This article analyses the operation of unilateral option arbitration clauses (UAC) in the European context. The approach to UACs varies between the Member States of the European Union (EU). This has led to significant uncertainty. This uncertainty is attributable partly to the recent amendments in the recast Brussels I Regulation (hereinafter ‘Recast Regulation’) which came into force on 10 January 2015. Under the Recast Regulation, the substantive validity of jurisdiction clauses is governed by the law of the chosen forum.
After an introduction (section 1) and a discussion of the typical wording and use of UACs (section 2), section 3 sets out the framework applicable to the assessment of jurisdiction clauses in the EU. Section 4 submits that the framework relevant to the assessment of the law applicable to UACs is provided by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 and discusses the operation of this Convention in the context of UACs. Section 5 provides a comparative assessment of the approach to the validity of UACs in the United Kingdom, Germany and France.Journal of International Arbitration