). This article shall limit itself to an instance where there is an agreement and that it bears an arbitration Clause as a mode of dispute resolution.
In such instances, to arrive in court without first seeking to arbitrate is premature as for urgency. However, it does not mean that such a suit fails in its entirety. Instead, the suit would be plagued by an obvious application of Preliminary Objections, seeking to refer the suit to Arbitration.
Note that like any interluctory application, the court must first determine the such an Application before the actual suit man progress. Therefore, ata the drafting stage, it is important to understand the instances when and where the processes of Alternative Dispute Resolution- Arbitration would be meaningful. Moreso in commercial agreements and arrangements.
An example of a good determinant for when to or omit such a clause is the size of the business. You do not want an instance where the Arbitration becomes more expensive than eiether the debt recovery through court process. Because this then would save face of the company in the public eye, that it is not litigious.
Therefore, to incorporate an arbitration clause in an agreement consider other alternatives that would better suit your objectives.
Advantages
- Efficient and Flexible
- Less Complicated
- Privacy
- Impartiality
- Usually less expensive
- Finality
- For employers, class action waiver
Disadvantages
- Questionable Fairness
- Finality
- Can be more expensive
- Unpredictability
