Available documents (1115)



II / 2. ANALYSIS (II) / ARTICLE II(1) / A. The obligation to recognize an agreement in writing / §11
11. Article II(1) provides that, when certain conditions are met, Contracting States “shall” recognize an agreement in writing to arbitrate.
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / ii. 'Inoperative' / §110
110. A French court has found that it had jurisdiction as the timeframe specified for the constitution of the arbitral tribunal had expired, thereby dismissing the argument that there was no manifest inapplicability of the arbitration agreement pursuant to article II of the Convention. The court ruled that the arbitration agreement was “caduc” and concluded that it had jurisdiction over the dispute without any reference to the Convention.168
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / ii. 'Inoperative' / §111
111. Another situation of the alleged inoperability of an arbitration agreement can be found in the Westco decision rendered by the High Court of Hong Kong. A party alleged that non-compliance with procedural conditions prior to the commencement of the arbitral proceedings rendered the agreement to arbitrate inoperative. The High Court dismissed the argument and referred the parties to arbitration.169
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §112
112. The “incapable of being performed” provision is generally understood as relating to situations where the arbitration cannot effectively be set in motion.170 As explained by an Indian court relying on Section 45 of the Indian Arbitration Act of 1996 (which mirrors article II(3) of the Convention) “the phrase incapable of being performed signifies, in effect, frustration and the consequent discharge. If, after the making of the contract, the promise becomes incapable of being fulfilled or performed, due to unforeseen contingencies, the contract is frustrated.”171
170. Stefan Kröll, The ‘Incapable of Being Performed’ Exception in Article II(3) of the New York Convention, in ENFORCEMENT OF ARBITRATION AGREEMENTS AND INTERNATIONAL ARBITRAL AWARDS – THE NEW YORK CONVENTION 1958 IN PRACTICE 323, at 326 (E. Gaillard, D. Di Pietro eds., 2008).
171. Ramasamy Athappan and Nandakumar Athappan v Secretariat of Court, International Chamber of Commerce, High Court of Madras, India, 29 October 2008. See also the references cited at para. 67.
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §113
113. It emerges from case law that an arbitration agreement has been held incapable of being performed when the arbitration agreement was pathological, i.e., in two main situations: (i) when the arbitration agreement is unclear and does not provide sufficient indication to allow the arbitration to proceed and (ii) when the arbitration agreement designates an inexistent arbitral institution.
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §114
114. For instance, ruling upon Section 44 of the Indian Arbitration Act of 1996 (implementing articles I and II of the Convention), an Indian court denied enforcement of an arbitral clause providing for “Durban Arbitration and English Law to apply”.172 The court held that the alleged arbitration agreement was “absolutely vague, ambiguous and self-contradictory”. Similarly, the Swiss Federal Tribunal refused to enforce an arbitral clause providing for arbitration “through the American Arbitration Association or to any other American court” on the ground that the arbitration agreement was not sufficiently clear so as to exclude beyond doubt the jurisdiction of the state courts under both article II(3) and Swiss law.173
173. Federal Tribunal, Switzerland, 25 October 2010, 4A279/2010. It is unclear from that case whether the Federal Tribunal analysed the arbitration agreement under the “incapable of being performed” ground as the decision concluded that the arbitration agreement was invalid under the “null and void, inoperative or incapable of being performed” provision.
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §115
115. In a case where the arbitration agreement designated a non-existent arbitral institution, a United States court nevertheless compelled the parties to arbitration pursuant to article II(3) of the Convention and the Federal Arbitration Act. The court reasoned that the UNCITRAL Arbitration Rules referred to in the arbitration agreement provided for a method for constituting an arbitral tribunal in the absence of a prior agreement by the parties and dismissed the plaintiff’s claims that the agreement was incapable of being performed.174
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §116
116. In Russia, the Highest Arbitrazh Court of the Russian Federation held that, in order for the arbitration agreement to be enforceable under the Convention, the agreement had to contain clear language from which the true intentions of the parties to refer the dispute to an arbitration body could be ascertained.175 Another Russian court held an arbitration agreement to be “incapable of being performed” within the meaning of article II(3) of the Convention because it was not a standard arbitration clause pursuant to the UNCITRAL Rules and it was therefore impossible to conclude that the parties had agreed on those Rules.176 It further added that the appointing authority, the “President of the International Chamber of Commerce”, did not exist.
