KluwerArbitration
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Publication
Finances in International
Arbitration: Liber
Amicorum Patricia
Shaughnessy
Bibliographic reference
Gary B. Born, Matteo
Angelini, et al., 'Chapter 4:
Rethinking “Pathological”
Arbitration Clauses:
Validating Imperfect
Arbitration Agreements', in
Sherlin Tung , Fabricio
Fortese , et al. (eds),
Finances in International
Arbitration: Liber
Amicorum Patricia
Shaughnessy, (© Kluwer
Law International; Kluwer
Law International 2019) pp.
35 - 56
P 38 include so-called blank clauses, clauses with undefined scope, clauses referring
© 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
Chapter 4: Rethinking “Pathological” Arbitration
Clauses: Validating Imperfect Arbitration Agreements
Gary B. Born; Matteo Angelini; Carina Alcoberro Llivina
1. Almost fifty years ago, Frédéric Eisemann, a distinguished former Secretary-General of
the ICC, coined the term “pathological arbitration clause” (1) to refer to arbitration
agreements that were in some way defective. In an influential article, Eisemann
cataloged a variety of poorly drafted arbitration clauses that he described as a “dark
museum” of arbitration. (2) In Eisemann’s view, ineptly worded arbitration clauses were
invalid and foreclosed access to the arbitral process: “just as the most elaborate lighting
system would be useless in case the power switch fails, the legal system most favourable
to arbitration would not bear fruit unless the arbitration clause is correctly drafted.” (3)
This vivid metaphor—of a dark museum of pathological arbitration clauses—has had a
P 36 lasting influence on international arbitration law. Eisemann’s article has been widely
cited in academic commentary, (4) and its title has become a standard way to refer to
invalid arbitration agreements. (5)
2. Fifty years since Eisemann’s article was first published, it is no less unusual for
international arbitration agreements, like other contractual provisions, to contain
defects in drafting. (6) There is extensive practical guidance on drafting international
arbitration clauses, including commentary (7) and model arbitration clauses published
by all leading arbitral institutions. (8) Nevertheless, both businessmen and
businesswomen and lawyers routinely ignore or misapply this guidance. Common defects
affecting arbitration clauses include errors in specifying the seat of arbitration,
institutional arbitration rules, appointing authority, applicable law or other aspects of
the arbitral process, as well as clauses containing internal contradictions, lacking
certainty or otherwise containing flaws. (9) As casebooks and treatises on international
P 37 arbitration make clear, national courts and arbitral tribunals are therefore routinely
confronted with arguments that arbitration agreements are pathologically defective and
invalid. (10)
3. Notwithstanding Eisemann’s appellation, in most cases, courts and arbitral tribunals
uphold international arbitration clauses, even if they are in some way defective. As aptly
put by the Singapore Court of Appeal in Insigma v. Alstom:
where the parties have evinced a clear intention to settle any dispute by
arbitration, the court should give effect to such intention, even if certain
aspects of the agreement may be ambiguous, inconsistent, incomplete or
lacking in certain particulars… so long as the arbitration can be carried out
without prejudice to the rights of either party and so long as giving effect to
such intention does not result in an arbitration that is not within the
contemplation of either party. (11)
This approach, aimed at validating imperfect arbitration agreements, has now been
widely adopted. As discussed below, most recent authorities reject the view that poorly
drafted arbitration clauses are incurable pathologies in favor of applying a validation
principle that gives effect to the intention of commercial parties to submit their dispute
to arbitration. (12)
4. These decisions suggest that the term “pathological clause” is in fact an unhelpful
misnomer. Arbitration clauses with defects would be better described as “imperfect
clauses” or “convalescent clauses,” in need of judicial (or arbitral) care or perfection but
capable with such care of serving as healthy, valuable members of the dispute resolution
family.
5. The concept and vocabulary of “pathological arbitration clauses” is archaic and ought
to be abandoned. It is incorrect to regard badly drafted arbitration agreements as
pathologically defective; instead, despite their defects, those clauses can be given
meaningful and constructive effect in virtually all cases. Indeed, denying effect to
supposedly pathological arbitration agreements is inconsistent with the New York
Convention and most contemporary arbitration legislation, because it denies effect to
the parties’ shared intentions regarding the resolution of their disputes. The better view
is that defects in the drafting of arbitration agreements should be viewed as inevitable,
but reparable, imperfections. The image of a dark museum of incurable pathologies
should be replaced by a more commercially minded analysis aimed at validating
international arbitration clauses, even when they have been the result of imperfect or
confused drafting.
6. There are many categories of supposedly “pathological” arbitration agreements. These
to
nonexistent arbitral institutions, institutional rules or arbitrators, internally
contradictory arbitration clauses, optional arbitration clauses and indefinite or uncertain
1
 arbitration agreements. Despite the diversity of these defects, a common set of
principles can be applied to analyze—and ultimately validate—all these categories of
allegedly defective international arbitration agreements.

§4.01 BLANK OR BARE ARBITRATION CLAUSES

7. “Blank” or “bare” clauses are arbitration clauses that provide nothing more than that
future disputes shall be submitted to arbitration. (13) These types of agreements do not
specify an arbitral seat or a means of selecting the arbitrators (whether directly or
through incorporation of institutional rules). (14) Notwithstanding the obvious
shortcomings of such provisions, recent decisions by national courts generally uphold the
validity of blank arbitration clauses.
8. In Lucky-Goldstar Int’l (HK) Ltd v. Ng Moo Kee Eng’g Ltd, (15) for example, a Hong Kong
Court of First Instance upheld an arbitration clause which ambiguously referred to a
“third country” as the arbitral seat. The clause provided:
Any dispute or difference arising out of or relating to this contract or the
breach thereof which cannot be settled amicably without undue delay by the
interested parties shall be arbitrated in the third country under the rules of
the third country and in accordance with the rules of procedure of the
International Commercial Arbitration Association.
9. The claimants in Lucky-Goldstar observed (correctly) that the institution referred to in
the clause, the so-called International Commercial Arbitration Association, did not exist
and therefore argued (incorrectly) that the arbitration agreement was void. The Hong
Kong court rejected that argument, holding that: “[a]s there are no rules of this
nonexistent organization,” the mistaken reference should be excised from the clause. (16)
P 39 The court in Lucky-Goldstar was willing to ignore the reference to the nonexistent
arbitral institution because it reasoned that the dominant intention of the parties was to
use international arbitration to settle their disputes and that this intention could be
effectuated even if the particular mechanism identified by the parties was unworkable.
10. The claimants nonetheless argued that the remaining arbitration clause—after
deletion of the reference to the nonexistent “International Commercial Arbitration
Association”—was a blank clause that specified neither an arbitral seat nor an appointing
authority. Citing international arbitration commentary suggesting that such “blank
clauses” were inoperative, (17) the claimant argued that it was not obligated to arbitrate
the parties’ dispute. According to the claimant, absent a reference to an arbitral
institution or appointing authority, no arbitrator could be appointed, and absent a
reference to an arbitral seat, no national court could serve as a default appointing
authority.
11. The Hong Kong court rejected this argument as well, holding that the parties’ intention
to arbitration could (and should) be given effect by interpreting the arbitration clause as
granting the party initiating the arbitration the right to select the arbitral seat, provided
that the seat was in a country other than one where a party was a national. Once that
choice was made, the arbitral seat would be specified, allowing recourse to the
arbitration legislation (and national courts) of that jurisdiction for any assistance
required to constitute the tribunal. Once the tribunal was constituted, it could then
conduct an ad hoc arbitration without undue difficulty. The court concluded that it was
able to fill in, in an appropriate and sensible manner, the procedural gaps in the parties’
arbitration agreement and refer the parties to arbitration.
12. More recently, in KVC Rice Intertrade Co. Ltd v. Asian Mineral Resources Pte Ltd, (18) the
Singapore High Court also validated a blank arbitration clause, albeit through different
means. The Singapore court considered the circumstances in which it, and the Singapore
International Arbitration Centre (SIAC), acting in its capacity as default appointing
authority under the Singapore International Arbitration Act, could give effect to a blank
arbitration clause.
13. KVC Rice Intertrade involved the consolidation of two disputes under separate
contracts, each of which contained an arbitration clause that did not specify the place of
arbitration, the applicable law, or the manner in which the arbitrators were to be
appointed, and instead referred to nonexistent rules. The Singapore court nonetheless
upheld the validity of the provision, holding that “a bare arbitration clause which merely
provides for submission of disputes to arbitration without specifying the place of the
arbitration, the number of arbitrators or the method for establishing the arbitral tribunal
remains a valid and binding arbitration agreement if the parties have evinced a clear
intention to settle any dispute by arbitration.” (19)
P 40
14. Having reached that conclusion, the court considered the practical difficulties
encountered in establishing an arbitral tribunal under a blank arbitration clause. The
primary difficulty the court considered was whether under Singapore arbitration
legislation the statutory power of the SIAC President to appoint an arbitrator where the
parties fail to do so could be exercised where an arbitration clause fails to designate the
seat of arbitration. This question arose because under Singapore law, like the UNCITRAL

