Incorporation

There are many authorities on the question whether an arbitration clause can be incorporated from one document into the contract between the parties. The cases have drawn a distinction between ‘two contract’ cases, where clear words of incorporation are required, and other cases, where the rules for incorporation are more generous. Habas Sinai VE Tibbi Gazlar Isthisal Endustri AS v Sometal SAL [2010] EWHC 29 (Comm) raised a previously unresolved question, namely, whether general or specific words are necessary to incorporate an arbitration clause from an earlier contract between the same parties. Christopher Clarke J held that the more generous rules were applicable in such a case.

Habas: the contractual background

Under a contract dated 9 June 2008, Sometal SAL (‘Sometal’) agreed to sell a quantity of steel scrap on CIF terms to Habas Sinai VE Tibbi Gazlar Isthisal Endustri AS (‘Habas’). The contract was typed on a sheet of paper with the letter heading of Metkim, Sometal’s agent. It specified matters such as quantity, price, shipment, discharge rate, payment, final weight and tender, and then concluded with the words ‘All the rest will be the same as our previous contracts’.