KluwerArbitration

Document information Incorporation of Arbitration Clauses by Reference

Domenico di Pietro
Publication (*)

Journal of International
Arbitration I Introduction
A considerable number of business contracts are entered into by incorporation of contractual
Bibliographic provisions contained in a separate document to which the parties make reference, such as
reference contractual provisions of industry-specific trade associations or the general conditions of one of the
parties. Frequently, reference is also made to a contract entered into by one of the parties with a
Domenico di Pietro, third party. An example is where the provisions of a subcontract incorporate by reference the
'Incorporation of Arbitration “general conditions” of the prime contract or where, in a bill of lading, reference is made to the
Clauses by Reference', provisions contained in the charterparty.
Journal of International
Arbitration, (© Kluwer Law Often, the document incorporated by the parties contains—among other provisions—an arbitration
International; Kluwer Law clause, the validity of which is sometimes disputed on the basis that incorporation by reference
International 2004, Volume does not fulfil the requirements of validity imposed by the applicable law. This article attempts to
21 Issue 5) pp. 439 - 452 provide an introduction to the analysis of the validity of arbitration clauses incorporated by
reference. The obvious starting point for such an analysis is the New York Convention (1) which,
despite its title, also deals with the enforcement of arbitration clauses. The New York Convention is
particularly relevant since it has been entered into by more than 130 contracting states which, as a
result, have adapted their arbitration statutes in order to comply with its provisions.
After a brief consideration of the scope of the New York Convention and how it purports to achieve
its goals, this article presents a brief analysis of relevant provisions as well as the way these
provisions have been interpreted and enforced. From there, the analysis focuses on whether—and
to what extent—the law of the contracting states can implement legislation more favourable than the
provisions of the New York Convention and whether such departure would affect the application of
other provisions of the Convention altogether. Finally, the article will seek to highlight both content
and interpretation of some arbitration statutes which have implemented more favourable provisions
with regard to incorporation of arbitration clauses by reference.
P 440

II The New York Convention

A A device for success
The Convention's objective of building an international network for the recognition and enforcement
of arbitral awards rendered abroad could only be achieved by attracting the highest possible
number of contracting states. In order to attain broad consensus, drafters had to devise a legal
instrument which would facilitate international arbitration without clashing with the different
fundamental legal principles of each contracting state. Their task, therefore, was one of attaining
compatibility between furthering the objectives of international arbitration and the public policies of
the contracting states. The final draft of the Convention achieved such compatibility, performing a
balancing act. On one hand, the Convention imposes a general obligation on contracting states to
enforce arbitration awards as well as arbitration clauses and agreements. On the other hand, it
exempts this obligation in the presence of circumstances making recognition and enforcement
incompatible with the fundamental principles of law at the place of enforcement. (2)

B Article II and incorporation by reference

The implementation of a system facilitating the enforcement of foreign arbitral awards is entirely
dependent on the existence of provisions guaranteeing the enforcement of arbitration clauses. This
issue is tackled in Article II which reads as follows:

(1) Each Contracting State shall recognize an agreement in writing under which
the parties undertake to submit to arbitration all or any differences which have
arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not, concerning a subject matter capable of
settlement by arbitration.

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 (2) The term “agreement in writing” shall include an arbitral clause in a contract
or an arbitration agreement, signed by the parties or contained in an exchange
of letters or telegrams.
(3) The court of a Contracting State, when seized of an action in a matter in
respect of which the parties have made an agreement within the meaning of this
article, at the request of one of the parties, refer the parties to arbitration, unless
it finds that the said agreement is null and void, inoperative or incapable of being
performed. (3)

The first paragraph of Article II requires contracting states to implement legislation giving effect to
arbitration agreements in writing for the resolution of arbitrable disputes. The second paragraph, in
the English version, goes on to explain that the term “writing” used in the previous paragraph
includes arbitration agreements contained in a document which is either signed by the parties or it
is contained in an exchange of letters and
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telegrams. The final paragraph makes sure that actions in breach of valid arbitration agreements
must be stayed. (4)
Article II does not deal directly with incorporation of arbitration clauses by reference. Therefore, it is
unclear whether Article II(2) only applies to cases where the arbitration clause is contained in the
documents exchanged by the parties or whether it also applies to cases where:
(a)although the documents exchanged do not contain an arbitration clause, nonetheless, they make
express reference to an arbitration clause contained in another document (a so-called relatio
perfecta); or
(b)the documents exchanged by the parties do not contain an arbitration clause but make reference
to a document containing one, although there is no express reference to it in the exchange of
documents (a so-called relatio imperfecta).
As the next section demonstrates, the prevailing case law seems to support the argument that the
exchange of documents described under Article II(2) should be read as entailing scenario (a)
above. Whether scenario (b) applies is much more controversial. (5)

