Asymmetric Arbitration Clause
ASYMMETRIC ARBITRATION CLAUSE Asymmetric arbitration clause is where only one party has the right to refer disputes to arbitration, but the other must litigate. The case of NB Three Shipping v Harebell Shipping [2004] EWHC 2001 (Comm) concerned an application to stay arbitration proceedings under an asymmetric clause. The shipowner was entitled to bring arbitration but the charterer was limited to High Court proceedings. Morison J noted the clause gave “‘better’ rights” to the ship owners but refused to stay the arbitration. An asymmetric arbitration clause is not valid (nor indeed even an arbitration agreement) until the point at which the party exercises its option to arbitrate – prior to that, there is a lack of mutuality ( Union of India vs Bharat Engineering Corporation ILR 1977 Delhi 57). In ( New India Assurance Co Ltd v Central Bank of India & Ors AIR 1985 Cal 76) it was held that an asymmetric arbitration clause constitutes a valid arbitration agreement f