Arbitration agreement. This is an agreement by the parties to a contract (for example a charter )to submit all or some disputes between them in any legal relationship they may have. The “Model Law” adopted by the United Nations Commission on International Trade Law (UNCITRAL) in 1985 describes an “arbitration agreement” as follows:
“An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. The arbitration agreement shall he in writing. An agreement is in writing if it is contained in a document signed by the parties in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement “
The “arbitration agreement” shows that the parties want to be assisted by privately appointed decisionmakers rather than be governed by litigation in courts, which are generally public. There may be other advantages of arbitration over litigation such as cost and speed of procedure. Private dispute resolution by arbitration can be subject to the law of certain countries but in some countries legislation attempts to give the parties unfettered freedom of choice. Two examples are the Arbitration Act 1979 in England and the Arbitration Ordinance 1990 in Hong Kong. In 1981 the highest court in England, the House of Lords, decided, in the case of The Nema, that an unsatisfied disputant in a commercial, contractual dispute should not be allowed to take an arbitrators’ decision (against him) too easily to the courts.