C Case law on incorporation by reference under Article II(2) of

the New York Convention
Several different judicial attempts have been made to justify the compatibility between incorporation
of arbitration clauses by reference and the wording adopted by Article II(2). Less than a decade ago
the Supreme Court in Hong Kong endorsed an innovative reading of Article II observing that:

If one looks at Art. II of the New York Convention … one sees at paragraph 2 the
following words: “The term ‘agreement in writing’ shall include an arbitral clause
in a contract or an
P 442
arbitration agreement, signed by the parties or contained in an exchange of
letters or telegrams.” That definition is not exclusive. (6)

According to the Supreme Court's interpretation, the definition of “agreement in writing” provided by
Article II(2) is not exclusive or exhaustive since the words “shall include” are not qualified by the word
“only.” As a result, the definition provided by Article II(2) should not prevent the application of the
Convention to arbitration clauses entered into in a form of “writing” other than that provided for in the
same text. Though interesting, the reading of the Convention that the Supreme Court suggests
seems to be at odds with other official versions of Article II(2). The French and Spanish versions, for
example, seem to offer—at least at first sight—a much less flexible reading of Article II(2). (7)
Other decisions advocating the applicability of Article II to incorporation by reference have followed
different legal reasoning, stressing that incorporation by reference is not in contrast with the spirit
and the objectives of the Convention. According to some case law, recognition and enforcement of
arbitration clauses incorporated by reference should be granted in the presence of evidence
showing the parties’ awareness about the consequences of the incorporation. The analysis as to
the parties’ actual or deemed awareness should then be carried out by taking into account
indicators such as the status of the parties, the specificity of the reference and the customs of the
industry to which the parties belong. As the Swiss Federal Supreme Court explained in Tradax v.
Amoco, (8) results should differ based on whether the reference is made by experienced business

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 professionals or lay people with little or no experience about a particular industry and its customs.
Similarly, a different conclusion would be reached if the contract were to refer to provisions of
another contract entered into by the same parties—which is deemed to be known—or if it would
refer to general conditions which may not necessarily be known to the parties. In finding for the
validity of the arbitration clause which had been incorporated by reference, the Swiss court noted
that both parties were commercial entities with extensive experience in a specific industry and
therefore they were deemed to know the standard terms to which they had made reference.
Similar arguments were used in another Swiss case dealing with the validity of an arbitration clause
contained in the general conditions printed on the back of a bill of lading which had not been signed
by the shipper and had not been referred to otherwise in a signed document. The court upheld the
validity of that arbitration clause considering that:
P 443

[i]n particular situations, a certain behaviour can replace compliance with a

formal requirement according to the rules of good faith.… This is exactly the
case here. The parties, which have a long standing business relationship, base
it in fact on general conditions containing … the arbitration clause at issue.
Further, the shipper itself has filled in the bill of lading before returning it to the
carrier, which signed it.… The carrier had the right to believe in good faith that
the shipper, its business partner since several years, approved of the
contractual documents which it had filled in itself, including the general
conditions on the back, among which the arbitration clause. (9)

In yet another Swiss case a few years later it was openly accepted, in even clearer terms, that in the
presence of two experienced traders there should be no need for specific reference to the
arbitration clause contained in the provisions that the parties intend to incorporate. In that case it
was stated that:

[t]he agreement resulting from an exchange of written documents need not

explicitly mention the arbitration clause; reference to the contract in its totality
suffices. (10)

Courts in the United States have also dealt with the problem of Article II and incorporation by
reference. The U.S. courts seem to have embraced the line of analysis that places great importance
on the status of the parties and their awareness about the consequence of the incorporation. The
District Court of Washington, for example, rejected a defence that an arbitration clause contained in
standard conditions was unconscionable and had not been pointed out to the defendant. The court
observed that the contract was the result of arm's length negotiations by experienced business
professionals so that its terms were such as the parties “knew or should have known in the exercise
of reasonable diligence.” (11)
In another case, (12) where the parties had entered into a contract subject to the rules and
regulations of the London Metal Exchange, the U.S. Court of Appeals echoed the decision of the
District Court. The appellate court introduced its decision explaining the policy of U.S. courts toward
international arbitration in general, stating:

[a]s a point of departure, we note that federal policy strongly favors arbitration
as an alternative dispute resolution process.… The policy in favor of arbitration
is even stronger in the context of international business transactions.
Enforcement of international arbitral agreements promotes the smooth flow of
international transactions by removing the threats and uncertainty of time-
consuming and expensive litigation. Stability in international trading was the
engine behind the [New York Convention]. This treaty—to which the United
States is a signatory—makes it clear that the liberal federal arbitration policy
applies with special force in the field of international commerce.

