We expect to see these trends continue to play out as these changes in market practice become the new normal and as parties’ willingness to innovate continues to increase. This article examines the latest clause drafting trends, their drivers and how best to address them in negotiations.
“Getting your dispute resolution clause right is one of the most effective ways of managing transaction risk and avoiding a fight. And the drafting doesn’t have to be complex—in fact, recent developments reinforce that simplicity is often the best policy.” Katrina Limond, counsel, London
1. On trend: mixing and matching your governing law and seat
In 2025, we saw a notable increase in the number of agreements providing for a seat of arbitration in a different country to the country of the governing law (for example, agreements governed by English law but providing for a seat of arbitration in Paris or the DIFC). This may indicate a greater awareness of parties’ freedom to tailor their dispute resolution clauses to meet their particular preferences: they can choose an internationally respected governing law and, at the same time, a familiar and geographically convenient seat of arbitration. It may also represent an increased willingness to find a compromise solution where the parties’ primary positions differ during negotiations.
For most arbitration clauses, there is unlikely to be a legal barrier to a mix-and-match approach. However, the approach may require more considered drafting (including, for example, specifying the law governing the arbitration agreement) and, as with other more complex clauses (see below), it is not always the most practical choice.
Most obviously, it may mean you need to involve lawyers qualified both in the law chosen as the governing law of the agreement and the law of the seat at the drafting stage, when obtaining legal opinions and, more importantly, if a dispute arises. This could make the process more time-consuming and costly. When considering whether to include a mix-and-match clause, it is sensible to take both the advantages and disadvantages into account. In some cases, the compromise will be worthwhile; in others a simpler approach may make more sense.
2. Retro vibe: a return to simple dispute resolution clauses
More generally in 2025, we saw complex dispute resolution clauses falling (further) out of fashion, with a particularly significant drop-off in their use on deals with a European nexus, in response to a singularly unhelpful decision from the Court of Justice of the EU. The CJEU’s decision called into question the validity of the asymmetric jurisdiction clauses that had routinely been included in international finance deals for many years.
These clauses generally required one party or group of parties (for example a borrower) to bring proceedings in a specified court while allowing the other party or group of parties (for example the lenders) to bring proceedings elsewhere. There was generally no contractual restriction whatsoever on where the parties with the option to litigate elsewhere could bring proceedings.
The CJEU’s decision suggested that an asymmetric jurisdiction clause which specifies a member state court as the court in which all parties can bring proceedings would be invalid as a matter of EU law if it permitted the parties with the option to litigate elsewhere to bring proceedings outside the EU or Lugano Convention states. This was because it would disregard the objectives of foreseeability, transparency and legal certainty under the EU regime by allowing jurisdiction to be determined by reference to the private international law rules of non-EU and non-Lugano Convention states.
The decision has had implications for many deals with an EU nexus (for example those involving parties based in the EU). This includes transactions where non-member state courts, such as the English or New York courts, are chosen in the clause, due to a risk that the courts of at least some member states might treat these clauses in the same way.
It has also led to concerns about whether judgments given pursuant to these clauses in non-EU and non-Lugano Convention states would be enforceable in the EU. The decision has led to a marked shift away from market-standard asymmetric clause in favour of more narrowly drawn clauses (for example allowing lenders to bring proceedings only in EU member state courts) or exclusive jurisdiction clauses (for example requiring all parties to bring proceedings only in the English courts or only in the French courts).
This change in the legal regime has accelerated a trend away from complex jurisdiction clauses that began more than ten years ago. It has been mirrored by a similar shift away from asymmetric arbitration clauses (clauses specifying that one party or group of parties must only refer disputes to arbitration but permitting the other parties to both arbitrate and litigate (or vice versa)) and from other more complex provisions in dispute resolution clauses, such as detailed requirements as to who may be appointed as arbitrator. The result is that drafting trends have almost come full circle, with a retro “less is more” approach having a new moment.
We expect that trend to continue in 2026, with simplicity once again being seen as the height of sophistication.
3. In vogue: specifying the governing law of an arbitration clause
Arbitration clauses are treated as separate from the wider commercial agreements that they commonly sit within. As a result, when an arbitration clause provides for a seat of arbitration in a different country to the country of the governing law, disputes can arise about which law governs the interpretation of the arbitration clause: is it the law of the wider agreement or the law of the seat?
