An arbitration clause is a contract provision that requires disputes to be resolved by a private arbitral tribunal rather than national courts, specifying the institution, seat, language and number of arbitrators.
In trade practice
In agricultural commodity trade, specialist institutions such as GAFTA and FOSFA operate their own arbitration rules and standard contract forms that are widely used for grain, oilseed and related products; awards made under these rules are enforceable in most jurisdictions under the New York Convention. For frozen fruit and vegetable contracts, parties more commonly choose general commercial arbitration institutions such as the ICC or national chambers. A poorly drafted clause that names a non-existent institution or omits the seat can render the clause inoperable. The clause should be reviewed alongside the governing law choice to avoid conflicts.
In a specification
The clause should state the arbitral institution by its full official name, the seat of arbitration, the language of proceedings and the number of arbitrators, and should cross-reference the institution’s current rules.