The Court of Appeal was also mindful of previous judgments passed by the U.S. Supreme Court in
which it was stated:

in the absence of any express provision excluding a particular grievance from

arbitration, we think only the most forceful evidence of a purpose to exclude the
(13)
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 claim from arbitration can prevail. (13)

P 444
Having described the mindset with which disputes about the validity of arbitration clauses should be
approached in general, the court went on to analyse the circumstances of the case and observed
that the party challenging the validity of the arbitration clause was a sophisticated commodities
trader with extensive experience in London Metal Exchange transactions. For that reason, the court
believed that the same party could not claim that it did not understand its rights and obligations
under the contracts and concluded that:

[b]y incorporating the LME Rules into their contracts, the parties agreed to abide
by all the Rules. Thus, the contracts did contain an agreement to arbitrate in
accordance with LME Rules, notwithstanding that the agreement did not appear
on the face of the contracts. (14)

Some decisions delivered in the United States have sometimes made recourse to the so-called
doctrine of usage of trade (15) to uphold the validity of arbitration clauses incorporated by reference
into contracts between business entities. In a case heard by the Court of Appeals (16) the parties
had entered into a contract for the sale of steel. In the document with which the order was confirmed
it was stated that the sale was subject to the terms contained in the “enclosed” General Conditions
of Sale. The General Conditions of Sale, which were actually not enclosed, contained an arbitration
provision. The Court of Appeals held that the provisions referred to in the order had been
incorporated by reference and became part of the contract between the parties. The fact that the
documents containing the arbitration clause had not been either actually enclosed with the order or
expressly mentioned therein was considered to be immaterial. This is because arbitration is
standard practice within the steel industry and the doctrine of trade usage protects the expectation
of the parties for the application of such provisions.
The line of analysis advocated in the above-mentioned cases was also considered in the
controversial French case of Bomar v. ETAP (17) where the parties had concluded a
P 445
contract for the sale of crude oil making reference to the general conditions of one of the parties,
which contained an arbitration clause. In the action brought to set aside the arbitral award, the Paris
Court of Appeal observed that the New York Convention admits the adoption of an arbitration
clause by reference provided that the parties' intention to arbitrate does not involve any ambiguity.
No ambiguity was recorded by the French (id.) which also noted that the buyer had considerable
experience in the oil industry and therefore could not claim to be unaware of the usual terms
normally entered into in that industry.
This ruling of the (id.), however, was reversed by the Court of Cassation in a widely criticized
decision (18) on the grounds that Article II requires an express reference to the existence of the
arbitration clause contained in the general conditions of contract. The exception to this is the
existence of a long-standing business relationship between the parties insuring that they are
properly aware of the written conditions normally governing their commercial relationships.
Notwithstanding the ruling of the Court of Cassation, the Court of Appeal of Versailles—to which the
case was sent back for a decision on the merits—refused to set aside the award on the ground that
the existence of the arbitration clause in the general conditions was not mentioned in the agreement
between the parties. The court stated that:

the principle of consensualism requires the party invoking the arbitration

agreement to prove that the other party knew about the arbitral clause at the
time it entered into the main agreement. As both parties in this case are
merchants, all types of evidence are allowed. (19)

After detailed examination of the evidence and particularly the correspondence exchanged by the
parties, the Court of Appeal held that the parties were aware of the content of the standard
conditions and therefore the arbitration clause was valid and binding upon them. The flexible
approach adopted in this case law, although very encouraging from one point of view, should not be
relied upon to conclude that Article II should and will be invariably and unconditionally interpreted as
entailing incorporation by reference. Caution should always be exercised where, for example, (a)
the existence of the arbitration clause contained in the document to which the parties make
reference was not pointed out by one of them, or (b) one of the parties is not used to dealing on the
terms incorporated by reference.

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 Despite the inclination of many state courts to read the Convention flexibly and liberally, it cannot be
denied that the absence of an express provision in Article II with regard to incorporation by
reference may legitimately lead to different outcomes. No blame, therefore, should be attached to
the decisions which have interpreted the New York Convention more conservatively to deny the
validity of arbitration clauses incorporated by reference. This is especially so in highly complex
multiparty agreements or where the intention to incorporate as well as the awareness of the
incorporation was more difficult
P 446
to establish. (20) Examples of such borderline cases are found in shipping disputes, where the bill of
lading makes reference to the charterparty containing an arbitration clause, and insurance and
reinsurance contracts.
The Italian Court of Cassation, for example, stated that a general reference in the bill of lading to the
charterparty does not validly incorporate the arbitration clause contained in the charterparty.
According to the Italian court, where:

the carrier raises an objection of lack of jurisdiction in favour of foreign

arbitrators against the buyer of the goods and subsequent holder of the bill of
lading, the arbitration clause is valid only if the bill of lading specifically refers
thereto (by words which show that the party agrees to derogate from the
jurisdiction of the Italian courts). A general reference in the bill of lading to a
different document containing an arbitral clause does not incorporate that clause
into the bill of lading and, therefore, the clause may not be relied upon against a
subsequent holder of the bill. In the present case, the general reference to the
conditions, terms and exceptions of the charter party contained in the bills of
lading, which were issued to the shipper by the carrier and then signed over to
… the consignor of the goods, does not derogate from the jurisdiction of the
Italian courts. Derogation can only ensue from a specific reference to the foreign
arbitration clause. (21)