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 Model Law on International Commercial Arbitration (the “Model Law”), (20) the default
appointment powers of the SIAC President apply only if the place of arbitration is
Singapore. (21)
15. The Singapore court observed (correctly) that “the SIAC President cannot act in a case
where it is clear that the place of arbitration is not Singapore.” (22) In addition, however,
the court also reasoned that, in exercising his or her appointment powers, the SIAC
President is only required to make a prima facie inquiry into the place of arbitration. The
court held that, as long as there are sufficient grounds to make a prima facie finding that
the place of arbitration would be Singapore, the SIAC President is entitled to exercise its
appointment powers—even if it were later determined that the arbitral seat was in fact
elsewhere (i.e., not Singapore).
16. The court also held that, in any event, should the SIAC President be unable to act,
Singapore courts retain a residuary jurisdiction to make appointments provided the
dispute has some connection with Singapore. (23) The court observed that “in any
jurisdiction with a strong policy in favour of arbitration, the courts should have the
residual jurisdiction to assist with the appointment of arbitrations as a last resort, to
ensure that the parties’ intentions to have their dispute settled by arbitration is not
defeated.” (24)
17. These decisions are representative examples of the willingness of national courts to
uphold blank arbitration agreements. National courts have done so based on the
rationale that effect should be given to the parties’ intention to submit their disputes to
arbitration, notwithstanding defects in the particular method they specify to do so.
National courts have also been prepared to fill or remedy gaps in the parties’ arbitration
clause, through either contractual interpretation or statutory default mechanisms, where
necessary to achieve the parties’ underlying objective of resolving their disputes by
arbitration.
18. The willingness of national courts to uphold blank arbitration agreements is
P 41 consistent with the validation principle—which is applied in a variety of contexts to
give effect to contractual agreements. (25) The rationale for the validation principle was
expressed in compelling terms in Hamlyn v. Talisker Distillery (26) —an early English
decision with a memorable factual setting.
19. Hamlyn arose from a contract between a Scots farmer to sell grain, grown in Scotland,
to a Scots distillery. The House of Lords was required to determine what law governed the
validity of an arbitration clause in the grain purchase contract which provided that
“should any dispute arise out of this contract, the same to be settled by arbitration by
two members of the London Corn Exchange, or their umpire, in the usual way.” (27) The
question was important because the arbitration clause was valid as a matter of English
law but invalid “under Scottish law, because the arbitrators were unnamed. The House of
Lords concluded that the fact that the arbitration clause was only valid under English law
and not Scottish law, confirmed that the parties” must have intended English law to
apply. In particular, Lord Ashbourne held:
This interpretation gives due and full effect to every portion of the contract;
whereas the arbitration clause becomes mere waste paper if it is held that the
parties were contracting on the basis of the application of the law of Scotland,
which would at once refuse to acknowledge the full efficacy of a clause so
framed. It is more reasonable to hold that the parties contracted with the
common intention of giving effect to every clause, rather than of mutilating or
destroying one of the most important provisions. (28)
Even after more than a century, that analysis remains precisely correct: arbitration
clauses ought not to be mutilated, or treated as pathological, but instead should be
validated, through sensible constructions that give effect to the parties’ desire for an
efficient and neutral means of international dispute resolution.
20. The willingness of national courts to uphold blank arbitration agreements is also
consistent with, and required by, the approach to enforcement of arbitration agreements
enshrined in Article II of the New York Convention (and the parallel language of Article
8(1) of the UNCITRAL Model Law). (29) Article II(1) of the Convention requires Contracting
States to “recognize” international arbitration agreements, while Article II(3) requires
that disputes be referred to arbitration “at the request” of a party “unless [the court]
finds that the said agreement is null and void, inoperative or incapable of being
performed.” (30) This text is mandatory, requiring Contracting States to give effect to all
P 42 the material terms of international arbitration agreements; where the parties’
dominant intention is to arbitrate, the Convention obligates the Contracting States to
give effect to that intention—not to deny effect based on drafting errors and lacunae in
the parties’ agreement.

§4.02 CLAUSES WITH UNDEFINED SCOPE

21. The validity of international arbitration clauses has also been challenged on the basis
that they fail to specify the category of disputes submitted to arbitration. (31) As with
challenges to so-called blank clause, this type of challenge is almost always misplaced.

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 An express definition of the scope of arbitrable disputes is not essential to the validity of
the arbitration agreement, and, in any event, the scope of an arbitration agreement can
virtually always be readily implied from the parties’ contractual or other relations and
customary practice in international arbitration. (32) It is, therefore, unsurprising that
national courts and arbitral tribunals virtually always uphold international arbitration
clauses with an undefined scope.
22. In Tritonia Shipping Inc. v. S. Nelson Forest Prods. Corp., (33) for example, an English
court upheld an arbitration clause in a charter party which provided only for “arbitration
to be settled in London.” The court rejected the argument that the clause was invalid
because it failed to specify the scope of arbitrable disputes and reasoned that the
provision meant “any dispute under this charter party to be settled in London.” (34)
Similarly, in Allianz Life Ins. Co. v. Phoenix Life & Reass. Co., a U.S. court upheld a clause
with an undefined scope, reasoning that “the phrase, while certainly skeletal, does
constitute an agreement to arbitrate.” (35) Other national courts, from both common law
and civil law jurisdictions, as well as arbitral tribunals, have reached similar conclusions.
(36)
P 43

§4.03 CLAUSES REFERRING TO NONEXISTENT ARBITRAL INSTITUTIONS,

INSTITUTIONAL ARBITRATION RULES OR ARBITRATORS
23. The validity of an arbitration clause may also be challenged on the basis that it refers
to nonexistent arbitral institutions, rules or arbitrators. These types of errors may make
the selection of arbitrators difficult and can result in arguments that the parties’ agreed
means of dispute resolution is impossible to perform (and therefore that the arbitration
agreement is inoperative or void).
24. Eisemann described the risks presented by such clauses in stark terms: “the risks of
even the slightest uncertainty regarding the designation method, … the unrealistic
character of certain requirements decided by the parties and the…dangerous
consequences of provisions a priori hardly compatible with the spirit of arbitration or
with public policy.” (37) Despite that view, most national courts and arbitral tribunals
have upheld the validity of arbitration clauses that mistakenly refer to nonexistent
arbitral institutions or appointing authorities. (38)
25. Courts routinely uphold clauses that refer to rules or institutions that no longer exist,
but that have successors, by applying the provisions of the successor institution. (39) This
approach rests on the sound view that parties which include an arbitration clause in their
international contracts chose arbitration because of its advantages—of efficiency,
expedition, expertise, evenhandedness and enforceability; these parties intend to resort
to arbitration even if the specific arbitral institution or procedural rules they have
selected is no longer in existence. (40) The same approach is adopted regarding
arbitrators who have ceased to be available. (41)
P 44
26. Courts also uphold arbitration clauses that refer to the incorrect name of the arbitral
institution. (42) The most common approach taken by courts when faced with a reference
to an arbitral institution that never existed is to correct or supplement the erroneous
reference. For example, references to the nonexistent “Paris Chamber of Commerce” (43)
have been implemented as references to the ICC in Paris, while references to the “the
International Chamber of Commerce in Geneva” (44) have been treated as references to
ICC arbitration seated in Geneva.
27. Alternatively, some courts have excised provisions referring to nonexistent institutions
on the basis that such provisions are unnecessary to the parties’ agreement. For example,
as discussed above, the Hong Kong court in Lucky-Goldstar deleted a reference to the
nonexistent “International Commercial Arbitration Association” by dismissing it as
surplusage. (45) Similarly, a Swiss court held that a reference to the nonexistent
“international trade organization in Zurich” should be “blue-pencilled” (or “red-
pencilled”) out of the arbitration agreement, to leave a valid and enforceable ad hoc
arbitration clause. (46)
28. A U.S. court adopted the same approach and excised a reference to a nonexistent
arbitration forum in Warnes SA v. Harvic Int’l Ltd. (47) In that case, the court reasoned that
“an agreement on a nonexistent arbitration forum is the equivalent of an agreement to
arbitrate which does not specify a forum; since the parties had the intent to arbitrate
even in the absence of a properly designated forum.” (48) Likewise, in Travelport Global
Distrib. Systems BV v. Bellview Airlines Ltd, another U.S. court reasoned that:
The parties clearly expressed their intention to resolve this dispute through
arbitration in the Distribution Agreement. This was the parties’ primary
intention; the agreement as to the particular forum was secondary. The Court
may therefore designate a proper arbitral body. … In this case, the UNCITRAL
Arbitration Rules referenced in the agreement itself provide a method for
constituting an arbitral tribunal in the absence of a prior agreement by the
parties. (49)

