What is arbitration agreement?
Arbitration agreement is a legally binding contract entered into between two or more parties usually made after the dispute occurred to provide alternative means to resolve disputes between parties without going through traditional court litigation.

What is arbitration clause?
Arbitration clause is included in a main contract between the parties prior to a dispute arise. It provides that any disputes arising under the main contract will be submitted to binding arbitration.

In short, an arbitration clause is preemptively included in a contract, while an arbitration agreement is made after a dispute has already occurred. They serve as mechanisms for resolving disputes outside of court litigation.

It is advisable that parties to an agreement should opt to add arbitration clause while drafting the contract because having parties who had disagreement to agree on another agreement is not easy if not impossible. Most arbitration institutions, for instance the National Commercial Arbitration Centre, provide model arbitration clause. For more information about arbitration agreement or arbitration clause, please Contact Us.

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by : Mosseny