What Constitutes an "Agreement in Writing" in International Commercial Arbitration? Conflicts between the New York Convention and the Federal Arbitration Act

By Strong, S. I. | Stanford Journal of International Law, Winter 2012 | Go to article overview

What Constitutes an "Agreement in Writing" in International Commercial Arbitration? Conflicts between the New York Convention and the Federal Arbitration Act


Strong, S. I., Stanford Journal of International Law


This Article investigates whether and to what extent a party must produce an "agreement in writing" when seeking to enforce an international arbitration agreement or award in a U.S. federal court. This issue has recently given rise to both a circuit split and a petition for certiorari to the U.S. Supreme Court, and involves matters of formal validity as well as federal subject matter jurisdiction. The problem arises out of subtle differences in the way an "agreement in writing" is defined in the Federal Arbitration Act (FAA) and the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention).

This is not just a U.S. problem, however. Questions relating to form requirements under the New York Convention have also been much discussed at the international level, with UNCITRAL recently issuing a formal recommendation on how to deal with the problem.

This Article describes the scope of the current problems associated with form requirements, including how inconsistencies in domestic practice affect international commercial arbitration and global trade. After discussing the difficulties in both the U.S. and the international sphere, the Article makes a number of suggestions for legislative and judicial reform. This is the first article to discuss the circuit split and associated issues in the context of the FAA and to take a serious comparative look at the implementation of the UNCITRAL recommendation at the international level.

I.   INTRODUCTION
II.  "AN AGREEMENT IN WRITING"--DIFFICULTIES AND DILEMMAS UNDER
     U.S. LAW
     A. Statutory Analysis
     B. U.S. Case Law
        1. Cases Analyzed Under Article II(2) of the New York
           Convention
           a. Arbitral clauses or agreements
           b. Exchange of letters or telegrams
        2. Cases Analyzed Under Section 2 of the FAA
        3. Cases Analyzed Under Both Article II(2) of the New York
           Convention and Section 2 of the FAA
     C. Conclusions Regarding the Form Requirement Under U.S. Law
III. INTERNATIONAL ISSUES REGARDING THE FORM REQUIREMENT OF THE
     NEW YORK CONVENTION
     A. International Interpretation of Article II(2) of the New York
        Convention
     B. International Interplay Between Article II(2) and Article
        VII(l) of the
        New York Convention
     C. UNCITRAL Recommendation
     D. The UNCITRAL Model Arbitration Law
IV.  FUTURE DIRECTION OF U.S. LAW CONCERNING FORM REQUIREMENTS
     A. Adoption of an Expansive Reading of Article II(2) of the
        New York Convention
     B. Explicit Adoption of Domestic Legal Standards Through
        Reliance on Article VII(1) of the New York Convention
     C. Adoption of Article 7 of the UNCITRAL Model Arbitration Law
V.   CONCLUSION

I. INTRODUCTION

At first glance, the term "agreement in writing" appears relatively easy to define, apply and understand. However, as with most things in law, the task has proven much more difficult in practice than in theory.

Indeed, U.S. federal courts have experienced a number of problems when interpreting this phrase, which appears in article II(2) of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, more commonly known as the New York Convention. (1) Not only is there a circuit split on how to define the term itself, there are also growing inconsistencies regarding the proper relationship between article II(2) of the New York Convention and the various provisions of the Federal Arbitration Act (FAA) (2) that describe the need for a written arbitration agreement in disputes arising under the New York Convention. (3)

In fact, certiorari was recently sought from the U.S. Supreme Court on precisely this issue, stating the question presented was "the proper scope and application of article II(2) of the Convention, relating to when an arbitration clause must be 'signed by the parties or contained in an exchange of letters or telegrams'" and noting a "split of authority" on this matter.

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