Incorporation of arbitration clauses

Bills of lading and charterparties

There has been much authority in England dating back to the 19th century as to whether an arbitration clause contained in a charterparty is incorporated into a bill of lading where the bill of lading contains general words of incorporation relating to the terms and conditions of the charterparty. Although the precise test for incorporation is still a matter of some debate, the English view is that an arbitration clause is neither a ‘term’ nor a ‘condition’ but rather is a separate contract, and thus will not be incorporated. This is not just a matter of linguistics, for the underlying principle is that the parties are not to be treated as having relinquished their right to go to the ordinary courts in the absence of some clear agreement. What is required for incorporation is, therefore, a clear expression of intention to bring into the parties’ contract the arbitration provisions of some other agreement, although it is probably not the case that there has to be an actual reference to the arbitration clause in question. In Thyssen Canada Ltd v Mariana Maritime SA, March 2000, the Federal Court of Appeal of Canada was faced with a particularly difficult incorporation question, as while there was a reference in a bill of lading to a charterparty arbitration clause, it was unclear whether the reference was to the head charter or the subcharter.