18 February 2021
Unilateral option clauses are a common feature in many transaction documents. A unilateral option clause grants one party the exclusive right to decide between arbitration or litigation to resolve a dispute. This means a party can choose the forum for their dispute at the time the dispute arises, rather than at the time of negotiating the agreement.
Parties should take care when considering whether to include unilateral option clauses in their agreements. Treatment of these clauses varies dramatically between jurisdictions. The consequences of including unilateral option clauses in agreements that are connected with a jurisdiction that considers them to be invalid can be severe.
Clifford Chance has updated and expanded its 2017 Survey on the current effectiveness of unilateral option clauses across the world. The Survey now covers over 95 jurisdictions.