What are the validity requirements for an arbitration agreement under the laws of your country?
International Arbitration (4th edition)
Under Argentine law, the arbitration agreement shall be “in writing” (Art. 1650 NCCC). While a written agreement signed by the parties would be sufficient to prove the existence of an “arbitration agreement”, the writing requirement can also be fulfilled by an exchange of letters respectively executed by each party.
Austrian law requires that the arbitration agreement must identify the parties and a defined legal relationship which are to be submitted to arbitration. The arbitration agreement must be in writing, either as a part of a document signed by the parties or as an exchange of letters, telefax, emails or any other means of communication that provide a record of the arbitration agreement. Regarding the exchange of documents, the Austrian Supreme Court (OGH 18 OCg 1/15v) has clarified that “exchanged documents” do not need to be signed irrespective of the means of communication used. Additional formal requirements must be met if consumers or employees are parties to the arbitration agreement.
The arbitration agreement may be incorporated in a contract as an arbitration clause or it could be a separate agreement. In any case, the arbitration agreement as any other agreement has to comply with the requirements of the law for its validity, namely requirements for legal capacity of the parties (according to lex personalis), form of the agreement and capability of the dispute to be settled by arbitration. The specific rules regarding the arbitration agreement are incorporated in Art. 7 of ICCA and literally implement Art.7 of the UNCITRAL Model law. Art.7, para.2 of ICAA sets the requirement that the arbitration agreement has to be in written form. It is deemed that the agreement is in writing when it is evidenced in a document, signed by the parties, or in the exchange of letters, telex, telegrams or other communication means shall also be considered that the arbitration agreement is evidenced in writing when the defendant accepts in writing or by declaration, recorded in the minutes of the arbitration hearing that the dispute shall be settled by the arbitration or in case the defendant participates in the arbitration proceedings without challenging the arbitration jurisdiction. The doctrine considers that the arbitration agreement may be contained in emails exchanged by the parties.
Under the FAA, an arbitration agreement must be in writing and must be part of a valid contract. 9 U.S.C. § 2. However, it does not necessarily need to be signed and it can be incorporated by reference. Id. The FAA places arbitration agreements on “equal footing” with all other contracts. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443–44 (2006). In addition, arbitration agreements can be invalidated by “generally applicable contract defenses,” such as fraud, duress, or unconscionability. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996).
The validity requirements for an arbitration agreement depend on which statute applies. Some domestic arbitration statutes require that arbitration agreements be in writing, while other domestic arbitration statutes, such as those in Alberta and Ontario, do not expressly. Every international commercial arbitration statute, including the Federal Commercial Arbitration Act, require that arbitration agreements be in writing.
Law 101/1987 stipulates that an arbitration clause which is an integral part of a contract shall be regarded as an agreement separate from the other terms of the contract. Notwithstanding the above, an arbitral tribunal’s decision which declares the contract void from the outset shall not automatically give rise to the nullity of the arbitration clause.
The special requirements for an arbitration agreement are that it must be in writing and there must be an explicit undertaking to transfer the dispute resolution to the arbitrator. Arbitration agreements may also be concluded by electronic means of communication. The scope of the disputes to be resolved in the arbitration proceedings must be specified (i.e. it is impossible to include all potential future disputes in an arbitration agreement).
Furthermore, as the arbitration agreement is a contract, it must meet the general requirements for contracts and legal acts under Czech law. Among other things, the arbitration arrangements must be definite and comprehensible.
UAE- Federal Jurisdiction
The UAE Arbitration Law sets out the express requirements for a valid arbitration agreement.
Physical Person with Legal Capacity
The parties entering into this agreement must be physical persons with the legal capacity to act (Article 4(1)).
The risk of a person, entering into an arbitration agreement, not being deemed to have the required authority to do so, remains very present, as does the consequent risk that arbitral award could be nullified.
The Matter in dispute must be Capable of ‘Conciliation’
The matter to be arbitrated must be capable of ‘conciliation’ (Article 4(2)) and, therefore, cannot relate to matters of a criminal nature.
