HFW Commodities Bulletin - January 2010

Incorporating Arbitration Clauses Into Sale Contracts
By Mark Morrison

The recent English High Court decision in Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v Sometal Sal (18 January 2010) reviewed the principles to be applied under English law to determine whether an arbitration clause is incorporated into a sale contract.

Sometal agreed to sell to Habas scrap steel ex Romania and Bulgaria CIF Memrut Bay, Turkey. The contract was written out under the letterhead of Sometal's agent. It specified key terms such as quantity, price, discharge rate and payment and concluded with the words "all the rest will be the same as our previous contracts".

There had been fourteen previous contracts between these parties. The first three were on Habas' letterhead and included either UNCITRAL or Istanbul arbitration clauses; the eleven subsequent contracts were either drawn up by Sometal or were on the letterhead of Sometal's agent. Some of the later contracts contained