DR Essentials: Drafting Effective Dispute Resolution Clauses


During our breakfast seminar on Thursday 15 June, Partner Robert Rhoda and Managing Associate Jenny Zhuang will give a refresher course on best practices for drafting effective dispute resolution (including arbitration) clauses.

Effective Dispute Resolution Clauses

Traditionally, governing law and dispute resolution clauses have often been considered as "boiler plate" or "midnight clauses".

This has always been an unwise approach to drafting dispute resolution clauses. Although disputes are usually far from the parties' minds (and often their lawyers') when completing a transaction, unclear drafting or a lack of attention to strategy at this early stage can lead to serious and often unintended consequences later if and when a dispute does rear its head.

Over time, as more complex dispute resolution clauses have become popular (optional arbitration clauses and hybrid arbitration clauses being 2 examples), the risks associated with bad drafting have increased. The increase in litigation surrounding these clauses has created a body of case law which helps guide practitioners.

Recently, a number of cases in Hong Kong have demonstrated the importance of clearly drafted dispute resolution clauses. Ambiguity or uncertainty, surrounding arbitration clauses in particular, can often lead to satellite litigation, whether in the form of challenges to the jurisdiction of a tribunal, applications for stay of an action in favour of arbitration or challenges at enforcement stage. This type of satellite dispute is distracting, time consuming and usually creates a significant layer of additional cost.

During this one-hour breakfast seminar, we will highlight some best practice drafting techniques with reference to recent case law and answer any questions you may have about drafting dispute resolution clauses. Topics will include:

  • Keeping governing law clauses simple and clear
  • Exclusive versus non-exclusive jurisdiction clauses
  • Institutional model arbitration clauses
  • DR clauses across multiple transaction documents
  • 'Exotic clauses' (optional, multi-tiered, hybrid etc)
  • Tailoring DR clauses for Mainland China related disputes.

We know these topics can be somewhat dry so we will keep it as lively and interactive as possible!

Click here to access our new Disputes+ website.