Examining The Validity Of Asymmetrical & Optional Arbitration Clauses

1. What are Asymmetrical Arbitration Clauses?

Arbitration clauses by its very nature envisages reference of all disputes governed under the auspices of an Arbitration Agreement to be resolved vide Arbitration by reference of the parties to the Contract. However, in certain instances, the parties enter into Arbitration Agreements that vest disparate powers pertaining to the reference of disputes. These clauses are also commonly known as ‘Unilateral Option Clauses', ‘Hybrid Clauses' and ‘Asymmetrical Arbitration clauses' in international legal parlance.

An “asymmetric arbitration clause” or “unilateral option arbitration clause” under which the parties bound by it limit themselves to bringing an action in a particular jurisdiction, while at the same time allowing one or more parties to choose whether to refer a dispute to arbitration.