Arbitration is a legal process through which disputes between two parties are resolved outside of the traditional courtroom setting. It involves an unbiased third party, the arbitrator, who listens to the arguments and evidence presented by both parties and makes a binding decision. In many cases, arbitration is faster, less expensive, and less formal than litigation.

To initiate arbitration, the parties must enter into an agreement that contains an arbitration clause and a submission agreement. While these two agreements are closely related, they serve distinct purposes and should not be confused with one another. In this article, we will differentiate between the arbitration clause and submission agreement on the basis of their key features.

Arbitration Clause

An arbitration clause is a provision in a contract that requires the parties to resolve any disputes through arbitration rather than litigation. It is often included in employment contracts, consumer agreements, and commercial contracts. The arbitration clause typically outlines the specific conditions that must be met before arbitration can be initiated, such as the number of arbitrators, the location of the arbitration, and the law that applies.

One key advantage of including an arbitration clause in a contract is that it can help avoid costly and time-consuming court proceedings. Arbitration is often faster and more efficient than litigation, as the parties can choose an arbitrator with expertise in the relevant subject matter, and the process can be tailored to meet the specific needs of the parties. Additionally, arbitration proceedings are not public record, which can help protect the parties` confidentiality.

Submission Agreement

A submission agreement is a separate contract that details the specific issues to be resolved through arbitration. It is often used when a dispute arises that is not covered by an existing arbitration clause. The submission agreement typically outlines the issues to be resolved, the location of the arbitration, and the timeline for the proceedings.

Unlike an arbitration clause, which is included in the original contract, a submission agreement is a separate agreement that the parties must enter into after a dispute has arisen. One key advantage of a submission agreement is that it can be more flexible than an arbitration clause, as the parties have more control over the specific issues to be resolved and the timing of the proceedings.

Conclusion

In summary, an arbitration clause and submission agreement are both essential components of the arbitration process, but they serve distinct purposes. An arbitration clause is a provision in a contract that outlines the conditions for initiating arbitration, while a submission agreement is a separate contract that details the specific issues to be resolved through arbitration. When used effectively, arbitration can be a valuable tool for resolving disputes quickly and efficiently. As such, it is essential to understand the differences between these two agreements to ensure that you are getting the most out of the arbitration process.