Isai S.S. —
Mandatory and hybrid arbitration clauses in the practice of international financial institutions
// International Law and International Organizations. – 2020. – ¹ 2.
– P. 88 - 105.
DOI: 10.7256/2454-0633.2020.2.32622
URL: https://en.e-notabene.ru/mpmag/article_32622.html
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Abstract: This article analyzes the process of application of the hybrid and mandatory arbitration clauses in the practice of international financial institutions. Same as the international commercial arbitration, the domestic arbitration is the most acceptable form of resolution of financial disputes. Contracts with consumers of financial services more often utilize the mandatory arbitration clauses, being the reason why arbitration became de-facto a mandatory means of resolution of disputes with consumers in the sphere of financial services. At the same time, arbitration procedure of dispute resolution is not without its flaws, currently demonstrating trends of increased costs of arbitration, as well is increased term of review of arbitration cases. This gave rise to a new form of arbitration clauses – hybrid dispute resolution clauses, which gives the parties to a dispute an opportunity to seek resolution in state courts, as well as arbitration as an alternative. The novelty of this research consists in the fact that in the conditions of growing “complication” of the arbitration process, there is a high likelihood of application of the hybrid dispute resolution clauses among the international financial institutions. There is also the fact that that arbitration, conducted in accordance with the US financial regulator FINRA, is also mandatory, and in majority of cases yields no results in resolution of disputes of consumers, but its “mandate” is underlines by other causes, than the initiative of large international corporations providing the service.