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© 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 P 45
29. An Australian court took a similar approach in Robotunits Pty Ltd v. Juergen Karl
Mennel when confronted with an arbitration clause that was “on its face … pathological.”
(50) The clause provided: “[e]ach party irrevocably and unconditionally submits to
arbitration in accordance with the arbitration guidelines of the Law Institute of Victoria.”
The court observed that “the arbitration guidelines of the Law Institute of Victoria” do not
exist and do not appear to have ever existed, but nonetheless found the clause operable
because of the parties’ “clear intention to submit disputes … to arbitration.” (51)
30. In Pricol Ltd v. Johnson Controls Enters. Ltd, the Indian Supreme Court also upheld an
arbitration clause which referred to a nonexistent arbitral institution. (52) The clause
referred to the “Singapore Chamber of Commerce” and also provided that the arbitral
seat would be Singapore. Although the “Singapore Chamber of Commerce” did not exist,
the court held that the parties’ underlying intention to arbitrate their dispute should be
given effect and that “the most reasonable construction” of the parties’ clause was to
interpret it as referring to the Singapore International Arbitration Centre. (53)
31. In contrast, a recent decision by Venezuela’s Supreme Court denied effect to an
arbitration clause which referred to a nonexistent arbitral institution. (54) The
Venezuelan court declared that “jurisdiction is a matter of public order and that in light
of the unavailability of the arbitration center provided for in the arbitration agreement,
the disputes in relation to the [sale and purchase] agreement shall be resolved before
Venezuelan courts.” (55) This decision fails to take into account the parties’ intention and
is at odds with the overwhelming weight of international authority. It is also at odds with
Article II of the New York Convention, for the reasons outlined above.
32. In TMT Co. Ltd v. The Royal Bank of Scotland, the Singapore High Court refused to
enforce an arbitration clause which referred to a nonexistent institution. (56) The clause
in question purported to incorporate the arbitration rules of “the relevant exchange” but
there was no such “exchange” involved in the parties’ relationship. The court reasoned
that “[t]he trades were carried out through a clearing house, which is a different type of
P 46 organisation.” (57) The court refused to interpret the clause as referring to either an
exchange or a clearing house because “such an interpretation would require ‘a significant
rewriting of the clause as it actually stands’.” (58)
33. The conclusion in TMT is surprising and subject to serious criticism for departing from
both Singapore precedent and international authority. The Singapore courts had
previously found that an arbitration clause is capable of being performed despite
providing for a nonexistent arbitral institution. (59) The decision in TMT also departs from
the weight of international authority, where errors in references to arbitral institutions
are often liberally corrected. (60) In TMT, the parties’ intention to arbitrate their disputes
was plain, and the Singapore court’s refusal to give effect to that intention disregards
both the needs of commercial parties and the New York Convention’s directive that
international arbitration agreements be recognized and enforced.

§4.04 INTERNALLY CONTRADICTORY ARBITRATION AGREEMENTS

34. A closely related set of issues arises from internally contradictory or inconsistent
international arbitration agreements. These issues typically involve clauses that select
two different arbitral seats, two different arbitral institutions, or two different
mechanisms for selecting arbitrators, or that appear to provide for both arbitration and
litigation of the same disputes. (61)
35. Arbitral tribunals (62) and national courts (63) have generally found ways to enforce
P 47 these provisions in commercial settings, either by deleting parts of the clause as
unnecessary surplusage or by reconciling apparently inconsistent terms through careful
or liberal interpretation. In doing so, arbitral tribunals and courts have emphasized the
importance of giving effect to the parties’ predominant intention to resolve their
disputes by arbitration, even if the particular mechanics they have chosen to implement
this intention cannot function.
36. In Marnell Corrao Assocs. Inc. v. Sensation Yachts Ltd, for example, the Auckland High
Court relied on the “general principle that Courts should uphold arbitration, by striving to
give effect to the intention of parties to submit disputes to arbitration, and not allow any
inconsistencies or uncertainties in the wording or operation of the arbitration clause to
thwart that intention.” (64) Likewise, in a more recent decision, the Swiss Federal Tribunal
evoked a similar principle:
Incomplete, unclear or contradictory provisions in arbitration clauses create
pathological clauses. To the extent that they do not concern mandatory
elements of the tribunal agreement, namely the binding submission of the
dispute to a private arbitral tribunal, they do not necessarily lead to
invalidity. Instead, a solution must be sought by interpretation and if necessary,
by supplementing the contract with reference to general contract law, which
respects the fundamental intent of the parties to submit to arbitral jurisdiction …
. When interpretation shows that the parties intended to submit the dispute to
an arbitral tribunal and to exclude state jurisdiction, but with differences as
to how the arbitral proceeding should be carried out, the rule that a contract

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 should be given effect applies and an understanding of the contract must be
sought which will uphold the arbitration clause. Imprecise or flawed
designation of the arbitral tribunal does not necessarily lead to invalidity of
the arbitral agreement. (65)
37. The most frequently encountered example of an internally contradictory arbitration
clause is a provision referring to two (or more) different arbitral seats, arbitral
institutions or sets of institutional arbitration rules. One solution that courts have
adopted to deal with the difficulties arising from these types of provisions is to interpret
them as granting the claimant the option of choosing between the various available
arbitral mechanisms. As one court held, “an arbitration agreement may provide for two
arbitral tribunals. This means as a rule that the claimant in the arbitration has a choice.”
(66)
P 48
38. Other interpretations of particular provisions of this character may also be
appropriate. For example, references to two different arbitral institutions may be
interpreted as a reference to one institution’s arbitration rules, with the other institution
acting as appointing authority (particularly where one reference is to the UNCITRAL
Rules) or can be given effect by conducting a “hybrid” arbitration that is conducted by
one institution under another institution’s rules. (67)
39. Some contracts (ill-advisedly) include both an arbitration and a forum selection
clause. Courts have generally upheld these clauses, concluding that the forum selection
clause does not conflict with the arbitration clause. (68) This was the view of the English
High Court in the often-cited decision in Paul Smith Ltd v. H & S Int’l Holding Inc, (69)
where the court held that the clause providing for arbitration was a “self-contained
[arbitration] agreement,” while the clause referring to English jurisdiction only specified
the lex arbitri. (70) There are numerous decisions by national courts in other jurisdictions
that are to similar effect and reflect a policy of giving effect to clauses that refer to both
arbitration and national court proceedings. (71)
P 49

§4.05 DEFECTIVE CHOICE-OF-LAW CLAUSES

40. It is well established that an arbitration agreement is not required to include, or be
accompanied by, a choice-of-law provision. (72) Many contracts contain no choice-of-law
clause at all—a fact that has no effect on the validity of the arbitration clause. (73)
Similarly, defects in a choice-of-law clause, like defects in substantive terms of the
underlying contract, should have no effect on the validity of the separable arbitration
clause—even if they were assumed to vitiate the underlying substantive clause or
contract. The validity of an arbitration agreement can, therefore, virtually never be
challenged based on a defective choice-of-law clause.
41. Consistent with this analysis, attempts to invalidate an arbitration clause because of
a defective choice-of-law provision have virtually never been successful. In Sonatrach
Petroleum Corp. (BVI) v. Ferrell Int’l Ltd, for example, a challenge to the validity of the
agreement to arbitrate failed where the choice of the substantive law governing the
contract was defective but the arbitration clause expressly provided for arbitration in
London. The arbitration agreement was valid and was governed by English law. The court
reached this conclusion on the basis that the arbitration clause was sufficient to
establish the parties’ objective intention to arbitrate rather than to refer disputes to
national courts.

