Arbitration in Derivatives Contracts

Development summary

This article examines the use of arbitration to resolve disputes arising from derivatives transactions. It reviews ISDA’s recent efforts to facilitate arbitration, assesses arbitration’s potential to mitigate enforcement risks where judgments are not mutually recognized and to address competing regulatory standards in European and international derivatives, and considers the available options and relevant factors for market participants using ISDA standard-form documentation. It concludes that further research and data are needed to monitor the use of arbitration in this field.