Effective interpretation Sample Clauses

Effective interpretation. Under the principle of effective interpretation (effete utile), when the wording of the agreement raises the question whether the intent to arbitrate exists or not (e.g. in a pathological, optional arbitration clause), weight should be given to the interpretation which results in the arbitration clause being effective rather than one which “renders them useless or nonsensical”.298 In other words, the principle relying on consent assumes that parties who have included an arbitration clause in their contract have intended that the clause is also effective (ut res magis valeat quam pereat).299 293 See ibid. 294 See Saudi Arabia v. Arabian American Oil Co. (ARAMCO), 27 International Law Report 117 (1963). 295 See Lehrberg 1995, pp. 66-67. 296 See Waincymer 2012, p. 140. 297 See Hemmo 2007a, pp. 586-587; KKO 1997:134. 298 See Xxxxxxxx-Xxxxxx 1999, pp. 258-259; Aho 1968, p. 257; Hemmo 2007a, pp. 652-653; Article 4.5 of the UNIDROIT Principles of International Commercial Contracts; Article 5.106 of the Principles of European Contract Law. 299 See Waincymer 2012, p. 141; Born 2009, p. 1065. It is noteworthy that Xxxxxxxxx asserts that the principle of effective interpretation is well suited for evaluating the existence of the arbitration agreement, but not so much as to the subjective scope thereof because “there typically is no starting point where that person can be presumed to want a valid arbitration”.300 While this is true in the sense that the non- signatory is typically not present when the arbitration agreement is drafted and therefore any determination as to the non-signatory’s intent is obviously futile, the principle may be deemed to carry significance when considering whether the signatory parties meant to include the non-signatory beneficiary in the scope of the arbitration agreement. Although this topic will be discussed below, it may already be stated briefly that it would be rather peculiar if the signatories deliberately wanted to exclude the non-signatory from possible arbitration proceedings and thus possibly subject themselves to multiple proceedings in several fora.