Arbitration or court? How to choose before the dispute starts
The clause in your contract decides more than you think. How to choose between arbitration and court before a dispute starts.
Elena Marlowe
·
7 min read
Why the clause matters
Many commercial contracts contain an arbitration clause that sends disputes to private arbitrators instead of a court. Most people sign it without a second thought.
It decides who hears your case, how fast, how much it costs, and whether you can appeal.
What to compare
01
Speed
Awards often arrive in 8 to 14 months, against two years or more in court.
02
Cost
Less discovery saves money, but you share the arbitrators' fees.
03
Privacy
Hearings and awards are private. Court filings are public.
04
Appeal
Awards are final, with very narrow grounds for review.
05
Decision-maker
You help pick the arbitrators. In court, the judge is assigned.
Arbitration is a trade: speed and privacy for a second chance.
Common mistakes
Four mistakes show up again and again:
Signing a clause without reading who chooses the arbitrators.
Ignoring a demand for arbitration because it isn't a court paper.
Assuming you can appeal a result you dislike.
Agreeing to a seat or rules that favour the other side.
If you're drafting a contract
Decide before there's a dispute
Choose the rules, the seat and the number of arbitrators while you still agree on everything. It costs nothing now and a lot later.
A short clause that names the details beats a long one that leaves them open.
What happens next
If a dispute has already started, the clause in your contract decides your next step. Send it to me and I'll tell you where your case belongs.
WRITTEN BY
Elena Marlowe
Commercial litigator in New York since 2013. I run a one-lawyer practice and write these to answer the questions I hear on first calls.
This article is general information, not legal advice about your situation. Reading it doesn’t create an attorney–client relationship.
KEY TAKEAWAYS
Arbitration is private and usually faster
Awards are final, with very narrow review
Choose the rules and seat when you draft
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