In England, 2025 was notable as the year in which the answer to this question changed, following an amendment to the Arbitration Act 1996 (one of a series of amendments aimed at ensuring England and Wales remains an attractive and competitive destination for dispute resolution globally). Before August 1, 2025, and unless the parties agreed otherwise, the default position in the English courts was that the law governing the wider contract also governed the arbitration clause. This meant that an arbitration clause within a contract governed by English law was also likely to be governed by English law, even if the seat of arbitration was in Paris or Singapore.
Since August 1, 2025, however, the position has essentially been reversed. The Arbitration Act 2025 provides that, unless the parties agree otherwise, it is the law of the seat that will govern the interpretation of the arbitration clause. An arbitration clause in an English law governed contract providing for a seat of arbitration in Paris will therefore be governed by French law unless the parties agree otherwise.
This legislative change has refocused attention on the importance of considering which law governs an arbitration clause. Whilst the change itself is directly relevant only to situations where the English courts might have to adjudicate on the interpretation of an arbitration clause, the point of principle is relevant across the board: when negotiating an arbitration clause that provides for a seat of arbitration in a different country to the country of the governing law, parties should bear in mind that the arbitration clause and the wider agreement may be found to be governed by different laws and consider which law they wish to apply.
Since the default position is different in different jurisdictions if the agreement is silent as to which law should apply, the safest course is usually to expressly specify the law applicable to the arbitration agreement. Doing so creates certainty and reduces the risks of disputes further down the line about how the clause should be interpreted and applied.
4. Carefully crafted: choosing decision-making bodies
Many commercial contracts include provisions requiring that certain categories of dispute should be determined by an expert or referred to a specialist body, rather than an arbitral tribunal or court. For example, a shareholders’ agreement might include an expert determination clause providing that disputes relating to the valuation of shares will be determined by an expert accountant. These clauses typically go on to provide that, if such a dispute arises, the expert will be appointed by agreement between the parties or, if the parties cannot agree, an industry body in the relevant field.
It often makes a great deal of sense to involve an external body, but it is important to ensure that the right body is chosen and that it can act appropriately when needed. Historically, industry bodies have taken a relatively informal approach to acting as an appointing body in these circumstances.
More recently, however, this seems to be changing. It is increasingly common for industry bodies to have written policies or rules in place which set out the basis on which they will act (or in some cases specifying that they will no longer act). When drafting an expert determination clause, if an industry body is to be designated as the appointing body it is therefore important to check that the body is willing to act and that its approach to making an appointment (whether set out in formal policies or rules or otherwise) will work in practice. This can require a detailed analysis of the relevant rules or policies and/or direct discussions with the body itself.
As an example of the issues that can arise, one industry body commonly chosen by parties in expert determination clauses now requires the parties to make a joint request to the body for the appointment of an expert. The risk with this requirement is that, if one party refuses to co-operate in making a joint request, this could significantly delay or even prevent the determination going ahead, potentially requiring applications to the court or arbitral tribunal to resolve the deadlock and entirely undermining the aim of resolving the substantive issue in dispute quickly and without recourse to a more formal mechanism.
One option to mitigate the risk is to designate an institution that specialises in appointing individuals to decision-making roles rather than an industry body. For example, an expert determination clause could provide that, in the absence of agreement, an expert should be appointed by the ICC’s International Centre for ADR in accordance with the ICC’s Rules for Appointment of Experts and Neutrals or by the LCIA in accordance with the LCIA’s Terms and Conditions for Appointments Only. Using a specialist institution of this type is likely to reduce the risk of disputes about the appointment process and increase the likelihood of an appropriate expert being appointed, without the need for recourse to a court or arbitral tribunal. Moreover, these bodies can generally be counted upon to make sensible appointments since such appointments are part of their day-to-day business.
Similar care should be taken when choosing "specialized" courts or committees in jurisdiction clauses. The parties’ agreement may not be capable of overriding the jurisdictional allocation within the relevant court system, possibly rendering the clause inoperable or inadvertently bestowing jurisdiction on another judicial body should the matter in question fall outside the chosen body’s purview.
5. Still having a moment—drafting arbitration clauses to manage geopolitical and sanctions risks
The widening of sanctions regimes has led to parties thinking more carefully about what this means for the viability of their arbitration clauses. The principal concern is that, if a chosen seat ceases to be perceived as "neutral," a counterparty may refuse to comply with the arbitral process and refer disputes to its home courts, which may well be amenable to hearing the dispute despite this being a breach of the agreement to arbitrate.