The English Court of Appeal seems to have shared this conclusion. The Federal Bulker affirmed
the principle that general words of incorporation in a bill of lading are not apt to incorporate an
arbitration clause in a charterparty. (22) Other courts have, however, expressed a different view and
tend to admit the validity of arbitration agreements even in those circumstances. (23)

D Summary
As we have seen above, the case law seems to support the conclusion that Article II of the New York
Convention covers cases where the documents exchanged make express reference to an
arbitration clause contained in some other document which is not actually exchanged by the parties.
The debate as to whether Article II applies to merely general reference to standard conditions of
trade or equivalent documents containing an arbitration clause without any specific reference to that
clause (relatio imperfecta) has not been settled. According to some decisions the answer should
be positive if the standard conditions have been communicated to the other party or are already in
possession of the other party.
According to some case law, general reference may also suffice if it is established that the parties
are experienced traders used to entering into contracts governed by certain trade rules and were
aware, in the particular case, of the effect triggered by the incorporation. However, it may not be
safe to regard such approach as established good law and
P 447
therefore rely on the unqualified recognition of the validity of arbitration clauses in similar cases.
Since Article II is silent on this issue, case law advocating a different approach should not take the
parties by surprise.

E The New York Convention and the application of more

favourable rules of domestic law
Regardless of the correct interpretation of Article II, the validity of the incorporation by reference may
be held valid by more favourable domestic rules that contracting states may have implemented.
In the past it was debated whether: (a) the New York Convention imposes a strict standard of formal
validity of arbitration clauses prohibiting the implementation of more liberal legislation, and (b) the
application of domestic provisions in lieu of Article II would altogether exclude the application of the
New York Convention. Both recent case law and the opinion of most commentators seem to have

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 rejected those arguments. A brief analysis of the scope of the Convention may be used to support
this conclusion. (24)

F The scope of the Convention

One of the objectives of the New York Convention was to facilitate the development of international
arbitration—which is universally regarded as the most reliable means of dispute resolution available
to international traders (25) —by protecting it from any unreasonable influence from states and state
courts. (26)
It has been suggested, however, that the New York Convention also aims at preventing the
unconscionable use of arbitration. One well known judgment observes that:

the purpose of the Convention is to facilitate the resolution of disputes through

arbitration, taking particular account of the needs of international commerce;
nonetheless, the requirement of writing prescribed in Art. II of the Convention
has the effect of protecting the parties concerned from entering into ill-thought-
out commitments involving the renunciation of the right of access to normal
courts and judges. (27)

This may not find much support in the history of the Convention and especially in the reasons that
brought about its creation. (28) As has been pointed out, international traders
P 448
and those who participate in international business do not need to be protected from arbitration,
rather they need protection from the interference of domestic courts. (29)
The argument according to which the New York Convention protects parties from ill-thought-out
arbitration agreements may have some weight at a domestic level, where the acquaintance with
arbitration may not be as widespread in certain industries. However, in the international arena,
where arbitration is traditionally regarded as the norm, the above-mentioned point of view may
attract a limited number of supporters.
With particular reference to the subject matter of our analysis, the history of the Convention, as well
as its provisions, seems to suggest that the predominant scope of Article II is to make sure that the
contracting states recognize and enforce arbitration agreements and that they do so—if not
unconditionally—at least where such agreements display certain features representing a common
denominator shared by all contracting states' legal systems.
The assertion that one of the objectives of the Convention is to harmonize the domestic legislation
of the contracting states with regard to the formal requirements of arbitration clauses should be
interpreted with this in mind. In this context, harmonization should not mean that the contracting
states are required to implement legislation identical to the provisions contained under Article II,
with express prohibition to implement more liberal rules. The harmonization sought by the
Convention seems more concerned with ensuring that the contracting states will not implement
provisions less favourable to arbitration than the provisions of the Convention.
As it has already been suggested, compliance with the provisions of Article II should be therefore
regarded as a maximum requirement that the contracting states can impose for the validity of
arbitration clauses. (30)
In this sense should be understood the assumption according to which Article II is to be regarded as
a uniform rule superseding national law. Article II represents a uniform rule superseding national
law insofar as national law introduces formal requirements less favourable than those of the
Convention. (31)
The implementation by the contracting states of more liberal arbitration provisions should therefore
be regarded as entirely compatible with the Convention. This conclusion seems to be encouraged
by international instruments such as those published by the United Nations Commission on
International Trade Law (UNCITRAL), particularly the Model Law. (32) By the same token, the
application of more favourable provisions available either under domestic law or international
conventions should not render other provisions
P 449
of the New York Convention inapplicable. This contrary argument has not found much following. (33)
Most commentators nowadays seem to agree that the New York Convention contains nothing to
prevent the combined application of its provisions with more favourable rules of national law. (34)
The New York Convention is structured to allow for the combined application of its provisions with
the more favourable rules which may be available under any national law. A quick look at some of its
provisions shows the validity of this argument. Article V, for example, describes the circumstances