§4.06 OPTIONAL OR NONMANDATORY ARBITRATION CLAUSES

42. Parties sometimes agree to provisions that appear to treat arbitration as an optional
or nonmandatory means of dispute resolution. These clauses may provide for a variety of
different dispute resolution mechanisms in a single agreement, without clearly
denominating any mechanism as mandatory. (74)
43. Preliminarily, the phrase “optional” arbitration agreement is imprecise. In fact, all
arbitration agreements are “optional,” in the sense that either party has the option of
commencing arbitration when a dispute arises or, alternatively, doing nothing or
attempting settlement; however, when one party does commence arbitral proceedings
under an arbitration agreement, the other party is then bound by the agreement to
arbitrate. The better descriptive term for what is sometimes referred to as “optional”
arbitration agreements is a “nonmandatory” arbitration agreement.
P 50
44. A number of national courts and arbitral tribunals have considered whether
arbitration can be compelled under apparently “optional” provisions of this sort. These
authorities almost uniformly treat even ambiguously drafted provisions as “mandatory”
in commercial settings, if either party initiates an arbitration, thereby obliging the
parties to resolve their disputes by arbitration and to refrain from litigation of arbitrable
disputes. (75)

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 45. In most cases, national courts have reasoned that such arbitration clauses give both
parties the option to initiate arbitration proceedings. If that option is exercised by one
party, then both parties are bound to arbitrate. (76) This approach has the merit of
commercial sense and again seeks to give effect to the parties’ intention. It would make
little sense for parties to agree to optional arbitration in an entirely nonmandatory sense
for it would leave both parties free to decide after a dispute had arisen whether or not
they wish to arbitrate. A nonmandatory provision of this sort would be almost entirely
superfluous as it would not provide an enforceable dispute resolution mechanism. (77)
46. Most national courts are, therefore, reluctant to conclude that an agreement to
arbitrate is only “optional.” (78) An English court held, for example, that a clause
providing for “arbitration, if any, by ICC rules in London,” was a mandatory arbitration
agreement, because the words “if any” were either surplusage or an abbreviated
reference to “if any dispute arises.” (79) This approach was followed by the Privy Council
in Anzen Ltd v. Hermes One Ltd, where a clause provided that “any party may submit the
dispute to binding arbitration.” (80) The court held that the clause was binding, reasoning
that “[i]t enables a party wishing for a dispute to be arbitrated, either to commence
arbitration itself, or to insist on arbitration, before or after the other party commences
litigation, without itself actually having to commence arbitration if it does not wish to. …
[U]ntil one party insists on arbitration, there is no promise by the other party not to
P 51 litigate.” (81) In a similar vein, another recent English decision correctly reasoned that
arbitration agreements are presumptively mandatory, rather than aspirational or
“optional.” (82)
47. There are nonetheless isolated instances in which a putative agreement to arbitrate
has been held to be optional, in the sense that the parties will only be required to
arbitrate if they agree to do so after a dispute arises. This conclusion has, typically, only
been reached when clear language forecloses any other interpretation. (83) Absent very
clear language, however, commercial parties should not be presumed to have agreed
merely to discuss the possibility of arbitration in the future. Parties are always free to
consider and discuss such possibilities, and interpreting an arbitral clause to produce
only this result deprives it of any commercial or legal substance. Rather, provisions
referring to arbitration are ordinarily meant to be agreements to arbitrate, not
agreements to think or talk about arbitrating. (84)
48. National courts have generally also upheld unilateral or asymmetric arbitration
clauses which give only one party the option to choose between different dispute
settlement mechanisms provided in the agreement. (85) Unilateral arbitration clauses
are particularly common in financial agreements (86) and have been challenged based
on lack of mutuality or unconscionability. (87) Such challenges have generally been
unsuccessful. As one arbitral tribunal reasoned:
First, it must be said that this is not a pathological arbitration agreement;
rather, it is a clause that arbitration specialists, practitioners and
P 52 jurisprudence nowadays deem to be equivalent to a unilateral option
clause. We can therefore state straight away that it is valid and effective.
The unilateral option clause—or, better, the clause for the unilateral exercise
of the options herein foreseen; or, even better, the clause providing for a
combination of options—consists in a complex agreement indicating and
containing more than one mechanism of dispute resolution, or several choices
within one means of dispute resolution. By such agreement, the contracting
parties agree to grant one of them, or both, the power to choose unilaterally
one of several contractually agreed options. They can do this in respect of
either arbitration, court proceedings or a combination of both resolution
mechanisms. In this last case, the parties agree to leave to their own choice
whether to exercise unilaterally the option to have recourse to a state court or
to arbitration. Thus, the parties grant themselves a power, in the form of the
option to follow either the judicial or the arbitral path. (88)
49. Some commentators have suggested that agreements granting a choice of the means
of dispute resolution to both parties are pathological and therefore void: “when the
option is given to both parties, the clause is unquestionably pathological, since one party
may opt for arbitration and the other for the courts thus creating inextricable conflicts.”
(89)
50. This view is contrary to the weight of authority and the New York Convention’s
requirements. Provisions allowing both parties to choose between arbitration and
litigation may well be ill-advised (because they invite wasteful tactical jockeying).
However, there is no reason to conclude that these types of provisions are invalid. A
clause granting both parties a choice between arbitration and litigation can be
interpreted as granting both parties the option to either arbitrate or litigate and when
one party makes that choice, the other party is bound by the choice. This gives effect to
the parties’ agreement and the obligations of contracting parties under Article II of the
New York Convention.

§4.07 INDEFINITE OR UNCERTAIN ARBITRATION CLAUSES

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 51. A recurrent basis for challenging the validity of international arbitration agreements is
that the terms of the putative agreement are indefinite or uncertain. Drafting errors in
the specification of the arbitral seat, institutional rules, means of selection of arbitrators
and other aspects of the agreement can give rise to these types of claims. Most national
court decisions and arbitral awards have rejected challenges to the validity of an
arbitration clause that are based on uncertainty and endeavored to give effect to the
parties’ intention to arbitrate. (90)
52. National court decisions have typically inquired whether the parties’ principal or
dominant intention was to resolve their disputes by arbitration, as opposed to by other
P 53 means. If the parties intended to submit their dispute to arbitration, then
uncertainties or omissions in specifying aspects of the arbitral procedure (e.g., arbitral
seat, institutional rules, choice of arbitrators) have generally been disregarded. (91)
53. This approach was adopted in a recent Indian decision in Enercon India Ltd v. Enercon
GmbH. (92) There, the Supreme Court of India considered the validity of a clause that
provided for a tribunal composed of three arbitrators, but that failed to provide a
mechanism to appoint the third arbitrator. The court upheld the clause despite its
uncertainty, concluding that parties intended that the two arbitrators jointly chose the
third one.
54. Nevertheless, a few courts have held that particular provisions are so uncertain or
confused that they cannot be held to manifest an intention to arbitrate. (93) These
decisions are ill-considered and fail to address the dispositive question of whether the
parties’ dominant intention was to arbitrate. Three recent Russian cases provide
examples of this type of ill-considered analysis:
(a) The Highest Arbitrazh Court of the Russian Federation refused to enforce an
arbitration agreement which provided that “if the parties could not solve the
dispute amicably, all disputes and disagreements shall be settled by an arbitration
court at the location of the claimant, according to the rules of that country
governing such proceedings. The award rendered by an arbitrator may be
challenged in any court administering justice in such cases. The costs of arbitration
shall be borne by the party against whom the award was rendered. The law of the
claimant’s State shall apply to the disputes arising out of the performance of the
P 54 present contract.” (94) The court held that “In order for an arbitration agreement
to be enforceable, clear wording is required from which true intentions of the
parties about their choice of an arbitration body can be ascertained. Such
determination cannot be made on the basis of paragraph 13 of the contract.” (95)
That conclusion is plainly wrong. There would have been no difficulty identifying the
arbitral institution (or best-known arbitral institution) in the claimant’s principal
place of business, thereby giving effect to the parties’ stated intention to arbitrate.
(b) The Ninth Arbitrazh Court of Appeal held that an arbitration agreement was
“incapable of being performed” where it provided that “if parties fail to come to an
agreement, the dispute shall be resolved by an arbitral tribunal in Moscow
according to UNCITRAL Rules in effect when the dispute’s resolution takes place.
The President of the International Chamber of Commerce in Paris has the right to
appoint the arbitrators.” (96) The court reasoned that “the sale and purchase
contract of 24 June 2007 No 12070292 does not contain a standard arbitral clause. In
the opinion of the panel of judges, an arbitration agreement as provided for by
section 8.2 of the Contract cannot be performed as the parties did not agree on a
particular arbitration rules (UNCITRAL Arbitration Rules or Rules of ICC as
Appointing Authority in UNCITRAL or other ad hoc arbitration proceedings).” (97)
Again, that decision is plainly wrong—ignoring the obvious fact that the UNCITRAL
Rules specifically envisage the parties’ selection of an appointing authority (98)
(precisely because the UNCITRAL Rules themselves do not do so (99) ).
(c) Similarly, the Russian Supreme Court refused to enforce an ICC award on the ground
that, inter alia, the underlying arbitration clause did not constitute an enforceable
agreement to submit a dispute to arbitration under the ICC Rules. (100) The court
opined that the parties’ intention to conduct their dispute under the ICC Rules was
not clear because it lacked an explicit reference to the ICC International Court of
Arbitration, even though the clause expressly referred to international arbitration
under the ICC Arbitration Rules. (101) Again, this conclusion is plainly wrong and
P 55 ignores both the settled international approach to the interpretation of uncertain
arbitration clauses (102) and the language of the ICC’s model arbitration clause.
55. These decisions are inconsistent with the overwhelming weight of international
authority. They are also inconsistent with the New York Convention’s fundamental
requirement, in Articles II(1) and II(3), that Contracting States recognize agreements to
arbitrate. (103) In all three cases, the true intention of the parties was to submit disputes
to arbitration, and the limited uncertainties in the arbitration clauses could easily have
been resolved to give effect to the parties’ intentions. Fortunately, these decisions
represent the exception rather than the rule, and most courts and arbitral tribunals give
effect to international arbitration agreements, even where they have errors, omissions or
uncertainties that might be “characterized as pathologies.”