The Arbitration Agreement must be in Writing
The requirement for an arbitration agreement to be in writing, is satisfied where the arbitration agreement is:
‘contained in a document signed by the Parties or mentioned in an exchange of letters or other means of written communication or made by an electronic communication…’ (Article 7(2)(a))
This requirement for a written agreement, is further satisfied where the arbitration agreement makes a clear reference to ‘a Model Contract, international agreement or any other document containing an arbitral clause’ which will form part of the contract (Article 7(2)(b)).
The requirements for an arbitration agreement to be in writing, may further be satisfied by:
‘an exchange of written statements between the Parties during the arbitration proceedings or upon acknowledgement before the Court, where one party requests that the dispute be referred for Arbitration and no objection is made by the other party in the course of his defence’. (Article 7(2)(d))
The above denotes an offer and unconditional acceptance of an arbitration agreement.
This is, however, subject to the issuer of such pleadings having the authority to bind the represented party to arbitration, whether by an exchange of pleadings or otherwise.
UAE - Common Law Jurisdictions
The DIFC Arbitration Law (Article 12) and the ADGM Regulations (Regulation 13) broadly require that the arbitration agreement is in writing.
To fall within the scope of the 1996 Act, an arbitration agreement must be in writing or be evidenced in writing. This includes an oral agreement to arbitrate by reference to “terms which are in writing” (s.5(3) of the 1996 Act).
Sections 1029 to 1033 ZPO deal with the arbitration agreement under German law.
Pursuant to section 1029 (2) ZPO, the arbitration agreement may take the form of an independent arbitration agreement or that of an arbitration clause contained in a contract.
The formal requirements are enshrined in section 1031 ZPO. The arbitration agreement shall be contained in a document signed by the parties, or in an exchange of letters, telefaxes, telegrams, or other means of telecommunication which provide for a record of the agreement.
Pursuant to section 1031 (2) ZPO, an arbitration agreement can also take the form of a document transmitted from one party to the other party or by a third party to both parties, provided that no objection to the document was raised in good time and that common usage allows to qualify the terms of the document as contractual content.
Pursuant to section 1031 (3) ZPO, reference to a document which contains an arbitration clause can also constitute an arbitration agreement if the reference is such as to make that clause part of the contract.
The formality requirements differ in case of a contract to which a party is a consumer. Pursuant to section 1031 (5) ZPO, the arbitration agreement to which a consumer is party must be contained in a contract which has been personally signed by the parties.
The notion of a "consumer" is dealt with at section 13 of the German Civil Code (Bürgerliches Gesetzbuch, BGB). It may be interpreted wider than perhaps customary in an international context. However, the qualified written form protecting consumers may be substituted by the electronic form pursuant to section 126a BGB. The arbitration agreement with a consumer must not contain any other agreements than the agreement to arbitrate, but this rule does not apply in case of a notarial recording.
Any non-compliance with the form requirements is cured if the parties do not object against the arbitral tribunal's competence before arguing on the substance in the arbitral proceedings (section 1031 (6) ZPO).
Under the Arbitration Law, an arbitration agreement can be entered into by the parties before or after a dispute arises. The Arbitration Law requires the agreement to be entered into in writing (or be part of a main agreement), although the law also allows for a pre-dispute arbitration agreement to be evidenced by an exchange of letters, telexes, telegrams, facsimiles, email or other communication method as long as the receipt of that communication is acknowledged by the other party and recorded.
Any post-dispute arbitration agreement must be in writing.
The general requirements for agreements under Indonesia’s contractual law also apply to arbitral agreements, namely: mutual consent, the parties’ capacity, a definite object, and a permissible cause.
Section 7 of the Arbitration and Conciliation Act, 1996 deals with the requirement of the Arbitration Agreement
- An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement
- An arbitration agreement shall be in writing
- An arbitration agreement is in writing if it is contained in
- A document signed by the parties,
- An exchange of letters, telex, telegrams or other means of telecommunications which provide a record of the agreement
- An exchange of statements of claim and defence in which existence of the agreement is alleged by one party and not denied by the other
- The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.
The content and scope of an arbitration agreement are governed by § 598 of the Liechtenstein CCP. Pursuant to this provision, an arbitration agreement is an agreement between parties to submit any or all disputes which have arisen or will arise between them that relate to a contractual or non-contractual relationship between them to arbitration. The arbitration agreement may be concluded by way or a separate agreement or in the form of a clause forming part of a main agreement.
