Arbitration Agreement

Section 6 of the Arbitration Act 1996 defines the concept broadly: an arbitration agreement 'means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).' Formality matters, though — section 5 confines Part I of the Act, which contains most of its protections, to agreements made in writing: 'The provisions of this Part apply only where the arbitration agreement is in writing, and any other agreement between the parties as to any matter is effective for the purposes of this Part only if in writing.'

The practical payoff of having a written arbitration agreement is section 9's stay of court proceedings. A party to the agreement who is sued in respect of a matter that the agreement says should go to arbitration 'may (upon notice to the other parties to the proceedings) apply to the court in which the proceedings have been brought to stay the proceedings so far as they concern that matter.' Crucially, the court has very little room to refuse: 'On an application under this section the court shall grant a stay unless satisfied that the arbitration agreement is null and void, inoperative, or incapable of being performed.' That mandatory language is what gives an arbitration clause real teeth — the default is that the dispute goes to arbitration, and it is for the party resisting arbitration to show why the agreement should not be enforced.