§4.08 CONCLUSION

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 56. In summary, despite the availability of practical drafting guidance and model
institutional arbitration clauses, parties continue to draft defective, ambiguous or
internally inconsistent provisions with remarkable frequency. The historic adage,
reflected in Frederic Eisemann’s classic article, was that such provisions are
“pathological.” As discussed above, however, the term “pathological arbitration
agreement” is a misnomer or myth. The approach taken by most national courts from
leading jurisdictions around the world is to regard imperfections in an arbitration clause
not as “pathologies,” belonging in a “dark museum,” but rather as almost inevitable
imperfections which can readily be remedied with proper care and attention.
Consistently with this approach, national courts have applied a validation principle to
give effect to commercial parties’ dominant intention to resolve their international
disputes by arbitration, notwithstanding errors or defects in expressing the particular
means of dispute resolution. Such an approach is to be commended. It is mandated by
the New York Convention and, ultimately, accords with the expectations of businesses
engaged in international commerce and the pro-arbitration policies behind domestic
arbitration law. It is this approach and vocabulary, of convalescent arbitration clauses,
not pathological ones, that should be used in the future.
P 55

References
1) See Eisemann, La Clause d’arbitrage pathologique, in Commercial Arbitration: Essays
in Memoriam Eugenio Minoli 129, 130 (1974) (Eisemann considered pathological “any
arbitration clause which, by its wording cannot fulfill its essential functions.”
According to Eisemann an arbitration clause has four essential functions: “(1) The
first, which is common to all agreements, is to produce mandatory consequences for
the parties, (2) The second, is to exclude the intervention of state courts in the
settlement of the disputes, at least before the issuance of the award, (3) The third, is
to give powers to the arbitrators to resolve the disputes likely to arise between the
parties, (4) The fourth, is to permit the putting in place of a procedure leading under
the best conditions of efficiency and rapidity to the rendering of an award that is
susceptible of judicial enforcement.”).
2) Eisemann, La Clause d’arbitrage pathologique, in Commercial Arbitration: Essays in
Memoriam Eugenio Minoli 129 (1974).
3) Eisemann, La ’Clause d’arbitrage pathologique, in Commercial Arbitration: Essays in
Memoriam Eugenio Minoli 130 (1974).
4) See, e.g., Davis, Pathological Clauses: Frederic Eisemann’s Still Vital Criteria, 7 Arb.
Int’l 365 (1991); Girsberger, Pathological Arbitration Clauses: Another Lawyers’
Nightmare Comes True, in S. Kröll & L. Mistelis et al. (eds.), International Arbitration
and International Commercial Law: Synergy, Convergence and Evolution 123 (2011);
Ipek, Interpretation of Article II(3) of the New York Convention, 23 Marmara
Üniversitesi Hukuk Fakültesi Hukuk Araştırmaları Dergisi 683 (2017); Lamm & Sharpe,
Inoperative Arbitration Agreements Under the New York Convention, in E. Gaillard & D.
Di Pietro (eds.), Enforcement of Arbitration Agreements and International Arbitration
Awards: The New York Convention in Practice 304 (2008); Molfa, Pathological
Arbitration Clauses and the Conflict of Laws, 37 Hong Kong L.J. 161 (2007); Pengelley,
Conflicting Dispute Resolution Clauses: The Rule in Paul Smith Revisited, in R. Kalyani
(ed.), Arbitration Awards: Demystifying the Myth 96 (2009); Schmitthoff, Defective
Arbitration Clauses, 1975 J. Bus. L. 9.
5) See generally Beffa, Decision 4A_246/2011 or the Leniency of the Swiss Federal Tribunal
Towards Pathological Clauses, 30 ASA Bull. 169 (2012); Karrer, Pathological Arbitration
Clauses, Malpractice, Diagnosis and Theories, in P. Vogt (ed.), The International
Practice of Law, Liber Amicorum for Thomas Baer and Robert Karrer 109 (1998); Note,
Germany: Validity of Agreements to Arbitrate—Positive Interpretation of Pathological
Arbitration Clauses, 2008 Int’l Arb. L. Rev. 25; Waincymer, Adjudicating the
Effectiveness of Arbitration Agreements, 26 Am. Rev. Int’l Arb. 407 (2015).
6) See Girsberger, Pathological Arbitration Clauses: Another Lawyers’ Nightmare Comes
True, in S. Kröll & L. Mistelis et al. (eds.), International Arbitration and International
Commercial Law: Synergy, Convergence and Evolution 123 (2011).
7) G. Born, International Arbitration and Forum Selection Agreements: Drafting and
Enforcing Appendix C (5th ed. 2016); P. Friedland, Arbitration Clauses for International
Contracts 64-70, 183-87 (2d ed. 2007); J. Paulsson et al., The Freshfields Guide to
Arbitration and ADR: Clause in International Contracts 129 (3d ed. 2011).

9
© 2020 Kluwer Law International, a Wolters Kluwer Company. All rights reserved.
 8) For example, the model ICC arbitration clause provides: “All disputes arising out of
or in connection with the present contract shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce by one or more arbitrators
appointed in accordance with the said Rules.” The model LCIA arbitration clause
provides: “Any dispute arising out of or in connection with this contract, including
any question regarding its existence, validity or termination, shall be referred to
and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to
be incorporated by reference into this clause. The number of arbitrators shall be
[one/three]. The seat, or legal place, of arbitration shall be [City and/or Country].
The language to be used in the arbitral proceedings shall be []. The governing law of
the contract shall be the substantive law of [].”
9) G. Born, International Commercial Arbitration 771-72 (2014).
10) In recognition and enforcement proceedings, arbitration agreements may be held
“null and void, inoperative or incapable of being performed” under Article II(3) or
V(1)(a) of the New York Convention or in parallel provisions under national law. See
UNCITRAL Model Law, Arts. 8(1), 34(2)(a)(i); UNCITRAL, Secretariat Guide on the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York,
1958) 72, 75 (2016).
11) Insigma Tech. Co. Ltd v. Alstom Tech. Ltd, [2009] SGCA 24, 31 (Singapore Ct. App).
12) See below, at ¶7 et seq.
13) See E. Gaillard & J. Savage, Fouchard Gaillard Goldman on International Commercial
Arbitration ¶486 (1999) (“A ‘blank clause’ (clause blanche) is one which contains no
indication, whether directly or by reference to arbitration rules or to an arbitral
institution, as to how the arbitrators are to be appointed … In French domestic
arbitration law, such clauses will be held ineffective.”).
14) G. Born, International Commercial Arbitration 767-68 (2014). See also E. Gaillard & J.
Savage (eds.), Fouchard Gaillard Goldman on International Commercial Arbitration
¶266 (1999). For cases where the parties have agreed on a seat but not on an
appointing mechanism, see Shengchang and Lijun, The Role of National Courts and
Lex Fori in International Commercial Arbitration, in L. Mistelis & J. Lew (eds.),
Pervasive Problems in International Arbitration, 15 Int’l Arb. Law Library 167 (2006).
15) Lucky-Goldstar Int’l (HK) Ltd v. Ng Moo Kee Eng’g Ltd, [1994] Arb. & Disp. Res. L.J. 49
(H.K. Ct. First Inst.). See also Rix, Through the Looking Glass: An Account of Obscure
Arbitration Clauses in the Lucky Goldstar Decision, in Hong Kong International
Arbitration Centre (ed.), International Arbitration: Issues, Perspectives and Practice:
Liber Amicorum Neil Kaplan 425 (2018).
16) Lucky-Goldstar Int’l (HK) Ltd v. Ng Moo Kee Eng’g Ltd, [1994] Arb. & Disp. Res. L.J. 49,
51 (H.K. Ct. First Inst.).
17) A. van den Berg, The New York Arbitration Convention of 1958 158 (1981); E. Gaillard &
J. Savage, Fouchard Gaillard Goldman on International Commercial Arbitration ¶958
(1999).
18) KVC Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd and Another Suit, [2017]
SGHC 32 (Singapore High Ct.).
19) KVC Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd and Another Suit, [2017]
SGHC 32 at ¶29 (Singapore High Ct.).
20) The Model Law is supplemented for international arbitrations by the Singapore
International Arbitration Act, Cap. 143A.
21) See Model Law, Articles 1(2), 11(3); Singapore International Arbitration Act, Section
8(2).
22) KVC Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd and Another Suit, [2017]
SGHC 32, ¶31 (Singapore High Ct.).
23) KVC Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd and Another Suit, [2017]
SGHC 32, ¶67 (Singapore High Ct.).
24) KVC Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd and Another Suit, [2017]
SGHC 32, ¶47 (Singapore High Ct.).
25) See Ipek, Interpretation of Article II(3) of the New York Convention, 23 Marmara
Üniversitesi Hukuk Fakültesi Hukuk Araştırmaları Dergisi 683, 717 (2017). See also
Swiss Law on Private International Law, “Art. 178(2) (‘Furthermore, an arbitration
agreement is valid if it conforms either to the law chosen by the parties, or to the
law governing the subject-matter of the dispute, in particular the main contract, or
to Swiss law’.”).
26) Talisker Distillery v. Hamlyn & Co., [1894] A.C. 202. See also Schofield, Hamlyn & Co. v.
Talisker Distillery: A Study in the Conflict of Laws, 9 Harv. L. Rev 371 (1896).
27) Talisker Distillery v. Hamlyn & Co., [1894] A.C. 202, 205.
28) Talisker Distillery v. Hamlyn & Co., [1894] A.C. 202.
29) Ipek, Interpretation of Article II(3) of the New York Convention, 23 Marmara
Üniversitesi Hukuk Fakültesi Hukuk Araştırmaları Dergisi 683, 717 (2017).
30) Venezuela became a signatory to the New York Convention on 8 February 1995.

