Arbitration

Arbitration clauses in bylaws

Before a conflict arises, including a well-drafted arbitration clause in the bylaws or contract defines in advance how disputes will be resolved: who decides, under what rules and at what seat, avoiding later disputes over jurisdiction.

In one line

This page covers the preventive drafting of the clause; the conduct of the proceedings and enforcement of the award are covered on the pages on corporate, international commercial and investment arbitration.

First steps

Type of contract or bylaws where the clause will be inserted
Matters intended to be submitted to arbitration
Seat and language of the arbitration
Institutional or ad hoc rules chosen
Number of arbitrators and method of appointment
Any prior negotiation or mediation stage

What a sound clause must define

The arbitration agreement, governed by articles 1649 et seq. of the Civil and Commercial Code, requires clarity about the matters submitted and the parties' intent to arbitrate. A complete clause specifies the seat, the language, the applicable rules, the number of arbitrators and the mechanism for their appointment.

Ambiguity is the main source of disputes: clauses that fail to define the rules or mix court and arbitral avenues generate preliminary disputes that delay the merits. We draft the text tailored to the type of contract or company.

The bylaw clause and its scope

Once included in the bylaws, the clause binds the company and its shareholders, including those who join later. Its wording must address the arbitrable corporate matters and respect the limits of article 1651 of the Civil and Commercial Code.

We assess whether a broad or narrow arbitration clause is preferable, the possibility of tiered mediation and arbitration, and the choice between institutional or ad hoc arbitration depending on the structure of the company or contract.

Common mistakes

Using a generic template clause without adapting it to the case
Failing to define the seat or the applicable rules
Confusingly combining court and arbitral jurisdiction
Ignoring the arbitrability limits of article 1651 of the Civil and Commercial Code
Omitting the arbitrator-appointment mechanism

Frequently asked questions

What should an arbitration clause include?

At least the intent to arbitrate, the matters submitted, the seat, the applicable rules and the arbitrator-appointment mechanism. The more precise it is, the fewer disputes it generates later.

Does the bylaw clause bind future shareholders?

In principle it binds anyone who acquires shareholder status, since it forms part of the articles of association. The exact scope depends on the wording and each situation.

Can prior mediation be combined with arbitration?

Yes, through tiered clauses that provide for a negotiation or mediation stage before arbitration. They must be carefully drafted so the time limits do not create obstacles.

Can I add an arbitration clause to existing bylaws?

Yes, through a bylaw amendment adopted with the required majorities. A separate arbitration agreement may also be entered into depending on the case.

This page is informational and does not replace professional advice on your specific case. It does not imply any promise of results.

Let's draft your arbitration clause

We prepare or review the clause for your bylaws or contract. Contact us to get started.

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