Be careful with carveouts: Your ability to arbitrate disputed payment claims might depend on it

What you need to know

  • In the rush to close a deal, dispute resolution clauses and arbitration agreements are often given little, if any, consideration. This can have serious consequences after the ink is dry.

  • Not only is it critically important to tailor your dispute resolution clause to suit your particular project, any agreement to arbitrate should clearly describe the types of disputes it is intended to cover and whether those disputes are required to be referred to arbitration.

  • As the WA Court of Appeal recently found, unless an arbitration agreement requires a dispute to be referred to arbitration, a court, in turn, will not have to refer the matter to arbitration under s.8 of the Commercial Arbitration Act 2012 (WA).

Read more