CAPES (HATHERDEN) LTD V WESTERN ARABLE SERVICES LTD

Arbitration - Incorporation of standard terms -Whether contract incorporated arbitration clause - Course of dealing - Independence and impartiality of arbitrators - Effect of article 6 of the European Convention on Human Rights - Whether claimant estopped from denying submission to arbitration

The claimant farmer agreed under two oral contracts to supply barley to the defendant, who later sent contract notes to the claimant purporting to incorporate Agricultural Industries Confederation standard terms, AIC Contract 1/04, which included an arbitration clause. Disputes arose, and the claimant, having taken advice from the National Farmers' Union, informed the defendant that he had requested AIC to act as arbitrators, that he had appointed his own arbitrator and that the defendant was itself obliged to appoint an arbitrator. The defendant nominated its own arbitrator. Subsequently the claimant asserted that the AIC terms had not been incorporated and that there was no obligation to go to arbitration. The defendant sought a stay of the claimant's action. HHJ Havelock-Allan QC refused a stay. (1) There had been no agreement to go to arbitration - there were two completed oral agreements and the subsequent contract notes were of no effect. (2) There was no incorporation by course of dealing. (3) The fact that the majority of AIC arbitrators were drawn from the trading rather than farming side of the industry did not mean that they ceased to be independent or impartial. Accordingly, had the point arisen, article 6 of the European Convention on Human Rights did not impose a stricter test for incorporation, requiring express notification to the claimant of the arbitration clause. (4) The claimant had not unequivocally represented that he intended to go to arbitration, and there had been no reliance, so there was no estoppel against the claimant.