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 in the presence of which recognition and enforcement may be refused by the courts. By using the
word may, the Convention intended to provide national courts with the discretion to allow
enforcement of awards even in the presence of circumstances which would otherwise affect the
validity of the award. Article V seems to account for cases in which the law is more liberal in the
country where enforcement is sought than the law of the place of arbitration. The pro-enforcement
bias here is so strong that Article V, inter alia, allows the enforcement of arbitral awards irrespective
of whether they have been set aside at the place of arbitration. (35)
Another example of the relationship advocated by the Convention between its provisions and more
favourable legislation is found at Article VII(1) where it is stated that the provisions of the Convention
do not affect the:

validity of multilateral or bilateral agreements concerning the recognition and

enforcement of arbitral awards entered into by the contracting states nor deprive
any interested party of any right he may have to avail himself of an arbitral
award in the manner and to the extent allowed by the law or the treaties of the
country where such award is sought to be relied upon. (36)

Admittedly, such provisions deal with enforcement of awards rather than arbitration clauses.
Nonetheless, they seem to support the argument that the Convention does contemplate the
combined application of its provisions with other more favourable provisions available under
domestic or international law.

III More Favourable Provisions Under Domestic Law

Many states have implemented arbitration statutes providing for provisions more liberal, or at least
clearer, than the relevant rules of the New York Convention. (37) Examples
P 450
of those provisions as well as some remarks about the way they have been interpreted are offered
below. (38)

A French Code of Civil Procedure

Article 1443(1) provides: “To be valid, an arbitration clause shall be in writing and included in the
contract or in a document to which it refers.” (39)
The French case law on Article 1443(1) should be distinguished from the French decisions applying
different rules. In the above-mentioned case of Bomar v. ETAP, for example, the Court of Cassation
somewhat surprisingly ignored the applicable provision of French law and went on to analyse the
validity of the arbitration clause incorporated by reference on the basis of Article II of the New York
Convention only. (40)
Most decisions rendered on the basis of Article 1443(1) have proved more favourable to the validity
of arbitration agreements incorporated by reference. In Société Dreistern Werk v. Société
Crouzier, (41) for example, the parties had entered into an agreement about the sale of machinery
that made reference to the UNEC General Conditions for the Supply of Plant and Machinery for
Export No. 188 which contain an arbitration clause. The arbitration clause was considered invalid by
the Court of Appeal in Nancy. The Court of Cassation, however, quashed the decision stating that
any decision as to the validity of the arbitration clause could not be taken without first establishing
whether the parties were actually familiar with the content of the UN general conditions containing
the arbitration clause and, if so, whether by remaining silent they had tacitly agreed to incorporate
those conditions into the contract.

B Italian Code of Civil Procedure

Article 833(2) provides: “The arbitration clause contained in general conditions incorporated into a
written agreement between the parties is valid, provided that the parties had knowledge of the
clause or should have had such knowledge by using ordinary diligence.” (42)
In a case entertained by the Italian Court of Cassation the parties had entered into an agreement
containing general reference to the provisions of the International Tanners Council and the
International Council of Hides, Skins and Leather Traders Associations (ICHSLTA) which happened
to contain an arbitration clause.
The Italian court rejected the argument that, in the absence of specific reference, the arbitration
clause could not be regarded as having been validly incorporated. After noting that both parties
were experienced traders, the court stated that:
P 451

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 the reference “ per relationem imperfectam” made by the parties in the contracts
at issue engenders a valid arbitration clause, since the parties never argued that
they were not aware of the contents of the Standard Contract. (43)

The focal point of the Italian court's analysis, in compliance with Article 833(2), was the fact that both
parties were experienced traders and, as such, they ought to know that reference to the general
conditions of contract of that trade association would have entailed the incorporation of an
arbitration clause.