10
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 31) Judgment of 7 April 1933, 1934 GH 12 (Austrian Oberster Gerichtshof) (“An arbitral
tribunal can only decide disputes arising from defined legal relationships and not
from undefined legal relationships”); H. Fasching, Lehrbuch des österreichischen
Zivilprozeβrechts ¶2180 (1990) (mandatory minimum content of a valid arbitration
agreement encompasses: (i) determination of the parties; (ii) the final submission to
arbitration; and (iii) the subject matter of the dispute); Wenger, in S. Berti et al.
(eds.), International Arbitration in Switzerland Art. 178, ¶28 (2000). Compare B. Berger
& F. Kellerhals, International and Domestic Arbitration in Switzerland ¶284 (3d ed.
2015) (“the description of the dispute or legal relationship…should be sufficiently
clear from its content”).
32) G. Born, International Commercial Arbitration 768-69 (2014).
33) Tritonia Shipping Inc. v. S. Nelson Forest Prods. Corp., [1966] 1 Lloyd’s Rep. 114 (English
Ct. App.).
34) Tritonia Shipping Inc. v. S. Nelson Forest Prods. Corp., [1966] 1 Lloyd’s Rep. 114, 116
(English Ct. App.).
35) Allianz Life Ins. Co. v. Phoenix Life & Reass. Co., 2000 WL 34333013, at *3 (D. Minn.).
36) Judgment of 15 March 1990, DFT 116 Ia 56 (Swiss Federal Tribunal); Judgment of 24
January 2003, XXX Y.B. Comm. Arb. 509, 522 (Hanseatisches Oberlandesgericht
Hamburg) (2005) (upholding arbitration clause providing “Arbitration: Hamburg”);
Robotunits Pty Ltd v. Juergen Karl Mennel, [2015] VSC 268, ¶43 (Victoria S.Ct.); Roose
Indus. Ltd v. Ready Mixed Concrete Ltd, [1974] 2 NZLR 246, 247 (N.Z. Ct. App.).
37) Eisemann, La ’Clause d’arbitrage pathologique, in Commercial Arbitration: Essays in
Memoriam Eugenio Minoli 129, 132 (1974).
38) G. Born, International Commercial Arbitration 778-82 (2014).
39) See, e.g., Khan v. Dell, Inc., 669 F.3d 350 (3d Cir. 2012) (rejecting claim that arbitration
agreement was invalid when parties’ chosen arbitral institution (National
Arbitration Forum) ceased functioning; arbitration agreement remains valid and
court will appoint arbitrator under §5 of FAA); In re Brock Specialty Servs., Ltd, 286
S.W.3d 649 (Texas Ct. App. 2009) (upholding arbitration clause referring to defunct
National Mediation Arbitration, Inc.); China Agribus. Dev. Corp. v. Balli Trading, [1998]
2 Lloyd’s Rep. 76 (QB) (English High Ct.) (recognizing award made pursuant to CIETAC
Rules, where arbitration agreement provided for arbitration pursuant to Foreign
Economic and Trade Arbitration Commission (FETAC) Rules and FETAC was
succeeded by CIETAC). See also G. Born, International Commercial Arbitration 780
(2014).
40) See, e.g., Moss v. First Premier Bank, 835 F.3d 260, 266-67 (2d Cir. 2016) (refusing to
compel arbitration where parties’ agreed arbitral institution was unavailable); Carr
v. Gateway, Inc., 944 N.E.2d 327 (Ill. 2011) (parties’ designated arbitral institution,
National Arbitration Forum, was integral to arbitration agreement and not ancillary,
logistical concern). See also G. Born, International Commercial Arbitration 782 (2014).
41) See Stinson v. Am’s. Home Place, Inc., 108 F.Supp.2d 1278, 1285 (M.D. Ala. 2000)
(“Although the arbitrator specified in [the contract] is not now available to resolve
their dispute, there is no indication that the choice of that particular arbitrator was
central to the arbitration clause. In such cases §5 dictates that the court choose
another arbitrator and enforce the arbitration clause.”); Zechman v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 742 F.Supp. 1359 (N.D. Ill. 1990) (where term of arbitration
agreement fails, decision whether to substitute new term for failed term or to refuse
to enforce agreement altogether turns on intent of parties at the time agreement
was executed); Astra Footwear Indus. v. Harwyn Int’l Inc., 442 F.Supp. 907, 910
(S.D.N.Y. 1978) (§5 of FAA provides a solution “when the arbitrator selected by the
parties cannot or will not perform”). See also G. Born, International Commercial
Arbitration 781-82 (2014); Geimer, in R. Zöller (ed.), Zivilprozessordnung §1039, ¶1 (32d
ed. 2018).
42) See G. Born, International Commercial Arbitration 778 (2014).
43) See, e.g., Partial Award in ICC Case No. 6709, in J.-J. Arnaldez, Y. Derains & D. Hascher
(eds.), Collection of ICC Arbitral Awards 1991-1995 435 (1997) (reference to
“International Section of the Paris Chamber of Commerce” interpreted as reference
to ICC); Award in ICC Case No. 5103, 115 J.D.I. (Clunet) 1206 (1988) (same).
44) Partial Award in ICC Case No 7920, XXIII Y.B. Comm. Arb. 80 (1998).
45) Lucky-Goldstar Int’l (HK) Ltd v. Ng Moo Kee Eng’g Ltd, [1994] Arb. & Disp. Res. L.J. 49,
51 (H.K. Ct. First Inst.).
46) Preliminary Award in Zurich Chamber of Commerce of 25 November 1994, XXII Y.B.
Comm. Arb. 211, 213 et seq. (1997).
47) Warnes SA v. Harvic Int’l Ltd, 1993 WL 228028 (S.D.N.Y.).
48) Warnes SA v. Harvic Int’l Ltd, 1993 WL 228028, at *2 (S.D.N.Y.).
49) Travelport Global Distrib. Systems BV v. Bellview Airlines Ltd, 2012 WL 3925856, at *5
(S.D.N.Y.).
50) Robotunits Pty Ltd v. Juergen Karl Mennel, [2015] VSC 268 (Victoria S.Ct.).
51) Robotunits Pty Ltd v. Juergen Karl Mennel, [2015] VSC 268, ¶9 (Victoria S.Ct.).
52) Pricol Ltd v. Johnson Controls Enters. Ltd, Arbitration Case (Civil) No. 30 of 2014, ¶¶7-
8 (Indian S.Ct.). See also Born & Lim, Indian Supreme Court Declines to Intervene in
International Arbitration with SIAC Appointing Authority, Wolters Kluwer (15 January
2015).