Arbitration agreements may be challenged under the general rules (§ 871 et seq. ABGB) on the grounds of error, fraudulent intent or duress. Furthermore, the valid conclusion of arbitration agreements is subject to formal requirements (§ 600 CCP).
Section 9 of the Arbitration Act outlines the definition and form of an arbitration agreement. In this regard and in brief:-
- An arbitration agreement shall be in writing; and
- An arbitration agreement may be in the form of an arbitration clause in an agreement or in the form of a separate agreement
Section 9(4) of the Arbitration Act provides that an arbitration agreement is in writing if :-
- its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means; or
- if it is contained in an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other
Section 4A of the Arbitration Act also states that the requirement that an arbitration agreement be in writing is met by any electronic communication that the parties make by means of data message if the information contained therein is accessible so as to be useable for subsequent reference.
According to article 1423 of the Commerce Code, an arbitration agreement must be in writing and signed by the parties, or it may be in an exchange of letters, telexes, telegrams or faxes, or any other means of telecommunication that properly record the agreement.
As well, the arbitration agreement can be valid if there it exists a written complaint and a written answer to it where such inference cannot be denied. Also, a reference made in an agreement to a document that contains a committing clause to arbitrate will constitute an agreement to arbitrate if such agreement is in writing and the reference creates the implication that such clause is part of the agreement.
For these agreements it is strongly recommended to define the arbitral mechanism and institution that shall know about the arbitral procedure, since it is not advisable to use Ad Hoc mechanisms.
By section 1(1) of the ACA, an arbitration agreement, to be valid, must be in writing or otherwise evidenced in writing. Further, both parties must have mutually agreed or consented to the arbitration agreement and the arbitration agreement must be in respect of a commercial relationship. The parties must have legal capacity to enter into the arbitration agreement as with every other contract, the arbitration agreement must satisfy the basic legal requirements of a valid contract of offer, acceptance, and consensus ad idem.
Arbitration agreements may comprise current and potential disputes under a defined legal relationship between the parties. Only disputes at the disposal of the parties may be subject to arbitration. In addition, the ordinary rules and principles of formation and validity under Norwegian contract law apply to arbitration agreements.
There is no particular form prescribed; agreements need not be executed in writing. However, they may be declared void if they are entered into under duress, fraud or undue influence, or if the agreement is deemed unreasonable pursuant to Section 36 of the Contract Act.
There are some additional validity requirements, including requirements to written forms, that apply to arbitration agreements in special cases (eg, in relation to carriage of goods and consumer disputes).
The validity requirements in relation to consumers are that:
- agreements entered into before a dispute has arisen are not binding on the consumer; and
- agreements must be executed in a written, separate document signed by both parties.
An arbitration agreement is required to be in writing. It may be contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defense in which the existence of an agreement is alleged by one party and not denied by the other. Reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract is in writing and the reference is such as to make that clause part of the contract. [Art. 4.7 and Art. 5.6, Department of Justice Department Circular No. 98, or the Implementing Rules and Regulations of the ADR Act (IRR)]
However, in the recent case of Hygienic Packaging Corporation v. Nutri-Asia, Inc. , the issuance of a Sales Invoice making reference to Purchase Orders which contained arbitration clauses was not considered a binding arbitration agreement in the absence of proof of any intention of the parties to be bound by the arbitration clause.
The arbitration agreement must be in writing. An arbitration agreement shall be deemed written if it is included in a document issued by the two parties or in an exchange of documented correspondence, or any other electronic or written means of communication.
Moreover, a stipulation in a contract to be bound by an arbitration clause in any other document shall constitute an arbitration agreement. Similarly, a stipulation in a contract to be bound by the provisions of a model contract, international convention or any other document containing an arbitration clause shall constitute a written arbitration agreement, if the reference clearly deems the clause as part of the contract.
An arbitration agreement must be concluded by persons having legal capacity, whether they be natural persons (or representatives) or corporate persons. In general, government bodies may not agree to enter into arbitration agreements except upon the approval of the Chairman of the Council of Ministers, unless allowed by a special provision of law.
Art. 7(2) of the UNCITRAL Model Law provides that ‘[t]he arbitration agreement shall be in writing’ and ‘[a]n agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another’. Singapore law also provides in the same section that ‘[t]he reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract’.
