When entering into a contract, parties usually do not intend – or even anticipate – ending up in a dispute with their counterparty. If a dispute does arise, however, the wording of the dispute resolution clause becomes crucial. Not only might it determine where a dispute is resolved, it may also dictate how a dispute is resolved. Parties may, if they choose, prescribe the structure and process by which a dispute is addressed. Ambiguity in the drafting, or a party’s failure to adhere to specified requirements, could nonetheless affect the ultimate outcome. The clause should therefore be carefully drafted, clear in its terms, and properly reflect the mutual understanding and intent of both parties.

Two recent decisions from the courts of England and Wales illustrate the importance of understanding how a dispute resolution clause may operate when entering into a contractual arrangement.

Recent Decisions Focused on Dispute Resolution Clauses

In Ropa v Kharis Solutions Ltd [2026] EWHC 259 (Comm), the Circuit Commercial Court considered a dispute resolution clause which layered multiple dispute resolution mechanisms. The clause mentioned first that the parties should attempt to resolve the dispute through “friendly consultation.” Then, any outstanding issues may be submitted to mediation. The clause then provided that, if mediation is unsuccessful, the dispute should be submitted to arbitration. This case raised questions about the dispute resolution clause, including whether the provision for mediation created an obligation to mediate the dispute as a binding condition precedent to commencing arbitration.

The court found it did not, noting that, to be enforceable, the dispute resolution process must be sufficiently certain. The court referred to the following three requirements for an alternative dispute resolution clause as set out in the judgment of Ramsey J in Holloway v Chancery Mead [2007] EWHC 2495 (TCC): (i) the process must be sufficiently certain in that there should not be the need for another agreement at any stage before matters can proceed; (ii) the administrative processes for selecting a party to resolve the dispute and to pay that person should be defined; and (iii) the process, or at least a model of the process, should be set out so that the detail of the process is sufficiently certain.

In Ropa, the court determined that the clause did not set out a process that is sufficiently certain that there is no need for further agreement for a mediation to proceed, and that the administrative process for selecting the mediator and paying them was not defined. The court noted that it would be necessary, at the least, for the parties to further agree on the identity of the mediator — or how and by whom a mediator is to be appointed if they do not agree — and on where responsibility for the fees of the mediator and the costs of staging the mediation are to fall.

The Court of Appeal also considered dispute resolution clauses in Tyson International Company Ltd v GIC RE, India, Corporate Member Ltd [2026] EWCA Civ 40. GIC had entered into two sets of contracts covering the same reinsurance, with each set providing for a different dispute resolution mechanism. The agreements referred to as the “MRCs” (Market Reform Contracts) contained a clause providing for “English governing law and exclusive English jurisdiction.” The agreements referred to as the “Certificates” provided for New York governing law and New York-seated arbitration. The Certificates also contained a confusion clause which provided that the MRC take precedence in case of confusion between the agreements.

The first instance judge held that the jurisdiction clause in the MRCs prevailed over the arbitration agreement in the Certificates. GIC appealed on the basis that the judge erred in (i) his construction of the confusion clause and should have found that it only applied if the relevant provision in the Certificates was uncertain in its meaning, or (ii) failing to conclude that the two clauses could be reconciled by giving priority to the later arbitration agreement and reading the English jurisdiction clause as giving the English court auxiliary or supervisory jurisdiction over the New York arbitration.

The Court of Appeal dismissed the appeal, determining that the confusion clause applied and the two jurisdiction clauses were flatly inconsistent with each other and could not be reconciled. There was no ambiguity in the meaning of the clause in the MRCs; it meant that any dispute as to the policies should be litigated in England under English law.

Takeaways

Although typically located towards the end of the contract, amongst other boilerplate clauses, the dispute resolution clause merits consideration to make sure that it is fit for purpose and that it reflects how the parties would like any future dispute to be determined. At the very least, parties should consider the choice of law and jurisdiction provisions.

A tiered dispute resolution clause is possible and, if drafted correctly, may steer parties to resolving a dispute in a proportionate manner.

Although not an exhaustive list, those drafting or reviewing dispute resolution clauses should consider the following:

• scope of disputes covered;
• whether requirements to mediate or negotiate should be included and whether those are intended to be binding conditions precedent;
• sufficient detail for the selected form of alternative dispute resolution; and
• consistency with other agreements and how the dispute resolution mechanisms in multiple, related contracts should interact with each other.

The courts of England and Wales will enforce a contractually agreed, layered approach to resolving a dispute but, as these two recent cases highlight, clarity matters.