Legal implications of the arbitration agreement


It is widely accepted that court litigation process is complex and time consuming due to the multiplicity of courts degrees and the kinds of competence, the long appealing process, and the problematic nature of judgment enforcement. For the aforementioned reasons, litigants may prefer to settle their disputes by arbitration rather than court litigation.Arbitration agreement could be reached before the dispute arises, in this case the agreement comes in the form of contractual clause included in the contract itself. In other cases, the arbitration clause maybe agreed upon after the dispute arises in an independent agreement from the binding contract.Arbitration agreement may have usually dual legal implications. On the one hand, this agreement, as any contractual agreement, imposes legal obligation on the contractual parties, the so-called ‘positive affect’ of the arbitration agreement. One the other hand, the subject matter of the dispute for which the arbitration agreement reached upon will not be possible to be heard by the ordinary courts, and this is called the ‘negative affect’ of the arbitration agreement.To sum up, arbitration agreement clause, either the pre-dispute agreement or post-dispute agreement, means that the contractual will of parties intends to build two legal implications;First, prevent the competent from asserting jurisdiction on the subject matter of the dispute. This agreement has a preventive affect which means that a court judge will seize to hear the dispute if he finds an arbitration clause in the contract.Second, contractual parties should adhere to the arbitration award willingly. The losing party should not bring proceedings again before ordinary courts to seek redress on the same dispute which is settled by arbitration previously, because the arbitration award will have the same the legal enforcing power as same as court judgments.