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Summary
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A Seller sent several letters for the confirmation of orders to the Buyer, which contained the following text on the front side: “Confirmation of Order: Based on our overleaf General Business Regulations including the E.C. Conditions we have sold to you…” On the reverse side it contained the text of the General Business Regulations, which provided for dispute resolution by the “Court of Arbitration of the EG Bourse de Commerce in Strasbourg” and also stated that “The buyer submits to arbitration eliminating legal proceedings.” The Buyer responded by fax requesting certain changes to the packaging and mentioning that delivery was urgent. A dispute arose and the Seller initiated arbitration at the Chambre Arbitrale pour le Fruits et les Légumes dans le Trafic National et International, obtaining a favorable award. The Seller applied to the Bezirksgericht (Regional Court) for enforcement of the award, which the buyer opposed, contesting the validity of the arbitration agreement. The Bezirksgericht declared the award enforceable and the Buyer appealed to the Obergericht (Higher Cantonal Court) of Basel-Landschaft.
The Obergericht dismissed the appeal, holding that the award was enforceable. It noted that while Article II(1) and II(2) NYC required the arbitration agreement to be an “agreement in writing”, this included an arbitration agreement concluded through an “exchange of letters or telegrams”, provided that there was a written offer to arbitrate and a written acceptance of the offer by the other party (which did not need specifically to make reference to the arbitration clause but could also simply refer to the contract as a whole). It stressed that it needed to be kept in mind while interpreting Article II(2) NYC that the drafters of the NYC had referred to “telegrams”, in addition to letters, in order to cover all means of communication in common use at the time, and that it was thus sufficient if the arbitration agreement was contained in a data medium, such as a fax, which allowed for reproduction in writing and confirmation of the mutual agreement of the parties. The Obergericht further noted that an arbitration agreement fulfilled the formal requirements of Article II(2) NYC even if it was not physically included in the parties’ correspondence, but only contained in a separate document, such as the general terms and conditions, to which the parties referred to in their correspondence. However, it noted that this was controversial in a situation when the correspondence referred to the general terms and conditions without specifically mentioning that the latter provided for dispute settlement by arbitration, and that in such a situation it needed to weigh the necessity to facilitate the resolution of disputes by way of arbitration in international commerce, on the one hand, and the need to protect parties against over burdensome obligations, on the other. It found, however, that the parties would be sufficiently protected where (i) the parties had had the opportunity to review the general terms and conditions, which was the case when these were printed on the back of the main contract; (ii) the parties were familiar with the general terms and conditions based on their regular business relationship; or (iii) the parties could be assumed to have been familiar with the terms and conditions in view of trade customs and the nature of the transaction. The Obergericht concluded that in the present case the requirements of Article II(2) NYC had been met. In addition, it noted that the form requirement under Article II NYC was meant to exclude oral or implicit arbitration agreements and while the form requirement under the NYC was more restrictive than what was required under various foreign laws, a contracting state was not permitted to apply less restrictive requirements, just as it was not permitted to apply more restrictive requirements, for the form of an arbitration agreement.
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Refine your searchSwitzerland / 05 July 1994 / Switzerland, Obergericht des Kantons Basel-Landschaft / 30-94/261