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2. ANALYSIS (II) / ARTICLE II(3) / B. Enforcement of arbitration agreements under article II(3) / b. Courts' review of the existence and validity of an 'agreement in writing' / iii. 'Incapable of being performed' / §117
117. Other courts have adopted a pro-arbitration stance and interpreted vague or inconsistent arbitration agreements so as to uphold such agreements. For instance, French courts have enforced an arbitral award rendered under the auspices of the Arbitration Court of the Chamber of Commerce of Yugoslavia notwithstanding that the wording of the arbitration agreement provided for arbitration under the auspices of a non-existent institution, the “Belgrade Chamber of Commerce”. The court held that the parties intended to refer to the Arbitration Court of the Chamber of Commerce of Yugoslavia, which has its headquarters in Belgrade.177 Similar reasoning has been adopted in Switzerland,178 Germany,179 and Hong Kong180 where the courts have held that the intention of the parties to have their dispute resolved by arbitration should prevail.
177. Epoux Convert v. Société Droga, Court of Appeal of Paris, France, 14 December 1983, 1994 REV. ARB. 483.
178. Federal Tribunal, Switzerland, 8 July 2003, 129 III 675.
179. Kammergericht [KT] Berlin, 15 October 1999, XXVI Y.B. COM. ARB. 328 (2001)
180. Lucky Goldstar International Limited v. Ng Moo Kee Engineering Limited, High Court of Hong Kong, Hong Kong, 5 May 1993, XX Y.B. COM. ARB. 280 (1995).
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II / 2. ANALYSIS (II) / ARTICLE II(1) / A. The obligation to recognize an agreement in writing / §12
13. Article II(1) deals with the agreement to arbitrate. When deciding whether to enforce an arbitration agreement, courts rely on the consent of the parties to establish whether they have agreed to submit the underlying dispute to arbitration
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14. The task of a court in determining an agreement to arbitration has been defined as follows by the Supreme Court of the United States under both the Federal Arbitration Act and the New York Convention: “the first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate” the dispute.20 As confirmed by an Australian court, consent falls to be assessed on a case-by-case basis.21
21. ACD Tridon v. Tridon Australia, Supreme Court of New South Wales, Australia, 4 October 2002, 5738 of 2001. See also: Moscow Dynamo v. Alexander M. Ovechkin, District Court, District of Columbia, United States of America, 18 January 2006, 05-2245 (EGS) where the United States District Court of Colombia denied enforcement of the alleged arbitration clause as it was unable to find “factual predicate or legal authority to support [the] argument that a written agreement to arbitrate can be found absent a written exchange demonstrating both parties’ agreement to arbitrate with one another.”
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15. Reported case law in various jurisdictions applying the Convention22 shows that parties were referred to arbitration pursuant to article II(3) when courts have found that the parties had consented to arbitration. Consent to arbitration has been found in a variety of situations, including when the parties (i) participated in the negotiation of the contract, (ii) participated in the performance of the contract, (iii) participated in both the negotiation and performance of the contract, (iv) had knowledge of the arbitration agreement, or (v) participated in the arbitral proceedings without raising any objection to the arbitral tribunal’s jurisdiction.
22. This study is based on more than 350 decisions from Australia, Belgium, Brazil, Canada, China, Colombia, Egypt, France, Germany, Hong Kong, India, Italy, Russia, Spain, Switzerland, United Kingdom, United States of America, and Venezuela. These decisions can be found on the Internet at www.newyorkconvention1958.org.
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16. First, a United States court held that participation in the negotiation of the contract containing the arbitration clause through an exchange of documents evidences the parties’ consent to arbitrate any dispute arising out of that contract, thereby satisfying the requirements of article II.23 In so ruling, the court noted that the party had affixed its stamp to the broker’s slip as further evidence of consent.
23. Chloe Z Fishing Co. Inc., et al v. Odyssey Re (London) Ltd, formerly known as Sphere Drake Insurance, P.L.C., et al., District Court, Southern District of California, United States of America, 26 April 2000, 109 F.Supp.2d 1236 (2000).
