With the continuing increase in cross-border investments,1both North-South and South-South, it bears reminding that companies must plan in the good times for the eventuality that parties may not see eye-to-eye in the future – something known but not always implemented. Latin America is poised for even greater investment due to high economic growth rates2 and a burgeoning middle class with its increased demand for goods and services.3

Some investors believe Latin America to be in a better position for growth than Asia.4 With increased investment, however, comes an increased likelihood of disputes. Disputes, particularly those involving parties of different nationalities, multinational entities, or foreign sovereigns, can be incredibly expensive and can seriously affect a client’s bottom line. As also stated in the book from which the title to this article is taken, words can be incredibly powerful.5  Resolving cross-border disputes effectively and costefficiently requires a clear and thoughtful dispute resolution mechanism. As ‘‘[t]he end was contained in the beginning,’’6 so too is an arbitration controlled by the provision contained in the deal documents.

In an effort to regulate costs and avoid local courts, arbitration has become an increasingly popular option. As such, alternative dispute resolution mechanisms should be discussed with clients, and great care should be taken in preparing such agreements before the disputes arise. The key to ensuring a cost-effective and efficient arbitration is careful consideration of numerous factors. While much of this article can be applied to crafting an effective arbitration agreement generally, this article makes reference to issues specific to deals involving Latin American entities. Considering the following topics is fundamental to preparing an arbitration provision that captures the intent of the parties and avoids needless litigation and costs. 

They are: 1) conditions subsequent to the arbitration; 2) choice of law; 3) the seat of arbitration; 4) timing provisions; 5) quality and number of arbiters; 6) confidentiality measures, 7) language; 8) categorization as a ‘‘domestic’’ or ‘‘international’’ arbitration; 9) costs and attorneys’ fees, and; 10) concurrent, subsequent, and final proceedings. Each are dealt with, in turn, from the perspective of a U.S. practitioner attempting to limit his client’s risk and future costs when dealing with a Latin American entity.