ISDA® consults on use of arbitration under ISDA Master Agreement | Practical Law

ISDA® consults on use of arbitration under ISDA Master Agreement | Practical Law

The International Swaps and Derivatives Association (ISDA) has issued a memorandum, seeking members' views on steps that ISDA could take to assist in their use of arbitration. (Free access.)

ISDA® consults on use of arbitration under ISDA Master Agreement

Practical Law UK Legal Update 3-513-5506 (Approx. 5 pages)

ISDA® consults on use of arbitration under ISDA Master Agreement

by PLC Arbitration
Published on 23 Nov 2011 • ExpandEngland, International, USA (National/Federal)...Wales
The International Swaps and Derivatives Association (ISDA) has issued a memorandum, seeking members' views on steps that ISDA could take to assist in their use of arbitration. (Free access.)
The Financial Law Reform Committee of the International Swaps and Derivatives Association, Inc (ISDA®) has issued a memorandum, requesting members' feedback on steps ISDA could take to assist in the use of arbitration where members consider that arbitration would be the appropriate method of dispute resolution (November memorandum) (see "ISDA: The use of arbitration under an ISDA Master Agreement: feedback to members and policy options").
The request follows up an earlier memorandum in January 2011 that noted the increased use of arbitration in the financial sector, including for disputes under the ISDA Master Agreement. The January memorandum highlighted certain areas where initiative by ISDA may be helpful, including:
  • Drafting arbitration clauses.
  • The availability of appropriately qualified arbitrators.
  • Developing jurisprudence on interpretation of ISDA documentation.
The November memorandum seeks members' responses to various questions relating to those areas, including:
  • Should ISDA develop and publish one or more model forms of arbitration clause for use with the ISDA Master Agreement?
  • Should any model clause specify the seat of arbitration and, if so, which seat(s)?
  • Do members agree that ISDA should publish clauses suitable for arbitration under the rules of any or all of:
  • Are there any other arbitral institutions that should be added to the list?
  • Should ISDA provide a model for an optional clause that allows one or both parties to choose between arbitration and litigation after the dispute has arisen?
  • Should ISDA include "fast-track" provisions to speed up the arbitration to use with the model clauses?
  • Are there any steps that ISDA can take to address the perceived lack of international arbitrators with experience of the derivatives market?
  • Do members believe that the fact that arbitral awards are private and, therefore, have no precedential value is a significant issue? If so, how do they think this is best addressed?
Responses to ISDA's questions and any additional comments should be sent to Peter Werner by 19 December 2011.
Source: ISDA: Financial Law Reform (10 November 2011).
"ISDA" and "ISDA SIMM" are registered trademarks of the International Swaps and Derivatives Association, Inc. (ISDA). ISDA is not a sponsor of Practical Law and had no part in the development of this resource.