Arbitration Drafting Arbitration Agreements and Clauses 2

Question 1

What purpose does a choice-of-law clause serve in an arbitration agreement?

Accepted Answer

It specifies which jurisdiction's substantive law governs the merits of the dispute

Answer

A choice-of-law clause identifies the substantive law the arbitrator must apply when resolving the merits, providing predictability for both parties.

Question 2

Why is a severability clause (also called a separability clause) included in many arbitration agreements?

Accepted Answer

To ensure the arbitration clause remains valid and enforceable even if other parts of the underlying contract are found void

Answer

A severability clause ensures that challenges to the validity of the main contract do not automatically nullify the arbitration agreement contained within it.

Question 3

Which approach do most institutional arbitration rules (e.g., AAA, JAMS) take regarding the arbitrability of a dispute when the clause is ambiguous?

Accepted Answer

They favor a presumption of arbitrability, resolving doubts in favor of arbitration

Answer

Courts and most institutional rules apply a presumption of arbitrability, meaning ambiguous clauses are construed in favor of sending the dispute to arbitration.

Question 4

What is the 'seat' of arbitration and why does it matter when drafting an arbitration clause?

Accepted Answer

The legal place of arbitration that determines which jurisdiction's procedural law and supervisory courts govern the proceedings

Answer

The seat is the legal domicile of the arbitration, fixing which national courts may supervise the proceedings, grant interim relief, and potentially vacate the award.

Question 5

When an arbitration clause limits discovery to document exchange only, what is the primary benefit parties typically seek?

Accepted Answer

Reduced cost and faster resolution by avoiding depositions and extensive interrogatories

Answer

Restricting discovery to document exchange avoids the expense and delay of depositions, interrogatories, and broad document requests associated with litigation.

Arbitration - Arbitration and Dispute Resolution Certification Practice Test

Arbitration - Arbitration and Dispute Resolution Certification Practice Test

Arbitration Drafting Arbitration Agreements and Clauses 2