Unilateral Option Clauses: The Way Forward
DOI:
https://doi.org/10.12728/culj.13.3Keywords:
Arbitration Agreement, International Commercial Arbitration, Mutuality, Procedural Equality, Unilateral Option ClausesAbstract
India is on its way to being recognised as one of the arbitration-friendly nations of the world. An unresolved question of law, acting as a hurdle to this is the enforceability of option clauses. Since arbitration agreements are the foundation of the rights of the parties to an agreement, it is to be considered whether unilateral option clauses are valid because the parties have agreed to the same. This paper analyses the consequences of only one party to a contract having the right to approach a broader choice of forum to hear its grievances. Although unilateral option clauses are commonly used in commercial transactions, they pose various issues. This paper examines the different facets of the validity and operation of such clauses in arbitration. For this, the paper relies on the developments in Indian as well as international arbitration laws-specifically, the recent judgement of the Singapore Court of Appeals is examined. The issues with respect to enforceability of such clauses make it necessary to weigh the benefits of having them, as against their complex operability.
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3. Suresh Tulshan v. Marco Polo Restaurant Pvt. Ltd.,G.A.No. 2827 of 2013 :C.S.No. 221 of 2013 (Original Side).
4. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York Convention, 1958, http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention.html.
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8. NB Three Shipping v. Harebell Shipping, (2005) 1 Lloyd’s Rep. 509.
9. The Arbitration and Conciliation Act, 1996.
10. Bhartia Cutler Hammer Ltd. v.Avn Tubes Ltd., (1993) BC 472.
11. Id.
12. Baron v. Sunderland Corporation, All England Report 1966(1) 349(351).
13. Union of India v. Ratilal R. Taunk, 2nd (1966) ILR 2 Cal 527
14. The Arbitration and Conciliation Act, 1996.
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16. Id.
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18. Id.
19. Emmsons International Ltd. v. Metal Distributors, (2005) BC 465.
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22. The Arbitration and Conciliation Act, 1996.
23. Castrol India Limited v. M/sApex Tooling Solutions, Application no. 5597 of 2013 in C. S. No. 162 of 2013.
24. DAVID SUTTON, JUDITH GILL & MATHEW GEARING, RUSSEL ON ARBITRATION 217 (Sweet & Maxwell, 23rd ed. 2014).
25. NB Three Shipping Ltd. v. Harebell Shipping Ltd. [2005] 1 Lloyd’s Rep. 509.
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31. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., 11 December, 2009.
32. Id.
33. Pittalis v. Shorefettin, (1986) 1QB 868.
34. Fuerst Day Lawson Ltd v. Jindal Exports Ltd.,11 December, 2009.
35. Renusagar Power Co. Ltd. v. General Electric Co., AIR 1994 SC 860.
36. Id.
37. CJSC Russia Telephone Company (RTC) v. Sony Ericsson Communication Rus LLC, Case no. VAS-1831/12.
38. Arbitration and Conciliation Act, § 18, 1996.
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44. Mauritius Commercial Bank Limited v. Hestia Holdings Limited & Another,(2013) EWHC 1328.
45. Marie Berard, Clifford Chance – Unilateral Option Clauses in Arbitration: Survey (Jan. 2017), https:// www.cliffordchance.com/ briefings/ 2017/ 01/unilateral_optionclauses-2017survey.html.
46. Dannev.Crédit Suisse,[2015] Cass. Civ. (1ère) 13-27, 264.
47. Fuerst Day Lawson Ltd. v. Jindal Exports Ltd.,11 December, 2009.
48. Wilson Taylor Asia Pacific Pte Ltd.v.Dyna-Jet Pte Ltd., (2017) SLR 3 267.
49. Id.
50. Id.
51. Id.
52. Id.
53. NACE v. Maurice Johnson and E & M Enterprises, Inc., No. 01-15-00529-CV.
54. In re 24R, Inc., 324 S.W.3d 564, 567 (Tex.2010).
55. Royston, Rayzor, Vickery, Williams v. Lopez, 467S.W.3d.
56. JagdishChanderv. Ramesh Chander and Ors., 2007(2) Arb. L.R. 302.
57. Arbitration and Conciliation Act, § 18, 1996.
58. Arbitration and Conciliation Act, 1996.
59. AdvancePCS,172 S.W.3d at 607; Palm Harbor, 195 S.W.3d at 676.
60. Indian Contract Act, § 11, 1872.
61. Indian Contract Act, § 14, 1872.
62. Arbitration and Conciliation Act, § 7, 1996.
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Published
2018-07-01
How to Cite
Patil, S. (2018). Unilateral Option Clauses: The Way Forward. Christ University Law Journal, 7(2), 45-62. https://doi.org/10.12728/culj.13.3
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