C English Arbitration Act 1996

Section 6(2) provides: “The reference in an agreement to a written form of arbitration clause or to a
document containing an arbitration clause constitutes an arbitration agreement if the reference is
such as to make that clause part of the agreement.” (44)
The prevailing case law seems to suggest that section 6(2) does not allow unqualified recognition of
arbitration clauses incorporated by reference. Most cases, for example, appear to support the view
that an arbitration clause contained in one document would not be regarded as having been
incorporated into another document simply by the second contract stating that it is made on the
same conditions as the first. The observation offered by the English courts to justify such conclusion
is that in those cases the obligation to arbitrate is uncertain and it cannot be carried by general rules
of incorporation unless the wording and intention to do so are absolutely clear. (45)
Although the DAC Report (46) encouraged the adoption of a more liberal attitude towards
incorporation by reference, recent decisions on the effect of section 6(2) seem to prove that the
balance of authority favours the proposition that an arbitration clause is to be regarded as validly
incorporated only if there is express reference to it in the words of incorporation. This was also the
position before the Arbitration Act 1996 came into force. (47)
In summary, according to the majority of decisions, and in the absence of special circumstances,
section 6(2) should be interpreted as denying the validity of the incorporation where the reference
does not expressly mention the arbitration clause. Specific reference to the arbitration clause
seems therefore necessary. (48)
P 452

IV Conclusions
The case law on Article II seems to suggest that domestic courts are inclined to uphold the validity of
incorporation of arbitration clauses to which the parties have made express reference (relatio
perfecta). More uncertain is the fate of clauses incorporated by general reference to the document
or set of rules in which the clauses are contained (relatio imperfecta).
Some decisions tend to affirm the validity of arbitration clauses where the document in which they
are contained is either known or available to the parties. Most decisions upholding the validity of
arbitration clauses incorporated without specific reference tend to do so by placing importance on
the status of the parties and particularly on whether the parties are experienced traders that are
used to entering into contracts governed by certain rules or are aware of the outcome generated by
the reference.
Although such case law is regarded as complying with the pro-enforcement bias of the Convention,
it is not possible to assume that a similar conclusion should be reached by any courts under any
circumstances. The silence of Article II on the issue may produce inconsistent case law. In fact,
some courts have denied the validity of incorporation where the reference was not specific or where
it was not possible to ascertain whether the parties where in a position to foresee the outcome of
the incorporation.
The New York Convention seems also to allow the application of more favourable provisions which
may have been implemented by the contracting states and that both sources of law can be the
object of combined application if this is beneficial to enforcement.
The arbitration statutes of a considerable number of contracting states recognize the validity of
arbitration clauses incorporated by express reference. Unfortunately, most of them are silent on the
issue of general reference to a document containing an arbitration clause (relatio imperfecta). State
courts, however, seem prepared to grant enforcement in the presence of evidence as to the parties’
actual or deemed awareness of the existence of an arbitration clause in the document incorporated
by reference.
P 452

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 References
*)
J.D., LL.M., Solicitor (England and Wales) and Avvocato (Italy), International Arbitration Group,
Mayer, Brown, Rowe & Maw LLP, London. The author would like to express his gratitude to
Dominic Spenser Underhill, Partner, Mayer Brown Rowe & Maw LLP for his constant support and
guidance as well as the much appreciated help with this article. The author would also like to thank
Philippa Casey, Mayer Brown Rowe & Maw LLP for her useful comments on this article. Any errors
contained in the article belong exclusively to the author.
1)
United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June
10, 1958, 330 U.N.T.S. 3 [hereinafter New York Convention].
2)
See, e.g., id. art. I (the Reservations), art. II, (on arbitrability and substantial validity of the arbitration
clause) and art. V. See also Domenico Di Pietro, Are the Principles of the New York Convention
Realised Consistently? in Report of the Society for Advanced Legal Studies, Achieving Justice
Through International Arbitration (2004).
3)
New York Convention, supra note 1, art. II.
4)
As far as requirement of signature is concerned, it now seems generally accepted that for an
arbitration agreement to be an “agreement in writing” within the meaning of art. II it must be “either
(1) an arbitration clause or (2) an arbitration agreement, (a) signed by the parties, or (b) contained
in an exchange of letters or telegrams.” Sphere Drake Insurance PLC v. Marine Towing, Inc., 20
Y.B. Com. Arb. 937 (1995); see, however, Kahn Lucas Lancaster, Inc. v. Lark International Ltd., July
29, 1999, which did not follow the decision in Sphere Drake.
The same conclusion was also reached by the Swiss Supreme Court, according to which:
“arbitration clauses are valid [if they are] contained in a signed contract or in an exchange of letters,
telegrams, telexes and other means of communication. In other words, a distinction should be made
between agreements resulting from a document, which must in principle be signed, and
agreements resulting from an exchange of written declarations, which are not necessarily signed.”
Compagnie de Navigation et Transports S.A. v. Mediterranean Shipping Company S.A., January
16, 1995, 31 Y.B. Com. Arb. 697 (1996).
5)
See Albert Jan van den Berg, The New York Arbitration Convention of 1958 172 (1981); Neil
Kaplan, New Development on Written Form, in Enforcing Arbitration Awards Under the New York
Convention 17 (1998); Domenico Di Pietro & Martin Platte, Enforcement of International Arbitration
Awards: The New York Convention of 1958 65 (2001); see also Julian Lew, Loukas Mistelis &
Stephan Kroll, Comparative International Commercial Arbitration 113 (2003); Fouchard Gaillard
Goldman on International Commercial Arbitration 67 (Emmanuel Gaillard & John Savage eds.,
1999); Toby Landau, The Written Form Requirement for Arbitration Agreements: When “Written”
Means “Oral”, 11 ICCA Congress Series 19 (2003); Alan Redfern & Martin Hunter, Law and
Practice of International Commercial Arbitration (1999).
6)
Jiangxi Prov'l Metal & Minerals Imp. & Exp. Corp. v. Sulanser Co., April 6, 1995, 21 Y.B. Com. Arb.
546 (1996).
7)
The French version of art. II(2) reads: “[o]n entend par ‘convention écrite’ une clause
compromissoire insérée dans un contrat, ou un compromis, signés par les parties ou contenus
dans un échange de lettres ou de télégrammes.” The phrase “on entend,” which in this context can
be translated into the English “it is understood” seems much narrower than the phrase “shall include”
employed in the English version and seems also to contradict what was advocated in the decision
taken by the Supreme Court.
Similar observation can be made with reference to the Spanish version according to which: “[l]a
expresión ‘acuerdo por escrito’ denotará una cláusula compromisoria incluida en un contrato o
un compromiso, firmados por las partes o contenidos en un canje de cartas o telegramas.” Also
here, the verb “denotar,” which can be translated into the English “to denote,” seems to challenge
the interpretation advocated by the Supreme Court in Hong Kong.
8)
Tradax Export S.A. v. Amoco Iran Oil Company, February 7, 1984, 11 Y.B. Com. Arb. 532 (1986).
9)
Compagnie de Navigation et Transports S.A. v. Mediterranean Shipping Company, January 16,
1995, 21 Y.B. Com. Arb. 690 (1996).
10)
Tribunal Fédéral, January 12, 1989, 15 Y.B. Com. Arb. 510 (1990).
11)

