A Guide to Dispute Resolution Clauses in International Contracts, Part 2

Home | China Law Blog | A Guide to Dispute Resolution Clauses in International Contracts, Part 2 Table of Contents Toggle The Critical Role of Dispute Resolution Clauses Last week, I published an in-depth post on international dispute resolution clauses. See A Guide to Dispute Resolution Clauses in International Contracts. The unexpected volume of emails I received from that wonky post -- more than I've gotten to a post in months -- highlights both how critical these provisions are in international contracts, and that many lawyers are as fascinated by these clauses as I am. Reader Feedback: A Testament to the Importance of Dispute Resolution Clauses Lawyers from across the globe responded to my article. An arbitration lawyer from Dubai/London praised its educational insights: "I have just read your remarkable article about Dispute Resolution Clauses, and felt that I had to email you to tell you how informative and educational I found it. Thank you." An arbitrator in London noted its potential to enhance the efficiency of dispute resolution processes: "In my role as an arbitrator, I often observe the critical impact that well-drafted dispute resolution clauses can have on the efficiency and effectiveness of the resolution process. Your emphasis on the importance of these clauses resonates with me." A trade lawyer in Singapore wrote me on how she has seen first-hand how poorly drafted dispute resolution clauses lead to costly delays: "Your article on dispute resolution clauses was timely for me. I recently wrapped up a case where a poorly drafted arbitration clause led to significant delays and increased costs. Your insights on customization and jurisdictional considerations are spot-on." Corporate counsel at an international auto manufacturing company stressed the importance of such clauses in the automotive industry: "In the automotive industry, where supply chain disputes can cripple operations, having a well-defined dispute resolution mechanism is crucial. Your point about specifying discovery limitations within arbitration clauses was particularly enlightening, as the contracts written at my last company did not limit discovery and we would sometimes find ourselves in overly complicated and expensive arbitrations. Real-World Conversations Highlighting Key Points Recently, I had an in-depth discussion with a lawyer-client that highlighted several crucial (and underrated) aspects of dispute resolution clauses: Jurisdictional Preferences and Practicalities: We discussed how for many non-manufacturing transactions and some of the more significant and complex transactions with Chinese companies, the lawyers at my law firm often opt for Singapore arbitration today, having previously used Hong Kong arbitration. Similarly, for Vietnamese manufacturing contracts, we mostly use Singapore arbitration. But we typically opt for Chinese courts in our China Manufacturing Agreements. See Why Your China Manufacturing Agreements Should Almost ALWAYS Be in Chinese. This discussion underscores the numerous variables involved in drafting a dispute resolution clause. Confidentiality in Arbitration: My client mentioned using Singapore arbitration for a company with a unique, non-patent-protected product, preferring arbitration for its better confidentiality compared to court proceedings. This illustrates how factors like IP protection can influence the choice of dispute resolution provision. Assumptions About Privacy: I talked about how the arbitration lawyers at my firm had an arbitration in a jurisdiction where arbitrations were not confidential unless agreed upon by both parties. This highlights a common misconception and the importance of explicitly stating confidentiality requirements in contracts. Customizing Arbitration Clauses: We discussed the flexibility of arbitration clauses, noting how lawyers can specify details such as the number of depositions allowed, discovery time limits, and the scope of written discovery. This customization is one of arbitration's greatest advantages, but it is often not fully utilized by the person drafting the contract. We then talked about how dispute resolution clauses are written for litigation and/or arbitration, but they are usually written by corporate lawyers. A Practical Example: Dealing with SOEs in China My post also led me to have a conversation with a lawyer friend who specializes in arbitration. He was interested in my experiences dealing with Chinese companies, particularly SOEs (State-Owned Entities), which often require disputes to be resolved by arbitration in China. I mentioned how many of my law firm's own clients are terrified of Chinese arbitration, believing them to be inherently corrupt. We then discussed how this really need not be the case. When Chinese companies insist on arbitration in China, it can make sense to agree, but then be sure to write the arbitration clause to favor your own client. For example, we used to always try (and almost always succeed) to get a particular individual—a now-retired Chinese law professor (at a Canadian law school) who was in the same law school class and friends with two of our lawyers—to either be the sole arbitrator in a one-person arbitration or the arbitration chairperson in a three-person arbitration, with the task of choosing the other two arbitrators. This ensured that even in an arbitration in China our clients would have a highly competent arbitrator or panel of arbitrators. We now do something similar. Conclusion The overwhelming response to my previous post on dispute resolution clauses highlights their critical role in international contracts. By considering jurisdictional preferences, confidentiality needs, privacy assumptions, and the customization of arbitration clauses -- among other things -- you can create a dispute resolution provision that will not only work to prevent disputes, but also ensure efficient and effective resolution if a conflict does arise. Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Dan Harris Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog. Harris Sliwoski Attorney Read more posts [email protected] Read More Litigation and Arbitration Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? 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