Judicial principles and studies
Arbitration Clause: Option vs. Obligation and Its Effect on Court Jurisdiction
A short summary explaining when an arbitration clause is binding versus permissive, noting the separability of the arbitration agreement and the writing requirement.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The study examines when an arbitration clause excludes court jurisdiction — emphasizing that the clause must be drafted as binding, the effect of permissive wording that preserves access to courts, the separability of the arbitration agreement, and the requirement that arbitration be a clear, written choice (per Article 10 of the Arbitration Law).
Summary
An arbitration clause must be compulsory in effect to bar court jurisdiction; phrasing that gives parties a choice between arbitration and courts does not prevent judicial proceedings. The arbitration agreement is severable from the main contract and may be renounced expressly or implicitly by the parties. Arbitration is an exceptional dispute-resolution route that requires a clear written manifestation of the parties' will. This is an educational summary and not judicial text or legal advice.
Practical significance
To ensure courts are excluded, drafters should use mandatory wording for arbitration clauses and meet the writing requirement. Permissive clauses leave the door open to litigation before courts. The separability principle means a valid arbitration agreement can operate independently, while parties retain the ability to waive arbitration.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.