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 53) Pricol Ltd v. Johnson Controls Enters. Ltd, Arbitration Case (Civil) No. 30 of 2014, ¶¶7-
8 (Indian S.Ct.).
54) Judgment of 1 March 2016, Corp. LSR C.A. v. Jesus Ramon Rodriguez, Expte. 1181, 9
(Venezuela S.Ct.).
55) ‘ Judgment of 1 March 2016, Corp. LSR C.A. v. Jesus Ramon Rodriguez, Expte. 1181, 9
(Venezuela S.Ct.).
56) TMT Co. Ltd. v. The Royal Bank of Scotland plc, [2017] SGHC 21 (Singapore High Ct.).
57) TMT Co. Ltd v. The Royal Bank of Scotland plc, [2017] SGHC 21, ¶65 (Singapore High
Ct.).
58) TMT Co. Ltd v. The Royal Bank of Scotland plc, [2017] SGHC 21, ¶66 (Singapore High
Ct.).
59) See, e.g., HKL Group Co Ltd v. Rizq International Holdings Pte Ltd, [2013] SGHCR 5
(Singapore High Ct.).
60) See above, ¶¶25-28.
61) G. Born, International Commercial Arbitration, ¶783 (2014).
62) See, e.g., Partial Award in ICC Case No. 6000, discussed in Grigera Naón, Choice-of-Law
Problems in International Commercial Arbitration, 289 Recueil des Cours 9, 88 (2001)
(interpreting arguably contradictory dispute resolution clauses in related contracts
“in a manner which allows to keep, for each of them, its own domain of application”);
Final Award in Arbitration Chamber of Paris, Case No. 9473 of 2 January 1999, XXVI Y.B.
Comm. Arb. 18 (2001) (seller’s express and tacit acceptances of two order
confirmations by buyer, containing arbitration clauses, gave rise to valid arbitration
agreements, notwithstanding forum selection clauses in seller’s confirmations);
Interlocutory Award in Japan Shipping Exchange Arbitration Court of 1 September 1981,
XI Y.B. Comm. Arb. 193 (1986) (clause providing for arbitration under rules of “Korean
Commercial Arbitration Association” and “Japan Shipping Exchange” held to give
claimant choice of forums).
63) See, e.g., Razo v. Nordic Empress Shipping Ltd, 362 F.Appx. 243 (3d Cir. 2009) (rejecting
argument that arbitration agreement was invalid because of contradictory terms,
containing arbitration and forum selection clauses); Bank Julius Baer & Co. v.
Waxfield Ltd, 424 F.3d 278, 284 (2d Cir. 2005) (forum selection clause could be
reconciled with arbitration agreement, giving effect to latter) rev’d on other grounds,
Granite Rock Co. v. Int’l Bhd of Teamsters, 561 U.S. 287, 296 (U.S. S.Ct. 2010); Peters
Fabrics, Inc. v. Jantzen, Inc., 582 F.Supp. 1287, 1291 (S.D.N.Y. 1984) (competing forms,
providing for AAA and GAC arbitrations, held to constitute agreement to arbitrate);
Star Shipping AS v. China Nat’l Foreign Trade Transp. Corp. [1993] 2 Lloyd’s Rep. 445
(English Ct. App.) (upholding clause providing “any dispute arising under the charter
is to be referred to arbitration in Beijing or London in the defendant’s option”);
Cavity Insulation Guarantee Agency Ltd v. Thermabead Ltd [2018] EWHC 3895 (English
High Ct.) (arbitration agreement valid despite internally contradictory language).
64) Marnell Corrao Assocs. Inc. v. Sensation Yachts Ltd, [2000] 15 PRNZ 608, 623 (Auckland
High Ct.).
65) Judgment of 7 November 2011, DFT 4A_246/2011, ¶2.2.3 (Swiss Federal Tribunal)
(emphasis added). See also Astor Management AG v. Atalaya Mining plc, [2017] EWHC
425, ¶64 (“The role of the court in a commercial dispute is to give legal effect to
which the parties have agreed, not to throw its hands in the air and refuse to do so
because the parties have not made its task easy. To hold that a clause is too
uncertain to be enforceable is a last resort, or, as Lord Denning MR once put it, ‘a
counsel of despair’.”).
66) Judgment of 30 January 2003, XXXII Y.B. Comm. Arb. 303, 308 (Oberlandesgericht
Düsseldorf). See also Lobb P’ship Ltd v. Aintree Racecourse Co. Ltd, [2000] 18 ASA Bull.
421, 421 (Comm.) (English High Ct.) (clause providing that “[d]isputes may be dealt
with [through arbitration] but shall otherwise be referred to the English Courts”
granted claimant an option to choose type of dispute resolution); William Co. v. Chu
Kong Agency Co. Ltd, [1994] XIX Y.B. Comm. Arb. 274 (H.K. Ct. First Inst. 1993) (clause
contained both choice-of-court and arbitration provisions, held that clause granted
claimant option of what procedure to use).
67) See, e.g., Insigma v. Alstom, [2008] SGHC 134 (arbitration clause providing that
disputes should be resolved by SIAC applying ICC Rules was workable and operative
“hybrid” arbitration agreement as SIAC was able and will conduct an arbitration
applying the ICC Rules). See also Partial Award in ICC Case No. 6000, discussed in
Grigera Naón, Choice-of-Law Problems in International Commercial Arbitration, 289
Recueil des Cours 9, 88 (2001) (interpreting arguably contradictory dispute
resolution clauses in related contracts “in a manner which allows to keep, for each
of them, its own domain of application”).
68) See, e.g., Bank Julius Baer & Co. v. Waxfield Ltd, 424 F.3d 278, 284 (2d Cir. 2005), rev’d
on other grounds, Granite Rock Co. v. Int’l Bhd of Teamsters 561 U.S. 287, 296 (U.S.
S.Ct. 2010) (holding that forum selection clause could be reconciled with arbitration
agreement and giving effect to latter); Personal Sec. & Safety Systems v. Motorola,
297 F.3d 388, 395-96 (5th Cir. 2002) (forum selection clause can be interpreted in
manner that is consistent with arbitration provision; forum selection clause applies
only in event of dispute not subject to arbitration). See also G. Born, International
Commercial Arbitration 784 (2014).

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 69) Paul Smith Ltd v. H & S Int’l Holding Inc., [1991] 2 Lloyd’s Rep. 127 (QB) (English High
Ct.). See also Sulamérica CIA Nacional de Seguros SA v. Enesa Engenharia SA [2012]
EWCA Civ 638 (English Ct. App.) (affirming lower court decision which reconciled
jurisdiction and arbitration provisions by holding that Brazilian jurisdiction clause
merely authorized Brazilian courts to declare arbitrable nature of dispute, compel
arbitration, and enforce award, and confirmed jurisdiction of Brazilian courts in
event parties agreed to dispense with arbitration).
70) Paul Smith Ltd v. H & S Int’l Holding Inc., [1991] 2 Lloyd’s Rep. 127, 129 (English High
Ct.).
71) See, e.g., Bartlett Grain Co. v. Am. Int’l Group, 2011 WL 3274388, at *1 (W.D. Mo.) (giving
effect to both forum selection and arbitration clauses: forum selection clause
“appl[ied] to suits which fall outside the arbitration clause, for example
enforcement provision based on the award,” without affecting arbitral tribunal’s
jurisdiction); Axa Re v. Ace Global Mkts Ltd [2006] EWHC 216 (Comm) (English High Ct.)
(no conflict between jurisdiction and arbitration clauses; interpreting English
jurisdiction provision as fixing supervisory court of arbitral process); Judgment of 25
January 2007, VII ZR 105/06 (German Bundesgerichtshof) (forum selection clause
interpreted as applying only to situations where courts’ intervention was sought in
connection with arbitration); Temiskaming Hosp. v. Integrated Medi. Networks, Inc.
(1998) 46 B.L.R.2d 101 (Ontario Super. Ct.) (dispute resolution provisions contained
forum selection clause for specified defaults and arbitration clause for other
matters; litigation concerned specified defaults and not other matters); PT Tri-MG
Intra Asia Airlines v. Norse Air Charter Ltd, [2009] SGHC 13 (Singapore High Ct.)
(holding that arbitration clause referred substantive disputes to arbitration, and
jurisdiction clause referred to Singapore court’s supervisory jurisdiction over
arbitration).
72) G. Born, International Commercial Arbitration ¶770 (2014).
73) Moreover, where parties make no express choice of law, the designation of the
arbitral seat may be treated as an implied choice of law governing the arbitration
clause, or the contract itself. See, e.g., Egon Oldendorff v. Liberia Corp., [1995] 2
Lloyd’s Rep. 64 (English High Ct.). See also N. Blackaby et al. (eds.), Redfern and
Hunter on International Arbitration ¶3.205 (6th ed. 2015).
74) Judgment of 14 November 2016, IVII Y.B. Comm. Arb. 280, 286 (2017). See also Comsa,
At a Crossroads: The Case of Pathological Arbitration Clauses Which Determine a
Jurisdictional Fight, 25 Lex ET Scientia Int’l J. 47, 55 (2018).
75) G. Born, International Commercial Arbitration ¶789 (2014).
76) Price v. Carter [2010] EWHC 1451 (TCC) (English High Ct.) (contract containing both
forum selection and arbitration clause need to provide claimant option to select
dispute resolution mechanism); Three Shipping Ltd v. Harebell Shipping Ltd [2004] All
ER (D) 152 (QB) (English High Ct.) (stay of judicial proceedings granted on basis of
clause providing shipowners with option to commence arbitration); Westfal-Larsen
Co. AS v. Ikerigi Compania Naviera SA, [1983] 1 All ER 382 (QB) (English High Ct.); Thorn
Sec. (Jong Kong Ltd) v. Cheung Fee Fung Cheung Constr. Co., [2005] 1 HKC 252 (H.K. Ct.
App.).
77) G. Born, International Commercial Arbitration ¶789 (2014).
78) See, e.g., Judgment of 14 February 2003, Poiré v. Tripier, 2003 Rev. arb. 403 (French
Cour de cassation chamber mixte); Judgment of 8 April 2004, XXXI Y.B. Comm. Arb.
802 (Italian Corte di Cassazione) (2006); Judgment of 3 May 1980, Kabushiki Kaisha
Ameroido Nihon v. Drew Chem. Corp., VIII Y.B. Comm. Arb. 394 (Yokohama Dist. Ct.)
(1983) (rejecting claim that arbitration clause was not mandatory); Judgment of 30
May 1994, XX Y.B. Comm. Arb. 745 (Tokyo High Ct.) (1995) (arbitration clause
mandatory and exclusive).
79) Mangistaumunaigaz Oil Prod. Ass’n v. United World Trade Inc., [1995] 1 Lloyd’s Rep.
617, 621 (English High Ct.).
80) Anzen Ltd and Others v. Hermes One Ltd, [2016] UKPC 1 (English Privy Council)
(emphasis added). See also Gulf Hibiscus Ltd v. Rex Int’l Holding Ltd,[2019] SGHC 15
(Singapore High Ct.).
81) Anzen Ltd and others v. Hermes One Ltd, [2016] UKPC 1, ¶36 (English Privy Council).
82) Yegiazaryan v. Smagin, [2016] EWCA Civ 1290 (English Ct. App.) (clause referring to
arbitration is generally mandatory, not merely aspirational).

