Unlocking Disputes

April 11, 2012 10:05 ET

Unlocking Disputes Publishes Herbert Smith Article on Dispute Resolution Clauses and How to Avoid Pitfalls

LONDON, UNITED KINGDOM--(Marketwire - April 11, 2012) - Unlocking Disputes (http://www.unlockingdisputes.com/) recently published a new article from Herbert Smith's dispute resolution team. In the piece, Murray Rosen QC, Matthew Weiniger and Pamela Kiesselbach provide an overview of recent case law and a summary of the key lessons to be learnt from each case.

Unlocking Disputes is the campaign from the Bar Council, the Law Society and TheCityUK to promote dispute resolution in London. The new article, titled "Herbert Smith: Dispute Resolution Clauses - How to Avoid Pitfalls" centres around three key topics:

  1. Beware of conflicting jurisdiction clauses

As stated in the article, complex transactions will often consist of a number of separate but inter-related agreements often containing conflicting dispute resolution clauses. There have been a number of recent decisions which provide guidance on how English courts will deal with situations where a dispute may fall within the scope of more than one agreement.

The cases discussed in the article illustrate points including why particular care needs to be taken when drafting dispute resolution clauses in transactions which involve a number of agreements. The article also focuses on the increased risk of uncertainty and satellite litigation where there are different dispute resolution clauses which are potentially applicable to a dispute.

  1. How "non-exclusive" are non-exclusive jurisdiction clauses?

The effect of a non-exclusive jurisdiction clause will be subject to construction by the courts based upon the parties' intention. Depending on the drafting, non-exclusive jurisdiction clauses may not give as much scope to bring proceedings in other unnamed jurisdictions as one might expect.

Key points addressed include the importance of ensuring that the drafting of the clause does not give rise to ambiguities and achieves the required result and why, where a party wants to be able to bring concurrent proceedings in more than one jurisdiction, the drafting should reflect this.

  1. The efficacy of dispute resolution clauses and "torpedo" actions

As a result of the lis pendens rule in Article 27 Brussels Regulation and ECJ case law it is possible for a party to undermine the efficacy of a dispute resolution clause which provides for the exclusive jurisdiction of the courts of, or arbitration in, one member state (e.g. England) by bringing court proceedings in another member state (e.g. Italy).

The third and final section of the article analyses the drafting of effective dispute resolution clauses for incorporation into the relevant agreement and possible steps that may be taken to counteract or protect from such "torpedo" actions.

Read "Herbert Smith: Dispute Resolution Clauses - How to Avoid Pitfalls" in full at: http://www.unlockingdisputes.com/news-and-insights/herbert-smith-dispute-resolution-clauses-how-to-avoid-pitfalls/

About Unlocking Disputes in London

Unlocking Disputes is the groundbreaking new industry-led campaign to promote London as the global dispute resolution centre. The dispute mediation campaign operates from the Rolls Building, London's brand new business court complex - comprised of the Chancery Division, the Technology and Construction Court, and the Admiralty and Commercial Courts - specialising in financial, business and property litigation.

The campaign brings together the Bar Council, which represents barristers in England and Wales, the Law Society, which represents solicitors in England and Wales, and TheCityUK, which promotes UK financial and professional services, to showcase the quality and value which London's legal services sector can offer clients all over the world.

Read more commercial dispute resolution articles from Unlocking Disputes at: http://www.unlockingdisputes.com/news-and-insights/

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