Is an asymmetric disputes clause valid and enforceable?

September 22, 2020

Asymmetric clauses are a regular feature of commercial contracts, especially in finance transactions. The apparent unfairness reflected by one party having different, and often ‘better’, rights than the counterparty has given rise to a number of reactions. In many courts, party autonomy, in agreeing to the asymmetry, is upheld. There are sound policy reasons to do so. Elsewhere, the principle of equal treatment is invoked to challenge the asymmetric clause. Several major decisions upholding the equal treatment challenge have been handed down. Many of these have either been misunderstood, misapplied or have subsequently been clarified in favour of broad party autonomy.

This article was first published in ‘Arbitration: The International Journal of Arbitration, Mediation and Dispute Management’, Vol. 86 Issue 3, August 2020, pp347-363, and reproduced with permission of Kluwer Law International. 

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