Standard arbitration clause - Model clause
The consent of the parties is fundamental for the function of a dispute resolution process outside of the traditional court system. Therefore, there has to be an existing arbitration agreement between parties to refer their dispute to an arbitral tribunal. There are generally two types of arbitration agreements, an arbitration clause, and a submission agreement. An arbitration clause is a dispute resolution clause inserted into an agreement, that covers future disputes that might arise under or in connection with the agreement. However, even if the parties did not incorporate an arbitration clause into their principle agreement at the outset but want to refer the dispute to arbitration after it has arisen, they can still agree to refer the dispute to arbitration, with the so called submission agreement.
Where the parties agree to refer their dispute to arbitration under the rules of the Nordic Arbitration Centre, it is recommended that the NAC Model Clause is included in their contract.
„Any dispute, controversy, or claim arising out of, or in relation to, this contract, including the validity, invalidity, breach or termination thereof, shall be resolved by arbitration in accordance with the Arbitration Rules of the Nordic Arbitration Centre of the Iceland Chamber of Commerce in force on the date on which the arbitration is commenced.“
The Iceland Chamber of Commerce operates an independent arbitration institute, The Nordic Arbitration Centre. The Nordic Arbitration Centre provides for a dispute resolution mechanism, allowing parties to solve their dispute in an efficiently and safely.