The Study Of The Legal Dilemma Of Unilateral Arbitration Clause

In 2012,French Cour de cassation made the decision on Rothschild Case,denying the validity of the unilateral jurisdiction clause in contract.The decision sparked a great controversy,which make the study of unilateral dispute resolution clauses be a focus in theory and practice.At present,the studies of Chinese scholars are refined to the unilateral jurisdiction clause,rarely involving the unilateral arbitration clause(“UAC”).However,the existence of UAC agreed in foreign-related commercial contracts cannot be ignored and more cases emerged related to UAC.In 2016,the Shanghai First Intermediate People's Court heard the case about sales contract,in which parties agreed UAC,and the court made a judgment affirming the validity of the clause.The issue of the validity of the UAC is highly controversial in the world and there is no conclusive conclusion.Statue laws make no provision on UAC,so the cases related to the clause shall be analyzed case by case.Though different opinions on the validity of the UAC,it is widely used in the commercial contracts,especially the finance agreements.The Chinese commercial businessman will inevitably handle the UAC in foreign activities,so as the courts and arbitration institutions in China.Although the conclusions of cases are so different,according to the existing judicial practice and cases,the courts' views on UAC can be divided into two types: the supporting courts hold that the parties' autonomy and right of disposition shall be admitted and respected and accept the validity of UAC while the negative side holds that the UAC violate the basic principle of equality and justice and therefore invalid.In this context,this thesis focuses on the legal dilemma of UAC in the domestic and international level,proving that UAC is not deserved invalid because of the “unilateral” characteristic.UAC is stipulated in financial contracts,as well as the contracts related to consumers and employees.So the thesis will illustrate the legal dilemma of UAC according to the different types of the main contracts and give some suggestions based on the types of contracts.Finally,this thesis will analyze the application of UAC in China according to the existing laws and judicial interpretation and analyze the existing judicial practice in China.The main contents are as follows:The first chapter is about “overview of the question of validity in the unilateral arbitration clause”,to introduce the present situation of UAC and the question of its validity.UAC belongs to the hybrid dispute resolution clause,and it is also a kind of unilateral dispute resolution clause.The clause has obvious "unilateral" characteristics,raising the question of validity for discussion in judicial practice.British courts typically support the validity of UAC,admitting its validity,while the countries such as Russia,France and Bulgaria object to the UAC,thinking that the UAC is unenforceable and invalid.The second chapter is about “reasons for the question of validity of unilateral arbitration clause”.UAC came into view with more and more financial institutions using it in contracts,and the validity and effectiveness of UAC are gradually discussed by people.Although the discussion of validity of UAC,the existence of the clause has certain rationality,to reduce the risk of financial institutions in clearing debts,and also accords with freedom of contract and the principle of equality and fairness,to have some legality.The problem of validity exists,on the one hand,because there is no clear norm to stipulate UAC across the countries;on the other hand because of the abuse of UAC in contracts in violation of the protection of the lightweight's rights for justice.The third chapter is about “the validity of unilateral clause in different contracts”.Considering the protection of the lightweight's rights on the national laws and international treaties,UAC could be regarded as invalid for violating substantial justice if it is stipulated in the consumer contracts or employment contracts.Because of the highlight of protecting the consumers' rights and interests,UAC shall be limited in consumer contracts,especially using as the adhere clause.When UAC is stipulated in the employment contracts,employers can provide meaningful choice or “opt-out” clause to avoid the existence of unconscionability.In addition,if UAC is agreed in foreign-related contracts,chosen applicable law is very important to avoid disputes arising from characterization and applicable laws in courts.The forth chapter is about “legal thinking on unilateral arbitration clause for China”.Chinese Arbitration Law,Civil Procedure Law and related judicial explanations make provisions on arbitration agreement and jurisdiction agreement,and General Rule of the Civil Law and Contract Law still contains the principles and systems of equality and justice.The court in China shall accord with the above laws to hear the cases related to UAC.And the existing case shows that the court in China have a positive attitude to UAC,but the analysis of judgment may lead to some legal problems,especially when the parties did not agree on the applicable law for UAC.In conclusion,this thesis focuses on the validity of UAC and the attitude to UAC according to the laws in China.This thesis mainly bases on the cases,laws and international convention,starting from the present situation of UAC and then from the perspective of business and law,to analyze the existence of UAC and how to handle the UAC clause in different contracts.The analysis is not to deny UAC unilaterally,but to advise the commercial entities to take prudent actions in the application of UAC in contracts,especially the contracts related to consumers and employees.The parties of contract shall make a clear choose of the proper laws of UAC in contracts to ensure the validity of the clause.