Blow Machinery Ltd. signed two contracts in the last year with large international companies, for the supply of raw materials.The first contract, with Machine Ltd. a supplier of raw materials contained an arbitration clause.The second contract, with Paper Ltd. a packaging company, did not contain an arbitration clause.

Unfortunately, due to the downturn in business Blow Machinery Ltd. has not been able to comply with the terms of either contract.The secretary of Blow Machinery has advised the company that they are in a far better position with the first contract as they will be able to go to arbitration.Malcolm, the Managing Director of Blow Machinery Ltd. does not agree. He feels they will fare much better with the second contract as any judge in a court would be sympathetic to a business in the present climate and he, Malcolm would get an opportunity to explain the position of the company in public.

Malcolm has asked you to briefly explain the merits of each.

what is the merits of each, having an arbitration clause, and not having one?

What advise would you give to malcom?