The need to consider geopolitics and sanctions when drafting dispute resolution clauses is likely to continue in 2026 with parties seeking to sanction-proof their arbitration clauses to the extent possible to limit parallel proceedings and ensure a widely enforceable award. In particular, we expect the following choices to be impacted by geopolitical/sanctions considerations:
- Seat of arbitration: Parties will give careful thought to whether the chosen seat is "neutral" and to the sanctions-related obligations applying to a tribunal in the jurisdiction of the seat.
- Constitution of the tribunal: Parties may give heightened importance to geopolitical considerations and the risk of a challenge when nominating an arbitrator.
- Institution administering the arbitration: Parties will consider whether their chosen institution requires any special licenses or authorizations if a sanctioned counterparty is involved. Some institutions benefit from a general license allowing them to administer cases involving sanctioned parties (such as the LCIA’s general licence from OFSI).
- Enforcement risk: Geopolitical and sanctions-related considerations will also form part of the assessment of enforcement risk. When drafting clauses, deciding whether to commence arbitration and setting an enforcement strategy post-award, parties will want to establish whether enforcement is likely to be possible in hostile countries or where sanctions are in place.
Our next publication in this series will examine the impact of sanctions on arbitration in more detail.
6. Accessorising: AI, summary procedures, funding, disclosure, cyber, expert protocols
Accessorizing clauses (i.e. including provisions which go beyond the minimum required to achieve an enforceable arbitration clause) was less popular in 2025, and we expect this trend to continue in 2026.
This is in part because several of the "accessories" that have been seen in the past, such as provisions around emergency arbitrators, summary procedures and third-party funding are now catered for by institutional rules or domestic arbitration legislation. For example, the ICC Rules, the SIAC Rules and the HKIAC Rules all now require disclosure of third-party funding, meaning there is no need for parties to provide for this expressly in arbitration clauses governed by these rules. This is not to say that a one-size fits all approach can be adopted, however. For example, the LCIA Rules remain silent on the issue of third-party funding.
In addition, the issues that parties might wish to cater for can change over time. AI continues to be a hot topic, with institutions such as JAMS and AAA introducing model arbitration clauses (or variants to existing clauses) for AI-related disputes. Use of AI as a dispute resolution tool is currently widely debated, with the AAA rolling out the option of AI arbitrators for certain low-value construction disputes, although we understand this has not yet been taken up by parties. For some, this begs the question of whether arbitration clauses should limit the use of AI tools. In theory this could be done, for example by restricting arbitrators’ use of AI tools in the decision-making processes involved in producing their awards, or requiring any AI use to be limited to "closed system" tools or disclosed to the parties.
Several institutions (CIArb, VIAC, SCC and SVAMC) have taken the approach of issuing guidelines and draft procedural orders concerning arbitrator use of AI, none of which extend to mandatory provisions or prohibitions. In practice, given the swift development and everchanging landscape of available AI tools, waiting until a dispute arises to consider the use of AI (in initial procedural orders) offers the advantage of flexibility compared to incorporating provisions in an arbitration clause. This approach allows parties to adapt to the tools existing and the parties’ own appetites for use of AI at the relevant time.
Another relatively new clause accessory is the inclusion of equality, diversity and inclusion (EDI) provisions, such as those promoting diversity when appointing arbitrators. Institutions have issued guidelines or encouraged in their rules taking diversity into account when appointing arbitrators (examples include the ICC, HKIAC and KCAB rules). The LCIA’s landmark EDI Guidelines were issued in 2024 and are increasingly being incorporated into procedural orders in LCIA arbitrations.
As with AI, however, the current trend is to avoid including EDI provisions within arbitration clauses. This is consistent with the approach of the Law Commission of England and Wales which, when consulting about proposed amendments to the English Arbitration Act 1996, considered addressing discrimination in the context of arbitrator appointments, but ultimately decided against that on the basis that such provision may have limited practical benefit and risked founding arbitrator challenges.
In conclusion, the key clause trend for 2026 is simplicity. Parties are rightly concentrating on getting the basics right, prioritising enforceability over flexibility. For good reason, they are also waiting until a dispute has arisen before taking a position on procedural details.