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 11)
JMA Investments v. C. Rijkaart B.V., June 18, 1985, 11 Y.B. Com. Arb. 578 (1986).
12)
Metallgesellschaft v. Montrose Second Circuit, January 15, 1991, 17 Y.B. Com. Arb. 672 (1992).
13)
AT & T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 650; 106 S.Ct. 1415,
1419; 89 L. Ed.2d 648 (1986).
14)
Id.
15)

Additional Terms in Acceptance or Confirmation

(1)A definite and seasonable expression of acceptance or a written confirmation
which is sent within a reasonable time operates as an acceptance even though
it states terms additional to or different from those offered or agreed upon,
unless acceptance is expressly made conditional on assent to the additional or
different terms.
(2)The additional terms are to be construed as proposals for addition to the
contract. Between merchants such terms become part of the contract unless:
(a)the offer expressly limits acceptance to the terms of the offer;
(b)they materially alter it; or
(c)notification of objection to them has already been given or is given within a
reasonable time after notice of them is received.
(3)Conduct by both parties which recognizes the existence of a contract is
sufficient to establish a contract for sale although the writings of the parties do
not otherwise establish a contract. In such case the terms of the particular
contract consist of those terms on which the writings of the parties agree,
together with any supplementary terms incorporated under any other provisions
of this Act. U.C.C. § 2-207 (1977).

16)
Aceros Prefabricados, S.A. v. Tradearbed, Inc. 282 F.3d 92, 46 UCC Rep.Serv.2d 596; 2001 WL
34382097.
17)
Bomar Oil N.V. v. Entreprise Tunisienne d'Activités Pétrolières (ETAP), January 23, 1991, 17 Y.B.
Com. Arb. 488 (1992) [hereinafter Bomar v. ETAP].
18)
Fouchard Gaillard Goldman on International Commercial Arbitration 241 (Emmanuel Gaillard &
John Savage eds., 1999).
19)
Bomar v. ETAP, supra note 17, at 490.
20)
See, e.g., the decision of the High Court in Singapore in Concordia Agritrading v. Cornelder (2000)
3 Int'l Arb. L.R. 42; or the decision of the Supreme Court of India in Smita Conductors v. Euro Alloys
Ltd., 27 Y.B. Com. Arb. 482 (2002).
21)
Granitalia v. Agenzia Marittima Sorrentini Corte di Cassazione, December 22, 2000, 27 Y.B. Com.
Arb. 506 (2002).
22)
Federal Bulk Carriers v. C Itoh & Co. [1989] 1 Lloyd's Rep. 103.
23)
Compania Espanola de Petroleos v. Nereus Shipping S.A., 527 F 2d 966, 973 (2nd Cir. 1975).
24)
See the debate in Van Den Berg, supra note 5, at 280; Di Pietro & Platte, supra note 5, at 65; Lew,
Mistelis & Kroll, supra note 5, at 113; Gaillard & Savage, supra note 5, at 67; Vera Van Houtte,
Consent to Arbitration through Agreement to Printed Contracts: The Continental Experience, 16
Arb. Int'l 1 (2000); Toby Landau, The Written Form Requirement for Arbitration Agreements: When
“Written” Means “Oral”, 11 ICCA Congress Series 19 (2003).
25)
It has been described as “the servant of international business and trade.” Robert Briner,
Philosophy and Objectives of the Convention, in Enforcing Arbitration Awards Under the New York
Convention 9 (1998).
26)