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17. Second, evidence of consent has been found in the parties’ conduct in performing the contract. In situations where a party does not sign the contract or return a written confirmation, but nevertheless performs its obligations, many courts have held that such conduct amounts to a tacit acceptance of the terms of the contract, including the arbitration agreement.24 For example, the Indian Supreme Court has enforced an arbitral award notwithstanding the fact that the arbitration agreement was neither signed nor contained in an exchange of documents. It held that the party, in particular by opening letters of credit in reliance on the contract and invoking the contract’s force majeure clause, accepted the terms of the written contract, including the arbitration clause.25 Following the same reasoning, but applying French law on the basis of the “more-favourable-right” provision at article VII(1),26 a French court upheld an arbitration agreement contained in a booking note on the ground that the parties had performed the booking note. The court held that since the parties had knowledge of the booking note, which constituted the parties’ sole “meeting of minds”, they were bound by the arbitration agreement contained therein.27
24. Metropolitan Steel Corporation Ltd. v. Macsteel International U.K. Ltd., High Court of Karachi, Pakistan, 7 March 2006, XXXII Y.B. COM. ARB. 449 (2007), at 451-452; Standard Bent Glass Corp. v. Glassrobots OY [Fin.], Court of Appeals, Third Circuit, United States of America, 20 June 2003, 02-2169; Compagnie de Navigation et Transports SA v MSC Mediterranean Shipping Company SA, Federal Tribunal, Switzerland, 16 January 1995; Smita Conductors Ltd. v. Euro Alloys Ltd., Supreme Court, India, 31 August 2001, Civil Appeal No. 12930 of 1996.
Contra: Concordia Trading B.V. v. Nantong Gangde Oil Co., Ltd, Supreme People’s Court, China, 3 August 2009, [2009] MinSiTaZi No. 22.26. ALBERT JAN VAN DEN BERG, THE NEW YORK ARBITRATION CONVENTION OF 1958: TOWARDS A UNIFORM JUDICIAL INTERPRETATION (1981), at 81; Emmanuel Gaillard, The Relationship of the New York Convention with other Treaties and with Domestic Law, in ENFORCEMENT OF ARBITRATION AGREEMENTS AND INTERNATIONAL ARBITRAL AWARDS: THE NEW YORK CONVENTION IN PRACTICE 69, at 70 (E. Gaillard, D. Di Pietro eds., 2008).
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18. Third, when a party that did not sign the contract containing the arbitration agreement had nevertheless participated in the negotiation of, and performed obligations under, that contract, certain courts have referred that non-signatory to arbitration. In a case concerning an action to set aside an award, but dealing with the issue of the binding character of an arbitration agreement on a non-signatory, the Paris Court of Appeal confirmed that the parent company that participated in the negotiation of and assumed obligations under the main contract was bound by the arbitration agreement, despite not being a party to the main contract.28 However, this approach is not universally accepted. For instance, in the Dallah case, the Supreme Court of the United Kingdom, relying on the New York Convention, refused to grant leave to a party seeking to enforce an award rendered against the Islamic Republic of Pakistan on the grounds that there was no evidence that the common intention of the parties was to add the Government of Pakistan as a party to the main contract, despite its participating in negotiations and in the performance of certain obligations under that contract.29
28. Société Kis France et autres v. Société Générale et autres, Court of Appeal of Paris, France, 31 October 1989, 1992 REV. ARB. 90. For a similar reasoning, finding that the government of Turkmenistan “acted as the alter ego of [a State owned entity] in regard to this Joint Venture with [the claimant in the arbitration]”: Bridas S.A.P.I.C., Bridas Energy International, Ltd., Intercontinental Oil and Gas Ventures, Ltd., and Bridas Corp v. Government of Turkmenistan, Court of Appeals, Fifth Circuit, United States of America, 21 April 2006, 04-20842.
29. Dallah Real Estate and Tourism Holding Company v. Ministry of Religious Affairs, Government of Pakistan, Supreme Court, England and Wales, 3 November 2010, UKSC 2009/0165. See also the contrary decision by the French Paris Court of Appeal in the same matter: Gouvernement du Pakistan - Ministère des affaires religieuses v. société Dallah Real Estate and Tourism Holding Company, Court of Appeal of Paris, France, 17 February 2011, 09/28533, 09/28535 and 09/28541, 2011 REV. ARB. 286.
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19. Fourth, consent has also been found in situations where a party had knowledge of the arbitration agreement. For instance, when the arbitration agreement is printed on the back of the contract (or contained in general terms and conditions printed on the back of the contract), parties have been deemed to have knowledge of the agreement to arbitrate as they had the opportunity to review the arbitration agreement.30 In this vein, in a dispute where the arbitration agreement was contained in a document other than the main contract, the Italian Court of Cassation noted that, in order to establish the parties’ consent to an arbitration agreement, the parties had to have knowledge of the arbitration agreement through a specific reference to it in the main contract (“per relationem perfecta”).31
30. Court of Appeal of the Canton of Basel-Landschaft, Switzerland, 5 July 1994, 30-94/261; Bobbie Brooks Inc. v. Lanificio Walter Banci s.a.s., Court of Appeal of Firenze, Italy, 8 October 1977, IV Y.B. COM. ARB. 289 (1979), at 291.
