Options of Disputing Parties after Reaching an Arbitration Agreement

After the disputing parties have reached an arbitration agreement, they have two options: arbitration or lawsuit.

Generally, the disputing parties have to refer their disputes to arbitration according to the arbitration agreement unless the arbitration agreement is held invalid for any of the following reasons:

(1) the issues to be arbitrated agreed upon under the arbitration agreement are beyond the scope of arbitration specified by law; 

(2) the arbitration agreement was entered into by a person without capacity or with limited capacity for civil acts; or

(3) the arbitration agreement was entered into by a party under duress by the other party. 

Disputes that may not be referred to arbitration include:

(1) disputes over marriage, adoption, guardianship, child maintenance, or inheritance; and

(2) administrative disputes which shall be subject to the jurisdiction of competent administrative authorities according to law. 

In addition, an arbitration agreement shall be made in writing out of the free will of both parties.

If the parties renege on their arbitration agreement, they may agree on a waiver of arbitration in writing to invalidate their arbitration agreement and resolve their disputes by a lawsuit.