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The Unilateral Arbitration Clause between Permissibility and Nullity |
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PP: 233-246 |
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Author(s) |
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Nashat Mahmoud Jaradat,
Ghassan JassimSarhan,
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Abstract |
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| Researching the judicial applications of Arab countries to one of the issues that have occupied legal thoughts in the Western world for decades and still in one form or another, the so-called Unilateral Arbitration Clauses, we did not find a discussion of the applicability of this clause within the laws. Even though this condition takes a reasonable space of the legal arguments as previously mentioned, it has even become widely used in contracts, such as tenancy, contracting, and financial investments. The study showed that the above-mentioned clause has recently increased its use in financing contracts, especially with the increasing globalization of banking services and bank transfers. Although banks usually prefer to resort to traditional litigation, lack of similarity in the legal rules and judicial applications related to banking transactions and their difference from one country to another was a reason for the banks preference of resorting to arbitration. There is no examination of the legitimacy of an unequal or optional arbitration clause in Bahrain. Also, the Bahraini and Egyptian courts, to the best of our knowledge, did not decide whether it should be considered null or valid. The same case is applied to the French courts which have no cases that examined this type of clauses except for a case in 2006 and the other is a judgment close to the same issue on October 7, 2015, from the French Court of Cassation. The English and American courts were different; they examined this clause and had several judicial implementations due to the fact that most of the arbitration terms are either related to multinational companies operating within the framework of the Wall Street Stock Exchange in New York or those that stipulate the enforcement of British and Wales law on the provisions of the contract . However, many Arab countries, in general, as well as Bahrain and some Gulf countries, in particular, are seeking in their economic model to attract foreign investments and capital, especially those related to financial and banking industries, to diversify sources of income. The decision of investing or not investing the capital in a country is made by the judicial authority in terms of independence as well as the judicial application of legal texts as these factors are directly reflected in the desire to invest and show the possibility of protecting investors. |
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