Korea’s Arbitration Act (the “Act”) defines arbitration agreement as “agreement between the parties to settle, by arbitration, all or some disputes which have already occurred or might occur in the future with regard to defined legal relationships, whether contractual or not” (Article 3(2) of the Act). According to a 2007 ruling by the Korean Supreme Court, it is not required that an arbitration agreement stipulate the arbitral institution, governing law, or seat for the agreement to be valid.
The Act requires that an arbitration agreement must either be in writing (Article 8(2) of the Act) or be deemed to have been made in writing (Articles 8(3), 8(4) of the Act). An arbitration agreement is deemed to have been made in writing where (i) the terms of the arbitration agreement have been recorded, regardless of how the agreement was made (including by oral means); (ii) the terms of the arbitration agreement have been communicated by electronics means (e.g., telegram, telex, facsimile, electronic mail) and the terms are verifiable; (iii) no opposing party disputes allegations in a request for arbitration or answer that an arbitration agreement exists; or (iv) a contract refers to a document containing an arbitration clause which forms part of the contract. These requirements are consistent with Option I under Article 7 of the UNCITRAL Model Law on International Commercial Arbitration, as amended in 2006.
In domestic arbitrations, an arbitration agreement must be in writing. It can be included in a written communication or in a document to which reference is made in the main agreement (FCCP Article 1443).
In international arbitrations, arbitration agreements are not subject to any form requirement (FCCP Article 1507). In practice, the existence of an arbitration agreement is evidently easier to prove if it has been recorded in some form.
French law provides no other substantive requirement to the validity of an arbitration agreement except for the arbitrability of the dispute (French Civil Code Article 2059).
According to the EAL, an arbitration agreement may be concluded prior to the existence of the dispute or after it has arisen. Whether being an arbitration clause (clause compromissoire) or a submission agreement (compromise), the validity requirements of an arbitration agreement under the arbitration law are the following:
- the parties must have capacity to enter into the arbitration agreement (article 11);
- the subject matter of the arbitration must be arbitrable (article 11);
- the subject of the dispute to be resolved by arbitration must be specified in the compromise, or in the statement of claim in case of a prior agreement to arbitrate (article 10); and
- the arbitration agreement must be in writing or else it is null. The writing requirement includes a document signed by the parties, an agreement by exchange of correspondences or other means of communication (article 12), and/or an incorporation into the contract by reference to a document containing an arbitration agreement insofar as the reference is explicit in considering the arbitration agreement part of the parties’ contract (article 10(3)).
Furthermore, it is worth noting that in administrative contracts, the arbitration agreement must be approved by the competent minister, or whoever assumes his or her authority with respect to public entities, and delegation in this regard is prohibited (article 1). This has been confirmed by a judgment of the State Council where it ruled that the arbitration agreement is void when the competent minister, or whoever assumes his or her authority with respect to public entities, has not approved it and that such requirement is a matter of public policy. It also ruled that the arbitration agreement must deal only with matters that are arbitrable and in the case of a submission agreement (compromis d’arbitrage), the parties must identify the dispute subjected to the arbitral proceedings or the agreement would be null and void. (State Council, challenge no. 8256 of JY 56, hearing session dated 5 March 2016)
As a general comment, arbitration agreements are considered as contracts (Art. 1454 Civil Code), so that they must comply with the general requirements of contracts (consent, legal capacity, lawful purpose and cause) (Art. 1461 Civil Code)
Specifically, according to Art. 1 of the LAM the first validity requirement of the arbitration agreement is that all controversies must be subject to transaction. The second requirement is that the arbitration agreement must be in writing (Art. 5) and it can be understood that an arbitration agreement exists not only if it is in a writing document signed by the parties, but when it is the result of an exchange of letters or any other writing communication means that record the will of the parties to submit themselves to arbitration (Art. 7), which could include emails or other writing document, even if they are not signed by the parties.
According to Article 7(2) of ICA Act the arbitration agreement must be in writing. Nevertheless, the same provision states that the ‘in-writing’ requirement is also fulfilled when (i) the agreement to arbitrate can be found in any exchange of communication among the parties, (ii) in an exchange of statements of claim and defence one party alleges the existence of an arbitration agreement and the other party does not deny it, (iii) when a written contract refers to a document containing an arbitration agreement provided that such reference implies that this arbitration agreement is part of the referring contract.
