Shook Attorneys Discuss the New York Convention and the Importance of Written Agreements in International Arbitration
Shook, Hardy & Bacon Miami Partners John Barkett, Frank Cruz-Alvarez and Sergio Pagliery and Consultant Marike Paulsson authored a Kluwer Arbitration Blog article, “Perspectives on the New York Convention under the Laws of the United States: Agreement in Writing,” exploring two New York Convention cases to explain the applicability of the New York Convention and highlight the importance of an agreement in writing.
The New York Convention is “the engine that makes international arbitration an effective mechanism to resolve disputes,” the authors note, because it provides a uniform rule: that an 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."
Barkett, Cruz-Alvarez, Pagliery and Paulsson first examine Kahn Lucas Lancaster, Inc. v. Lark International Ltd., which questions whether “‘signed by the parties or contained in an exchange of letters or telegrams’ applied to both ‘an arbitral clause in a contract’ and ‘an arbitration agreement,’ or just to ‘an arbitration agreement.’” The U.S. Court of Appeals for the Second Circuit found that under the New York Convention, “when a modifier is set off from a series of antecedents by a comma, the modifier should be read to apply to each of those antecedents."
The authors then turn to Maritima De Ecologia (Marecsa) v. Sealion Shipping Ltd., which illustrates how parties with multiple agreements "sometimes pay little attention to dispute resolution clauses, as they tend to get lost in the magnitude of international trade deals.” The U.S. District Court for the Southern District of New York found that U.S. law “provided no basis to imply an agreement to arbitrate solely from the past conduct of the parties,” which further emphasizes the importance of establishing arbitration agreements in writing.
“There is no substitute for thoughtfulness when it comes to ensuring the applicability of the New York Convention," Barkett, Cruz-Alvarez, Pagliery and Paulsson conclude. "If a party is relying on an arbitral clause in a contract, have the contract signed. If a party is relying on an arbitration agreement, have the agreement signed. If a party is relying on incorporation by reference, make sure that the incorporation is clear and unequivocal in the contract document and in the arbitration clause being incorporated.”