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 26)
Lord Mustill, History of International Commercial Arbitration, in The Leading Arbitrators' Guide to
International Arbitration 11 (Lawrence Newman & Richard Hill eds., 2004).
27)
Tradax Export S.A. v. Amoco Iran Oil Company, February 7, 1984, Tribunal Fédéral, 11 Y.B. Com.
Arb. 532 (1986).
28)
Pieter Sanders, The History of the New York Convention, 9 ICCA Congress Series 11 (1999).
29)
See Andreas Reiner, The Form of the Agent's Power to Sign an Arbitration Agreement and Article
II(2) of the New York Convention, 9 ICCA Congress Series 82 (1999).
30)
Lew, Mistelis & Kroll, supra note 5, at 113; Di Pietro & Platte, supra note 5, at 65; Guillermo Aguilar
Alvarez, Article II(2) of the New York Convention and the Courts, 9 ICCA Congress Series 67
(1999).
31)
See Martin Frederik Gusy, The Validity of an Arbitration Agreement Under the New York
Convention, Remarks on the Order of OLG Schaswig, 19 J. Int'l Arb. 363 (2002).
32)
U.N. Doc. A/40/17, Annex I, adopted by the United Nations Commission on International Trade Law
on June 21, 1985, 24 I.L.M. 1302 (1985) [hereinafter Model Law].
33)
Van den Berg, supra note 5, at 276.
34)
Di Pietro & Platte, supra note 5, at 68; Gaillard & Savage, supra note 5, at 247.
35)
See New York Convention, supra note 2, art. V(1)(e).
36)
New York Convention, supra note 2, art. VII.
37)
UNCITRAL has played an important role in the implementation of more favourable legislation by the
publication of the Model Law. The Model Law deals with the formal requirements of arbitration
clauses as follows: “The arbitration agreement shall be in writing. An agreement is in writing if it is
contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other
means of telecommunication which provide a record of the agreement, or in an exchange of
statements of claim and defence in which the existence of an agreement is alleged by one party and
not denied by another. The reference in a contract to a document containing an arbitration clause
constitutes an arbitration agreement provided that the contract is in writing and the reference is such
as to make that clause part of the contract.” Model Law, supra note 33, art. 7(2).
38)
The space allowed to this article does not permit mention of each of the provisions of national law
that have departed from the wording of the New York Convention. For the same reason, the
provisions mentioned in this section cannot be dealt with exhaustively.
39)
NCCP, art. 1443(1) (Fr.).
40)
Bomar v. ETAP, supra note 17, at 488–90.
41)
2 Rev. Arb. 291 (1991) with comment by Catherine Kessedjian.
42)
CPP, art. 833(2) (Italy).
43)
Conceria Madera Srl v. Fortstar Leather Ltd., November 16, 2000, 27 Y.B. Com. Arb. 500 (2002).
44)
Arbitration Act 1996, c. 23, § 6(2) (Eng.).
45)
See Robert Merkin, Arbitration Act 1996 28 (2000); Bruce Harris, Rowan Planterose & Jonathan
Tecks, The Arbitration Act 1996: A Commentary 77 (2003).
46)
Departmental Advisory Committee on Arbitration Law chaired by Lord Justice Saville, February
1996 Report on the Arbitration Bill.
47)
See Thomas & Co v. Portsea Steamship [1912] A.C. 1; The Neran [1994] 2 Lloyd's Rep. 50;
McAlpine v. RMG 1 A.D.R.L.J. 53 (1998).

48)

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 48)
See Excess Insurance Co. v. Mander [1997] 2 Lloyds Rep. 119; Trygg Hansa Insurance Co. v.
Equitas [1998] 2 Lloyd's Rep. 439; Cigna Life Insurance v. Intercaser [2002] 1 All E.R. (Comm.)
235; and The Michael S, December 20, 2001, Commercial Court, Colman J. (unreported). See,
however, Secretary of State for Foreign and Commonwealth Affairs v. Percy Thomas Partnership,
H.H.J. Bowsher Q.C., Ref., January 19, 1998, where it was held (following the suggestion contained
in the DAC) that an arbitration clause contained in the standard conditions of contract that were
incorporated by reference into a contract was binding though no specific reference was made to the
clause in the incorporating provision.

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