An arbitration agreement may be no longer enforceable according to Chilean contract law because of nullity, resolution by breach of contract, or termination –either by mutual agreement or by expiration date or condition. By virtue of the separability principle, the circumstances affecting the enforceability of the underlying contract do not affect the enforceability of the arbitration agreement unless the specific ground is able to contaminate any contractual arrangement like legal incapacity when signing the contract.
A valid arbitration agreement in international arbitration must meet minimum requirements of form and substance. In terms of formal requirements, the arbitration agreement must be made in writing, by telegram, telex, facsimile or any other means of communication allowing it to be evidenced by text. Strictly speaking, signature or exchange of the arbitration agreement is not required as long as the parties' agreement can otherwise be evidenced based on written documents. The revised chapter 12 of the PILA is expected to provide for a relaxation of these formal requirements, allowing for an arbitration agreement to be validly concluded even if only one party fulfils the aforementioned formal requirements.
As regards content requirements, such arbitration agreement must stipulate the parties' intent to resolve a determined or determinable dispute by way of arbitration, thereby excluding the jurisdiction of the state courts.
The same conditions apply to arbitration agreements in domestic arbitration pursuant to art. 357 and 358 CPC.
With regard to the criteria on substance, an international arbitration agreement is deemed valid if it displays the legal requirements for a mutual party intent concerning the essential aspects either based on (i) the law chosen by the parties to specifically govern the arbitration agreement, or (ii) the law governing the subject matter of the dispute (i.e. in general the underlying contract), or (iii) Swiss law.
According to the AL, a valid arbitration agreement shall meet the following conditions: (Articles 1 and 2)
- The arbitration agreement shall be in writing, but an arbitration agreement may be deemed to exist if it can be sufficiently discerned from the communications between the parties in the form of documents, security, letters, fax, telegram or other methods.
- The parties may stipulate to resolve through arbitration only disputes to which settlement is allowed under law.
- The arbitration agreement must be related to the particular legal relationship existing between the parties. An arbitration agreement has effect on the parties if it is stipulated for disputes arising from such particular legal relationship.
As regards international commercial arbitral proceedings having their seat in Greece, articles 7 para. 3 and 5 L. 2735/1999 incorporate verbatim the provisions of article 7 para. 2 of the Model Law. Hence, both the written form requirement as well as the exchange of letters requirement are preserved. The latter casts doubt on the validity of the conclusion of an arbitration agreement by means of an oral or tacit acceptance of a respective offer made in writing. At the same time though, article 7 L. 2735/1999 introduces three provisions unknown to the Model Law seeking to ease the written form requirement or the consequences of its absence: (a) In para. 4 it is provided that the form requirement shall be deemed to have been fulfilled in case an arbitration agreement concluded orally is recorded in a document transmitted from one party to the other party or by a third party to both parties, assuming that no objection was made in good time, and that the contents of such documents may be deemed to consist part of the contract with common usage. This provision is similar to Section 1031 (2) of the German Code of Civil Procedure, (b) In para. 6 it is provided that the issuance of a bill of lading making explicit reference to an arbitration clause in a charter party constitutes a valid arbitration agreement. This provision is similar to the former Section 1031 (4) of the German Code of Civil Procedure, (c) In para. 7 it is provided that the lack of written requirement is remedied in case the parties participate in the arbitration proceedings without raising any objection – reservation as to it. This provision is a reproduction of the provision of article 869 para. 1 of the GrCCP controlling domestic arbitration. It is obviously similar to the provision of the Model Law (also incorporated in article 7 para. 3 of Law 2735) that an arbitration is in writing in case it is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another.
In relation to domestic arbitration, article 869 para. 1 of the GrCCP adopts also both the written form requirement as well as the exchange of documents requirement. It should be noted that said provision explicitly demands with regard to the exchange of documents (letters, facsimiles etc.) that each of them be signed by the parties. Said provisions of Law 2735/1999 and of Model Law relaxing the written form requirement are unknown to the GrCCP. It is provided though, as mentioned before, in said article, that in case the parties participate in the proceedings without making any reservation or objection the lack of written form requirement is remedied.
An arbitration agreement has to be in writing to be valid and enforceable. An agreement to arbitrate can either be in a separate contract or be embedded in a clause in a commercial contract between the parties.