31. Louis Dreyfus S.p.A. v. Cereal Mangimi S.r.l., Court of Cassation, Italy, 19 May 2009, 11529.
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2. The scope of the New York Convention was initially meant to be limited to the recognition and enforcement of arbitral awards to the exclusion of arbitration agreements.1 While issues pertaining to the validity of arbitration agreements had arisen in the context of discussions about the recognition and enforcement of arbitral awards in connection with articles IV(1)(b) and V(1)(a) of the Convention,2 it was only during the Conference, less than three weeks before the Convention was adopted, that the drafters decided to include a specific provision on the recognition and enforcement of arbitration agreements.3 By that time, most of the other provisions had already been adopted and they were not modified to reflect this late addition.4 This explains why the recognition and enforcement of arbitration agreements is not mentioned in the Convention’s title or in any other provisions, including articles I and VII.
1. Travaux préparatoires, Report of the Committee on the Enforcement of International Arbitral Awards, E/2704, E/AC.42/4/Rev.1, at 6, paras. 18-19. The Polish (E/CONF.26/7) and Swedish (E/CONF.26/L.8) proposals to add a provision on the validity of arbitration clauses were discussed during the Seventh and Ninth Meeting of the Conference but were ultimately rejected.
2. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Summary Records of the Eleventh (E/CONF.26/SR.11, at 7-12), Twelfth (E/CONF.26/SR.12, at 3-6), Thirteenth (E/CONF.26/SR.13, at 4-7 and 9-11), Fourteenth (E/CONF.26/SR.14, at 4-5 and 7-9), Seventeenth (E/CONF.26/SR.17, at 4-6) Meetings.
3. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Summary Records of the Twenty-first Meeting, E/CONF.26/SR.21, at 17. See E/2822 Annexes I and II.
4. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Summary Records of the Twenty-first Meeting, E/CONF.26/SR.21, at 17. See E/2822 Annexes I and II.
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20. In some jurisdictions, parties are deemed to have knowledge of the arbitration agreement when, irrespective of whether they had actual knowledge of the arbitration agreement, they should reasonably have known about it. In such cases, courts will enforce arbitration agreements when parties are aware of the arbitration agreement or should have been aware of the arbitration agreement. For instance, the Italian Court of Cassation now recognizes that, when the parties are professional businessmen who should be aware of the content of general terms and conditions in their field, a generic reference to such terms and conditions (“per relationem imperfecta”) satisfies the requirement of article II of the Convention.32 German courts also admit that consent can be implied from relevant international trade usages when the contract is typical of the industry and the parties are active in the relevant field of business.33
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21. Some courts have also ruled that parties are bound by an arbitration agreement incorporated by reference on the grounds that they should have been aware of its terms. It is indeed very common in international trade for parties not to set out the terms of their contract in detail, but instead to refer to separate documents, such as general conditions and standard-form agreements produced by professional bodies, which may contain arbitration agreements.34 Some courts have accepted that, by referring to general terms and conditions in their contract, the parties have consented to the arbitration agreement therein because they should reasonably have known about the arbitration agreement.35 Indeed, as noted by an Indian court, article II does not specify that the agreement to arbitrate must be contained in a single document.36 Hence, in a case where the Convention applied, a United States court upheld an arbitration agreement contained in general terms and conditions on the grounds that the parties had tacitly consented to the general terms and conditions to which the contract referred, notwithstanding the fact that the plaintiff had never been in possession of those general terms and conditions. The court reasoned that failure to request the terms and conditions referred to in a contract implied tacit acceptance of its terms, including the arbitration agreement.37 In the same vein, in Bomar, relying on both the Convention and French law, a French court held that an arbitration agreement contained in a document referred to in the main contract should be enforced insofar as it can be demonstrated that the parties were aware or should have been aware of it.38 A number of courts have thus upheld arbitration agreements contained in general conditions referred to in the main contract.39 In the same vein, in a dispute arising out of a bill of lading expressly referring to a charter party agreement, the Indian Supreme Court upheld an arbitration agreement contained in the charter party agreement.40 As confirmation of this approach, article 7(6) (Option I) of the UNCITRAL Model Law on International Commercial Arbitration expressly provides that a reference in a contract to any document containing an arbitration clause qualifies as an arbitration agreement in writing.41
34. Domenico Di Pietro, Validity of Arbitration Clauses Incorporated by Reference, in ENFORCEMENT OF ARBITRATION AGREEMENTS AND INTERNATIONAL ARBITRAL AWARDS – THE NEW YORK CONVENTION 1958 IN PRACTICE 355 at 355 (E. Gaillard, D. Di Pietro eds., 2008.