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 83) See, e.g., Nanosolutions, LLC v. Prajza, 793 F.Supp.2d 46, 57 (D.D.C. 2011) (arbitration
clause providing disputes, “upon mutual agreement of the parties hereto,” may be
finally settled by arbitration was optional); Eurosteel Corp. v. M/V Millenium Falscon,
2002 WL 1972266, at *3 (N.D. Ill.) (clause providing that “arbitration, if any” will take
place in Paris is not mandatory); Nanosolutions, LLC v. Prajza, 793 F.Supp.2d 46, 57
(D.D.C. 2011); Hoogovens Ijmuiden Verkoopkantoor BV v. MV “Sea Cattleya,” 852
F.Supp. 6, 7-8 (S.D.N.Y. 1994) (clause providing “arbitration to be settled in the
Netherlands” is not mandatory: “no more than an agreement that, if arbitration were
to be conducted whether voluntarily agreed upon or required by some other
contractual clause, it would proceed in the Netherlands”); Crest Nicholson (Eastern)
Ltd v. Mr & Mrs Western [2008] EWHC 1325 (English High Ct.) (where contract provided
number of dispute resolution options, of which arbitration was one, no mandatory
agreement to arbitrate existed); Librati v. Barka Co. Ltd, [2007] QCCS 5724 (Québec
Super. Ct.) (optional arbitration clause does not require arbitration); C.C.I.C.
Consultech Int’l v. Silverman, [1991] CanLII 2868 (Québec Ct. App.) (same); Empressa
de Turismo Nacional & Internacional v. Vacances sans frontière ltée, [1992] CanLII
3546 (Québec Ct. App.) ’(same).
84) G. Born, International Commercial Arbitration ¶792 (2014).
85) See Draguiev, Unilateral Jurisdiction Clauses: The Case for Invalidity, Severability or
Enforceability, 31 J. Int’l Arb. 19 (2014).
86) See Draguiev, Unilateral Jurisdiction Clauses: The Case for Invalidity, Severability or
Enforceability, 31 J. Int’l Arb. 19, 20 (2014); E. Gaillard & J. Savage, Fouchard Gaillard
Goldman on International Commercial Arbitration ¶486 (1999).
87) See, e.g., Majlis Perbandaran Seremban v. Maraputra Sdn Bh, [2018] MYCA 193
(Malaysian High Ct.); Wilson Taylor Asia Pacific Pte Ltd v. Dyna-Jet Pte Ltd, [2017] SGCA
32 (Singapore Ct App.). See also Draguiev, Unilateral Jurisdiction Clauses: The Case for
Invalidity, Severability or Enforceability, 31 J. Int’l Arb. 19, 44 (2014) (“many courts
would not strike down such a clause per se, but there are a number of jurisdictions
where in particular cases unilateral clauses have been refused valid effect on a
variety of grounds, including fairness and equality.”).
88) Judgment of 14 November 2016, IVII Y.B. Comm. Arb. 280, 286 (2017).
89) E. Gaillard & J. Savage, Fouchard Gaillard Goldman on International Commercial
Arbitration ¶486 (1999).
90) See G. Born, International Commercial Arbitration 772–76 (2014) and authorities cited
therein.
91) G. Born, International Commercial Arbitration ¶773 (2014).
92) Enercon India Ltd v. Enercon GmbH, Case (Civil). No. 2086 of 2014 (Indian S. Ct.).
93) See, e.g., Lovelock Ltd v. Exportles [1968] 1 Lloyd’s Rep. 163 (English Ct. App.)
(internally contradictory clause invalid); Judgment of 15 January 1992, Brunet v.
Artige, 1992 Rev. arb. 646 (French Cour de cassation civ. 2e) (requirement to “ask the
other party” whether dispute should be submitted to arbitration is unenforceable);
Judgment of 17 January 2013, DFT 4A_244/2012, ¶4.4 (Swiss Federal Tribunal)
(annulling award on ground that no arbitration agreement was formed: “In view of
the contradictory provisions in the Employment Agreement therefore, the principle
of reliance shows no clear intent of the parties to remove certain disputes from the
jurisdiction of the state courts and to submit them to an arbitral tribunal.”);
Judgment of 2 December 1982, 1983 NJW 1267 (German Bundesgerichtshof)
(arbitration clause referring to two different arbitral institutions invalid); Judgment
of 15 November 1994, XXII Y.B. Comm. Arb. 707, 709 (Oberlandesgericht Hamm) (1997)
(denying enforcement of award on grounds that arbitration clause was invalid
because it failed to specify arbitral tribunal, clause provided for arbitration by “the
arbitral tribunal of the International Chamber of Commerce in Paris, seat in Zurich”);
Judgment of 30 March 1993, XXI Y.B. Comm. Arb. 681 (Vaud Ct. App.) (1996) (no
arbitration agreement concluded); Kenon Eng’g Ltd v. Nippon Kokan Koji Kabushiki
Kaisha, [2004] HKCA 101 (H.K. Ct. App.) (dispute resolution clause referring to
mediation invalid on grounds of uncertainty); Tai-Ao Aluminium (Taishan) Co. Ltd v.
Maze Aluminium Eng’g Co. Ltd, [2006] HKCFI 220, ¶3 (H.K. Ct. First Inst.) (clause
providing “[t]he arbitration power of this contract belongs to the court(s) of the
place where the seller is situated” held to be too uncertain to be valid).
94) Tula Ammunition Factory (Russian Federation) v. Sporting Supplies Int’l (United
States), Judgment of 27 July 2011, VAS-7301/11 (Russian S. Arbitrazh Ct).
95) Tula Ammunition Factory (Russian Federation) v. Sporting Supplies Int’l (United
States), Judgment of 27 July 2011, VAS-7301/11 (Russian S. Arbitrazh Ct).
96) ZAO UralEnergoGaz (Russian Federation) v. OOO ABB Electroengineering (Russian
Federation), Judgment of 24 June 2009, No. A40-27854/09-61-247 (Russian Arbitrazh Ct.
App.).
97) ZAO UralEnergoGaz (Russian Federation) v. OOO ABB Electroengineering (Russian
Federation), Judgment of 24 June 2009, No. A40-27854/09-61-247 (Russian Arbitrazh Ct.
App.).
98) UNCITRAL Model Law, Art. 6.
99) UNCITRAL Model Law, Art. 6(2).
100) Dredging and Maritime Management SA v. InjTransStroy AO, Judgment of 26 September
2018, Case No. 305-18-11934 (Russian S. Ct.).

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 101) The ICC has asked the Supreme Court of Russian Federation for the clarification of
this decision. See Jones, ICC Seeks Clarity After Clause Deemed Unenforceable in
Russia, Global Arb. Rev. (16 November 2018). See also Ross, Russia’s Supreme Court
Reviews Practice in Wake of Ruling on ICC Model Clause, Global Arb. Rev. (30 January
2019) (in a recent review of its practice, the Supreme Court appears to have reversed
its position and expressly confirmed: (i) the enforceability of arbitration clauses
that follow the model clause of a specific institution and (ii) where there is doubt,
arbitration agreements should be interpreted under the Russian arbitration law in a
way that makes them valid and enforceable).
102) See above, ¶¶51-53.
103) G. Born, International Commercial Arbitration ¶777 (2014).

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