Asymmetrical Arbitration Agreements

In its decision of 24 September 1998,16BGH, decision of 24 September 1998 – III ZR 133/97. The Bundesgerichtshof17 Bundesgerichtshof ruled on a case in which such an unreasonable disadvantage was regarded as having existed. This would be the case if the contractor of the AAFC beneficiary did not know at the time of the complaint whether the recipient would exercise its right to vote. The party therefore runs the risk that its appeal (which it had brought before the competent State Court) will become inadmissible as a result of objections to arbitration. According to the German court, this risk associated with the loss of costs and time is not reasonable for the contractor. Such an unreasonable disadvantage can be eliminated by an endorsement that requires the AAFC user (if that party is the alleged defendant) to make use of his right to decide whether he intends to settle the dispute at the request of the other party through a pre-trial arbitration or litigation. The complementary agreement must also address the consequences of a rejected or delayed decision. In this case, however, such an agreement was by no means included. Dispute resolution clauses in contracts are generally either arbitration clauses or jurisdiction clauses. While arbitration clauses refer the parties to arbitration proceedings, the jurisdiction clause confers jurisdiction on a competent court.2Christ University Law Journal, 2018, vol.7 No. 2, 45-62, Salonee Patil, page 46. 3Christ University Law Journal, 2018, Vol.7 No. 2, 45-62, Salone Patil, page 46 The cases have been the subject of discussions on defences against a unilateral arbitration clause, and the following points are particularly noteworthy.

Theme 1: Is a unilateral arbitration clause a valid arbitration agreement? Singapore: Like the United Kingdom, the recent decision of the Singapore Court of Appeal shows that the asymmetric arbitration agreement is valid under Singapore law. This is the first time that the Court of Appeal has ruled on the validity of an asymmetrical and optional compromise clause under Singapore law. If the parties want to use asymmetric arbitration clauses in the Russian Federation, they must ensure that this type of clause is applicable in their country of their choice. This is due to the fact that, in some legal systems, the asymmetric compromise clause is considered inconsistent with the basic principle of the agreement between the parties.31Norton Rose Fulbright International Arbitration Report October 2017, p. 25. The recipient party may, in accordance with the agreement between the parties, refer directly to the AAC.32Maastricht Journal of European and Comparative Law 2018, Vol 25 (I) 77-86, Bas van Zelst, page 79. If the AAFC is valid in the relevant jurisdiction, the arbitration procedure can be continued as usual. Trade relations have now gained an international character by crossing national borders: the practice of arbitration has intensified throughout the world in recent years. This has led to new debates on many issues, such as the validity of unilateral (“asymmetrical”) arbitration agreements. Second, that both parties have the right to vote to make a decision.

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