35. Owners & Parties Interested in the Vessel M.V. Baltic Confidence, et al. v. State Trading Corp. of India, et al. (India), Supreme Court, India, 20 August 2001, Special Leave Petition (civil) 17183 of 2001; Tradax Export SA v Amoco Iran Oil Company, Federal Tribunal, Switzerland, 7 February 1984; X S.A. v Y Ltd., Federal Tribunal, Switzerland, 12 January 1989, 5P.249/1988.
38. Société Bomar Oil N.V. v Entreprise tunisienne d'activités pétrolières (ETAP), Court of Appeal of Versailles, France, 23 January 1991, upheld by Société Bomar Oil N.V. v Entreprise tunisienne d'activités pétrolières (ETAP), Court of Cassation, France, 9 November 1993, 91-15.194. See also SA Groupama transports v Société MS Régine Hans und Klaus Heinrich KG, Court of Appeal of Basse Terre, France, 18 April 2005.
39. Del Medico & C. SAS v. Iberprotein Sl, Court of Cassation, Italy, 16 June 2011, 13231; Copape Produtos de Pétroleo LTDA. v. Glencore LTD., District Court, Southern District of New York, United States of America, 8 February 2012, 11 Civ. 5744 LAK; Standard Bent Glass Corp. v. Glassrobots OY [Fin.], Court of Appeals, Third Circuit, United States of America, 20 June 2003, 02-2169; SA Groupama transports v Société MS Régine Hans und Klaus Heinrich KG, Court of Cassation, France, 21 November 2006, 05-21.818; Court of Appeal of the Canton of Basel-Landschaft, Switzerland, 5 July 1994, 30-94/261; Oberlandesgericht [OLG] Cologne, Germany, 16 December 1992, XXI Y.B. COM. ARB. 535 (1996).
40. Owners & Parties Interested in the Vessel M.V. Baltic Confidence, et al. v. State Trading Corp. of India, et al. (India), Supreme Court, India, 20 August 2001, Special Leave Petition (civil) 17183 of 2001 . See also: Tradax Export SA v Amoco Iran Oil Company, Federal Tribunal, Switzerland, 7 February 1984; Welex A.G. v. Rosa Maritime Ltd, Court of Appeal, England and Wales, 3 July 2003, A3/02/2230 A3/02/2231.
41. Article 7(6) (Option I) of the UNCITRAL Model Law on Arbitration (with amendments as adopted in 2006).
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22. Fifth, courts have relied on the procedural behaviour of the parties to infer their consent to arbitrate their disputes. Hence, participation in the arbitral proceedings without any objection to the jurisdiction of the arbitral tribunal has been held to establish the parties’ agreement to arbitrate.42 For instance, having found that an unsigned arbitration agreement did not comply with the requirements of article II(2), the Brazilian Superior Court of Justice nevertheless enforced an award rendered under that arbitration agreement on the grounds that the parties had consented to the arbitral tribunal’s jurisdiction by participating in the arbitral proceedings without raising any objections to the arbitral tribunal’s jurisdiction.43 Likewise, an Australian court enforced an arbitral award on costs rendered under the auspices of the ICC in Paris where the arbitral tribunal found that it did not have jurisdiction as the arbitration agreement was invalid. The Australian court held that, by signing the Terms of Reference, the parties had consented to submit their dispute to arbitration.44
42. CTA Lind & Co Scandinavia AB in Liquidation’s bankruptcy Estate v. Erik Lind, District Court, Middle District of Florida, Tampa Division, United States of America, 7 April 2009, 8:08-cv-1380-T-30TGW; China Nanhai Oil Joint Service Corporation Shenzhen Branch v Gee Tai Holdings Co Ltd, High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411; Oberlandesgericht [OLG] Schleswig, Germany, 30 March 2000, 16 SchH 05/99.
