What is an international arbitration clause?

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An international arbitration clause should follow Standard ICC Arbitration Clause:

“All disputes arising out of or in connection with the present contract shall be submitted to the International Court of Arbitration of the International Chamber of Commerce and shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.” The standard international arbitration clause can be modified in order to take account of the requirements of national laws and any other special requirements that the parties may have. In particular, parties should always check for any mandatory arbitration. [i]

Most of the countries have formulated their own arbitration laws and adopted a distributed legislative approach to establish a modern international commercial arbitration system. Nevertheless, Legislative trends are becoming unified and substantive from distributed legislation.

In order to better coordinate a country´s own arbitration law and resolve international commercial disputes in an effective way, the international community such as International Court of Arbitrage of the International Chamber of Commerce has formulated a serial of regional and global international conventions and documents to strengthen the unified and substantive legislation.

In commercial world, international arbitration clause is mainly used in the following cases: disputes in the international contract for the sale of goods; disputes in international transport of goods; disputes in international insurance; disputes in international trade and payment of settlement;  disputes in international investment, technology trade, joint ventures, compensation for trade, processing, international leasing, international cooperation in the development of natural resources, international engineering contracting and other aspects; disputes in international intellectual property protection; disputes in maritime collision, relief and general average; disputes in international environmental pollution, foreign infringement and so on.[ii]

It is based on the agreement of the parties. Generally, the arbitration institution is civil organization; the parties to the arbitration have the rights to choose the place of arbitration, the arbitration institution, the arbitrator(s), the arbitration procedure, the applicable substantive law and the language of the arbitration. The arbitral award is final and binding on both parties. The arbitral award takes effects immediately; no party shall sue the court for a change. The costs of the arbitral award are generally determined by the losing party unless it has been formulated previously.

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[i] International Chamber of Commerce (ICC)

[ii] International Court of Arbitration