HABAS SINAI VE TIBBI GAZLAR ISTHISAL ENDUSTRI AS V SOMETAL SAL

[2010] EWHC 29 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Christopher Clarke, 18 January 2010

Arbitration - Jurisdiction - Incorporation of arbitration clause from earlier contracts between the parties - Whether general or specific words needed - Whether incorporation effective - Arbitration Act 1996, section 67.

Under a contract dated 9 June 2008, Sometal agreed to sell a quantity of steel scrap on CIF terms to 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". There had been 14 previous contracts between the parties. The first three were on paper with Habas' letter heading, but the rest were either drawn up by Sometal or on paper with Metkim's letter heading. Some of the later contracts contained a London arbitration clause, others provided that terms were to be agreed. The question was whether the London arbitration clause had been incorporated into the 15th contract. The arbitrators held that the clause was incorporated, and Habas appealed against the award under section 67 of the Arbitration Act 1996. Christopher Clarke J, dismissing the appeal, held that the rule that an arbitration clause may be incorporated from one contract into another only if the latter refers expressly to the arbitration clause did not apply to incorporation from an earlier contract between the same parties, and in such a case general words of incorporation sufficed as long as an intention to incorporate was clear. In the present case the incorporating words were intended to refer to those contracts where terms had been agreed, and accordingly the arbitration clause was incorporated.