43. L’Aiglon S/A v Têxtil União S/A, Superior Court of Justice, Brazil, 18 May 2005, SEC 856.
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23. The reliance placed by courts on the parties’ consent to arbitration is consistent with the Convention’s philosophy of providing “satisfactory evidence of the agreement”.45 Commentators have emphasized the importance of the intention of the parties and whether there is a “meeting of minds”.46
45. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Comments by Governments and Organizations on the Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Comments by United Kingdom, E/2822/Add.4, Annex I, at 5.
46. REINMAR WOLFF, THE NEW YORK CONVENTION, supra note 6, at 128-132; ICCA’S GUIDE, supra note 6, at 45.
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24. Article II(1) requires national courts to recognize an agreement in writing under which the parties have undertaken to submit to arbitration all “differences” in respect of a legal relationship which is capable of settlement by arbitration.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / a. Meaning of 'differences' / §25
25. Article II(1) refers to the parties’ undertaking to submit to arbitration “all or any differences” which have arisen or which may arise between them, and which are covered by their agreement.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / a. Meaning of 'differences' / §26
26. Very few reported cases have addressed this issue and all of them have adopted a broad interpretation of “differences” in line with the pro-arbitration bias of the Convention.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / a. Meaning of 'differences' / §27
27. In interpreting the word “differences”, the High Court of Hong Kong has held that the parties should be referred to arbitration even when there is a dispute as to the existence of a dispute.47 The court concluded that whether or not a dispute existed was a matter for the arbitral tribunal to determine. The Australian Supreme Court relied on the words “all or any” in article II(1) to confirm that article II(1) should be construed broadly.48 Similarly, the Court of Appeal of England and Wales in Fiona Trust held that, in the absence of clear language to the contrary, arbitration clauses are to be given the broadest interpretation possible, since the parties, as rational businessmen, were likely to have intended any dispute arising out of the relationship into which they had entered to be decided by the same tribunal.49
49. Fiona Trust & Holding Corp. v. Privalov, Court of Appeal, England and Wales, 24 January 2007, 2006 2353 A3 QBCMF, upheld by Fili Shipping Co Ltd and others v Premium Nafta Products Ltd and others, House of Lords, England and Wales, 17 October 2007.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / b. 'Defined legal relationship' / §28
28. Article II(1)’s requirement that the dispute must have arisen “in respect of a defined legal relationship, whether contractual or not”, is very broad and seldom disputed in case law.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / b. 'Defined legal relationship' / §29
29. Relying on the text of article II, the Canadian Supreme Court has held that extra-contractual claims could fall within the scope of an arbitration agreement when the claims relate to contractual obligations.50
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3. For example, article I(1) which defines the scope of application of the Convention does not deal with arbitration agreements. However, the commercial reservation in article I(3) which applies to “differences arising out of legal relationships” encompasses, by its own terms, arbitration agreements set out in article II. By contrast, the Convention does not explicitly settle the issue whether the reciprocity reservation in article I(3) which deals with “the recognition and enforcement of awards made [...] in the territory of another Contracting State” applies mutadis mutandis to arbitration agreements.
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II / 2. ANALYSIS (II) / ARTICLE II(1) / C. Scope of the 'agreement in writing' / c. 'Subject matter capable of settlement by arbitration' / §30
30. The requirement that the dispute concerns a “subject matter capable of settlement by arbitration” refers to the arbitrability of the dispute.51 Given the New York Convention’s lack of guidance on this topic, national courts have determined whether a specific subject matter can be settled by arbitration either by referring to the law applicable to the arbitration agreement or by referring to their own law.
51. Dorothee Schramm, Elliott Geisinger, Philippe Pinsolle, Article II, supra note 15, at 96-73; Albert Jan van den Berg, The New York Convention of 1958: An Overview, in ENFORCEMENT OF ARBITRATION AGREEMENTS AND INTERNATIONAL ARBITRAL AWARDS – THE NEW YORK CONVENTION 1958 IN PRACTICE 39, at 53 (E. Gaillard, D. Di Pietro eds., 2008); Jan Paulsson, Arbitrability, Still Through a Glass Darkly, in ARBITRATION IN THE NEXT DECADE – 1999 SPECIAL SUPPLEMENT 95, at 96 (ICC INTERNATIONAL COURT OF ARBITRATION BULLETIN, 1999).
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