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ARTICLE · 29 JUNE 2021

Important Judgment On Pre-conditions In Arbitration Clauses

Bryan Cave Leighton Paisner
Bryan Cave Leighton Paisner
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Bryan Cave Leighton Paisner

Bryan Cave Leighton Paisner

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Many modern commercial contracts contain dispute resolution clauses which submit disputes to arbitration. It is common for parties to agree to a set of pre-conditions or escalation mechanisms which...

United StatesLitigation, Mediation & Arbitration
Glenn Haley
Glenn Haley
Sharon Chan
Sharon Chan

Summary

Many modern commercial contracts contain dispute resolution clauses which submit disputes to arbitration. It is common for parties to agree to a set of pre-conditions or escalation mechanisms which have to be complied with before formal arbitration can commence.

Some commentators were of the view that failure to comply with the escalation clauses in a contract put the jurisdiction of an arbitral tribunal in question and left open the possibility for the arbitral award to be challenged.

A recent decision of the Hong Kong High Court (C v D [2021] HKCFI 1474) provides a welcome confirmation of the growing international recognition that non-compliance with escalation mechanism is a question of admissibility, not jurisdiction.

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