header-logo header-logo

17 February 2023 / Masood Ahmed , Syed Naman Ali
Issue: 8013 / Categories: Features , Procedure & practice , Arbitration , ADR
printer mail-detail

Unilateral option clauses to arbitrate

To arbitrate or to litigate? Masood Ahmed & Syed Ali explore the courts’ approach to unilateral option clauses both at home & abroad
  • The English courts have traditionally recognised and upheld unilateral option clauses (UOCs), including in the recent case of Aiteo v Shell.
  • However, careful thought should be given to the merits of including UOCs in contracts, because other jurisdictions have taken a more cautious approach.

A unilateral option clause (UOC), sometimes referred to as an asymmetric jurisdiction clause, provides one party or a group of parties (but not all the parties) the right to elect between arbitration or litigation to resolve a dispute, thereby providing flexibility to the parties to choose the most appropriate procedure to resolve their dispute. Indeed, the Court of Appeal in Etihad Airways PJSC v Flöther [2020] EWCA Civ 1707 recognised the commercial efficacy and widespread use of UOCs in international finance transactions.

The English courts have traditionally recognised and upheld UOCs in respect of London-seated arbitrations—an approach

If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

Womble Bond Dickinson—Paula Myers

Womble Bond Dickinson—Paula Myers

Womble Bond Dickinson appoints Paula Myers to private capital team in Leeds

mfg Solicitors—five promotions

mfg Solicitors—five promotions

Law firm mfg Solicitors announces five promotions at Birmingham office

Brabners—six promotions

Brabners—six promotions

Brabners adds six to partnership in record year for partner promotions

NEWS
Calls to raise the age of criminal responsibility from 10 to 14 have been renewed, with the Bar Council arguing the current threshold criminalises children too early and risks pushing them towards lifelong offending
The legal profession's AI challenge extends far beyond fabricated case citations, according to a warning about the next phase of technological risk
Law firms should use the transition period before the Financial Conduct Authority (FCA) assumes anti-money laundering (AML) supervision to strengthen governance and compliance, experts have warned
Cross-border disputes increasingly demand creative approaches to gathering evidence, with litigators needing to look beyond traditional letters of request
A Court of Appeal ruling has clarified the distinction between contracts of 'indefinite' and 'perpetual' duration, with potentially significant implications for commercial drafting
back-to-top-scroll