That is what the Graves judge was missing. The jurisdiction clause in Graves was still important in light of mandatory arbitration. It would apply in at least two cases, in addition to those referred to by the Court of Appeal in Trade Finance Solutions Inc. The first is correct in the arbitration provision itself, which gives the Ontario Superior Court of Justice the jurisdiction to appoint the arbitrator if the parties cannot reach an agreement. The second circumstance is Section 46 of Ontario`s Arbitration Act 1991, which allows a court to set aside a sentence in the circumstances described in this section, including misconduct by the arbitrator. Contracts often contain both binding arbitration clauses and jurisdiction clauses that specify the competent courts. These clauses must be carefully developed to avoid conflict and ambiguity as to whether arbitration is the only dispute resolution procedure. In other words, the Court of Cassation has made it clear that jurisdiction clauses should not be confused with arbitration clauses. Although the two types of clauses differ from normal jurisdictional rules, they are subject to two different sets of rules. The term “split” or “hybrid clause” includes a large number of hybrid dispute resolution clauses, the most common clause providing for both judicial jurisdiction and arbitration in conjunction with a mechanism that allows one or both parties to determine the procedure as soon as a dispute arises.
Such clauses are generally used when a party has a superior negotiating position, the strongest party uses the clause to optimize its position in a particular dispute. For example, the clause provides for disputes to be settled in the English High Court, with Part A also entitled to vote in order for the dispute to be referred to arbitration proceedings. Such clauses are increasingly appearing in financing agreements, particularly in international derivatives and credit transactions with counterparties in jurisdictions where English court decisions may not be easily enforced.